Is bribery ever justifiable?
Dillon Harindiran
Whether received by public official or private interest, the act of bribery is broadly defined, within the Bribery Act of 2010, as a payment or promise of future payment, pecuniary or otherwise, to alter the behaviour of the receiving party in a way that would lead to an improper execution of their function within state affairs or private business. The act of bribery, regardless of political positioning, is widely accepted as being unfair, anti-competitive and immoral. However, in order to fully judge the means by which it is deemed wrong, we must consider both its economic and moral implications for society, business and state with regards to its effects domestically and internationally. The normality of an action is incredibly subjective and changing in nature. Variations in cultures, both geographically and across differing periods in time, create diverging ÂnormsÊ. Thus, the normality of an act such as bribery must be considered within the context in which it is committed. It is also important to understand that the normality of an action is broadly defined by the frequency with which it is committed and, furthermore, that the balance of the perceived, expected costs and benefits of embarking on a bribe are the sole factors by which a rational economic agent may judge bribery to be in his own interests. Thus in order to examine what makes bribery normal we must also examine the factors that affect the perpetration of the act e.g. the costs and benefits of committing bribery. Economic theory suggests that the firms best able to sate their consumerÊs wants, through the efficient and cost-effective provision of goods and services, will be the most profitable in the law-abiding market. Those that are unable to do so will be outcompeted by those that can and thus the market, through altering profitability, promotes the
most efficient firms that are, to the greatest extent, best able to benefit the welfare of consumers. The act of bribery is committed to expedite business transactions and dealings, secure deals at lower costs, circumvent regulation within respective industries and broadly gain an advantage over competitors. A firm that ÂwinsÊ contracts through bribery does not tender them through its ability to cost effectively meet the needs of the contractor, nor does a firm attempting to circumvent regulatory burdens, through the bribery of state officials, reduce its costs through greater efficiency. A firm that displaces others through bribery does so by illegitimately reducing its own costs, whilst indirectly exerting costs on the rest of society and other firms. Its competitors find themselves unable to access the same opportunities despite being as deserving of them, if not more so, and may, as a result, be forced to bribe as well. Firms that do not bribe must pay more for the goods and services that they require and must accept lower profits for those that they sell. Relatively, they face higher operating costs and lower revenues than firms that bribe, despite potentially being more efficient and socially beneficial. In such a scenario we may find that law- abiding firms are outcompeted and driven out of the market by firms that bribe. Thus, through bribery, the market, which was formerly meritocratic, has been distorted such that the most profitable and dominant firms are no longer those that most benefit social welfare, but are instead those that are most willing and able to bribe. Hence, outcomes achieved by bribery are not driven by relevant and deserving factors but by selfish motivations, undermining competitive market forces and reducing the free-marketÊs inherent meritocracy.
41
Made with FlippingBook - Online Brochure Maker