Crisis breeds corruption
June 3, 2009
In the wake of the global financial crisis there’s a growing distrust of business. That’s according to the new Global Corruption Barometer released by Transparency International on Wednesday.
The corruption watchdog says that about half of those surveyed around the world believe that the private sector engages in corrupt practices, by doing things like using bribes to influence public policy, laws and regulations.
The survey of more than 73,000 respondents from 69 countries showed that 53 percent believe the private sector to be corrupt, up from 45 percent in 2004.
Apart from the private sector, it's political parties and the civil service that are believed to most tainted by corruption.
"These results show a public sobered by a financial crisis precipitated by weak regulations and a lack of corporate accountability," said Transparency International chairperson, Huguette Labelle.
The poorest are hit hardest
Low income households are the most likely to face demands for bribes, adding to their difficulties of coping with rising unemployment in the global economic downturn.
"As economic growth shifts into reverse, poor households are increasingly forced to make impossible choices in allocating scarce resources," Huguette Labelle added.
"Do parents pay a bribe so that a sick child can see the doctor or do they buy food for their family? It is simply unacceptable that families continue to face these decisions."
The vast majority of those polled said they did not believe that government anti-corruption efforts were effective. Transparency International warns of an increasingly alienated and distrustful public while the survey shows that a large number of people would be willing to actively support clean business.
Half of the respondents said they would agree to pay a premium to buy from companies free of corruption.
Yet with the global recession biting, many believe that corruption is actually in on the increase. A recent study conducted by Ernst & Young looked at European attitudes towards corruption.
Among other things, it found that one in four of the respondents from more than 20 countries thinks that in times of economic crisis corruption is justified.
"You have to remember that there's a high estimated number of unreported cases. That's a problem with all kinds of white collar crime," says the author of the study, Stefan Heissner.
"To see that one fourth of the participants were willing to openly admit that they'd accept corruption is something that honestly speaking I didn't expect."
Paying bribes better than going bust?
The reason behind this trend is the current economic crisis, Heissner adds. Around 60 percent of Germans expect to see a rise in corruption as a result of the pressure companies are facing.
The reasoning seems to be that paying bribes is seen as being better than going bust. And very often these illicit business practices are particularly difficult to uncover as usually both sides of the deal profit from it.
"When you compare this kind of corruption for instance to a case of beguilement, then the difference is that you don't really have an aggrieved party."
"If a company has someone who secures a contract through paying a bribe, then he will be perceived as a successful employee who – despite the crisis – can still generate new business."
Both the Corruption Barometer by Transparency International and the Ernst&Young report point to a bleak picture. But Heissner insists that nonetheless there is progress in the fight against corruption. He adds that in recent years there has been a successful campaign to make corruption less acceptable.
On a global scale, bribery is not simply an issue of companies and businesses but it affects society as a whole. Corruption is often a crucial stumbling block in the way of a country's or region's development.
ai/Reuters/dpa
Editor: Chuck Penfold