The effects of economic development and the evolution of social institutions on the level of corruption: comparing the Asia-Pacific with other regional blocs

ABSTRACT

The variation in the level of economic development across countries has been proposed as an explanation for the disparity in the level of corruption that is observed. As a country evolves from one stage of economic development to another and its social institutions as a result become more refined and sophisticated, their capacity to tackle corruption and poor governance practices becomes increasingly better. Improvements in the overall quality of institutions, including better policing and justice systems, increase their capacity to detect and deter corruption. This evolution of institutional quality improves social and economic well-being of society, which in turn pressures regulators, legislators and politicians to continue in the fight against corruption. The objective of this paper is to examine how economic development mediated by improvements in the quality of social institutions impacts on the level of corruption. Lessons from worldwide trends, including the Asia-Pacific region, provide opportunities for countries to enact strategic measures that can accelerate the fight against corruption.     

Machiavelli & Modern Business: Realist Thought in Contemporary Corporate Leadership Manuals*

Niccolo Machiavelli’s teachings have never gone out of fashion; no doubt because power remains a central aspect of modern political and corporate life. The writings of this 16th century thinker seem as relevant today as they were a half millennium ago. Given the immutable nature of human beings, this is hardly surprising. What is surprising is the regular stream of monographs published in the last third of the 20th century, and reaching a crescendo in the last decade, that argue for Machiavelli’s relevance to modern management and corporate leadership. This essay will examine the structure, assumptions and conclusions of these manuals. After reviewing the manuals, this essay concludes that certain of these assumptions upon which these manuals are based are not transferable from a 16th century principality to a 21st century corporation. Not surprisingly, the teachings of these manuals concerning morality and the corporation are either inconsistent with the actual teachings of Machiavelli, or fail to acknowledge the teachings of Machiavelli most relevant to the modern corporate world. *A substantially modified version of this article was originally presented as a paper at the International Conference on Social Values held at the University of Oxford in July, 2004, and was reprinted in Samuel M. Natale, ed., The Fate of Empires: Education in a Consilient World (New York: Global Scholarly Publications, 2005). Peter J. Galie is professor of Political Science and Director of the Raichle Pre-Law Center at Canisius College. He received his PH.D. from the University of Pittsburgh in 1970. He has published numerous articles in the area of state constitutional law, two books entitled The New York State Constitution: A Reference Guide (Greenwood Press, 1991) and Ordered Liberty: A Constitutional History of New York (Fordham University Press, 1996). Professor Galie was selected as the Wilson College Olive Garvey White outstanding teacher in 1967, and was the recipient of the Kenneth L. Koessler Distinguished Professor Award, Canisius College, 1998. Christopher Bopst is an associate in the commercial litigation department at the law firm of Adorno & Yoss LLP in Miami, Florida. He received his B.A. from Canisius College in Buffalo, New York (1995) and his J.D. from Notre Dame Law School in Notre Dame, Indiana (1998). Mr. Bopst has written several articles on state constitutional law and other topics of interest to the legal community. He has also presented papers at various conferences and lectured to numerous groups about various legal issues.     

Corruption in international business

I analyze corruption in international business, presenting a critical assessment of the topic and providing suggestions for future research. I argue that corruption creates a laboratory for expanding international business studies because its illegal nature, the differences in perception about illegality, and the variation in the enforcement of laws against bribery across countries challenge some of the assumptions upon which arguments have been built, i.e., that managers can choose appropriate actions without major legal implications. Hence, I first provide suggestion for how to analyze the topic of corruption in future studies by analyzing the types, measures, causes, consequences, and controls of corruption. I then provide suggestions for how to extend leading theories of the firm by using corruption as a laboratory that challenges some of the assumptions of these theories: extending agency theory by analyzing the existence of unethical agency relationships; extending transaction cost economics by analyzing illegal transaction costs minimization; extending the resource-based view by studying corporate social irresponsibility capability; extending resource dependency by analyzing the ethical power escape; and extending neo-institutional theory by studying illegal legitimacy.     

