Bribery Assignment

OUMM3203 PROFESSIONAL ETHICS

1.0 Introduction

Bribery is an act of giving money or gift giving that alters the behavior of the recipient.

Bribery constitutes a crime and is defined by Black's Law Dictionary as the offering, giving,

receiving, or soliciting of any item of value to influence the actions of an official or other person

in charge of a public or legal duty.

The bribe is the gift bestowed to influence the recipient's conduct. It may be any money,

good, right in action, property, preferment, privilege, emolument, object of value, advantage, or

merely a promise or undertaking to induce or influence the action, vote, or influence of a person

in an official or public capacity.

In economics, the bribe has been described as rent. Bribery in bureaucracy has been

viewed as a reason for the higher cost of production of goods and services.

1.1 Forms of bribery

Many types of bribes exist: tip, gift, sop, perk, skim, favor, discount, waived fee/ticket,

free food, free ad, free trip, free tickets, sweetheart deal, kickback/payback, funding, inflated sale

of an object or property, lucrative contract, donation, campaign contribution, fundraiser,

sponsorship/backing, higher paying job, stock options, secret commission, or promotion (rise of

position/rank).

One must be careful of differing social and cultural norms when examining bribery.

Expectations of when a monetary transaction is appropriate can differ from place to place.

Political campaign contributions in the form of cash, for example, are considered criminal acts of

bribery in some countries, while in the United States, provided they adhere to election law, are

legal. Tipping, for example, is considered bribery in some societies, while in others the two

concepts may not be interchangeable.

In some Spanish-speaking countries, bribes are referred to as "mordida" (literally, "bite");

in Arab countries they are Baksheesh or Bakshish. However, Bakshish is more akin to tipping.

French-speaking countries often use the expressions "dessous-de-table" ("under-the-table"

commissions), "pot-de-vin" (literally, "wine-pot"), or "commission occulte" ("secret

commission" or "kickback"). While the last two expressions contain inherently a negative

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connotation, the expression "dessous-de-table" can be often understood as a commonly accepted

business practice (for instance, on the occasion of a real estate transaction before the notary, a

partial payment made between the buyer and seller; needless to say, this is a good way to launder

money). In German, the common term is Schmiergeld ("smoothing money").

The offence may be divided into two great classes: the one, where a person invested with

power is induced by payment to use it unjustly; the other, where power is obtained by purchasing

the suffrages of those who can impart it. Likewise, the briber might hold a powerful role and

control the transaction; or in other cases, a bribe may be effectively extracted from the person

paying it, although this is better known as extortion.

The forms that bribery take are numerous. For example, a motorist might bribe a police

officer not to issue a ticket for speeding, a citizen seeking paperwork or utility line connections

might bribe a functionary for faster service.

Bribery may also take the form of a secret commission, a profit made by an agent, in the

course of his employment, without the knowledge of his principal. Euphemisms abound for this

(commission, sweetener, kick-back etc.) Bribers and recipients of bribery are likewise numerous

although bribers have one common denominator and that is the financial ability to bribe.

As indicated on the pages devoted to political corruption, efforts have been made in

recent years by the international community to encourage countries to dissociate and incriminate

as separate offences, active and passive bribery. From a legal point of view, active bribery can be

defined for instance as the promising, offering or giving by any person, directly or indirectly, of

any undue advantage [to any public official], for himself or herself or for anyone else, for him or

her to act or refrain from acting in the exercise of his or her functions. (article 2 of the Criminal

Law Convention on Corruption (ETS 173) of the Council of Europe). Passive bribery can be

defined as the request or receipt [by any public official], directly or indirectly, of any undue

advantage, for himself or herself or for anyone else, or the acceptance of an offer or a promise of

such an advantage, to act or refrain from acting in the exercise of his or her functions (article 3 of

the Criminal Law Convention on Corruption (ETS 173)).

The reason for this dissociation is to make the early steps (offering, promising, requesting

an advantage) of a corrupt deal already an offence and, thus, to give a clear signal (from a

criminal policy point of view) that bribery is not acceptable. Besides, such a dissociation makes

the prosecution of bribery offences easier since it can be very difficult to prove that two parties

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(the bribe-giver and the bribe-taker) have formally agreed upon a corrupt deal. Besides, there is

often no such formal deal but only a mutual understanding, for instance when it is common

knowledge in a municipality that to obtain a building permit one has to pay a "fee" to the

decision maker to obtain a favourable decision.

