Controlling Corruption in International Business: The International Legal Framework

Abstract

Since 1995, the anti-corruption movement has had success in developing a global legal framework to combat transnational bribery and corruption. A distinguishing feature of the current anti-corruption movement is its emphasis on the economic cost of corruption and the involvement of the international financial institutions such as the World Bank, the International Monetary Fund and regional development banks, in the efforts to combat corruption. As part of their efforts to combat corruption, international financial institutions have made effective anti-corruption reforms a prerequisite for future allocation of funds. The current anti-corruption movement has also been successful in enlisting the participation of sectors of international and domestic civil society, as well as the business community, through integrity pacts and codes of conduct. Notwithstanding its relative success, the current anti-corruption movement faces serious hurdles as incidences of transnational corruption keep rising. On a philosophical level, the economic repackaging of the problem of corruption has made the anti-corruption effort more acceptable by excluding any explicit moral judgments that may lead to charges of moral or legal imperialism; however, the re-packaging is proving to be inadequate given the irrefutable moral and ethical dimension of corruption. Increasingly, scholars of international business ethics, as well as anti-corruption advocates, are emphasizing a “virtues’’ approach to combating corruption. The failure of the anti-corruption movement may also contribute to the de-legitimization of the “science” of economics. On a more practical level is the difficulty of distinguishing among different categories of illicit payments, such as a facilitation payment that can be legal; a bribe, which is illegal, and maintaining a favorable climate payment, which may be legal or illegal. Finally, the current anti-corruption movement must address the legacy of colonialism and its impact on how developing countries view anti-corruption efforts. For centuries, corruption has been associated with the East and anti-corruption with the West. Making free markets, rule of law, and democratic reforms a part of the anti-corruption campaign may lead to the perpetuation of the rule of geographical morality and the imposition of Western values. To some, this approach opens the anti-corruption movement to charges of neo-colonialism.