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If money is the root of evil, are developed countries doing enough about the problem of bribes paid in the developing world?

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It is a fact that many of the countries which suffer the most from corruption are the countries which have the fewest resources to combat the problem.  Poor countries may be faced with a dilemma of using resources to prosecute the corruption which degrades the quality and quantity of public goods that reach their citizens, or using resources to provide those basic goods, such as food aid and roads.

At the same time, larger bribes are not infrequently paid by outsiders, such as foreign corporations.  Casual observation shows that funds must be coming from outside some of the poorest countries.  In short, the bribe money is flowing from the developed world into the developing world.  

 A few developed countries, such as the United States, have showed a strong and increasing commitment to the extra-territorial application of their anti corruption laws.  The United Kingdom appears poised to launch an offensive in that direction under its new Anti Bribery law, which aims at any commercial organization that has a “business presence” in the UK. 

Not only is enforcement spreading through more enforcers, some say it is widening its tentacles to ensnare actors with more tenuous connections to the enforcing jurisdiction.  U.S. authorities have faced criticism along these lines.  These observations raise questions.  Are we indeed witnessing the start of a trend of extraterritorial enforcement?  If so, why is this cause for concern?  What are the costs and benefits?

Is addressing corruption by holding the bribe payers accountable in their own lands the most promising way to get to the root of the problem?  Some commentators have categorized procurement corruption under three headings:  demand theories (in which the government agent behavior is the focus); supply theories (in which supplier firms, often multinational corporations are the central determinant); and ethics-based theories (where self-regulation by the actors is key). 

While resistance on all fronts is desirable, perhaps concentrating on the supply angle is the more effective way to target anti-corruption resources.  In other areas of law enforcement, such as the narcotics trade, societies appear to have made more progress by focusing on the suppliers rather than the consumers (who in this case are the agents in developing countries who accept bribes).  Is the corruption market similar?  If developing countries do step up extra-territorial enforcement, what effect would that have on the anti corruption systems of the developing nations?


Jeanne M. Hauch

Senior Investigator, East Asia Pacific Team. INT

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