2.0 Overview of bribery

The nexus between bribery and corruption must be fully comprehended at the outset of

this paper. This is because there can be no bribery without corruption. Corruption refers to the

misuse of entrusted power for private gain. Corruption is a broader term in which lesser evils

such as bribery, nepotism and even misappropriation fall under as can be seen from Nye’s

definition of corruption:

‘behaviour which deviates from the formal duties of a public role because of private regarding

(personal, close family, private clique) pecuniary or status gains, or violates rules against the

exercise of certain types of private regarding influence. This includes such behaviour as bribery

(use of a reward to pervert the judgment of a person in a position of trust); nepotism (bestowal of

patronage by reason of ascriptive relationship rather than merit); and misappropriation (illegal

appropriation of public funds for private regarding uses)’.

Bribery can also be an offer, a payment or a promise to pay money or goods, favour, an

advantage, privilege, property or an object of value to a person in order to influence his views,

actions or conduct. Bribery is viewed in two ways. These are bribery according to rule and

bribery against the rule. Bribery according to rule is where a bribe is paid in order to receive

preferential treatment for something that the bribe receiver is required to do by law.

For instance, a builder offers to pay money to a building inspector in order that his

building premises are inspected. Bribery against the rule is where a bribe is paid to receive

preferential treatment or obtain services for which the bribe receiver is prohibited from doing.

For instance, an accused person offers to pay money to the prosecuting officer in order

not to get charged to court. For an act to be seen as a bribe, there will be an understanding that

the thing offered, paid or promised to be paid is meant to influence the views, actions and

conduct of the receiver who if he accepts must reciprocate the gesture by performing the

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intended act. It is for this reason that general gifts and tips (usually given as a token of

appreciation for good services) cannot be considered as bribes.

Bribes are more or less illegal and immoral agreements between the bribe giver and

receiver for the performance of an act in exchange for an object of value for the purpose of

influencing the receiver views, actions or conduct in order to gain special treatment. In most

jurisdictions bribery is seen as a crime, which is punishable by a term of imprisonment, a fine or

a combination of the two. The bribe giver and receiver are both culpable and as such most

jurisdictions treat them as offending parties. In some other jurisdictions bribery may be treated

with less severity and may be more acceptable as a norm or part of the society. It is for this

reason that bribes in such jurisdictions have been given names like ‘grease money’ in order to oil

the views of the receiver and make him swing into action. Bribery can take place in both public

and private capacities. Public capacity involves public officials or people who are being paid by

the taxpayer and private capacity involves anyone not being paid by the taxpayer.

The saying ‘it takes two to tango’ is an apt description of the problem of bribery. This is

because there are two sides to it. These are the demand and supply side. The demand side of

bribery involves the asking of the bribe by the receiver who can request this bribe for himself or

on behalf of someone else. He can also make this request directly or indirectly. If the person

demanding the bribe is acting on behalf of someone else he will be seen to be an accomplice to

the crime. On the other hand, the supply side of bribery deals with the offer, the payment or the

promise to pay the bribe by the giver to the receiver. Similar to the demand side, the giver of the

bribe in the supply side can also be acting either for himself or on behalf of someone else or can

also give the bribe directly or indirectly.

Bribery can also be viewed vertically from top to bottom and vice versa. Bribery from top

to bottom is where the bribery takes place at the highest levels of government and some of the

bribe payments trickle down to the lower officials as ‘hush money’; while bribe from bottom to

top is where numerous bribes are paid to lower officials and a percentage of the payment is

passed on to higher officials in the level of hierarchy.

