Bribery Dirty Hands

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November 5, 1999

Bribery, Globalization and the Problem of Dirty Hands

A. W. CraggGeorge R. Gardiner Professor of Business Ethics

Schulich School of BusinessYork University

4700 Keele St.Toronto, OntarioCanada (M3J 1P3)

E-Mail: [email protected]: 416-736-2100 (Ext. 20686)

Fax: 416-736-5687

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Please do not cite or quote without permission.


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Bribery is a social phenomenon. It is comes with the exercise of authority. Its goal is to win

some advantage by offering a decision maker, whether a judge, public official, politician or

purchasing officer in a public or private enterprise, an inducement designed to ensure a desired

outcome independently of its intrinsic merits.1 It seems to be more common in some cultures

than in others. And it is as old as human history itself.2

Bribery is a curious as well as a damaging phenomenon. It is a criminal offence to bribe

public officials in virtually all countries with modern legal systems. Respect for the law is an

acknowledged obligation of managers in virtually all modern management systems and theories.

Virtually all companies doing business nationally or internationally regard acceptance of bribes

by their own employees as an offence justifying dismissal. Yet available studies of the

phenomenon suggest that recourse to bribery is a common, perhaps an increasingly common

feature of international business transactions.

Bribery is a curious phenomenon in a second respect. In modern advanced economies,

bribery is acknowledged to be a form of corruption and therefore unethical at least by the

dictates of conventional morality. Nonetheless, bribery is widely thought by many inside and

outside the business world to be simply the cost of doing business internationally. The strength

and influence of this belief is illustrated by the fact that until very recently most governments of

industrialized countries allowed bribes as legitimate business expenses for tax purposes. The

result is the emergence of commercial values systems that condemn bribery when directed

internally against corporations themselves or toward the public officials of the nation state in

which a company is head quartered, but condone bribery when it is thought to be necessary to

gain or retain business in international markets.3

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It is the intersection of these two value systems which condemn bribery as morally

unacceptable and worthy of criminal sanctions on the one hand but justified and/or excusable in

the search for competitive advantage internationally on the other hand that I wish to explore in

this paper. Bribery, I want to suggest, can pose a serious ethical dilemma for multi national

corporations with implications for business ethics which are as yet poorly understood.

Bribery, a complex moral phenomenon:

I propose to define bribery asany attempt whether successful or not to persuade someone in a

position of responsibility to make a decision or recommendation on grounds other than the

intrinsic merits of the case with a view to the advantage or advancement of him or herself or

another person or group to which he or she is linked through personal commitment, obligation,

or employment, or individual, professional or group loyalty.

Bribery as just defined is unethical. It normally requires deliberate deception. It

generates unfairness and injustice.4 It corrupts moral character and destroys

reputations.5 It undermines the proper functioning of the democratic process.6 It

conflicts with values central to the operation of a free and competitive market place.7 It

undermines economic development8and worthwhile public and private sector

initiatives.9 It can be used to rationalize and excuse failure.10

A casual observer might be tempted to assume from this account that the fact that bribery

is wide-spread demonstrates that ethics is of little concern in the conduct of international

business. However, this conclusion is premature. Paradoxically, there are also strong ethical

imperatives that would appear to justify the use of bribery as a business strategy. Corporations

have both legal and moral obligations to their shareholders. The shares of most multi national

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corporations are widely held and are likely to include shareholders, for example pension funds

and pensioners, whose material welfare may well be directly dependent on corporate earnings.

Corporations are also widely argued to have obligations to other stakeholders as well, for

example, their employees and their families, their suppliers, their clients and customers and the

communities in which they do business. A corporation that fails to play the game of bribery

may lose business with a consequent fall in share values, the loss of jobs both on the part of

employees and suppliers of goods and services, the loss of tax revenues for dependent

communities and so on.11

Bribery is thus a significantly more complex moral phenomenon than might at first seem

to be the case. This may help to explain why a business strategy that is by one set of

uncontroversial moral standards unethical has none the less become so wide spread.

