Corruption+&+Govt+Legitimacy

**Transparency International**


 * Organisation for Economic Cooperation and Development (OECD) page on Bribery and Corruption**


 * World Values Survey, 30-year timeline of survey "waves"**

It is both easy and legitimate to argue that all dictators in Sudan, as indeed in the rest of Africa, have been kept in power for so long by conniving armies. Members of the SAF have always been all too happy to play this role in return for lucrative pay. However, armies do not only keep dictators in power, they manufacture them afresh. In the absence of war, idleness spreads through the army and corrupts its spirit as an institution. No wonder then that soldiers can easily be lured by the glamour of involvement in politics and its lucrative rewards. Idi Amin, Gadhafi Husni Mubarak, Samuel Do, Al-Bashir and many others are a product of this defective institution; a quintessential hatching machine for African dictators and this is more evident in countries with weaker political structures and undeveloped civic societies. Had it not been for the existence of official armies, there would certainly be far fewer dictators around in the continent.
 * Towards the Abolition of African Official Armies - [|Abdullahi Osman El-Tom]Small Wars Journal March 26, 2013**

Rebel armies too, pose a similar danger if transformed into official forces. Africa’s history of decolonisation has left us with numerous unsavoury examples such as Kenyatta, Mugabe, Jawara, Mobutu, Mangisto and Mubarak. Hence, these rebel forces should equally disband as soon as their legitimate job is accomplished. While the causes of armed insurrections are understandable and often legitimate, their transformation into official armies is a dangerous affair that must be addressed. More often than not, rebel armies are skewed in favour of ethnic, regional or religious interests and as such, may not always be readily accommodative for all in the nation-state.

This paper examines the impact of national **wealth**, income distribution, government size, and four cultural variables on the perceived level of **corruption** in a country. The study finds that **corruption** is significantly correlated to GNP per capita, power distance, masculinity, and uncertainty avoidance. Significant interaction effects occur in collectivistic and high power distance countries. Suggestions for future research are developed.
 * Husted, B. (1999), "Wealth, Culture, and Corruption." Journal of International Business Studies, XXX (2): 339-60.**
 * Findings **

[W]e can tentatively describe a cultural profile of a corrupt country as one in which there is high uncertainty avoidance, high masculinity, and high power distance. In the case of collectivistic and high power distance countries, high masculinity is the single cultural variable that contributes to **corruption**.

The failure of individualism to be found as a significant variable is probably due to the fact, as noted by Hofstede (1997), that individualism is highly correlated with GNP per capita. Most of the information carried by individualism was already contained in the economic development variable, so that any additional information contributed by the variable was insignificant in the model.

An "arrangement" that involves "an exchange between two parties (the 'demander' and the 'supplier') which (i) has an influence on the allocation of resources either immediately or in the future; and (ii) involves the use or abuse of public or collective responsibility for private ends" (Macrae, 1982, p. 678)
 * Corruption Defined **

According to Alam (1995), **corruption** occurs because the government has a monopoly over certain resources that are needed by the private citizen. However, as one compares **corruption** from country to country, one can find economic and institutional differences that affect the availability of countervailing actions on the part of the person being extorted by government officials. **Corruption** decreases as private parties are able to take advantage of these countervailing actions. Among such factors that increase the availability of countervailing actions are: "(a) secular increases in wages, education and urbanization; (b) growth of mass media; (c) advances in transportation and communications technology; (d) improvements in managerial and accounting skills; (e) growth of capitalist classes, urban middle classes, and an urban labor force; and (f) upward pressures on government expenditure" (Alam, 1995, p. 430).

**Power Distance ** According to Hofstede (1997,p. 28), power distance refers to "the extent to which the less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally." In high power-distance countries there is considerable dependence of subordinates on their superiors in the form of paternalism. Paternalism is a system by which superiors provide favors to subordinates in return for their loyalty. Decisions are not made on the basis of merit, but on the basis of a balance of favors and loyalty. A paternalistic system thus leaves considerable room for **corruption** in the form of favoritism and nepotism. Takyi-Asiedu (1993) has specifically linked power distance to **corruption** in sub-Saharan Africa. He found that in high power-distance countries, "scandals involving people in authority are, almost always, covered up as long as they remain in power" (Takyi-Asiedu, 1993, p. 92). These cover-ups are a logical consequence of the loyalty of subordinates. This predicted relationship accords with the expectation of the majority of experts in the study by Cohen, Pant and Sharp (1996,p. 58) that people from a high power-distance **culture** would be more likely to view a questionable business practice as ethical than people from a low power-distance **culture**. Accordingly, one would expect that people from a high-power distance country would tolerate corrupt practices more than would people from low power-distance countries. Thus, we hypothesize: //Hypothesis 4: The higher the power distance in a country, the higher the level of **corruption** in a country. //