Most international legal instruments deal with the supply side of bribery particularly

bribery of foreign public officials. This is because the demand side is usually handled by the

laws of the host country or the laws of the country in which the bribe receiver is subject. Some of

these legal instruments will form the subject matter of the ensuing chapter

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3.0 Economic analysis on the act of bribery

Bribery is defined as "the offering, promising or giving something in order to influence a

public official in the execution of his/her official duties" (OECD Observer, 2000). Bribes can

take the form of money, other pecuniary advantages, such as scholarship for a child's college

education, or non-pecuniary benefits, such as favorable publicity. In the international context,

bribery involves a business firm from country A offering financial or non-financial inducements

to officials of country B to obtain a commercial benefit.

Transparency International defines corruption as "the abuse of public office for private

gain." The non-profit organization produces annually its survey of countries ranked on the basis

of how corrupt they are perceived to be. Known as the Corruption Perceptions Index (CPI), it is

based on "the misuse of public power for private benefit, with a focus, for example, on bribe

taking by public officials in public procurement" (www.transparency.org). The CPI has emerged

as a prominent measure of the extent of bribery in international business and is increasingly used

by scholars to empirically ascertain patterns and relationships with other variables to understand

this subject. The focus of this paper is on bribery, which is a major form of corruption.

The enormous growth in international trade and investment over the past fifty years has

been accompanied by an increase in bribery. The newspapers regularly report bribery scandals in

the conduct of international business (e.g., Crawford, 2008). The World Bank estimated that five

per cent of the exports to developing countries go to corrupt officials (Moss, 1997). It is

estimated that more than US$1 trillion is paid in bribes each year (Labelle, 2006). The chairman

of the U.S. branch of Transparency International, the non-governmental organization dedicated

to combating corruption, has noted that many analysts feel "there has been a gradual escalation.

At one point, five per cent (of a contract price) was standard. That's crept up gradually until now

it's in the twenty to thirty per cent range" (Andelman, 1998).

If bribery is a burden to international firms, it is even more costly to the countries where

they are prevalent. It has been estimated that money lost to bribery is the largest potential source

of funding available to many new democratic governments aside from foreign direct investment

(Hamra, 2000). The World Bank believes that tackling bribery can lead to significant increases in

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national income and faster economic growth and to improvements in quality of life issues such

as child mortality rates (The Costs of Corruption, 2004).

The seriousness of the issue has prompted governments, intergovernmental bodies, non-

governmental organizations, and commercial firms to control and discourage bribe giving and

bribe taking. The U.S. was the first industrialized country to address this issue when, in 1977, it

enacted the Foreign Corrupt Practices Act (FCPA) making it a crime for any American firm (and

foreign firms which issue negotiable securities on U.S. stock exchanges) to offer, promise, or

make payments or gifts of anything of value to foreign officials, politicians, and political parties

with the intention of changing policies or to secure the suspension of a legal norm (U. S.

Department of Justice). In 1999, the OECD Convention on Combating Bribery of Foreign Public

Officials in International Business Transactions signed by the 30 member countries of the

Organization for Economic Cooperation and Development (OECD) and six other nations came

into effect (OECD, 2002). The main goals of the treaty are to prevent bribery in international

business transactions by requiring countries to make it a criminal offence to bribe a foreign

public official, to have in place adequate sanctions and reliable means for detecting and

enforcing the offence, and prohibit bribes from being considered a business expense and thus tax

deductible. Financial agencies such as the World Bank, Asian Development Bank, and

International Monetary Fund have linked aid disbursements to improvements in administrative

practices to eliminate corruption (Lewis, 1997, Rose-Ackermann, 1997).

The World Bank has barred firms which engage in bribery from doing business with it. It

has established a program to let firms that have worked on bank-funded projects to voluntarily

disclose and has found that a number of companies admitted to paying bribes (Corpwatch, 2006).

The World Bank has created aggregate governance research indicators for 213 countries around

six dimensions, one of which is control of corruption. These annual figures provide beth a

snapshot and a trend line of the quality of governance in individual countries and on a

comparative basis (Kaufmann, Kraay, and Mastruzzi, 2006). Non-governmental organizations

such as Transparency International, through their annual rankings of perceived corruption among

countries, spotlight this subject.

Many businesses and industry groups have become conscious of their ethical conduct and

the need to comply with the emerging web of laws. Consequently, they have created codes of

conduct for their employees. Private trade associations such as the Business and Industry

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Advisory Committee to the OECD and the International Chamber of Commerce have developed

anti-bribery programs (Yannaca-Small, 1995). Thus, there have been worldwide efforts to

address both the demand for and supply of bribes.

