Bribery and corruption are two related vices that are prevalent in virtually all global societies. Bribery is defined as the act of giving or receiving something with the core intention of influencing the actions of the recipient. These actions most often than not induce the recipient to carry out illegal, dishonest or activities that breach trust in the conduct of business. Corruption on the other hand focuses on the misuse of public office, rank, or status for one’s personal gain (OCSE, 2000).
Bribery and corruption happen to be impediments to both global and national development. Countries and organizations are adversely affected by these vices. The global economies experience negative growth with the World Bank estimating that at least 0.5% of GDP is lost through these vices annually. Engaging in bribery and corruption has also been ranked as one of the main causes of unfavorable business environment. It also leads to the flourishing of organized crime and the eventual undermining of the rule of law. Moreover, the two vices impair the economic development of global nations eroding public trust in institutions as well as challenging democratic principles that many countries subscribe to.
The two vices, bribery and corruption, are prevalent or thrive in our societies particularly in the public sector due to various factors and circumstances. Government contracts are one of the causes of the prevalence of corruption and bribery in the public sector. These contracts involve large sums of money, which attract a sizeable number of competing applicants. This creates room for bribery and corruption to influence this tendering process in favor of individuals and organizations (Tavits, 2005). It also leads to the breach of trusts and other integrity related elements in public tenders and activities. The government benefits also enhance the prevalence of bribery and corruption in the public sector. These benefits include subsidies, pensions, favorable prices, and exchange rates. Bribes and corrupt tendencies may influence the way these benefits are allocated or extended to organizations and individuals.
The generation of the government revenue may also lead to increased bribery and corruption levels in the public sector. It is prudent to note that the government generates its revenue from fees, licences, taxes, public utility charges and custom duties. All these avenues can encourage individuals and businesses to bribe or use corrupt antics to ensure they remit less to the government. The bribes for instance, may be proposed or suggested by the taxpayer or the tax collectors. Time and regulatory avoidance is the other factor that encourages bribery and corruption within the public sector. Much of the public processes are characterized by lengthy and detailed procedures. Bribes and corrupt deals can speed up these public processes such as issuance of permits and licenses. Bribery and corruption may also be enhanced when it comes to the influencing of legal and regulatory procedures. Many businesses and individuals may engage in these vices to make regulatory and legal authorities to “look the other way” (Wells & Hymes, 2012).
It is important to understand that public sector corruption impact is defined through two perspectives: supply-side and demand-led corruption. The supply-side corruption covers the individuals, parties, and organizations that hand out bribes or corrupt payments not necessarily under coercion. The demand-side corruption on the other hand covers those that demand and accept bribes or corrupt payments. The two perspectives share a common similarity where both the bribe givers and recipients gain from the corrupt deal. In many instances, the supply-side corruption is usually accelerated in the public sector due to the presence of wealthy organizations and individuals. In many poor countries, wealthy multinational corporations that hail from industrialized countries may easily influence officials. Many of these poor countries may have weak legal systems that may enhance supply-side corruption. In these countries prevalent with the supply-side corruption, have leaders, senior officials, and politicians that are above the law or are immune to the criminal justice system. These loopholes are the major catalysts of the supply-side corruption. The demand-side public sector corruption is notably prevalent in the developed nations and societies (OCSE, 2000). Many of the developed countries have bureaucratic measures that can easily precipitate the demand for bribes by public officials. Those who understand the weaknesses of the system can easily exploit these inefficient bureaucracies with ease.
The supply-side corruption has a great impact in many societies. It locks out genuine businesses or deserving individuals from accessing public services, tenders, and utilities. Many multinational corporations that engage in this type of corruption lock out the indigenous firms from competitively participating in their own nation’s economy and commerce. This corruption further increases the cost of engaging in business for the less financially endowed firms. The demand-side corruption on the other hand, may hinder many competent individuals or organizations from engaging with the public sector. The corrupt payment demands in this case may be too exaggerated pushing out genuine businesses and individuals from engaging rightfully in the public sector. The demand-side corruption in most instances is intricate as legal and regulatory systems are well developed. The public officials that understand the workings of the system thus charge exorbitant corruption payments that may create non-conducive environment for business and public service.