**Individualism vs. Collectivism ** The individualism-collectivism dimension refers to the extent to which decisions about a person's life are determined by the individual or by the ingroup -- a person's circle of family, friends, or peers. In the study by Cohen, Pant and Sharp (1996), the panel experts thought that the relationship of individualism to the evaluation of a practice as ethical depended on the specific practice in question. Several authors have seen a relationship between collectivism and **corruption**...LaPalombara (1994,p. 332) notes that high collectivism is a particularly difficult structural condition to change because "persons in both the public and the private sectors will often not hesitate to violate written laws, particularly if they are interpreted to run counter to older and powerful moral codes." We would thus expect: //Hypothesis 5: The less individualistic (more collectivistic) a society, the higher the level of **corruption** in a country. //

**Masculinity-Femininity ** Masculinity is a dimension that refers, among other things, to a focus on "material success" as opposed to a concern with the "quality of life" (Hofstede, 1997, p. 82). Gonzalez-Fabre (1996,p. 60) has noted that in Venezuela, grand **corruption**, as opposed to petty **corruption**, is usually motivated by a desire for "the personal accumulation of riches." One would expect that this focus on material success would, in some cases, lead to a greater willingness to participate in corrupt transactions in the pursuit of material success. Zafiatu (1996) also attributes **corruption**in Chile to the desire for material gain...However, Vitell, Nwachukwu and Barnes (1993,p. 758) predict that countries high in masculinity will be less likely to perceive ethical issues in business practices than practitioners from countries with low levels of masculinity. A higher tolerance in the perception of ethical issues in questionable business practices would create more space for practitioners to accept corrupt practices. Thus, we may hypothesize: //Hypothesis 6: The greater the masculinity of a **culture**, the higher the level of **corruption** in a country. //

**<span style="font-family: 'Arial','sans-serif';">Uncertainty Avoidance ** <span style="font-family: 'Arial','sans-serif'; font-size: 13.3333px;">Hofstede (1997,p. 113) defines uncertainty avoidance as "the extent to which members of a **culture** feel threatened by uncertainty or unknown situations." It reflects a certain intolerance for ambiguity within a given **culture**. **Corruption** can be viewed as a mechanism to reduce uncertainty. In situations where outcomes are uncertain, **corruption** may serve to secure a more certain result. For example, Alam (1995,p. 422) describes how government officials in passport offices "create the potential for illicit gains by causing delays and uncertainty in the processing of applications." Rashid (1981) has argued that bribery reduces uncertainty in the contracting of utility services in egalitarian third-world countries. Thus, we hypothesize: //<span style="font-family: 'Arial','sans-serif'; font-size: 13.3333px;">Hypothesis 7: The greater the level of uncertainty avoidance in a nation, the higher the level of **corruption**. //

<span style="font-family: 'Arial','sans-serif'; font-size: 13.3333px;">** It appears that some sort of mutual causation may exist between income inequality and corruption. ** The basic intuition behind this relationship is that the existence of a more equal distribution of **wealth** reflects the existence of a middle class that can act to protect its interests through the organization of interest groups. Such groups weaken particularistic demands which tend to promote **corruption** (Scott, 1972).


 * Husted, Bryan W. (2002) Culture and International Anti-Corruption Agreements in Latin America [|Journal of Business Ethics][| Volume 37, Number 4]**


 * Husted, Bryan W. Culture and International Anti-Corruption Agreements in Latin America**


 * Husted, Bryan W. and David Allen. (2003) Toward a Model of Cross-Cultural Business Ethics: The Impact of Individualism and Collectivism on the Ethical Decision-Making Process. From the issue entitled "The European Identity in Business and Social Ethics - The EBEN 20th Annual Conference in Leuven"**


 * Husted, Bryan W. (2003) Governance Choices for Corporate Social Responsibility: to Contribute, Collaborate or Internalize?**


 * Swamy, A., St. Knack, Y. Lee and O. Azfar (July 1999), "Gender and Corruption." Draft Paper, IRIS Center, University of Maryland**

