Reading #23: Bribery and Corruption

Another problem associated with the global market is the widespread use of bribery and kickbacks in other countries. In most Western countries, offering a bribe and paying a bribe are considered immoral, but the legal systems tend to treat the offerers different from the payers. In many parts of the world, bribery is regarded to be a necessary evil, a business expense, and the cost of doing business. Many cultures regard gift-giving as a necessary part of establishing working relationships. So, one of the initial puzzles is how to differentiate between a “gift” and a “bribe.”

In many countries bribery is regarded as tradition. Public officials in many countries are routinely under-paid relative to market forces, and therefore they supplement their income by taking bribes. Of course, there are small time petty “bribes” by lower level public officials, and big time “BRIBES,” by higher level officials. Is bribery always wrong, never wrong, or sometimes wrong? Are there hyper-norms involved?

The most serious problem with regulating bribery at a global level is that it is that it is almost impossible to monitor and enforce laws against it. It takes place in private. Bribes are often perceived by both offerers and payers as a business opportunity, and therefore tend to perpetuate the tradition.

Conceptually, bribery is a problem for both stockholder and stakeholder theorists. Stockholder theorists tend to embrace “When in Rome do as the Romans do." But on the other hand, bribery obviously raise the cost of doing business, without adding to the value of the product or service. Stakeholder theorists promote international laws that insist on corporate “transparency” and laws that make it more difficult to pay bribes, especially laws against money laundering. Stockholder theorists often argue that some of these laws violate the right to privacy, or that these laws are costly and ineffective.