Corruption

1154 Words Oct 22nd, 2013 5 Pages
Effects of Corruption in Multinational Corporation’s [Student name]
[Professor’s name]
[Course title]
[Date]

Introduction
Corruption can be defined as a spiritual or moral deviation from an ideal. Corruption come in different styles and that include bribery and funds embezzlement.
Corruption has been the number one menace in many countries of the world. It impacts countries in many ways, impacting economy and development in a negative way. Corruption tends to raise the cost of government and may lower the rate of infrastructure growth. Most importantly, corruption has a negative impact on capitalism and foreign investment in that; it changes the environment which in turns affects decisions and actions. Corruption causes
…show more content…
Bureaucratic harassment such as the waiting time for a permit and statutory tax and tariff rates are other forms of corruption.
Countries have different laws, making some actions viewed in our capitalistic society as inappropriate, to be appropriate in a socialism or communistic society. The Organization for Economic Cooperation and Development (OECD) defines corruption as "intentionally to offer, promise or give any undue pecuniary or other advantage....to a foreign public official...in order that the official act or refrain from acting in relation to the performance of official duties in order to obtain or retain business or other improper advantage in the conduct of international business" (Raeschke -Kessler & Gottwald, n.d.). This measure criminalizes bribery in international transactions, however, influence peddling (a practice in which undue advantage of giving, promising or selling of an undue advantage to a person who will sell their influence to the government) is not covered by OECD definition.
An effect the U.S. Foreign Corrupt Practices Act (FCPA) of 1977 found that "United States direct investment in more corrupt countries grew more slowly than in other countries" (Wei, 2000). China is an interesting example. China is a large country with a vast supply of cheap labor. The country also has a great deal of rampant corruption. There has been a large amount of foreign

More about Corruption