The UN Global Compact underlines ‘Corruption is now recognized to be one the world’s greatest challenges’. Similarly, underlining its significance Kofi Annan argues ‘Corruption hurts the poor disproportionately – by diverting funds intended for development, undermining a government’s ability to provide basic services, feeding inequality and injustice and discouraging foreign investment and aid’ (Adeyeye 2012: 2). In addition to the importance of corruption in the policy agenda, there is emerging consensus in academia, empirically as well as theoretically, that corruption has detrimental effects on society on different levels. Odell (2010) describes it as a ‘systematic disabler’ damaging economic and human development and adding …show more content…
Corruption is described as a ‘very undesirable consequence’ of rentier states for oil companies by an interviewee (Industry Expert, Email correspondence 2015). As a result, corruption has a major influence on oil companies , which need to work closely with governments, handle with large amounts of money and ultimately depend on the government’s permission to operate (NGO Expert, Independent Expert, Interviews 2015). Consequently, the private sector faces a corruption dilemma since it can be the source or victim of corruption. In 2004, the fight of corruption became the 10th principle of the Global Compact, underlining the important role business plays (Globalcompact. Com). These social implications of corruption underline the social relevance of conducting research about the topic. Mainstream literature (e.g. theory of firms) assumes that there is a separation between politics and business and companies are rather unwilling to intervene in domestic politics (Friedman 1962; Henderson 2001) ‘It is not a corporation’s responsibility to fulfil the obligations of states, particularly since it could jeopardize their relationship with the government’ (Rosenblum, Maples 2009:xx). Oil companies depend on a host (country of operation) government’s licence to operate in a
Someone who is abusing the power that is given to him or her defines corruption, however, the word in its self is more than a simple idea; it is an intricate network. Since people’s views about ethical and moral behavior affect the way corruption is examined, the word has a slightly different meaning to each person. Additionally, misconduct across various societies is viewed differently due to social and cultural borders. The criminal justice system has had many instances where corruption had affected the outcome of a case and has inserted itself into the legal process.
"Corruption is an important cause of poverty because it promotes unfair distribution of income and inefficient use of resources." (The Link Between Corruption and Poverty) Americans enjoy a government that, although it has its flaws, looks out for its citizens and is geared for the benefit of the people as a whole. Leaders that are elected generally have the population's best interests at heart and fight for better lives for average Americans nationwide. Most countries in Africa do not have the luxury of such a government. The officials only care about themselves. They pocket a fair amount of the donated money and another significant portion is used for selfish projects that do not really benefit the country or the millions of poverty-stricken citizens. "The well-connected people don't have to pay the same taxes like everyone else; policemen and other junior officials seeking small bribes don't dare solicit cash from them. At the end of the day it is the poor and the weak who face the true brunt of corruption. This is a critical link between corruption and poverty." (The Link Between Corruption and Poverty) This also has an effect on the leaders that do have good intentions at heart. They have never been trained on how to be effective and they also, accidentally, use the money in many unhelpful ways. The money is squandered time and time again and the rest of the world does nothing but keep the supply of it coming. This is another area where something must
Corruption may undermine the fight against terrorism by draining public resources, and trust in government institutions. As one scholar puts it, “corruption begets distrust, which begets disorder, which breeds a host of other evils.” The expectation is that countries or regimes in the developing world witnessing an aggravated grand corruption will have difficulties curbing terrorism. Comprehending how illegal and corrupt behavior cause systemic damage to national security is essential to how states, especially, weaker states, plan to defeat terrorism. It will also aid the international community to know how and where to direct foreign assistance and military aid to countries battling against terrorism.