Bribery and globalization

There are two aspects of globalization that are relevant to our discussion. The first is the

fact that globalization has seen the emergence of multi national corporations as very significant

economic and social agents globally. The Global Policy Forum calculates, for example, that of

the twenty-five corporations/governments with the largest budgets, thirteen are governments and

twelve are corporations like Mitsubishi, Mitsui, Itochu, and General Motors.12 Of the fifteen

companies/governments with the worlds largest budgets, six are governments and nine are

corporations. Corporate Watch reports that of the one hundred largest economies in the world,

fifty-one are now global corporations; only forty-nine are countries. They also report that the

worlds largest two hundred corporations generate more than a quarter of the worlds economic

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activity. The implications of decisions taken by transnational corporations for the welfare both

of their employees world wide and the people of the countries in which they do business are

therefore substantial.13

The significance of corporate decision making is not directly tied to globalization. On

the other hand, globalization has extended the reach of corporations and enhanced the trend

toward the concentration of wealth thereby increasing the significance of private sector

management decisions for the welfare of increasing numbers of widely dispersed people. The

alleged explosion in the incidence of bribery internationally in the last two decades is just one

indicator of these trends and their importance.14

The second aspect of globalization relevant for our purposes is the way in which it

intersects with the phenomenon of bribery. Understanding the nature of this intersection requires

consideration of the impact of globalization on local economies, the competitive pressures

globalization creates for corporations in search of international markets, the emergence of global

money markets, the phenomenon of international aid, and the geographical boundaries of the

legal systems of nation states. Let us take each of these in turn understanding that their

cumulative impact is significantly greater than the mere sum of their parts.

As already noted, both the theory and the practice of modern management pay

unambiguous homage to obeying the law. However, law is a national phenomenon.

Furthermore, the theory and practice of sovereignty restricts the reach of legal systems for the

most part to the geographical territory of the nation state. Since the preponderance of bribes are

paid by corporations headquartered in industrialized countries and the preponderance of

recipients are in developing or under developed countries, head offices can claim correctly, as

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the president of Lockheed did in 1972, that they are not breaking their countrys laws by offering

bribes to public officials in other countries.15

Further, if the obligation of corporations to obey

the law is understood to extend only to laws that are actively enforced or laws whose breach

carries a reasonable risk of detection and punishment -- might it not be argued that when in

Rome one is entitled to do as the Romans do? -- then in many countries in the developing and

under developed world, bribery can also be said to be legal.

Although international aid predates globalization, it none the less plays a significant role

in the global economy.16 Among other things, it places large sums of money in the hands of

governments that have not raised the money they are spending through taxation. It is not

difficult to understand why funds of this nature and the goods they generate might be seen as

free goods by at least some of their recipients. It is perhaps not surprising that accountability

on the part of aid recipients for contracts financed through aid dollars might in practice become

quite tenuous. When the companies bidding for contracts are also foreign, the moral scruples of

local officials and the managers and agents of foreign companies may well become even further

attenuated since the transactions involved are only tenuously connected to local conventions and

local scrutiny in the countries of both the donors and the recipients.17

Globalization of international finance is a third significant factor. Where economic

activity is localized, bribery may still occur. However, the wealth it nets will be spent in one

form or another in the communities in which the wealth is generated. In a global economy, the

proceeds of grand bribery are very unlikely to stay in the communities or countries in which

bribery takes place. Thus, in a global economy, both the source and the destination of funds

generated by grand bribery is likely to be international in character. This serves to put the funds

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themselves and their recipients out of reach of the governments of the countries of the bribe

givers and the bribe recipients. Globalization in financial institutions has also made it possible

for vast sums of money to be accumulated and hidden from view in off shore accounts. The

phenomenon of dictators living out their lives after their overthrow in luxury in a foreign country

illustrates this phenomenon only too poignantly.

Finally, globalization is internationalizing local economies. Foreign investment is now

widely thought to be essential to development. UNCTADs World Investment Report 1995

points out for example that two-thirds of world trade in goods and services is accounted for by

transnational corporations. This internationalization exposes local economies to two risks to

which they would not otherwise be vulnerable. First, recent studies now show that bribery on a

grand scale inhibits access to international investment and therefore the funds needed to fuel

development (Kaufmann, 1998). Bribery also takes funds intended for local development and

diverts them to international financial institutions where they are very unlikely to be invested

back into the economies from which they were extracted.

Bribery and the problem of dirty hands

What then is the significance of these reflections for an understanding of bribery? The

answer is both simple and complex. Bribery isprima facieunethical virtually everywhere

judged by the standards of prevailing conventional morality. Certainly, this statement is true of

all countries in the industrialized world. However, in at least some circumstances, refusal to

engage in bribery can have far reaching impacts on the success and even the survival of

companies seeking to compete in international markets with obvious, serious implications for

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their shareholders and other stakeholders. Managers put in this position face an ethical dilemma.

Doing right may require that they do wrong. That is to say, meeting legal and moral obligations

to their shareholders and other stakeholders may require bribery.