[|JA66 .F85 2004]) ...the neopatrimonial regime, usually embodied in the office of the president, exists side-by-side with a Weberian rational bureaucracy, oftern created in colonial times, that seeks to perfomr routine public administration tasks. The neopatrimonial network is often threatened by the existence of the moderen state sector and is its competitor for resources. The dual nature of such an African state meant that donor-imposed stabilization and structural adjustment programs during the 1980s and 1990s had an unintended and counterproductive effect. The international lending community called for cutbacks in state scope through implementation of orthodox adjustment and liberalization programs, but given their ultimate political dominance, neopatrimonial regimes used external conditionality as an excuse for cutting back on the modern sgtate sectors while protecting and often enxpanding the scope of the neopatrimonial state. Thus, investment in basic infrastructure like roads and public health declined dramatically over a twenty-year period, as well as investmentd in primary education and agriculture. At the same time, Spending on so-called sovereignty expenditures like military forces, diplomatic servides, and jobs connected to the office of the presidendy increased dramatically.No international lender of bilateral donor at any time wanted this outcome, yet none were able to structure their conditionality in a way to prevent it from happening because of their inability to control local political outcomes.(pp.16-17)
 * Francis Fukuyama. (2004). State-building : governance and world order in the 21st century. Ithaca, NY: Cornell University Press** ( Hammermill

Holding government agencies accountable to the public is to some extent a matter of institutional design and internal checks and balances, but ultimately it is the people whom government supposedly serves who are responsible for monitoring its performance and demanding responsive behavior. Society organized into cohesive groups - whether in the form of parent-teacher associations (PTAs), watchdog groups, or advocacy organizations - is much more likely to demand and receive accountability than one consisting of disorganized individuals. On the other hand, civil society can degenerate into rent-seeking interest groups whose goal is not greater accountability but an increase in the scope of government subsidies or the substitution of government for civil society. Which of these outcomes prevails depends less on institutional design than on the nature of civil society itself. (p.30)

Cultural values are indeed shaped by education, leadership, and interaction with other societies. They change over time...[technocrats educated in Europe and the US] bring with them professional values regarding transparency and accountability that have spillover effects in their own countries. But the time necessary for society-wide change is long, and inn the short run cultural values can be changed only on a micro-level - in individual organizations, schools, or villages. (p.32)

The contradiction in donor policy is that outside donors want both to increase the local government's capacity to provide a particular service like irrigation, public health, or primary education, and to actually provide these services themselves. While many donors believe they can work toward both goals simultaneously, in practice the direct provision of services almost always undermines the local government's capacity to provide them once the aid program terminates. (p.40.)

...when the external aid agency bypasses the local government, the local government's function is less one of service provision than of liaison and coordination with the foreign donor. The local bureaucracy learns the wrong kind of skills, never takes ownership of the health care activity, and often sees many of its most skilled people leaving to work for the outside donor. The difference in resources available to the local government and to the outside donor is almost always enormous and means that the latter will often be marginalized in decisionmaking about the project's goals and implementation.(p.41)

"All delegation involves a tradeoff between efficiency and risk, and both the degree of risk and the appropriate level of delegation are often difficult for organizations to determine. (p.51)

General knowledge of foreign administrative practices need to be combined with a deep understanding of local constraints, opportunities, habits, norms, and conditions. This means that administrative and institutional solutions need to be developed not just with input of buy-in from the local officials who will be running local institutions, but by them...If we really want to increase the institutional capacity of a less-developed country, we need to change the metaphor that describes what we hope to do...we should be arriving with resources to motivate the natives to design their own factor and to help them figure out how to build and operate it themselves. Every bit of technical assistance the displaces a comparable capability on the part of the local society should be regarded as a two-edged sword and treated with great caution. Above all, the outsiders need to avoid the temptation to speed up the process by running the factory themselves. (p.88)

DC: Fukuyama suggests that the optimal method for achieving this kind of interaction with the "native" organization one intends to build is through direct grants to the governing authority, such as those allocated through the Millennium Challenge Account. He further states that positive outcomes in these cases rely heavily on recipient demand for the proffered assistance as well as a lack of micromanagement of the process and the funds once the assistance has been rendered.

