Corrupt Transactions Research Articles

Коррупция и миллениалы: региональные практики поведения

The article is devoted to the specifics of corruption practices of millennials in the realities of the subsidized region. The relevance of the problem is due to the following points: heterogeneity of corruption, its evolution, ambiguity of the phenomenon of youth corruption. The article deals with the identification of the prevailing features of regional corruption behavior of millennials with their special qualities (clip consciousness, technological advancement, ambition, accelerated pace of life, lack of reflection, starting security, value virtuality). The analysis uses the results of sociological research, conducted in the Republic of Mordovia in 2007–2019. A wide spread of corruption experience, a fairly high level of regular corruption, the predominant number of corrupt transactions in strictly defined areas, the increase in the cost of corrupt behavior, and a contradictory assessment of the actions of the bribe taker and the bribe recipient were revealed. The article emphasizes the existence of a system of double standards, when one's own corrupt behavior does not have a negative connotation and considers to be forced, while another's behavior is evaluated as a socially dangerous act. The authors suggest that the corrupt behavior of millennials becomes functional and adaptive one.

The mother of corruption

A centralised wastewater treatment plant - one of the region’s largest - was to be built in Khlong Dan, Thailand, to process 525,000 m3 of wastewater daily. Staggeringly corrupt deals between politicians, public officials and businesspersons inflated land prices. Colluders were convicted following complaints by locals to the Asian Development Bank, a new prime minister and the pollution control department.

Partisanship, Impeachment, and the Democratic Primaries: American Political Discourse, January - February 2020

Partisanship, Impeachment, and the Democratic Primaries: American Political Discourse, January - February 2020

Entrepreneurship, trust and corruption

I propose a theoretical model where trust towards strangers is a channel through which institutions determine economic outcomes, in particular, entrepreneurship and corruption. More importantly, I show that the role of trust has been overlooked since high levels of trust do not always enhance desirable economic outcomes. Trust helps individuals to participate in economic exchanges aligned with social welfare, but it also facilitates individuals to cooperate for the achievement of corrupt deals. Under this more general view of trust, the model generates a non-trivial new prediction at the individual level. Specifically, the individual-level relationship between honesty and trust changes depending on the institutional quality of a country. Dishonest individuals are the more trusting individuals in countries with poor institutions, and the less trusting in countries with good institutions. Using individual-level data of 80 countries from the World Value Survey and the European Values Study, I present empirical evidence in support of this prediction.

Efecto de marco en un juego de coimas: La relevancia de la dimensión moral

Corruption is a phenomenon that involves moral components. Despite the general agreement about the involvement of a moral transgression in the characterization of corruption, it has been difficult to find clear evidence of the implication of the participant’s morality in their choices in bribery games. To signal the presence of norms, researchers have relied on negative externalities, punishment and frames, but they have yielded mixed or null results. In a bribery game framed in a neutral way Abbink, Irlenbusch and Renner (2002) showed that the participants were sensitive to the possibility of receiving sanctions, but not to produce negative externalities on the other participants in the session. The insensitivity to increasing degrees of externalities was also the result obtained by Barr and Serra (2009) in their neutral version of a single round bribery game. According to these results, games with abstract or neutral frames do not seem to have the aforementioned moral dimension, which questions their validity as instruments to study corruption. This study searched for evidence of a moral component in a bribery game. The experiment relied on two independent groups of participants (N=106) who played the game either framed in neutral terms or with options labeled with relevant semantic content (for example, offer a corrupt deal). In addition, selfish monetary incentives in the bribery game were increased across within-subject conditions, whereas the payoffs for making no transaction or for playing the Trust Game remained fixed. Finally, to assess the moral connotation of decision-making scenarios, participants were asked to complete (post-decision) a Machiavellian scale, which has been previously associated with different aspects of moral decision-making. The experiment managed to identify a robust frame effect for both Players A and B. Results showed that both potential bribers and potential bribees were significantly less prone to choose the corrupt transaction in the loaded frame than in the abstract frame. In addition, the tendency for corruption increased as the selfish monetary incentives involved in the corrupt transaction increased across conditions. Moreover, responses to the game showed individual differences in the level of Machiavellianism, as high Machiavellian scores were directly associated with corrupt offers, though only in the loaded frame. The data also suggests that the present game managed to capture the expression of pro-social preferences (the idea of social preferences is that individuals evaluate an outcome not only on the basis of its consequences for themselves, but also based on consequences to others). This was evident in the fact that, in general, participants avoided the option that generated negative externalities when there was an option without externalities that was equivalent in terms of personal gain. In addition, possible ways of improving the sensitivity of the bribery game to variables expected to be associated with corruptibility were presented. These suggestions could be followed in future studies. The discussion draws attention to potential practical implications of present findings, which suggest that targeting socially undesired actions using labels with morally negative nuances could be an effective mean to discourage people from choosing them.

