Written by Kristian Risager, WELL

The (im)morality behind corruption
“All acts are to be regarded as corruption, if they involve a person in a position to make decisions using ones power in that field not in the interest of the organisation one represents, but to promote ones personal goals”. To put in another way, corruption is about private gain and public harm. Unfortunately it is not ethics, but economic rationale that dominantly dictates how people act when put in a corruption situation. The reason for corruption needs to be understood from an economic perspective. The reason why it is so prevalent is because the benefits often outweigh the costs. It is opportunism as described in microeconomic cost/benefit-analysis.

It is better to be feared than loved
Through ethics we can justify why one should not be corrupt by appealing to rationality however it has a weak deterrent effect. Institutional bodies that work with anti-corruption procedures would be naive to depend on ethics alone. In countries where there is weak or no anti-corruption legislation it is therefore necessary to somehow find ways to outweigh the costs instead of the benefits of engaging in corruption. Two ways to deter and combat corruption in international business transactions is debarment; exclusion from publicly supported commercial activities as a sanction and zero-tolerance attitude from investors. Counterstriking is still in its infant stage and therefore relatively weak. Only the Swiss, New Zealand, Danish and Canadian Export Credit Agencies say they would debar companies convicted of corruption. The key function of debarment is prevention and deterrence. This means a damaged reputation and lost revenue. It simply increases the opportunity cost of engaging in corrupt practices. The Machiavellian view on management seems to prevail when coming up with constructive ways to enforce anti-corruption procedures; it is better to be feared than loved.

Something completely else
The top-ten most corrupt business industries are:

1. Building & Construction
2. Weapons & Defence
3. Oil & Gas
4. Real Estate
5. Telecommunications
6. Energy
7. Natural Resources
8. Transport
9. Pharmaceuticals
10. Banking & Finance