Since the 1990s, international organizations, such as NATO, the UN, and African Union, with the strong military support of the US and European countries, have engaged in "humanitarian" activities in a number of weak and failed states that under the Westphalian view violate state sovereignty. Fukuyama points out that "Some people like to draw a sharp distinction between interventions for the sake of promoting human rights within a country and interventions to prevent security threats to other countries, and say that only the former are legitimate grounds for the violation of sovereignty. This distinction is questionable because it presumes that self-defense is somehow less legitimate than the defense of others. In any case, these issues often overlap in practice because the governments that commit human rights violations often also threaten their neighbors or are too weak to prevent such threats and abuses from arising." (p.98)

In the US this effort has come to be known as "nation-building." This terminology perhaps reflects the national experience, in which cultural and historical identity was heavily shaped by political institutions like constitutionalism and democracy. Europeans tend to be more aware of the distinction between state and nation and point out that nation-building in the sense of the creation of a community bound together by shared history and culture is well beyond the ability of any outside power to achieve. (p.99)

[T]he rhetoric of the international community stresses "capacity-building,"...including the vast number of NGOs that are n intimate part of it, comes so richly endowed and full of capabilities that it tends to crowd out rather than complement the extremely weak state capacities of the targeted countries. This means that while government functions are performed, indigenous capacity does not increase,m and the countries in question are likely to revert to their former situations once the international community soles interest or moves on to the next crisis area. (p. 104)

The big arguments are not over the principle of sovereignty per se, which few people are willing to defend in a pure form any longer. It is clear that not all sovereignties are created equal and that poor governance contributes directly to downgrading of the international community's respect for a country's sovereignty...The argument among members of the international community today focuses instead on the question of who gets to decide on whose sovereignty to violate, and on what grounds. (p. 105)

For well over a generation, the trend in world politics has been to weaken states. The trend has been to turn over to the market or to civil society functions that have been improperly appropriated. At the same time, the growth of the global economy has tended to erode the autoaomy of sovereign nation-states by increasing the mobility of information, capital, and, to a lesser extent, labor....Those who have argued for a "twilight of sovereignty" - whether they are proponents of free markets on the right or committed multilateralists on the left - have to explain what will replace the power of sovereign nation-states in the contemporary world. (p.120) On the other hand, the kind of traditional military power we associate with nation-states is clearly not sufficient to meet their needs. (p.121)


 * Leite, C. and J. Weidmann (1999), "Does Mother Nature Corrupt? Natural Resources, Corruption, and Economic Growth", International Monetary Fund Working Paper, 99/85, July.**

**ILL e-version** http://mercyhurst.illiad.oclc.org/illiad/illiad.dll?SessionID=S193316646B&Action=10&Form=64
 * Treisman, D. (1999a), "The Causes of Corruption: A Cross-National Study." Unpublished manuscript, University of California, Los Angeles, June.**


 * Gupta, S., H. Davoodi and R. Alonso-Terme (1998), "Does Corruption Affect Income Inequality and Poverty?" International Monetary Fund Working Paper, No. 98/76, May.**


 * Francis Fukuyama (1995). Trust: The Social Virtues and The Creation of Prosperity**


 * Scott, J.C., Comparative Political Corruption (Englewood Cliffs, NJ: Prentice Hall, 1975) ** Hammermill [|JF1081 .S35 1972]

//The answer to the question posed in the title is "no." There is no evidence that less corrupt governments receive more foreign aid. Our vast exploration of the data never uncovered any even weak evidence of a negative effect of corruption on received foreign aid. The same result applies to debt relief program, an additional form of aid. We found significant differences across donors. Scandinavian donors (the most generous in per capita terms) do reward less corrupt receivers. On the other hand, the United States appears to favor democracies, but seems to pay no attention to quality of government of receiving countries. Finally, we find indications of a "voracity effect" of foreign aid.// **Lambsdorff (below) indicates that the US tends to favor corrupt countries in providing aid.**
 * Alesina, A., & Weder, B. (2002). Do Corrupt Governments Receive Less Foreign Aid? //The American Economic Review//, //92//(4), 1126-1137.**