How to Engage in Illegal Transactions: Resolving Risk and Uncertainty in Corrupt Dealings

AbstractHow do exchange participants address risk in illegal transactions? The socio-cultural literature examines risk from cultural, ‘risk society’ and ‘governmentality’ perspectives, but there is relatively little empirical work focusing on the ways in which people experience and handle risk in illegal markets. Drawing on insights from criminology, economic sociology and social psychology, this article aims to contribute to the study of risk and uncertainty under conditions of illegality. It investigates a popular type of corrupt exchange in China: the buying and selling of government positions that are embedded in the power-imbalanced patron–client relation. The article examines the difference in risk faced by buyers and sellers and explores how they manage these transaction risks without resorting to state protection mechanisms (e.g. the police and courts). The article is based on 61 in-depth interviews with academics, journalists and state officials and a review of official documents and news reports in Chinese and English.

The determinants of cross-border corruption

We reconsider the question of what determines corruption at the cross-national level, using new methods and data: observations of occurrences of cross-national corruption. We find that economic development and a small population is associated with lower levels of corruption, as are freedom of the press, political rights, the presence of established democratic institutions, the salience of women’s role in society, and low exports of natural resources such as oil. The particular structure of the data also allows for the first time to consider the “relational aspects” of corrupt relationships, which come to the fore when parties to the corrupt transaction, the briber and the bribee, reside in different countries. Overall, we find limited evidence that the relational factors that we consider affect corruption, beyond the effects that they often have on bilateral trade.

The Role of Professional Enablers in Commission of Organised Crime: The Kenyan Perspective

Transparency international state that the corrupt transaction is often enabled by professionals from many fields and that the corrupt intermediaries link givers and takers, creating an atmosphere of mutual trust and reciprocity; they attempt to provide a legal appearance to corrupt transactions, producing legally enforceable contracts; and they help to ensure that scapegoats are blamed in case of detection. A number of writers have down the years sought to elaborate on the link between professional elites and the occurrence of organised crimes of an economic nature. Most if not all have postulated that as a matter of fact, the organised crimes of an economic nature only succeed because of the aid of professionals, referred thus as professional enablers. These professionals are by virtue of their expertise able to smoothen the process of commission of the crimes. A lawyer will for instance use his position to execute real estate transactions as part of a money laundering scheme while an auditor will likewise turn a blind eye on falsified accounting or financial statements as evidenced by the Parmalat, Enron, Toshiba or WorldCom corporate scandals. They are generally referred to as professional enablers. This paper is dedicated towards revisiting this link between these professional enablers and organised crime of an economic nature with particular focus on Kenya.

How Do Intermediaries Affect the Effectiveness of the Four-Eyes-Principle? An Experimental Investigation

Abstract Corrupt deals are commonly arranged by intermediaries. However, attempts to deter corruption pay little attention to the role of intermediaries in corrupt deals. This paper reports a laboratory bribery experiment on corruption designed to investigate how intermediaries with information about the lowest bribe that the official is willing to accept in a briber-initiated corrupt deal affect the effectiveness of the four-eyes-principle (FEP) on deterring corruption. We find that the introduction of the FEP significantly decreases the corruption level by increasing uncertainty. However, the presence of intermediaries with information completely offsets the positive effect of introducing the FEP on preventing corruption. Our findings suggest that further research on corruption should allow a more active role of intermediaries, and legislators should take the role of intermediaries into account when designing anti-corruption mechanisms.

Cooperation With the Police Against Corruption: Exploring the Roles of Legitimacy, Deterrence and Collective Action Theories

AbstractIn explaining public willingness to cooperate with the police, researchers have disproportionally emphasized legitimacy. Deterrence is presumed to be irrelevant; where it is considered, the approach appears perfunctory. Using survey data from 530 young adults in Ghana, this study examines the relative importance of deterrence and legitimacy perceptions in shaping willingness to report corruption transactions to the police. The results showed that perceptions of legitimacy did not affect the young adults’ willingness to report corruption to the police. The most important and consistent predictors of willingness to report corruption to the police were deterrence-based perceptions, specifically, of the certainty of being apprehended for engaging in corrupt transactions, of the severity of sanctions against such transactions and of the perceived cooperative intentions of other citizens. Deterrence proved particularly salient among those who claimed ignorance of where to report corrupt transactions.

