In the same token, the Organization of Economic Cooperation and Development (OECD)
Guidelines for Multinational Enterprises dene extortion as:
The solicitation of bribes is the act of asking or enticing another to commit bribery. It becomes
extortion when this demand is accompanied by threats that endanger the personal integrity or
the life of the private actors involved (www.transparency.org/).
Corruption is considered as one of the biggest global issues of our time and the world’s
most talked about problem (Prevention, 2003;World Bank, 2001;Hearn, 1999;www.
transparency.org.uk/corruption/), hindering international business. For example, more
than two-thirds (69 per cent) of the 177 countries and territories surveyed by TI, ranked
in the 2013 Index score below 50 on a scale from 0 (perceived to be highly corrupt) to 100
(perceived to be very clean), where Brazil (scored 42), China (40), India (36) and Russia
(28) are clear examples. At the same time, the Arab spring countries continue to score
poorly (Yemen, 18; Syria, 17 and Libya, 15), underscoring the need for comprehensive
reform in those countries (Transparency International, 2013). Its effects are so pervasive
that in Europe, it is noted as “breathtaking” which costs the European Union (EU)
economy over €120bn (£99bn) annually (Juncker, 2014). Similarly, in Africa, the United
Nations disclosed that over $50bn is being stolen annually (Compact, UN Global, 2014;
Olatunji and Daniel, 2014). This indicates that corruption is perceived to be well
entrenched in the public sector in most countries.
The good examples from less corrupt economies by OECD countries,
notwithstanding, the USA scored 73 in its 2012 ranking, considerably lower than many
other OECD countries including Australia, Germany, the UK and Japan. The US
government was one of the rst countries to be proactive in dealing with corrupt
business practices by creating the US Foreign Corrupt Practices Act (FCPA) and has
aggressively stepped up the prosecutions of individual executives and organizations
that commit such crimes. In an effort to combat corrupt business practices, a number of
international organizations such as, the OECD, the International Monetary Fund and TI
are teaming up with the UN in their resolve to combat corruption and bribery. A
formidable tool against corruption is the creation of the United Nations Convention
against Corruption (UNCAC) in 2003 and its underlying legal instrument for the tenth
principle against corruption that came into effect on December 14, 2005.
The next section of the paper examines the extant literature on the nature and
magnitude of the fundamental global problem of corruption and bribery that continues
to hamper international business and economies. This is followed by an in-depth
examination of the effect and consequences of corruption and bribery on international
business, at both the micro and macro levels. Finally, as corruption and bribery has been
linked to poverty and its characterization as a human rights violation, the paper offers
specic action-oriented sustainable strategies to help mitigate against corruption and
bribery, thereby promoting international business and economic growth and
development beyond the Millennium Development Goals of 2015.
Review of extant literature
Pervasiveness of corruption
Business and corruption do not mix and one classic exemplar of corruption is bribery.
Corruption distorts investment climates, undermines competition and fair trade, inates
business costs and public contracts, discourages companies from entering new markets