//Data on the perceived level of corruption from a cross-section of countries have been fruitfully introduced into empirical research lately. This study reviews a large variety of studies on the consequences and causes of corruption. It includes research on the impact of corruption on investment, GDP, institutional quality, government expenditure, poverty and international flows of capital, goods and aid. Research on the causes of corruption focuses on the absence of competition, policy distortions, political systems, public salaries as well as an examination of colonialism, gender and other cultural dimensions.// [C]orruption increases inequality in education and land distribution. Since these variables contribute to income inequality (and had been controlled in the first regression) the overall impact of corruption on income inequality may even be stronger...But whether the causality actually moves in a direction from corruption to inequality has been questioned by Husted [1999: 342-3], who argues that inequality also contributes to high levels of corruption. This has also been suggested by Swamy et al. [1999]. Moreover, both variables might be driven by cultural determinants. Acceptance of authority and low accessibility of people higher in hierarchy may increase inequality and corruption at the same time.
 * Lambsdorff, J. (1999, November). Corruption in Empirical Research: A Review.**

Another related contribution was made by Tanzi and Davoodi [1997], who examine the impact of corruption on the quality of investments. The quality of investments plays an important role in the productivity of capital and, hence, GDP. Referring to panel data on corruption from PRS for 1980-95, the authors suggest that corruption lowers the quality of the infrastructure as measured by the condition of paved roads and power outages. They support their hypothesis by reporting a high significance in their statistical results. However, based on own regressions for a cross-section of countries using the TI index for 1998 it was not possible to reproduce the significant results. This sheds some doubt on the robustness of the findings to different methodologies.

Brunetti and Weder [1998b] show that **a free press effectively deters corruption**.

The impact of merit-based recruitment on corruption in 35 developing countries has been investigated by Evans and Rauch [1996]. Higher values in the merit- based recruitment index are associated with a greater proportion of higher-level officials in the core economic agencies to be either in possession of a university degree or to enter the civil service through a formal examination system. While controlling for income, this index is negatively associated with corruption. To what extent the level of public sector salaries is linked to the amount of corruption was examined by Rijckeghem and Weder [1997]. They argue that **low salaries force public servants to supplement their incomes illicitly while high salaries mean higher losses if a public servant gets caught**. Corrupt countries tend to have a poor budgetary performance or may subscribe to the view that civil servants earn sufficient income from corruption and may reduce civil service pay as a consequence.

La Porta et al. [1997: 336] argue that **trust can be helpful in fighting corruption, since it helps bureaucrats to better cooperate with each other and with private citizens**. In a sample of 33 countries, the authors show that trust has a significant negative impact on corruption, while controlling for GDP per head.

Also the role of religion in contributing to the level of corruption was examined by La Porta et al. [1997: 337]. T **he authors consider the Catholic, Eastern Orthodox and the Muslim religion to be particularly hierarchical - and that such hierarchical forms of religion are detrimental to civic engagement, a factor which should help reduce corruption**. For the same sample of 33 countries mentioned above, the authors report **a positive association between the percentage of population belonging to a hierarchical religion and corruption**, controlling for other influences. For a larger section of 114 countries this relationship is reproduced by La Porta et al. [1999: 251-2]. But here the relationship becomes rather weak as soon as GDP per head is included. A strong association between religion and corruption is obtained by Treisman [1999a]. He regresses corruption on the percentage of Protestants in the total population in a sample of up to 64 countries and obtains a highly significant negative impact of this index on corruption, controlling for other variables such as GDP per head. A more in-depth analysis of the impact of religion is provided by Paldam [1999b]. He identifies 11 different groups of religions and tests their impact on corruption, controlling for other variables. **While in countries with a large fraction of Reform Christianity and Tribal religion corruption is lower, higher levels of corruption can be found in countries with a large influence of Pre- Reform Christianity, Islam, Buddhism and Hinduism**. However, the impact is only significant for Reform Christians (Protestants and Anglicans).

In line with the argument by La Porta et al., the idea that hierarchies contribute to corruption has been supported by Husted [1999 ], who uses a totally different set of data. Based on the surveys by **Hofstede** [1997], he employs the resulting data on cultural values. One variable defined there is called " **power distance** " which measures "the extent to which the less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally", [Husted 1999: 343]. **This variable is shown to have a positive impact on the level of corruption in a sample of 44 countries** in various regressions, while controlling for other explanatory variables. Concomitant with this indicator, **two further cultural variables positively and significantly impact on the level of corruption** : **first, the extent to which the quest for material success dominates over a concern for the quality of life and, second, the extent to which members of a culture feel threatened by uncertainty or unknown situations**. The latter variable must clearly be distinguished from risk avoidance, which might be expected to lower corruption. The idea is that corruption may give its beneficiaries the hope of reducing the level of uncertainty they face. But statistical support for this hypothesis still comes as a surprise because avoiding uncertainty should also give third parties who suffer from corruption the incentive to fight it.

