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This chapter first provides a broad definition of corruption and discusses why it is so toxic to effective governance. We then address how corruption has emerged as a key issue in the development process after being ignored for many decades. We explore the ways in which, without proper vigilance, government and corruption can become intertwined and feed off each other, destroying the foundations of human prosperity and the very purpose of governance. Existing efforts to tackle corruption at the national, regional and global levels are reviewed, and additional ways forward, particularly as regards the role of economic policies in developing the right sorts of incentives and institutions to reduce the incidence of corruption, are presented. Finally, proposals are put forth for the establishment of an International Anticorruption Court (IACC) to greatly strengthen and better implement a range of legal instruments that are already in place, but that have had limited success in checking the growth of multiple forms of corruption across the planet – affecting developing and developed countries alike. The setting up of an IACC is seen as a necessary adjunct to existing tools to check the spread of what many now regard as a global epidemic.
In the late eighteenth century, Swiss Cantons had been ruled by privilege, inequality, and conflicts; yet thirty years later a modern political nation was born that quickly caught up with developed England. Was this an internally-driven miracle or the most successful improvement in governance known in history following an external intervention? Chapter 1 deconstructs the transformation of Switzerland during the French Revolution and Empire, to inquire why a similar Napoleonic ambition seems to have met with less success in our own times.
With 2018 marking the twentieth anniversary of Canada’s Corruption of Foreign Public Officials Act, an opportunity presents itself to take stock of both developments and challenges for the legislative scheme. As demonstrated by a review of the parliamentary record, the desire to enact legislation to criminalize the offering of an inducement to a foreign public official to secure a business advantage was decidedly international in nature, with Canada aiming to bolster the efforts of others to create a level playing field for companies operating abroad. Yet, despite good intentions, as well as amendments to strengthen the Act in 2013 and the passage of additional transparency obligations in 2014, Canada’s legislative scheme has not kept pace with the international and multi-jurisdictional realities of the problem to be addressed. Renewed interest needs to be paid to the demand side of a foreign bribery transaction. In addition, the confiscation or forfeiture of any ill-gotten gains must become a priority, with the touting of success in securing the voluntary payment of sizeable fines failing to provide for a sufficient accounting for the wrongs done, particularly if the victims of corruption, even as a class that needs clearer definition, are to be made a true concern of the Act. The challenges posed by matters of immunity and the need to improve matters of multi-jurisdictional cooperation also need further attention.
The protection of foreign investment by treaties often clashes with the State's sovereign right to investigate economic crimes committed by investors. This article examines the different approaches taken by tribunals to questions concerning admissibility and jurisdiction, applicable law, the standard of review, the burden and standard of proof and deference to actions taken by domestic courts and regulators related to economic crimes. It concludes that investors should not automatically be deprived of treaty protections and their access to investment arbitration blocked. The arbitration agreement, being autonomous from the main contract (or the relevant treaty), should, as a rule, remain valid even if the conduct of investors is tainted by economic crimes. The article calls on investment tribunals to reflect in their awards on the contributory fault of the parties when representatives of States and investors are both complicit in economic crimes. To achieve greater legal certainty and procedural efficiency, a new generation of investment treaties and the practice of investment tribunals should draw on not only applicable domestic law but also existing sources of international law concerning economic crimes or national best practice.
Criminal violence differs from other conflicts because illegal cartels primarily use violence to eliminate rivals rather than overthrow the state. However, politicians’ ability to influence cartel behavior remains unclear. This article argues that politicians alter the use of violence by setting their jurisdiction’s police enforcement levels, but that cartels can bribe politicians to look the other way. Because cartels are uncertain about politicians’ corruptibility, not every bribe is successful. Following an election, cartels must invest resources into learning politicians’ level of corruption. Cartels only increase their level of violence after successfully bribing political leaders, which implies that local violence levels should increase the longer parties remain in office. The study formalizes this argument and tests its implications using data on homicides and political tenure from Mexico. The results link incumbency to violence and suggest Mexico experiences an additional 948 homicides for each year of increased political tenure after holding an election.
Four recent books, taken together, offer a wealth of important insights on how we might effectively tackle corruption. All of the books’ authors agree that there is something akin to a universal understanding of what corruption is, and all dispute the idea that corruption may simply be in the eye of the beholder. However, there are also sharp disagreements—for example over whether corruption is best eliminated from the top down, or whether bottom-up approaches are more effective. If the books share one weakness, it is that they do not sufficiently emphasize the importance of getting people to believe and feel that they have fair opportunities for good lives, even after institutional and legal reforms are made. Tackling corruption involves taking seriously the substantive link between actual fair treatment and the belief that fair treatment prevails. This will require further research examining how to shift and update people’s deeply held sentiments.
Researchers have extensively studied how large firms and SMEs use business and political ties to obtain tangible and intangible resources in transition economies. However, how SMEs establish these ties in the context of power-imbalanced dependence by using unethical and illegal “strategic practice” such as bribery remains underexplored. Furthermore, how SMEs deploy strategies to mitigate such risky actions in the process of resource acquisition is also given limited attention in the literature. Lack of exploration of these issues leaves significant gaps in our understanding of how SMEs are able to initiate and operate their ties for survival and growth despite enormous institutional constraints. We analyze the negative and positive effects of power dependence on business resource acquisition via regression analysis using survey data drawn from 232 Chinese SMEs. The findings indicate that power-imbalanced dependence among SMEs is associated with their use of bribery to establish political ties with officials for access to resources. The moderating effect of power-mutual dependence on this relationship is also examined. Theoretical significance and managerial implications of these findings for SMEs in transition economies are discussed.
International human rights law may serve as a language through which lawyers and others describe the harms resulting from corruption, but this approach has significant limitations as a legal framework. Despite a growing emphasis among scholars and practitioners on a human rights approach to the problem of corruption, this body of law does not provide a strong basis for addressing such conduct. International human rights treaties make no mention of corruption, and human rights treaty bodies have not brought conceptual clarity to the question of how corruption violates or undermines human rights. Given that human rights law binds States alone, it is also ill-suited to a phenomenon that typically occurs at the intersection of the public and private sectors. Even as a language for describing how corruption harms social and economic rights, human rights law has its limitations, some of which come into relief when compared with the field of development economics.
Tolerance of transgressions can influence the social cognitive and moral development of children and adolescents. Given the prevalent tolerance for bribery throughout the developing world and in China, the present research identified bribery as a serious transgression and investigated the various effects of moral evaluations and descriptive norms on transgression tolerance with increasing age. Thus, two studies examined these effects among primary, middle, and high school students (N = 972, 10-, 13-, and 16-year-olds). In Study 1, students’ transgression tolerance was negatively influenced by moral evaluations, and no age trend emerged. However, students reported more transgression tolerance with age owing to their increasing understanding of descriptive norms. In Study 2, the descriptive norms were manipulated: individuals in the high descriptive norm condition showed greater transgression tolerance than those in the low descriptive norm condition. An increasing tolerance of transgressions was observed only for those in the high descriptive norm condition. The effect of descriptive norms was found to contribute to the transgression tolerance trend.