Border Corruption

In many countries, customs and border protection agencies are perceived as the most corrupt government institutions. Officers in those organizations have more opportunities to participate in corruption than do employees in other law enforcement agencies. Moreover, border related corrupt activities may be directly linked to organized crime groups. Despite the importance of the topic, border corruption has remained conceptually underdeveloped. Complementing already existing classification schemes, this study uses two dimensions to develop a six-cell conceptual typology of border corruption: (1) the actor of the corrupt transaction on the client side, and (2) the collusive/coercive nature of the exchange. Possible implications for research and practice are also discussed.

Dynamic Problem-Solving, Corrupt Transactions and International Entrepreneurship

In a panel study covering 4627 observations of international entrepreneurial ventures in 9 countries in the Middle East and North Africa region from 2013- 2017, we demonstrate that international entrepreneurs may achieve competitive advantage through complicit problem-solving means such as corrupt transactions. The positive effect of corrupt transactions on international firm performance is stronger for entrepreneurs entering countries with lower levels of corruption and for entrepreneurs coming from countries with higher fear of failure. The results are highly consistent across several models and are robust to the choice of two firm performance indicators.

Corrupt at Its Core: How Law Failed the Victims of Waste Dumping in CCte DD Ivoire

On August 19, 2006, citizens of Cote d’ Ivoire woke to suffocating odors. Overnight, five-hundred tons of hazardous waste had been illegally dumped across the country’s largest city, Abidjan. Thousands were sickened. The incident stands as one of the most flagrant environmental crimes in recent memory. Now, more than a decade later, it is past time to examine the tragedy as an act of environmental corruption and to use the incident to draw lessons about the failures of global environmental governance. The relationship between the events in Abidjan and the international oil trade provide a particularly useful case study for exploring this issue because the Trafigura, the company involved in the incident, self-describes as being “at the heart of the global economy.” Taking the company at its word, the Abidjan dumping highlights a troubling lack of accountability at the heart of the global economy. It reveals how the system of laws that make up international trade law permit Northern trading partners to profit enormously from unlawful conduct in Southern States, while deploying formal legal structures as a shield against any responsibility for that conduct. Indeed, the incident reveals an implicit form of corruption embedded in a global trading system structured to allow plausible denials of involvement in illegal or corrupt transactions. This Article begins with an overview of how environmental corruption has typically been framed in scholarly discussions. Part 2 provides a description of the tragedy that occurred in Abidjan, situating it in the context of the public and private environmental governance and management choices that led up to it. Part 3 identifies the legal regimes that should have prevented this tragedy, and analyzes where those legal regimes fell short. This Part proposes that the contours of the global trading infrastructure in which such choices get made is itself corrupt — that drawing the boundaries of actors subject to environmental and human rights obligations to exclude transnational corporations (“TNCs”) is itself a kind of implicit corruption. Finally, this Article uses the robust literature on environmental corruption to demonstrate that this implicit form of corruption is built into the heart of the international commodities trade, and concludes by suggesting some ways forward.

INDIA’S PROGRESSIVE TRANSITION TOWARDS CASHLESS ECONOMY

India is a cash centric nation. High circulation of cash encourages the corruption and hawala transactions. To break this grip, Rs.500 and Rs1000 notes were demonetised last year. The new policy of demonetisation has shifted India towards the digital era. Cashless economy is a state where the flow of cash is trivial and most of the transactions are performed through electronic channels. Digital economy unearths black money and control circulation of fake currency. This paper will throw light on the basic concepts, modes of digital economy and the initiatives taken by government to create cashless environment. This paper will also examine the perspective of people regarding cashless economy. Data has been collected using both primary and secondary sources and analysed using simple research techniques

Resource Curse or Governance Deficit? The Role of Parliament in Uganda’s Oil and Zimbabwe’s Diamonds