The impact of gender on corruption, another aspect which is treated here as a cultural dimension, has also been investigated recently by Swamy et al. [1999] and Dollar et al. [1999]. The authors determine the **percentage of women in the labor force and in parliament. Both indicators negatively impact on the level of corruption in a cross-section of up to 66 countries**. The influence is large in magnitude, highly significant and robust throughout a large variety of regressions, controlling for various variables. These findings are in line with some micro-evidence reported by Swamy et al. and **suggest that policies designed to increase the role of women may help in lowering the level of corruption.**

According to Treisman, ** former British colonies exhibit lower levels of corruption than other countries **, controlling for the level of income per head and various other variables, for example the existence of a common law legal system. This result is reproduced by Swamy et al. [1999]. Both studies found that colonies of other countries do not exhibit the same reduction in the level of corruption.

**Leite and Weidemann [1999]** argue that **abundance of natural resources creates opportunities for rent-seeking behavior and gives rise to corruption**. They measure the first variable as a countries exports of fuels and minerals as a share of GNP. This variables is found to significantly increase the level of corruption in a cross-section of 72 countries, controlling for income in 1970. The results appear to be robust for a variety of specifications.

Another dummy variable tested by Treisman indicates **whether separate police forces exist both at central and subnational levels**. Treisman argues that in this case regulatory authorities overlap, providing incentives for the police to "overgraze" by excessively extorting bribes. ** This variable turns out to significantly increase the level of corruption. **

//Trust promotes cooperation, especially in large organizations. Data on government performance, participation in civic and professional societies, importance of large firms, and overall performance of different societies support this hypothesis. Furthermore, trust is lower in countries with dominant hierarchical religions, which may have deterred the formation of "horizontal networks of cooperation" among people. Despite economists' skepticism (see Robert Solow, 1995), theories of trust hold up remarkably well when tested on a cross section of countries.// This paper asks, "What are the forces that encourage the formation of trust?"
 * La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. (1997). Trust in Large Organizations. //The American Economic Review//, //87//(2), 333-338.**

In sum, trust enhances economic performance across countries...** Trust has a relatively small but significant effect on infrastructure quality and adequacy **, a significant effect on infant mortality, and a larger effect on the measures of educational achievement.

Fukuyama...argues that, for firms in particular, trust replaces another mechanism of cooperation - the family. He believes that family strength is detrimental to the growth of firms...Consistent with Fukuyama's argument, strong family ties are bad for the development of large firms.

According to Putnam (1993), trust is a habit formed during a centuries-long history of "horizontal networks of association" between people, covering both commercial and civic activities.


 * Lapalombara, J. (1994). Structural and Institutional Aspects of Corruption. //Social Research//, //61//(2), 325-350.**
 * Corruption Defined: ** Behavior by a public servant, whether elected or appointed, which involves a deviation from his or her formal duties because of reasons oi personal gain to himself or herself or to other private persons with whom the public servant is associated. Corruption, however, requires two or more parties to a transaction, at least one of whom holds a position of public trust and/or exercises a public role, and another (or others) of whom acts in a private capacity. The latter may be, of course, individual persons, legal persons in the private sector (such as banks, corporations, trade unions, or formal associations), or collectivities, such as a tribe, ethnic group, extended family, political party or club, and so on. The first point is that for corruption to exist, there must occur a deviation from a public role.


 * Corrupt "Behavior:" ** may be either passive or active. That is, it may include a failure to act on the part of a public official—as in cases where existing laws or regulations are not enforced or are enforced only in part, or selectively, in order to favor the other person, persons, or organizations involved in the transaction. It goes without saying that a great deal of corruption, especially when it involves bureaucrats and regulators, is of this latter variety.

An even more pernicious structural condition that encourages corruption, and one that is often overlooked by international lending institutions, is the sheer powerlessness of many governments. Westerners in particular fall into the posture of believing that if a national government exists, it should be able to keep domestic corruption in check. However, in many countries—today as well as in past years—it is already a near miracle if a national government can boast a minimally effective police force, to say nothing of a national bureaucracy capable of collecting taxes in a systematic way. In these circumstances, even were public authorities inclined to enforce existing laws against corruption, they simply lack the manpower, the sophistication, and the institutional means of doing so (LaPalombara, 1971, pp. 205-32).
 * Impediments to Anti-Corruption Law Enforcement: ** In some countries, the newer laws may run counter to deeply and widely held values. One thinks of such values as obligations to one's family, tribe, ethnic group, or geographic region. Where it exists, this structural condition is formidable, in that persons in both the public and the private sectors will often not hesitate to violate written laws, particularly if they are interpreted to run counter to older and powerful moral codes (Scott, 1972, pp. 10-13).

