Bribery and Corruption in International Business

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Bribery and corruption in the global business have been receiving serious attention from intergovernmental bodies, chambers of commerce, nongovernmental organizations, governments and the civil society. This is because bribery and corruption impose large costs on conducting business, misallocates a nation’s resource, undermines the efficiency of a market and it also distorts competition. Bribery encourages unethical practices, erodes the public trust on their leaders, undermines significant development projects and slows down the economic growth of developing nations (Tanzi 20). Bribery becomes defined as the practice of giving something, usually money, to influence an individual in the execution of his/ her duties. Bribes are not only in the form of money but also other advantages such as offering to pay for someone his/ her travel costs. Bribery also involves a business firm from one country giving financial or non-financial benefits to officials or executives of other countries to gain a commercial benefit. Corruption, on the other hand, it gets defined as the use of the public office for personal gain (Montagnon 13). The ever increasing growth in investment and international trade in a number of the past decades have become accompanied by an increase in corruption and bribery. According to the World Bank, it has become estimated that nearly 5 percent of exports to the developing nations go to corrupt officials. It gets shown that nearly over a trillion dollars get paid as bribes each year (Cohen 24). Bribery is costly to the nations where it is prevalent. According to surveys done, money lost to bribery and corruption is the biggest potential source of funding available to a number of new democratic governments aside from direct foreign investment. Tackling the issue of bribery can lead to an increase in the national income and stimulate economic growth, which in turn will lead to improvements in the quality of life. A reason for the rapid growth in corruption in the global market is due to the privatization of public enterprises globally. This has become accelerated by governments and the western creditors and executed in a way that allows the multinational companies to operate with impunity. These multinationals get supported by their governments and the respective agencies that give them room to participate in the practices at a vast scale. Most governments and the donor agencies like the International Monetary Fund create anti-poverty and proper governance agendas, but what they do send different messages about where their priorities lay. Stern action against corruption and bribery has to include sanctions by developing countries against these multinationals that engage in these malpractices. Effective political transparency to disengage the room under which corruption exists (Montagnon 33). To these multinationals, bribery and corruption ensure they get contracts which they could not have succeeded in getting, or to do so in clear terms. Annually, these multinationals pay large sums of money in bribes to get a friend and to influence contracts. These bribes become estimated to be 80 billion US dollars (Cook 26). This is the same amount UN estimates to be able to eradicate poverty in developing countries. The US Commerce Department provided the report that in the 5years preceding 1999 bribery was a serious issue in commercial contracts that were worth the US $145 billion.