Three strands of literature are reviewed here. They are (a) determinants of bribery and (b)

determinants of economic growth. The World Bank has developed a simple formula to describe

bribery: C = M + D-A-S where C standards for corruption, M for monopoly, D for discretion, A

for accountability, and S for salary. The formula indicates that bribery tends to be high in

societies where public officials earn low salaries but have a lot of discretion and limited

accountability. Highly regulated economies create conditions for corruption to thrive. Businesses

offer bribes and officials seek bribes to suspend the regulations.

Husted (1999) examined the role of economic and cultural variables and found that a

significant inverse relationship exists between perceived levels of bribery in a country and the

per capita income in purchasing power parity terms. Cultural dimensions--using Hofstede's

classification--of masculinity and power distance were significant factors (Hofstede, 1980).

Sanyal and Samanta (2002) confirmed Husted's findings and found that income distribution in a

country was another significant economic factor. Similarly, Getz and Volkema (2001) found that

bribery in a country was related to wealth and so was power distance and uncertainty avoidance.

Uncertainty avoidance moderated the relationship between economic adversity and bribery.

Thus, there is an empirical basis to suggest that certain economic and cultural factors determine

perceived levels of bribery. Sanyal and Samanta (2003) have also found that economic freedom

and level of human development are associated with levels of perceived bribery in a country with

open economies and high level of human development inversely related to bribery. All these

studies found that per capita income is inversely related to bribery.

The level of economic development in the world is very uneven. This is reflected in per

capita gross national income (formerly gross national product) in purchasing parity terms of as

high as $42,000 in the U.S.A. and as low as $830 in Yemen. Table 1 provides an overview of

this worldwide disparity.

Worldwide, between 1990 and 2004, the proportion of people living in extreme poverty

fell from nearly a third to less than one-fifth. Economic growth in the developing world has

averaged 4.8 per cent a year since 2000, more than double the rate of growth in high-income

economies, which averaged 2.0 per cent a year. The decline in poverty has been limited in

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countries that have experienced slower (or sometimes none at all) economic growth, usually

measured by changes in the gross domestic income (GDI) from one period to another. Countries

such as China, India, and Vietnam which have exhibited strong economic growth--between 1990

and 2003, the average annual GDP increases for these countries were 9.6, 5.9, and 9.5 percentage

respectively--have been able to pull millions of people out of absolute poverty. In contrast, in

Sub-Saharan Africa, where the growth rate was 2.8 per cent, in 2002, 300 million people lived on

less than $1 a day, an increase of 139 million people over 1981. This is in sharp contrast with

East Asia, where the number of extremely poor people fell by 580 million people, to 12 per cent

of the population. World Development Indicators data indicate that economic growth is linked to

sound policies, well-targeted aid, better governance, and a good investment climate (World

Bank, 2006).

The relationship between economic growth and bribery has been examined extensively in

the literature, beginning with Mauro (1995). In general, the studies find a negative correlation

between bribery and economic growth (Bardhan, 1997). Fisman and Svensson (2000) uses

evidence from Uganda to confirm that bribery retards development at the micro level. They

studied the relationship between bribe payments, taxes, and firm growth in Uganda for the period

1995-97 and found that a one percentage point increase in the bribery rate was associated with a

three percentage point reduction in firm growth.

Trade has proven to be an engine for growth in East Asia, equal to 81 per cent of the

region's GDP, which far outstrips trade's 55-per cent share of GDP at the global level. Rapid

expansion of China's trade has not only sustained its growth, but has also helped its regional

trading partners integrate faster into global manufacturing. Experts of goods and services grew

by 10 to 28 per cent in Malaysia, Thailand, the Philippines, Vietnam and Cambodia, and

contributed to economic growth rates over six per cent in 2004 in all of these countries. In

contrast, trade plays a much smaller role in Latin America and the Caribbean, making up barely

52 per cent of total output. Exports from Latin American countries have expanded by only 4.5

per cent a year since 2000, less than one-third the growth of exports by East Asia and less than

half the growth of exports from South Asia and Europe and Central Asia.