The possibility that one's responsibilities might require and therefore justify

unethical conduct under certain conditions is one that has been extensively discussed by

moral philosophers and others for centuries. The focus for those discussion, however, has

not traditionally been business. Rather, the focus has been the realm of public affairs. At

issue in these discussions is the view that people in positions of public trust fail in their

responsibilities when they put conventional moral standards ahead of their obligations as

public servants. Machiavelli summarizes this view well when he advises that:

A Prince cannot observe all those things which give men a reputation for virtue,

because in order to maintain his state he is often forced to act in defiance of good

faith, of charity, of kindness, of religion. And so he must have a flexible

disposition, varying as fortune and circumstances dictate. ... he should not deviate

from what is good, if that is possible, but he should know how to do evil, if that is

necessary.18

A modern defence of that view is offered by Michael Waltzer who argues that:

It is by his dirty hands that we know [the moral politician]. If he were a moral

man and nothing else, his hands would not be dirty; if he were a politician and

nothing else, he would pretend that they were clean ...19

Walzer goes on to say:

Politicians necessarily take moral as well as political risks committing crimes that

they ... think ought to be committed.20

Thus, for Walzer as for many others, public servants, particularly politicians, may face

situations where it is their public duty to over ride basic moral and legal imperatives in

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the public interest.

It would appear that similar arguments can be made for corporate decision

makers as well. Competitive pressures in global economy being what they are, corporate

decision makers may face situations where achieving success may require that, like theirpolitical counterparts, they dirty their hands. In both cases, failure to do so is arguably

a failure on the part of the decision maker to live up to his or her ethical responsibilities.

The ethics of dirty hands dilemmas

To summarize, the view that the responsibilities of public and corporate office

may sometimes require that one get one's hands dirty implies that: (i) over riding moral

rules can be justified by an appeal to the consequences of not doing so; (ii) immoral

means can be employed for beneficial as well as evil ends; and (iii) when morally

reprehensible means are used to advance or protect an important good or avoid a greater

evil, their use is morally defensible.

The realities of international markets suggest that situations involving bribery

may sometimes have this character. Managers who find themselves in such a situation

face a dilemma. All the alternatives available to them will have an unethical dimension.

To offer a bribe will be to become entangled in a web of deceit. Refusal will mean serious

failure in the pursuit of a legitimate business venture with seriously negative implications

for corporate stakeholders.

Obviously, not all situations in which bribery is a possibility will fit this

description. However, realism suggests that some will. When that happens, how is the

dilemma to be resolved? Philosophical reflection suggests four possible options.The first option is to argue that it can never be right to do wrong. To suggest

otherwise is to accept the possibility that morality can generate contradictions or

contradictory imperatives. Philosophers who have taken this position (sometimes

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referred to a moral absolutists but perhaps more accurately described as moral

rationalists, in my view) argue that morality is an expression of human rationality

(Donagan, 1984). On this (Kantian) view, it is not possible for moral principles to

conflict in a fundamental way.21

If they do, they have been inadequately articulated orapplied. The task then, when faced with a dilemma, is to reason through to the correct

solution.

Utilitarianism in a least some of its formulations offers a variation on this same

theme. Utilitarianism is a form of consequentialist moral thinking that claims that the

moral value of any action lies in its consequences22 The right action is always, on this

view, the one whose consequences maximize resulting utilities however they are

measured.23 Only one action will normally have this outcome. That will be the right

action in the circumstances.24

In summary, option one responses to moral dilemmas take the view that there

always is in principle a right answer.

A second view, option two, argues that while there are situations where people are

faced with extremely difficult choices that involve choosing between or among evils, there

is no dilemma of dirty hands. What these situations require is the will to choose the

lesser evil. A person forced to choose the lesser evil does not in process do wrong in order

to do right. Rather in choosing the lesser evil, such a person fulfills his/her ethical

obligations. Option two and option one are similar in as much as both agree that in

doing what we ought to do, we cannot do wrong.25

Do either of these options provide a practical solution to resolving dirty hands

dilemmas posed by the practice of bribery? It is hard to see that they do. The problem isa practical one. However, it poses serious theoretical challenges.

Bribery will only generate an ethical dilemma where the costs of refusing to bribe

are very substantial for the company involved. This will occur when the survival of a

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company or alternatively its capacity to complete successfully in a market in which it

would otherwise be competitive is at risk. This risk will not occur uniformly for all

companies in a given competitive situation. Options available to some companies will

not be available to others. Hence the implications of refusal can vary significantlydepending on the situation and the company involved. As a result, there can be no easy

calculation of consequences or straightforward application of moral principles in the

abstract. All calculations of costs or application of moral principles will be heavily

context dependent. But this is not the only obstacle to discerning the right answer in

particular circumstances.