Business corruption in the Asia Pacific region: recapitulation and prospects

ABSTRACT

Corruption in its multiple guises remains one of the most discussed, yet under-researched, influences affecting business practice and organization management in Asia. Comprising conceptual and empirical approaches to explore both national and region-level examples, the research contained in this collection epitomize some of the many challenges involved. As a contribution, collectively the research go some way to advance our understanding of the causes, conditions and manifestations of corruption in Asian business, as well as to highlight the implications for practice in seeking to manage the consequences. However, further studies are required to consolidate, deepen and extend both how we perceive and engage with Asian business corruption. Opportunities for theoretical and practical advancement include revisiting the meaning(s) of the term ‘corruption’ itself, corruption as an informal institution, the moderating factors which connect corruption to process, performance and consequences and, finally, the methodological challenges involved in relevant empirical data collection and analysis.     

Home country uncertainty and the internationalization-performance relationship: Building an uncertainty management capability

We analyze the impact of home country uncertainty on the internationalization-performance relationship of emerging market firms. Building on organizational learning theory and the institutional approach, we argue that internationalization has a positive impact on the performance of emerging market firms, and that this relationship is strengthened for firms based in emerging countries with higher corruption and political risk. The reason is that by being exposed to high levels of home country uncertainty in the form of political risk and corruption, firms develop an uncertainty management capability at home that helps them face the challenges of internationalization better. We also propose that this uncertainty management capability helps emerging market firms perform better outside of their home region. We test our arguments on a sample of 536 firms from Argentina, Brazil, Chile, and Peru.     

卖空的事前威慑、公司治理与高管隐性腐败

本文以我国融资融券的分步扩容为准自然实验,考察卖空的事前威慑对高管隐性腐败的治理效应及其作用机制,并分析不同公司治理环境下卖空机制作用的差异。研究结果表明,卖空的事前威慑能够有效抑制高管隐性腐败行为,显著降低在职消费水平,尤其是超额在职消费,并且卖空机制对高管隐性腐败的治理效应在国有企业中更为显著。进一步地,通过剖析卖空治理效应的作用机制,发现卖空机制加强了外部投资者和股东的监督作用,并促使公司提高了高管权益薪酬比重,使得高管与股东共担卖空导致的股价下跌风险,从而有效约束了高管的隐性腐败。此外,卖空机制的治理效应依赖于成熟的市场化环境,即只有在市场化水平较高的地区,卖空机制才能更有效地发挥其治理作用。而卖空机制与公司内部治理之间具有“替代效应”,当公司内部治理失灵时,卖空机制能够代替内部治理来规制高管的隐性腐败。本文不仅拓宽了卖空机制治理效应的有关研究,为我国放松卖空管制提供了微观的经验证据,而且为治理高管腐败提供了新思路。     

寻租与腐败的经济学分析

转轨时期,在市场机会大幅增加而制度约束处于不完备的状态下出现了权力资本化现象,导致受权力租金诱惑的政府官员产生出租权力以获得私利的动机与行为,从而形成寻租与腐败蔓延的现象。因此强化权力监督、实行“以薪养廉”,并逐步使政府退出市场就成为抑制寻租与腐败的根本对策。     

Fiscal centralization and the form of corruption in China

Fiscal recentralization in China in the 1990s introduced incentives that changed the form of corruption at the local government level from the helping-hand to the grabbing-hand type. Against the background of the experience of China, this paper describes how the central–local government revenue-sharing rule introduces strategic considerations that affect the form of corruption and thereby economic growth. Information regarding the possibilities for substitution in the form of corruption is shown to be relevant for decisions regarding fiscal centralization. However, the consequences of the decisions made in China suggest that such information was either not available or was not taken into account.     

Money laundering—a global obstacle

One of the biggest obstacles to maintaining an effective operating international financial system is money laundering. A global phenomenon and international challenge, money laundering is a financial crime that often involves a complex series of transactions and numerous financial institutions across many foreign jurisdictions. In addition, money laundering is also extremely difficult to investigate and prosecute. In this paper, I present a clinical examination of the money laundering process, the international extent of the problem and global efforts to introduce anti-money laundering measures and regulation in recent years.     

Does Aid Unpredictability Weaken Governance? Evidence from Developing Countries

This paper examines the effects of aid on governance from a different perspective by asserting that aid unpredictability can potentially increase corruption in recipient countries by providing incentives to risk‐averse and corrupt political leaders to engage in rent‐seeking activities. Analyses of data from 80 developing countries over the period 1984–2004 offer evidence that higher aid unpredictability is associated with more corruption as measured by a synthetic index. We also find further evidence that this latter impact is more severe in countries with weak initial institutional conditions. These findings are a supplementary advocacy for the need for better management and better predictability of aid flow in developing countries.