Foreign direct investment (FDI) is another engine of economic growth. A study by Habib

and Zurawicki (2002) looked at aggregate investment flows from seven countries among

themselves and 82 other countries over a three year period (1996-98) and related those flows to

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the individual country's CPI. They concluded that "corruption is a serious obstacle to

investment". They also found a negative effect due to the difference in bribery levels between

home and host countries suggesting that investing firms are reluctant to deal with the conditions

prevalent in an operating environment with a different level of bribery. In an undated World

Bank document, Smarzynska and Wei studied the impact of bribery in a host country on the

preference of foreign investors for a joint venture or a wholly-owned subsidiary. They conclude,

based on firm-level data, that bribery reduces FDI and shifts the ownership structure towards

joint ventures. They also report that U.S. firms are more averse to joint ventures in corrupt

countries than investors of other nationalities. This latter finding is consistent with that of Hines

(1995) who attributed the reluctance of U.S. multinational firms to avoid joint ventures in high

bribe countries to the prohibitions embedded in the FCPA. In another study on the effect of

bribery on FDI, Wei (2000) looked at bilateral investment from 12 source countries to 45 host

countries and found that a rise in bribery in a country affected inward FDI there. The study also

noted that while U.S. firms were averse to bribery in host countries, they were not necessarily

more so than average OECD country, in spite of the FCPA. Sanyal and Samanta (forthcoming),

in a study of U.S. outward FDI found that while high levels of bribery in recipient countries

discouraged U.S. investment there, there were important exceptions. Countries with huge

domestic markets (e.g., China) continued to attract U.S. FDI irrespective of the level of bribery.

4.0 Legal analysis on the act of bribery

“Bribery in criminal law refers to the improper acceptance by a public official, juror, or someone

bound by a duty to act impartially, of any gain or advantage to the beneficiary, including any

gain or advantage to a third person by the desire or consent of the beneficiary. A gain or

advantage may be a pecuniary benefit in the form of money, property, commercial interests or

anything else the primary significance of which is economic gain.”

“Every person who shall voluntarily offer or receive any benefit as consideration to influence an

official act to be done or not done, shall be guilty of bribery, and upon conviction thereof shall be

imprisoned for a period of not more than three years, and fined three times the value of the

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benefit offered or received, or both. If the value of the benefit cannot be determined in dollars,

the fine shall be not more than $5,000.00.”

In my opinion, Section 502’s definition of “bribery” can very well cover the sort of

payouts that ETG proposes in its brochure to make to Yapese citizens and the Yap State

Government.

Now, there are several issues. First, would ETG’s promise of a payout to Yapese citizens

who are not Yap State Government officials qualify as a bribe? In my opinion, this is likely so

according to Section 502. Section 502 deals with the influencing of an “official act to be done or

not done,” but the Section does not specifically restrict the crime of bribery to offers made to

government officials who may receive bribes to influence their official acts. Given the way that

Section 502 is worded, as long as any person who receives a “benefit as consideration” is in a

position “to influence an official act to be done or not done,” then the voluntary offer of such a

“benefit” to that person for the purpose of getting that person to influence an official act

constitutes a bribe under Section 502. An enterprising lawyer can argue that ETG’s promise of a

payout to non-government-official Yapese citizens is intended to get those Yapese citizens to

influence the Yap State Government to, among other things, repeal Yap’s anti-gambling laws

and allow for ETG to carry out casino operations in Yap. In that scenario, then, ETG’s promise

of a payout arguably constitutes a bribe under Section 502.

The second issue is whether ETG’s promise of an “annual gaming tax” to the Yap State

Government constitutes a bribe under Section 502 of the Yap State Code. Of course, if a license

fee or tax is legitimate and provided-for under relevant state/national laws and regulations, then

the payment (or the promised payment) of such a fee/tax should not be considered a bribe.

Section 502 accounts for this sort of possibility by limiting bribes to offers that are made

“voluntarily.” This means that if ETG is required by law to furnish some sort of tax or fee, then

ETG’s furnishing of that tax or fee is not “voluntar[y],” and so ETG’s payment (or promised

payment) of that tax or fee should not be deemed a bribe.