Resolving a genuine dilemma through the application of moral principles (a

Kantian solution) or through a calculation of consequences (a utilitarian solution) will

require understanding the implications of offering or refusing to bribe on both the supply

and the demand side. It is arguable that calculations of the implications of bribing or not

bribing for the company and its stakeholders are commonplace for managers. They are

the kind of calculation for which management is trained. Assessing the implications of

bribing or refusing to bribe for the individual, government, economy or society on the

demand side is quite another matter. The identify of the beneficiary of a bribe may not

be known with any certainty. It may be impossible to determine whether the bribe will

serve to further entrench existing patterns or extend corruption in new directions, for

example into new areas of government activity. It may be impossible to determine

whether a bribe will draw people into a web of corruption who had hithertofore been

immune. Neither will it be possible always or perhaps even occasionally to ascertain the

impact of a corrupt transaction on the market place, other players, political, judicial oreconomic institutions and practices, economic policy or development and so on.

Unfortunately, this is not the end of the difficulties that will be faced by a decision

maker faced with a bribery dilemma. Corruption has some of the characteristics of

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pollution. Taken separately, the pollutants added to a river system, for example, may

pose no serious problem. However, the cumulative effect may be very serious. Which is

the ethical perspective? Looked on as a single action, the implications of a bribe may not

be very serious. Looked on as reinforcing or enlarging an existing pattern, a bribe may bethought to have serious impacts. In this latter case, however, the actions of a corporation

seeking to gain or retain business are now constrained by the unethical actions of others,

hardly a fair requirement in a competitive environment.

What all of this indicates is that corruption is a very complex phenomenon. As

Daniel Kaufmann points out (Kaufmann, 1998), the incidence of bribery in a particular

cultural setting may be high or low, individualized or systemic, organized and centralized

or disorganized and decentralized, rising or falling and so on. Which combination of

these factors prevails will significantly affect any assessment of who is likely to be affected

and how they will be affected.26

The effects of corruption can also be direct or indirect. A decision to offer a bribe

to get a contract may result in a reduced quality of goods and/or services to be provided.

This will be a direct effect. Or it may additionally or alternatively contribute to the

perhaps serious distortion of public policy.27

Finally there is the problem of measurement. While there is a general consensus

among researchers that corruption has negative social and economic consequences,

available research findings are suggestive, not conclusive.28 It is unlikely that any

individual corporation would have research tools at its disposal capable of more accurate

assessments than those achieved by an international research community of scholars.

The cumulative effect of these uncertainties is to render any decision aboutwhether bribing or refusing to offer a bribe constitutes the lesser evil virtually impossible.

Neither is the uncertainty a decisive factor only for a utilitarian or consequentialist. To

the contrary, the uncertainties obfuscate any assessment whose focus is duties and

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obligations on the one hand or rights on the other. For example, it is now generally

conceded that extensive bribery is likely to distort public policy. Thus, research by Mauro

(1997) suggests an inverse correlation between corruption on the one hand, and

education expenditures, poverty, and income inequality on the other. The same wouldappear to be true for health. If this is true, it is clear that corrupt practices undermine

social and economic rights. Offering bribes can also affect the exercise of human rights,

the right to a fair trial and the right to the equal protection of the law, to take just two

examples. But equally, the refusal to offer a bribe may have negative implications for the

rights of shareholders and other corporate stakeholders.

And so we return to our main thesis. Business people faced with the option of

winning or retaining business by offering a bribe may be able to work around the

problem without breaking fundamental ethical strictures. However, they may not. And

when they find themselves in such a situation, they will be faced with a genuine moral

dilemma.

Lessons and conclusions

We have now canvassed two possible answers to the kind of dirty hands dilemma

that business people may confront in dealing with the problem of bribery. A third

common solution is to accept -- applying the logic of politics as articulated by Walzer and

others in the tradition of Machiavelli to business -- that business people faced with

situations of the sort described simply have to learn to dirty their hands. On this account,

others, for example shareholders, other stakeholders and the public generally will have to

accept that competing successfully in international markets will require business people

to make hard, unethical and perhaps illegal choices.The prevalence of bribery in international markets would suggest this course of

action captures current conventional wisdom. However, it is in many respects a counsel

of despair. For it provides little by way of moral incentives for the already wealthy and

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powerful to seriously confront a problem which is undermining the capacity of the

developing world to work its way out of the poverty with which it is obviously plagued.