growth. Corruption reduces the efficiencies of the operations of the market economy and a loss
The negative economic impacts of corruption have grown rapidly, and major international organizations have claimed that corruption hinders economic growth (world bank 2006). Although there are claims that corruption is harmful to economic growth, economists have not really agreed with the argument from a theoretical point of view. Theoretical studies suggest that corruption may counteract government failure and promote economic growth in the short run, given externally determined suboptimal bureaucratic rules and regulations. As government failure is itself a function of corruption, however, corruption should have
It would be convenient to start this research paper by stating that corruption is a challenge mainly for businesses in developing countries and that it is unrelated to the current affliction of the economy in the United States. It would also be convenient to claim corruption has declined in America as a result of awareness raising campaigns and the numerous anti-corruption laws. But none of those aforementioned statements would be true. Corruption is not the exception, but rather the rule in today’s business practices. In 2004, Daniel Kaufmann, a senior fellow at Brookings Institution and former director at the World Bank, calculated an index of "legally corrupt" manifestations which is defined as the extent of undue influence
Since the phenomenon of globalization, companies that decided to broaden their horizons have to face multiple challenges and their management functions need some adaptations. While going abroad, companies may become concerned with the subject of corruption that makes the business with foreign countries even more complicated. Even if there is a willingness to fight and reduce the corruption across the world, companies must be aware that this subject exists and must take it into account while dealing with foreign companies, their efforts to understand and adapt to local corruption influencing their success of
Corruption can be defined as the use of entrusted power to accumulate public wealthy for personal benefit. Corruption is not peculiar to any country, continent or state; it is sure a global issue which is an endemic to all government all over the world. However, corruption is prevalent in the Niger delta region of Nigeria; public officers in this oil producing state of Nigeria are corrupt. Consequently, it has defied the Niger delta from developing politically and economically which has left the states reputation in a mess. Radicalization of youths, abject poverty and -political instability are the three leading effects of corruption in the Niger delta region of Nigeria.
American businesses wield much political powers. This has been there for quite some time. Prior to the Civil War, some Americans worried less about the power of businesses. This was partly due to the fact that firms at this time were relatively small. This restricted the powers of the proprietors to local political arenas. When multinational corporations emerged in the late 19th Century the role played by businesses in the political scenes completely changed.
Corruption is defined as an illegitimate exchange of resources involving the use or abuse of public or collective responsibility for private ends (gains, benefits, profits, or privileges). This definition includes corruption between organizations and political agencies (when public power is misused) and between organizations (when collective responsibility is abuse) (Ritcher & Burke 2007). Corruption is multidimensional and has several causes and
Corruption defines the phenomenon in which a person who is in the position of authorities abuses power to acquire private benefits. Widespread of bribery have substantial detrimental effects on governments, firms, and the broader stakeholders in which it takes place. Corruption scandals reported in China, Pakistan, Egypt, South Africa and elsewhere draw a high attention on the corruption, especially in developing countries. Although in the past few decades, governments introduced a series of policies to prevent the fraud, it’s still hard to eliminate the corruption indeed.
The first chapter is an attempt to define corruption. It is important to divide overlapping and complicated terms such as corruption, scandal and fraud. Corruption is defined as an illegal transaction, where both actors benefit from their special position in the market or the government. Scandal is the public reaction to allegations of corruption and thus it is interconnected with the issue of legitimacy. Fraud, however is a purely criminal cathegory.
While corruption is said to generate inefficiency and retard growth in a country (Ackerman, 1997), China manages to deliver astronomical economic growth amidst rampant corruption (Li, Peng, 2001). To explain China’s puzzle, the essay first focuses on the causes of corruption and why it has yet to be eradicated, and then analyzes its economic impact in the short and long run.
Corruption is a complex political, social, and economic anomaly that negatively affects developing and developed countries. It weakens democratic institutions, holds economic development, widening the rich-poor gap and certainly leads to governmental instability. The World Bank definition of corruption states that “…the abuse of public office for private gain”.
THE POLITICAL ENVIRONMENT: The critical concern Political environment has a very important impact on every business operation no matter what its size, its area of operation. Whether the company is domestic, national, international, large or small political factors of the country it is located in will have an impact on it. And the most crucial & unavoidable realities of international business are that both host and home governments are integral partners. Reflected in its policies and attitudes toward business are a governments idea of how best to promote the national interest, considering its own resources and political philosophy. A government control's and restricts a company's