However, in this particular case, I believe that Yap State Law does not allow for any sort

of “gaming tax.” Indeed, as far as I know, there are a limited number of taxes and fees that are

paid to the State of Yap—including excise tax, hotel occupancy tax, motor vehicle tax, and so

forth—and none of those items include a “gaming tax.” There are also no provisions under the

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FSM Code for a “gaming tax”—the FSM primarily collects taxes/fees on wages and salaries, on

gross revenues, and on fishing licenses, and although one may argue that a “gaming tax” is

similar to a “gross revenue tax,” they are not, in my opinion, the same tax. (For one thing, a gross

revenue tax is broader than a limited “gaming tax.” For another, tax codes are notoriously very

keen on specificity in language, and if a tax code has no specific mention of a special provision

for a “gaming tax,” then the common practice in tax law is to not recognize such a provision.)

Even if the FSM Tax Code contains a provision for a “gaming tax,” that still should not matter,

because ETG’s brochure proposes that a “gaming tax” shall be paid to the Yap State

Government, not the FSM National Government.

In light of the foregoing discussion, it is my opinion that ETG’s promise of an “annual

gaming tax” to the Yap State Government is, in essence, a “voluntar[y] offer” according to

Section 502 of the Yap State Code. If we are to assume that ETG makes such an offer “as

consideration to influence an official act to be done,” e.g., to get the Yap State Government to

legally support ETG’s proposed Project in Yap, then that may constitute bribery under Section

502.

5.0 Ethical analysis on the act of bribery

During the early 2000s, Ireland was categorized as a tiger economy, which is an economy

that experiences brief but rapid growth. Since Ireland offers low corporate tax rates, companies

like Google and IBM placed European headquarters in the country, and made Ireland a hub for

big business. For a time, Ireland enjoyed this prosperity—but it soon came to a halt when the

collapse of the U.S. economy triggered a worldwide domino effect. Now, Ireland is unable to

pay off debt, and may need to be bailed out by other affluent countries like Germany.

While the Irish government is trying to find ways to decrease the deficit, one startling

proposal made by a blogger recommends that Irish officials bribe credit-rating agencies to inflate

credit scores in order to keep interest costs on debt payments low. There are deficiencies in this

proposal, however; it assumes that a higher credit score will solve all of Ireland’s financial

problems. There is no guarantee that bribing a credit agency will bring about the change

necessary to get Ireland out of debt. This argument also may not be feasible since bribery is an

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illegal act, but let’s assume that such a proposal is a viable option for Ireland. In terms of ethics,

there are pros and cons.

When doing ethical analysis, there are four models that serve as a framework to structure

an argument: utilitarianism in terms of actions, utilitarianism in terms of rules, rights & duties,

and virtue. Utilitarianism is the process of weighing benefits and harms, and choosing the option

that offers the most benefits for the greatest number of people. Rule-utilitarian thought focuses

on benefits and harms created by rules, while act-utilitarian thought calculates the consequences

of actions themselves. The rights & duties model chooses the course that respects what others are

entitled to (rights) and obligations a stakeholders has to fulfill them (duties). The last model,

virtue, chooses the option that enforces good habits of character for yourself and others. Each

model can be applied when evaluating whether bribery is ethical or not.

In terms of benefits and harms to the Irish economy, the benefits of bribing credit-rating

agencies would have a significant impact. Government would be able to get a handle on its

interest payments and pay off debt quicker, without the financial support of other countries. Such

benefits would likely reduce unemployment and drastically increase the quality of life for Irish

citizens. For this argument, harms are minimal—there is no harm that comes to the credit-rating

agencies if no one finds out of such bribery. If discovered, the reputation of the agency may be

diminished, but that certainly does not outweigh the benefits associated with helping the 4.5

million citizens of Ireland.

Another argument in favor of bribery has to do with duties. The Irish government has an

obligation to do what it takes to ensure the health and happiness of its citizens. While Ireland

enjoyed prosperity for a short time in the early 2000s, the government may have made poor

choices that led to Ireland’s current financial position. One blogger claims the reason for the

crisis stems from government’s decision to guarantee all bank liabilities, a promise that Ireland

could not keep. Doesn’t the government then, have a duty to citizens to use whatever means are

available to restore the economy to a normal state? If the government has the power to bribe

credit-rating agencies to help stimulate the economy, it should fulfill its promise of serving in the

best interests of citizens.

