Combatting International Corruption:
The Role of the Business Community
8
FRITZ F. HEIMANN
International Corruption in Perspective
Why Corruption Is Difficult to Control
To evaluate the role of corporations in combatting corruption, we must
consider first why corruption is so difficult to control. Corruption is
clearly a worldwide problem. It afflicts advanced industrialized economies as well as developing economies, market economies as well as
government-controlled economies, states with long democratic traditions,
states with authoritarian regimes, and states in transition to democracy.
Scandals in Europe, Japan, and South Korea have demolished the
notion that corruption is primarily a disease of the developing world.
We must also recognize that the benefits of corruption to the participants are often huge. Corrupt officials can make vastly more money
by taking bribes than by being honest. For corrupt companies, paying
bribes is an effective way to win orders. Bribery provides a way to beat
competitors who have better technology or lower costs. The cost of
bribes can often be built into selling prices. Bribes can be treated as taxdeductible business expenses in the home countries of many multinational corporations. The damage done by corruption hurts others, not the
corrupt parties.
Fritz F. Heimann is Counselor to the General Counsel, General Electric Company (GE), Fairfield,
CT. He is a founding member of Transparency International and is chairman of its US chapter
(TI-USA). The views expressed are the authors and should not be attributed to Transparency
International or to GE.
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Institute for International Economics
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The risk of getting caught has traditionally been low. Bribes are always paid in secret, and they are usually channeled through middlemen.
Governments whose leaders take large bribes rarely prosecute bribe
payers. The home countries of bribe-paying companies disregard what
their...