The two cultures of corruption

DavideTorselloA growing body of literature on the topic of corruption across all disciplines has built up increasingly sophisticated analyses of corruption from the viewpoints of studying corrupt countries, individuals, politicians, public servants, bureaucrats and business executives.

An alarming outcome of this analysis has been that, despite the goodwill of governments and organisations, the existence of measures of control and compliance regimes has not eradicated corruption. An equally alarming finding is that psychological studies have proved that, once it has fallen into the trap of breaking a moral code, the human brain easily finds justifications and rationalisations to do it again.

Anthropological and historical analyses of corruption in different cultures have also showed that there has never been a culture free of corruption, at any point in time. This means that any attempt to combat the phenomenon with a zero-tolerance attitude is, although well-intentioned, not going to succeed, as scandals such as UNAOIL or the Panama Papers demonstrates. So what makes corruption such a resilient crime?

One factor is the compatibility of corruption with a number of local, socio-cultural norms that render the practice acceptable, if not attractive. It may not be easy to distinguish between corruption and gift-exchange that takes place as a result of the hospitality etiquette of a particular culture. In many countries, not accepting a gift, or not reciprocating with another gift, is considered extremely impolite and anti-social.

This means that an executive representing a business that has a clear gift policy in place may not always be able to firmly refuse to offer expensive gifts when prompted to do so by government officials. Equally, it makes it very difficult for a public official to resist the temptation of accepting a gift offered by a customer who requires a permit, when he knows that, at the end of the working day, he is a member of the same community in which the briber lives.

It is not a coincidence that those countries that are relatively free from corruption are largely those in which local culture does not place a heavy emphasis on gift exchange and hospitality reciprocity. Scandinavian countries are an excellent example. On the other hand, in those countries where refusing a favour, an invitation for dinner, or a lavish present (such as in Eastern Europe, Africa and Latin America) may be seen as an offence against common rules of socialising, corruption tends to proliferate. In these regions, the fight against corruption can only be possible if profound cultural and generational changes are implemented under a proper knowledge of local society, and not imposed blindly from outside, as has been the case with development projects in emerging markets, which have been doomed to fail for this reason.

Another factor is the part played by the organisation for which the bribe taker or giver works. Although there is a human component of greediness and social acceptability, the corrupt individual operates in an organisational environment in which he has been socialised and motivated, and where he learns how to rationalise this crime.

Empirical evidence generated by research I have conducted into a number of FCPA violations by large multinationals demonstrates that companies which have been at the centre of corruption scandals in the past still bear strong signs of organisational malfunctions today. This is clearly not as a result of the local culture, as many of these businesses are multi-national, but instead strongly indicates that the organisation’s culture allows and enables corruption.

I have found that certain issues within company structures (hierarchical rather than flat), bottlenecks (such as poor communication and insular boards), corporate values and motivation patterns (excessive focus on numbers and targets, an urgent or short-term culture, excessive reliance on financial bonuses, etc.,) are very powerful predictors of corruption, both as a new or recurring practice.

The growing focus on measuring and monitoring those internal aspects of an organisation’s culture that may breed or justify corruption, is a positive trend that ties in with the recognition of the importance of corporate compliance mechanisms. If tied into a proper understanding of the cultural, national, regional and organisational factors that make corruption acceptable, we may have a better chance of changing the corruption landscape.

Davide Torsello

About Davide Torsello

Davide Torsello is Professor of Anthropology and Organisational Behaviour at CEU Business School Hungary, and Director of the Center for Business Integrity. He has written on and conducted extensive research into political and business corruption. Davide has developed an innovative software toolkit that measures organisational cultural vulnerabilities and risks of corruption.

Contact Details:
Email: TorselloD@business.ceu.edu

This entry was posted in 2016-09, Newsletter. Bookmark the permalink.