There remains, however, a fourth option. I want to suggest that faced with the

kinds of dilemmas our discussion rests on, morality simply breaks down. That is to say, itmay well be characteristic of serious moral dilemmas of the sort that business people do

sometimes encounter, that there just are no morally acceptable solutions available. What

one decides to do, faced with this sort of dilemma, then, is best seen simply as a matter of

choice governed either by personal convictions or alternatively non moral considerations.

To put it in another way, it is a mistake to think that there must be a morally acceptable

solution to all moral dilemmas. Some apparently intractable moral dilemmas may be

just that, intractable.

It is important to differentiate this option clearly from the first two and the third.

What this fourth option suggests is that it may well be the case that competition in

international markets will require decisions that have an unavoidably unethical

dimension and for which there are no morally acceptable solutions. What this implies is

that those caught in situations of this nature are not and should not be held morally

culpable for failing to do the "right" thing. In these cases, none of the options, from

which a course of action will have to be chosen, will be morally justifiable. It follows that,

in these kinds of situations, the decision is bound to be controlled by non-moral

considerations.29

Leaving the matter here, however, is clearly unsatisfactory. More needs to be said.

For anyone who understands the central role of ethics in the building of sound social

relationships, the suggestion that individuals might find themselves having to decide on acourse of action where the chief options were neither justifiable nor unjustifiable, morally

speaking, requires deeper analysis. It requires, at the very least, that one acknowledge

what is easily forgotten, namely, that morality has to do not simply with guiding

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individual choices but also with shaping and evaluating social environments.

What needs to be emphasized, here, is the deeply problematic character of any

environment in which individuals are required to choose among options all of which

require that important moral values be sacrificed or overridden on all available options.Addressing the social, political or economic forces that drive individuals into having to

cope with intractable moral conflict is, or should be, one of the central functions of moral

criticism.

Business ethics, then, is not justabout ethical management or ethical decision

making. It is also, perhaps even primarily, about shaping the social, economic and

political environment of business. A central criterion for measuring the ethical quality of

that environment is the extent to which those working in it find themselves driven

toward "dirty hands" decisions, decisions for which there are, morally speaking, no right

answers. Intractable moral dilemmas point not to unethical business people. Rather,

they point to corrupt business environments. Ethical companies will recognize this fact

and remove themselves and their employees from them in so far as they are able. They

will also support efforts on the part of governments, voluntary sector coalitions30and

industry wide alliances whose goal is systemic reform.

This view of business and business ethics, based as it is on a particular view of

morality and moral theory, has several virtues. It leaves those faced with what are

appropriately described as impossible moral choices free of moral censure. Nevertheless,

it does not condone their decisions. Rather, it isolates those decisions as exceptions,

significant deviations from normal business practice, and symptomatic of moral

pathology in the business environment. In contrast, option three, the Machiavellianoption, sees these decisions as simply an unavoidable consequence of business or politics.

Option four, unlike option three or options one or two, has the virtue, therefore of

bringing the focus of moral critique to bear on the reform of the social, political and

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economic environments in which business is conducted. It is an approach to reform that

acknowledges that moral values like efficiency, honesty, and fairness in the effective,

efficient and ethical operation of market economies are or ought to be regarded as norms

of sound business practice. At the same time, it is an approach which acknowledges thatglobalization has set the stage for practices that generate genuine unresolvable moral

dilemmas for managers and the corporations they mange. Once acknowledged, this

approach shifts the focus of ethical critique from the evaluation of the actions of

corporations and senior managers to the reform of the political, economic and social

environments in which business is conducted.31

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1. Like a good deal else to be discussed in what follows, this description of the goal of briberyhas an ironic dimension. For it is certainly within the realm of possibility though for the mostpart unlikely that the goal of a bribe might be simply to ensure that a bid for a contract or aproposal for a project was evaluated on its own merits. For example, in an environment in whichbribery was common, a company wishing to compete for a project and confident of thecompetitive merits of what it had to offer might simply want to ensure that the decision makersevaluated all bids solely on their merits. This then would be the purpose of the bribe. Whethersuch a strategy was likely to be effective in a corrupt business environment is, of course, anothermatter.

2. Daniel Kaufmann (1998, p. 139) quotes from a treatise called The Arthashastraby Kautilya(the preceptor and Kings advisor in ancient India), circa 400 B.C., which identifies forty waysin which a government servant can embezzle funds from the government. The passage quotedasserts that it is impossible to construct a system in which no funds are siphoned off by publicservants for their own private purposes.

