The Supply Side of Global Bribery

• Author: Frank Vogl
• Position: President of Vogl Communications, Inc., Washington, D.C. and Vice Chairman of Transparency International, Berlin, Germany

Discussions of how to combat corruption have focused more sharply on the recipients of bribes than on those who pay them. A more balanced approach, which is emerging, promises to make anticorruption efforts more effective.

WHEN the talk turns to corruption, the news media and most international institutions (whether official or nongovernmental) focus on the demand side of the equation: on public officials who abuse their office for private gain. Frequently, the supply side is given less attention. Those who pay bribes are sometimes depicted as innocent parties, forced by ruthless officials to provide kickbacks and do special favors in return for business.

The reality is that both parties to corrupt practices conspire to defraud the public, to undermine fair trade, to waste resources, to frustrate development, and often to increase human suffering.

For example, suppose a European supplier of pharmaceuticals does a deal with a minister of health from a developing country that has received emergency funds from an aid agency to purchase urgently required medicines. Instead of agreeing on a purchase of new drugs, the minister and the supplier conspire to use the aid funds to purchase out-of-date drugs, which are far cheaper. The supplier consequently makes a handsome profit and places a portion of it in an offshore bank account set up by the minister. Many of those in the minister's country who are sick receive the old, less effective drugs and die.

Current anticorruption efforts

Today, many organizations are assisting governments to curb corruption and build more transparent institutions. Initiatives are being launched to create a free press and a politically independent judiciary capable of investigating corruption and prosecuting corrupt individuals or firms. Efforts are under way to create effective offices of auditors general, honest and accountable revenue collection services, and more open public procurement processes, and to undertake many other institutional reforms to make life tougher and riskier for corrupt officials.

While government officials and the public at large in developing countries are increasingly embracing these initiatives, there is a widespread sense in these countries that the efforts of the international community lack balance. Too often the new anticorruption zeal appears uniquely directed at public officials who take bribes and at corrupt systems in the developing countries and the countries in transition in Eastern Europe and Central Asia. Meanwhile, bribe givers appear to remain undisturbed.

Many bribes paid in the course of international commerce originate in firms headquartered in the same industrial countries whose governments are now, more than ever, calling for new anticorruption campaigns in developing countries. There is a hollow ring, for example, to declarations of support by German foreign aid officials for anticorruption initiatives in Africa when Germany has no laws on the books to bar its enterprises from paying foreign bribes and permits them to be deducted from German corporate taxes.

Government and civil society leaders in developing and transition countries who challenge corrupt systems, and even corrupt leaders, in their countries display enormous courage. Building anticorruption movements takes skill, patience, and determination. There is no question that reforms in many countries would be strengthened if there were more visible evidence that leading international organizations and Western governments were evenhanded in their anticorruption campaigns, attacking the bribe givers with just as much force and fury as they now use to attack the bribe takers.

The lack of perceived balance in anticorruption efforts weakens the hand of the reformers, and those who support them, in many countries, but is this perception justified?

Is it accurate to suggest that the bribe givers continue to lead largely risk-free lives?

Is it stretching the truth to suggest that the lack of action against the bribe givers by the governments of leading industrial countries amounts to tacit support of bribe giving by these governments?

Or is a lot actually being done about the bribe givers as well, but the broad public, especially in developing and transition countries, is just poorly informed about such efforts?

These are important questions, and the ways in which they are answered in particular countries...