Corruption is an ethical issue redefined according to legal grounds. In definition, the factors associated with corruption are political in nature, “ends and justifications of political power as to the ways it was used and pursued” . Corrupt practices make use of power as a means to achieve a certain gain; bribes are considered a source of power that can lead to results meeting the interests of the parties involved. There are many corrupt practices spanning across individual and institutions.
Corrupt practices include bribery, personal favours, extortion, implicit understandings, and others. In the political aspect, corruption is more prevalent and defined according to the channel in which it takes place, usually using the public office in order to initiate such transactions and activities in a more “protected” environment. According to the OECD, the organisation does not define corruption but basically it enumerates and establishes an understanding as to what would count as corrupt acts .
These acts include trading in influence and bribing; the OECD also acknowledges the definition of the UN Conventions which include ’embezzlement, misappropriation or other diversion of property by a public official and obstruction of justice’ ; the OECD also cited common concepts of corruption include abuse of power and position, and self-enrichment. In international business transactions, corruption takes place when a company aims to enter an international market; the intention for such is to expand its market and business reach.
Since that these foreign markets are protected by legislation, or at least, governed by local policies, the bureaucracy implemented enable a number of inconveniences to the company entering the country. Hence, what happens is that those who play the role of gatekeeper can become corrupt by means of imposing more demands to the firms trying to entry their market. These demands come various forms, from favours to bribes.
Corrupt practices are enabled because of the identified need of a party that has the capacity to fulfil the demands of the corruption; in turn, the corrupt practices are taken further through actual actions that provoke the instigation of bribes, among others. 2. 2 What is Bribery? The online Britannica Encyclopaedia presents the following definition of bribery in the aspect of law: … the act of promising, giving, receiving, or agreeing to receive money or some other item of value with the corrupt aim of influencing a public official in the discharge of his official duties.
When money has been offered or promised in exchange for a corrupt act, the official involved need not actually accomplish that act for the offence of bribery to be complete . In the OECD document Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, it described the prevalence of bribery as, … a widespread phenomenon in international business transactions, including trade and investment, which raises serious moral and political concerns, undermines good governance and economic development, and distorts international competitive conditions .
Although it may seem that a corrupt practice such as bribery may mainly have ethical implications, its impact to the overall economy and society is critical. First, a sense of mistrust takes place; when people think that their government officials are corrupt, and that their transactions will only go through corrupt arrangement, the people will no longer view their government with a sense of respect . In addition to the culture of corruption, a culture of mistrust also becomes present.
As a result, people also concede to these practices either by means of riding the corruption wave or they find means to have a share of this entire practice. Second, the economic impacts of bribery can be seen in the eventual ‘artificially inflated prices’; hence, through such mechanism, bribery gives way to increases in political and economic costs . Furthermore, the OECD also pointed out that bribery is ‘a serious threat to the development and preservation of democratic institutions. Not only does it undermine economic development, it also distorts international competition by seriously misdirecting resources’ .