The explosion of corruption – in the US, Europe, China, India, Africa, Brazil, Thailand and beyond – raises a host of challenging questions about its causes, and about how to control it now that it has reached epidemic proportions.
Corporate corruption is out of control for two main reasons. First, big companies are now multinational, while governments remain national. Big companies are so financially powerful that governments are afraid to take them on. Second, companies are the major funders of political campaigns in places like the US, while politicians themselves are often part owners, or at least the silent beneficiaries of corporate profits. Roughly one-half of US Congressmen are millionaires, and many have close ties to companies even before they arrive in Congress. As a result, politicians often look the other way when corporate behaviour crosses the line. Even if governments try to enforce the law, companies have armies of lawyers to run circles around them. The result is a culture of impunity, based on the well-proven expectation that corporate crime pays.
Given the close connections of wealth and power with the law, reining in corporate crime will be an enormous struggle. Fortunately, the rapid and pervasive flow of information nowadays could act as a kind of deterrent or disinfectant. Corruption thrives in the dark, yet more information than ever comes to light via email and blogs, as well as Facebook, Twitter, and other social networks.
If the highest levels of the governments also take advantage from corruption or embezzlement from the state’s treasury, it is sometimes referred with the neologism kleptocracy. Members of the government can take advantage of the natural resources (e.g., diamonds and oil in a few prominent cases) or state-owned productive industries. A number of corrupt governments have enriched themselves via foreign aid, which is often spent on showy buildings and armaments.
A corrupt dictatorship typically results in many years of general hardship and suffering for the majority of citizens as civil society and the rule of law disintegrate. In addition, corrupt dictators routinely ignore economic and social problems in their quest to amass ever more wealth and power.
Nepotism and cronyism
Favoring relatives (nepotism) or personal friends (cronyism) of an official is a form of illegitimate private gain. This may be combined with bribery, such as demanding that a business should employ a relative of an official, controlling regulations, affecting the business. The most extreme example is when the entire state is inherited, as in North Korea or Syria. A milder form of cronyism is an “old boy network“, in which appointees to official positions are selected only from a closed and exclusive social network – such as the alumni of particular universities – instead of appointing the most competent candidate.
Seeking to harm enemies becomes corruption when official powers are illegitimately used as means to this end. For example, trumped-up charges are often brought up against
journalists or writers who bring up politically sensitive issues, such as a politician’s acceptance of bribes.
In the Indian political system, leadership of national and regional parties are passed from generation to generation creating a system in which a family holds the center of power,
some examples are most of the dravidian parties of south India and also the largest party in India – Congress.
A kickback is an official’s share of misappropriated funds allocated from his or her organization to an organization involved in corrupt bidding. For example, suppose that a politician is in charge of choosing how to spend some public funds. He can give a contract to a company that is not the best bidder, or divide more than they deserve. In this case, the company benefits, and in exchange for betraying the public, the official receives a kickback payment, which is a portion of the sum the company received. This sum itself may be all or a portion of the difference between the actual (inflated) payment to the company and the (lower) market-based price that would have been paid had the bidding been competitive. Kickbacks are not limited to government officials; any situation in which people are entrusted to spend funds that do not belong to them are susceptible to this kind of corruption. Kickbacks are also common in the pharmaceutical industry, as many doctors and physicians receive pay in return for added promotion and prescription of the drug these pharmaceutical companies are marketing.
Where does your Government stand on this issue of Corruption?
- Corporate Corruption (room4truth.com)
- Fifteen per cent of Russian shopping bill is to cover corruption costs – study (rt.com)
- Down with corruption! (macleans.ca)
- A novel way to combat corruption: Who to punish (economist.com)