**Effective Enforcement:** If corruption is to be managed and/or reduced anywhere, at least two necessary conditions must be met. First, the state must be a credible enforcer of laws—not merely of the law of contracts but the criminal laws as well. The criminal laws would address not only organized crime but also types of white-collar crime with which a great deal of contemporary political corruption is associated. Second, persons and organizations in the private sector must refrain from tendencies to use access to and influence over governments as a comparative advantage in the market place. Where either of these conditions is wanting, there will almost certainly develop an informal and perhaps extra-legal system of power and influence that degenerates into corrupt behavior.

**Additional Thoughts on Corruption** [T]here is manifestly an enormous difference between offering a village magistrate a small gift in appreciation of a decision made in one's favor and, say, the wide-spread practice of kicking back five, ten, or fifteen percent on a large-scale project involving public procurement. This being said, it remains an important consideration whether, whatever may be the range of behavior defined as corrupt in any political jurisdiction, governmental authority has the necessary human and organizational capability to deal adequately with the problem.

In effect, those who manage to win the political struggle for power wind up writing the rules for the system involved (Lindblom, 1977)." In so far as this is in fact the case, we can understand why, without falling into philosophical relativism, definitions of corruption would tend to vary across time and space.

In effect, it is the scale and scope of government, and not whether or not the masses participate in politics, that brings about a quantum change in the opportunity structure of corruption.

"Constant argues, in effect, that if the masses are given political rights, they will use these aggressively to acquire property, which becomes in itself an impulse to corruption. Pareto also underlines structural conditions that lead to corruption in mass societies. See Constant, 1957, p. 1113; Pareto, 1964, pp. 277-78, 691-92. ** Why can it not be that given political rights and the capability to develop economically, they will use this leverage to hold leaders to higher standards? **

**Hegemonic Politics** Another inducement to corruption is hegemonic politics. Stated axiomatically, we might say that the incidence of corruption will incline to increase in direct proportion to the number of uninterrupted years the same political party remains in control of government. Obviously, this tendency will be conditioned and moderated from place to place, depending, for example, on the autonomy and role of the press, the powers of oversight and investigation of the legislature and the judiciary, and so on. But the axiomatic principle is a simple extension of Lord Acton's oft-quoted aphorism about the corrupting influence of the mere exercise of power.

**Nationalist Contributions to Corruption** Nationalism can also encourage corruption within developing countries that are multi-ethnic or multi-racial. In many of these, laws are often passed that make it difficult or impossible for some of these minorities legally to own property or to engage in business and commerce. The Chinese in several Southeast Asian countries and persons from the Indian subcontinent who reside in other Asian or African countries are prime examples of such discriminated minorities. Precisely because they are already in business and commerce, and/or because they are wealthier than others, they typically find the ways and means, almost always corrupt, of overcoming this type of handicap...Some of Italy's industrialists now claim that they were "forced" into these corrupt relationships as a condition of doing business with the state. Be that as it may, it was certainly hegemonic political control that made this corruption possible.

Where political hegemony prevails, where alternations in government cannot or do not occur or do not bring the opposition effectively to power, we will encounter the most pernicious instances of market corruption. In this scenario,** the state literally sells to the highest bidder the material or symbolic things it controls and allocates. All countries at some point in their development have experienced this type of corruption; the building of railroads in Britain or of railroads and canals in the United States, the development of the steel, petroleum, chemical, and other basic industries in Europe and America offer monumental examples of this form of corruption. **
 * Market Corruption **

**Potential Solutions** Indeed, the Journal of Business Ethics (born in 1982) contains numerous contributions that seek to make a point that, were it possible to demonstrate it as true, many corporate managers would find highly attractive. It is that **ethical behavior that in the long run carries at least as many benefits to the manager and the corporation as does its antithesis. How to make this case to corrupt African leaders???** Actually, the author admits in the Endnotes that Donaldson, the main "Business Ethics" guy, admits that " the evidence that ethical behavior on the part of the firm pays dividendsis, at best, sketchy"