This article returns to the question of ‘resource curse’ and the powers of local parliaments to harness resource exploitation to meet national development agendas. The study is inspired by direct experiences with the Zimbabwean and Ugandan parliaments. It examines the dilemmas and uncertainties that confront dysfunctional states, and states with weak governance institutions, in governing newly discovered natural resources effectively. It focuses on the experiences of parliament in Uganda after the discovery of commercially viable oil deposits in the Albertine Graben region and in Zimbabwe following the discovery of diamonds in Chiadzwa, both in 2006. In both countries, parliament has frantically tried to carve out space for national dialogue on, and transparent mechanisms for, the governance and control of the natural resources. Yet, in both cases, we describe an opaque terrain, where gross corrupt deals and underhand transactions can be processed without regulation. Parliament has tried, but failed, to play a critical role in oil and diamond governance. We conclude that the ‘resource curse’ is more a reflection of a governance deficit than a resource abundance crisis.

When do middlemen matter? Evidence from variation in corruption in India

Corruption is a persistent problem in developing countries, and recent scholarship suggests that middlemen play an important role in corrupt acts. Yet, while intermediaries can reduce transaction costs in illicit exchange, they also increase agency costs and reduce benefits to others. The involvement of middlemen may thus vary. I argue that middlemen are most likely to engage in, and benefit from, the subset of corruption transactions that are repeated frequently, but not by the same parties. I test the implications of this argument using survey experiments administered to a large sample of politicians and bureaucrats at multiple levels of government in India. I show that middlemen are critical, but far from ubiquitous. Intermediaries are more relevant where corrupt deals are frequent but involve unfamiliar potential principals. My results suggest that anticorruption efforts must pay greater attention to the type of corruption and the incentives of middlemen.

How do foreign firms’ corruption practices affect innovation performance in host countries? Industry-level evidence from transition economies

Using data from the Business Environment and Enterprise Performance Survey (BEEPS), this article investigates how foreign firms’ involvement in corruption practices affects the innovation behaviour and performance of their direct competitors in transition economies of Eastern Europe and Central Asia. By unbundling corruption practices into grand and petty corruption transactions, this paper contributes to deepening the analysis of the ‘grease the wheels’ versus the ‘sand the wheels’ effects of corruption on innovation performance. Our empirical results indicate that grand corruption stifles the propensity of firms in the same line of business to conduct R&D activities and to bring new or upgraded products and services to the market, whereas petty corruption of foreign firms tends to foster major innovations in the domestic market. Domestic firms’ involvement in petty corruption appears to be detrimental to innovation efforts and incremental innovation, but not to major innovation.

Why Family Firms Engage in Corruption? Effects of CEO's Financial Aspiration and Religious Belief

We integrate insights behavioral theory of the firm, social psychology, and family business literature to examine the role of CEO's financial aspiration in engaging in corrupt transactions. Buildin...

Guanxi-Networks, Lawyers and Marketization of Parochial Corruption in China's Courts

In this article, I examine how privileged exchange opportunities in parochial corruption in China’s courts become marketized and made accessible to those who do not enjoy a relational-tie. To that end, I first analyze the conceptual features of guanxi, a particularistic relationship between two (or more) individuals who share a dyadic non-transferable relational-tie, as well as the operational rationale of guanxi-based exchange. Then I proceed to investigate what has led to the marketization of guanxi-based parochial corruption. The answer lies in the emergence of professional “judicial brokers”, particularly lawyers, who are best positioned to broker corrupt deals between judges and litigants. I also explain how a self-executable payment scheme, thanks to the asymmetry of anti-corruption measures, is developed to help solve the enforcement problem of illegal corrupt transactions. Finally, I provide some preliminary comparative reflections on guanxi and informal networks in other legal systems.

Demonetization impact the Indian economy: A descriptive study

The term demonetization is not new to the Indian economy. The highest denomination note ever printed by the Reserve Bank of India was the Rs 10,000 note in 1938 and again in 1954. But these notes were demonetized in January 1946 and again in January 1978, according to RBI data. Since less than 5 percent of population in India had access to such notes and most banks never had such currency notes, demonetization did not have a big impact on the country. The decision was taken to curb the illegal use of high denomination currency which was used for corrupt deals in the country. However, with the latest round of demonetization, the common public and bankers are undoubtedly facing hardship since more than 85 percent of currency in circulation has been rendered illegal in one single stroke. Demonetization is surely hampering the current economy and will continue to do so in the near term and will also impact India’s growth for the coming two quarters but will have positive long lasting effects. The question that arises is why demonetization was required at this point of time. There are certain pros and cons of demonetization.