Corruption as a business affair

Schumpeter column in The Economist on business corruption in the world, which is naturally worse in New Core countries like China and worst in Gap countries.

Recent World Bank study says that those who succumb typically end up spending more times negotiating with partners and bureaucrats, so the "efficient grease" theory doesn't hold.

Worse, it is corrupting for all involved.  Many businesspeople compare it to an illicit affair or cheating on their spouses:  once you start the lying, it takes over, especially since once you get the rep, they bribe-demanders just keep on coming.  Pretty soon you are "trapped in a world of secrecy and guilt."

But if you avoid such stuff:

Texaco, an oil giant now subsumed by Chevron, has such an incorruptible reputation that African border guards were said to wave its jeeps through without engaging the ritual shakedown.

So if you don't want to suffer corruption, present yourself as incorruptible.

America used to feel like the Lone Ranger on this one, with its Foreign Corrupt Practices Act.  Legend had it that our businesspeople were disadvantaged.  But 38 countries have now signed the OECD's 1997 anti-corruption convention.

A long-term evolution, no doubt, but moving in the right direction.