Public or private corruption?

This is a summary of some of the main arguments and findings of the book ¿Corrupción pública o privada? La dimensión ideológica de los discursos anti-corrupción en Colombia, Ecuador y Albania (Bogotá: Tirant lo Blanch, 2020). The book compares the official anti-corruption discourses of president Juan Manuel Santos (2010-2018) in Colombia, president Rafael Correa (2007-2017) in Ecuador and prime minister Edi Rama (2013-present) in Albania. It shows that although these three countries face very similar levels and perceptions of corruption their governments articulate this phenomenon differently due to their distinct ideological positions. While the neoliberal governments of Santos and Rama defined corruption primarily as abuse of public office and locate it mainly in the public sector, or in its interaction with the private one, the government of Rafael Correa, which embraced the 21st Century Socialism, defined corruption primarily as a problem of the private sector that captures and distorts the public sector.

The dichotomisation fallacy of public and private corruption and the quantification dilemma

Purpose This paper aims to examine the concept of corruption and dirty money. Corruption is amorphous and lacks a congruent definition. It is mainly divided into public and private corruption. This divide, is unnecessary, given the fact that both cause incalculable damage to the markets and lager society. Globalisation has necessitated liberalisation and resulted in amalgamating both public and private ventures. This, as a result, has made it more difficult to stick to this. Pronouncements from International Chamber of Commerce (ICC) and the Law Commission’s attitude not to segregate between private and public bribery prior to the legislation of United Kingdom Bribery Act 2010, has added greater impetus to the debate. Attempts to quantify the amount of corruption and money laundering, has equally, hit a dead end. The figures being bandied about are all estimates or “guesstimates” that cannot stand the empirical test. As a result, the conjectures have strong potentials to continue for a longer time. The purpose of this paper is to bring to the fore the need to jettison the long-held perception that public and private corruption should be seen in different lights. Design/methodology/approach This paper relies substantially on both primary and secondary sources in the analysis. Findings Indicatively, the facts tilt towards the conclusion that it is impossible to actually ascertain the quantifiable amount of money that is involved in corruption and the money laundering process. It is an illusion. Originality/value The paper provides the platform that the time is ripe for both public and private corruption to be seen as the same thing, as they both unleash catastrophic consequences on society. The issues of globalisation and liberalisation make this inevitable.

Romanian Business Leaders’ Perceptions of Business-to-Business Corruption: Leading More Responsible Businesses?

Business-to-business (B2B) corruption, also known as private corruption, refers to unethical or illicit activities between private parties, without the direct participation of the state. Existing literature on the topic, while still limited, has taken several avenues, from qualitative studies to perception-based surveys and research experiments. Upon reviewing key studies and their findings, this article concentrates on research questions related to: business people’s perceptions on the determinants that favor B2B corruption in Romania, consequences of the phenomenon, and potential solutions. Findings are based on primary data collected through a 2019 questionnaire administered to 120 business leaders in Romania. Results confirm earlier studies’ findings that general context, malfunction of the institutions, and mentality favor B2B corruption, and that there is a lack of consensus among the business community on how to recognize and deal with various forms of B2B corruption, despite the widely spread belief that B2B corruption negatively affects business activities. Also, both internal and external solutions are considered to work against B2B corruption. The current article also opens new avenues in the literature, showing that: the probability to face B2B corruption increases with business leaders’ professional experience; preferences on how to deal with corruption cases vary based on a firm’s capital structure (domestic vs. foreign), reflecting the importance of organizational culture; and business leaders overwhelmingly want to fight against B2B corruption through both internal and external measures. Substantial progress, however, will require a proper common understanding by the private sector of what constitutes B2B corruption, including its causes, consequences, and remedies.

Private Sector Corruption, Public Sector Corruption and the Organizational Structure of Foreign Subsidiaries

Corporate anti-corruption initiatives can make a substantial contribution towards curtailing corruption and advancing efforts to achieve the United Nations’ Sustainable Development Goals. However, researchers have observed that underdeveloped assumptions with respect to the conceptualization of corruption and how firms respond to corruption risk impeding the efficacy of anti-corruption programs. We investigate the relationship between the perceived level of corruption in foreign host countries and the organizational structure of subsidiary operations established by multinational corporations (MNCs). Foreign host market corruption is disaggregated into two components—private and public corruption. We employ an uncertainty-based perspective grounded in transaction cost theory to focus upon the distinct mechanisms through which private and public corruption can each be expected to impact a foreign subsidiary’s organizational structure [wholly-owned subsidiary (WOS) or a joint venture (JV) with a local partner]. We expect that each type of corruption fosters a different type of uncertainty (environmental or behavioral) which predominates in shaping the MNC’s choice of foreign subsidiary investment structure. Hypotheses are developed and tested with a sample of 187 entries into 19 foreign host markets. Each type of corruption was found to exert a distinct effect upon the organizational structure of foreign subsidiaries. More precisely, while heightened perceived levels of public corruption were found to motivate MNCs to invest through a JV with a local partner rather than a WOS, more pronounced private corruption precipitated the opposite outcome.

Corruption and Human Development Index

Corruption is a human phenomenon that covers the whole world. It is a fact that public corruption gains more prominence than private corruption, because the state has the duty of accountability in a transparent way to taxpayers. As a result of this, the authors focus on the analysis of public corruption, which involves agents and public resources of the state. Therefore, this study has the main objective to verify if there is a relationship between IPC corruption (corruption perception index) and HDI (human development index), which posits the hypothesis that the greater the corruption, the lower the HDI indexes. In addition to the CPI and HDI variables, they also analyze the GDP of the countries in a secondary way. The global data analyzed indicate a high correlation between greater corruption and a lower index of human development, which may suggest problems of accountability.

SEARCHING FOR NEW PARADIGMS IN A GLOBALIZED WORLD: BUSINESS ETHICS AS A MANAGEMENT STRATEGY

The process of globalization is an undeniable reality of today's world. Yet, paradoxically, the cornerstone of this phenomenon, economic performance, varies widely across the world whatever indicator (for example, GDP/habitant, competitiveness) we choose to use to compare countries. Increasingly, studies tend to explain this apparently paradoxical situation with reference to the issue of corruption and ethics. In essence, corruption is perceived to be an important impediment to the economic development of a country (or area). Many studies of corruption are focused at the national level. The aim of this conceptual paper is to explore the role of the firm (as opposed to national states or international institutions) as an influence on national corruption. We call for firms to reconsider their behavior regarding corruption, particularly in relation to their relationships with their stakeholders. We argue that by focusing on issues such as cooperation and stakeholder theory, a firm will change the way it does businesses by reducing private‐to‐public as well as private‐to‐private corruption and incorporating business ethics into its management strategies.