While there are ethical arguments in favor of bribery, there are also arguments not in

favor. Although the action of the bribery may bring more benefits than harms to the people of

Ireland in this particular situation, the rule that forbids bribery brings more benefits than harms in

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all situations. There are countless historical examples of individuals using bribery as a means to

gain power or money that is used for evil; in fact, I argue that there are more examples of bribery

used for immorality rather than for good. Because of the benefits that arise from outlawing

bribery, it would be unethical for the Irish government to use such tactics, even if it greatly

benefited its citizens.

Although the blogger notes that credit-rating agencies are already involved with bribery,

it would not be ethical to allow it in this case because it undermines the functional purpose of a

credit-rating system. These agencies are created so that investors have a resource to be able to

assess the risk with investing in bond markets. By using bribes to enhance credit scores, these

scores become biased and are no longer a useful tool for potential investors. There is no way to

ethically justify bribery in a credit-rating system because it goes against the very purpose of why

such a system exists in an economy.

The most powerful argument against bribery is related to the virtue model. Bribery is a

form of corruption that alters a behavior or outcome based on a reward. Rather than encouraging

good habits of character, such as hard work and judiciousness, the action teaches individuals to

cheat in order to get ahead. By using such a tactic to pay off debt, the Irish government is

justifying to citizens that the ends justify the means. Such examples will likely lead to corrupt

behavior within the Irish economy, because the government did not fulfill its duty of being a

moral representation of the country it administers. If the government engages in bribery, what

would stop business owners, politicians, lobbyists, and other stakeholders from doing the same?

This would open Pandora’s Box.

Based on my ethical analysis, I believe Daria’s proposal is unethical based on the

principles of rule-utilitarian thought and virtue. While there are benefits for Ireland that arise

from stimulating the economy, that harms that occur from distorting the credit-rating system as

well as encouraging citizens to engage in immoral behavior outweigh such benefits. It may have

to rely on neighboring countries to pay off debt, but bribing credit-rating agencies is certainly not

the ethical means to solve Ireland’s problems.

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Conclusion

In conclusion bribery is not an issue that can be answered immediately at hand

considering the type of situations that regulate its ethical character. We need to remeber that

bribery is a constant ethical issue. And becuase bribery are only sometimes acceptable it is in a

moral free space. Even with a deductive definition for bribey and its set of guidelines I cannot

conclude that bribery is always unethical. However, if I was to limit business practices solely to

our mother country (United States of America) I will stand by my argument that bribery is

unjustifiable. A basic point to remember, is that bribery is unethical because it undermines the

social and economic systems. It weakens market efficiency and predictability, thus denying

people their right to a minimal standard of living. Consider the two roles, to be a "realist" is to

justify bribery because "international business is a rough game and no place for the naive

idealist," or the role of a "moralist" that believes that cultural relativity is no excuse for unethical

behavior.

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References

Andelman, D. A. (1998), Bribery: The New Global Outlaw. Management Review

Caves, R. (1982), Multinational Enterprise and Economic Analysis. New York:

Cambridge University Press.

Corpwatch (2006), Firms Admit Paying Bribes in World Bank Program. CA: Oakland.

(www.corpwatch.org/article).

Leonard J. B (2006). Business & Professional Ethics for Directors,Executives &

Accountants, (4thEdition) ,Toronto,: ThomsonHigher Education.

Dr. Muhammad Diah Jurini (2008). “OUM320 Professional Ethics” ,(cetakan kelapan)

Seri Kembangan Selangor: Open UniversityMalaysia (OUM).

Mok Soon Sang (2005),Siri Pendidikan PTK (Teras DanProfesional),Kuala Lumpur:

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Abdul Rahim M. (2001) Ilmu Pendidikan Untuk KPLI,. SungaiBesi, Selangor: Sanon

Printing Corporation Sdn Bhd.

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http://www.corpwatch.org/article

Documents

Bribery Assignment