Bribery and corruption has no boundaries. It is a global problem the difference is the geographical reach and cost associated with these vices. The global nations under the United Nations organization understand the negative implications of corruption hence the ratification of the UN corruption preventive measures. These measures are captured in the articles that provide for participation of societies and prevention of money laundering. The UN understands the critical role played by civil societies and the citizenry in general in keeping corruption in check. It encourages access and creation of anti-corruption bodies that are integral in the fight against corruption. This international organization understands fully the effects of money laundering. It has fostered international regulatory platforms and cooperation in managing this problem. Many regional blocs in different continents have created mechanisms to manage and prevent corruption among their members. The European Union and African Union have distinct platforms for enhancing transparency among their member states (Loughman et al., 2012).
The United Kingdom and United States have continuously provided many countries with the legal and regulatory frameworks. The UK bribery act 2010 and the US FCPA act of 1977 have been instrumental in deterring corruption and bribery. The UK Bribery act of 2010 was crafted with the intent of emboldening the fight against corruption within the United Kingdom. It particularly identifies the specific criminal offence of the bribing of foreign public officials by U.K citizens and/or organizations with the intent of obtaining or retaining business. The act further provides strict guidelines to companies on preventing their employees from engaging in corrupt dealings. It also raises the jail term for bribery crimes from by three years from seven years to ten years. Companies under this act also face unlimited fine if identified to have negligently failed to prevent bribery.
The United States FCPA act of 1977 covers all US companies, citizens, foreign companies based in US, foreign companies listed on the US stock exchange, and all US permanent residents and citizens anywhere in the world regardless of their employer. It prohibits indirect corrupt payments made via intermediaries or agents. It also finds companies liable if they authorize any form of payment or knew that the agent would undertake payment. The act cites that knowledge on the part of the company includes awareness of “high probability” that corrupt payment or bribe will be extended. The act also stipulates the legal fines and criminal penalties to its violators. Companies may be fined up to US$ 2million or twice the benefit. Individuals on the other hand may face fines amounting up to US$ 250,000 or imprisonment of up to five years.
The two acts, the US FCPA act of 1977 and UK bribery act of 2010, have been instrumental in discouraging corruption, which is both demand-led and supply-sided. The two acts touch not only on their citizens, indigenous companies but also foreign company and officials. They also provide strict guidelines to companies that previously enjoyed their way through their corrupt employees. In short, this means corporate failure is punishable under these acts. The acts have also gone a notch higher by outlawing facilitation payments that previously provided loopholes for bribery and corruption in the respective nations (Myint, 2000).
In conclusion, bribery and corruption in the public sector is a global endemic. The vices surface in both the developed and less developed nations and societies. The public sector, however, notably is characterized by circumstances that enhance bribery and corruption. These namely are government contracts, government benefits, revenue generation, time and regulatory avoidance, and legal and regulatory procedures. Corruption has also been identified through two perspectives, demand-led and supply-side. The two have adverse effects on societies and provision of public services (Loughman et al., 2012). The US FCPA act of 1977 and UK bribery act of 2010 have also been identified as the legal benchmarks for fighting corruption and bribery. The laws have been effective as they cover a broad spectrum of entities. The two acts touch not only on their citizens, indigenous companies but also foreign company and officials.
References
Ameresekere, N. S. (2011). UN Convention against Corruption to combat fraud & corruption: A cancerous menace : with mere rhetoric subverts UN Convention. Central Milton Keynes: AuthorHouse.
Loughman, B. P., Sibery, R. A., & Ernst & Young (2012). Bribery and corruption: Navigating the global risks. Hoboken, N.J: Wiley.
Myint, U. (2000) Corruption: Causes, Consequences and Cures, Asia-Pacific Development Journal,7(2).
OCSE (2000). No longer business as usual: Fighting bribery and corruption. Paris: Organisation for economic co-operation and development.
Tavits, M. (2005) Causes of Corruption: Testing Competing Hypotheses, Working paper, Nuffield College.
Wells, J. T., & Hymes, L. (2012). Bribery and corruption casebook: The view from under the table. Hoboken, N.J: John Wiley & Sons.
