Wednesday, May 08, 2002

In defence of Bribery

The Economist has an article on bribery. Usual moralistic stuff, bribery's wrong, and governments ought to stop their firms bribing foreign companies and governments. In this case it is being backed, like so much other creeping socialisation of international business, by the OECD.

First a practical point. In many third world countries foreign countries are blocked out of the bidding simply because they are foreign. Contacts and family connections make sure that the contracts go to the well born. So what's the reaction to these connections? Buy them. In Marxist parlance it is replacing status (feudalism) with contract (capitalism). As perverse as it sounds bribery levels the playing field.

But off the coldly practical considerations. Did you know that in Swahili they use the same word (baksheesh) for bribes and for tips? And what is the difference?

To me the difference is that tipping is done with the knowledge and approval of the owner, a simple moral difference - but what if everyone knows and everyone accepts that to get by you need to give some baksheesh now and again. This may not be full approval, but it is a grey area. And this state of affairs is what goes on in most if not all third world countries, and quite a few areas of the first world as well.

And then there's the actual role of governments. If we define a bribe as an extra payment for a service rendered without the knowledge and approval of the owner of the service provider, then does this deserve a criminal sanction?

For the bribe taker (who is after all the more guilty party - as he is misappropriating resources for his financial gain) then this can surely be a disciplinary matter, and if it goes any further - a civil matter. A business that doesn't know what its employees are doing should not call on the taxpayer to bail it out. As for the bribe giver, if owners care about this they can simply bring out blacklists of bribe givers.

So how does this reflect on these laws? Well it simply is not much of our business what goes on in foreign government procurement.

If our firms are going to bribe foreign governments then let them take their risks. Foreign governments can discipline their corrupt officials, or even prosecute them. If they don't want to do this then it is up to their people to replace them. If their people find that government corruption is way down their list of priorities, then why should it be anywhere near the top of ours?

Of course the argument goes that as we give aid to the Third World then where the money goes concerns us. But that is not an argument for criminalising our businessmen, but for curtailing our aid. And there are plenty of arguments for that already.


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