3. I return to this point below. For an illustration of these values at work, see the defence byCarl Kotchian, CEO of Lockheed Aircraft Corporation, of his decision (1972) to authorize thebribery of Japanese officials to ensure the purchase of the Tristar passenger aeroplane by AllNippon Airways (Boatright 1997, p. 28 ff for example).

4. Richard T. de George explores of this and the other themes identified in this paragraph inCompeting with Integrity In International Business, (Oxford, 1994), particularly ChapterSix:Ethical Dilemmas, Conflicting Norms and Personal Integrity pp. 96-112. See alsoCorruption and the Global Economycited in note 1 above.

5. de George explores this theme also at some length in the book and chapter referred to in theprevious note. See also note 10 below.

6. See for example Vito Tanzis discussion of Corruption and the Budget inEconomics ofCorruption(Jain, 1998), p. 122.

7. See, for example, Susan Rose-Akermans discussion of The Political Economy ofCorruption in Corruption and the Global Economy (Jain, 1998).

8. The World Bank and the International Monetary Fund have denounced corruption as animpediment to economic development and have taken a number of steps toaddress the problem (Elliot, 1997).

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9. The previous note is relevant here as well.

10. An intriguing example of this occurred in Canada earlier in this decade as a result of AirCanadas decision to buy the European Airbus rather than its Boeing competitor. Boeing isalleged to have subsequently complained that bribery had influenced the final decision. AirCanada officials denied the suggestion. Nonetheless, the RCMP (Canadas national police force)undertook an investigation that resulted in requests for bank account information from Swissauthorities. One of the accounts was identified as belonging to Brian Mulroney who was at thetime of the Airbus purchase the Prime Minister of Canada. When the news of the letters ofrequest and the on-going investigation were reported in a Canadian newspaper, Brian Mulroneysued the Canadian Government for liable. Eventually the Canadian Government settled the lawsuite for several millions of dollars. The initial accusations were taken seriously in part no doubtbecause bribery is widely thought to be common in the aerospace industry. This, combined withcould be surmised to be a desire to explain away a significant failure to obtain a contract, wascentral to an embarrassing episode in Canadian political history.

11. The dilemma faced by Carl Kotchian, president of Lockheed Aircraft Corporation in theearly 1970's, is a case in point. The company was on the edge of bankruptcy. Failure to win acontract to supply passenger jets to All Nippon Airway was vital to the survival of the company.Bribes in excess of $12 million secured contracts for planes and ensured the companyssurvival. The bribes were not significant relative to the size of the contract amounting to lessthan 3% of the total value of the resulting contracts. They expedited the contracting process,appeared to build certainty into the hazardous process of complex negotiations, and resulted inthe supply of a quality product to the airline. Had Lockheed not paid the bribe, a competitorcompany almost certainly would have done so leaving little to be gained by refusing to accede toa practice widely thought to be a condition of doing business in Japan at the time, or so it mightbe argued. At the same time, refusal to play the game would have put at risk the livelihood ofthe companys employees and the welfare of the communities that depended on the company for

their economic welfare.

12. See the Global Policy Forums website athttp://www.globalpoicy.org/socecon/tncs/tncstat.htm.

13. Corporate Watch:Http://www.corpwatch.org/trac/corner/glob/ips/top200.html. Thedecisions of small and medium sized firms can also have a significant impact on the welfare ofpeople thousands of miles from their home base. This influence can result from collective

actions whether formally coordinated or not. The flight of capital from the tiger economies ofAsia in the mid nineties is a good example. Even the decisions of small corporations can also

have surprisingly significant impacts. This phenomenon is well illustrated by the activities ofBre-X, a junior Canadian gold mining company, in Indonesia. In this case, claims of a majorgold discovery led several multi national gold mining companies into a competition for the rightto develop the deposit. In pursuit of their objectives, members of the Marcos family were hiredas agents, and special arrangements made with people closely connected to the Marcosdictatorship. When the gold play turned out to be fraudulent, significant numbers of small

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investors, who relied in part on the listing of Bre-X on both the Calgary and Toronto stockexchanges, lost savings affecting directly their quality of life in retirement for example.

14. Evidence pointing to increases in the incidence of bribery world wide is suggestive notdefinitive. It is not clear for example whether the reports of corruption point to it growth orsimply to more consistent and effective reporting. For discussions of this issue see Jain (1998),Kimberly (1997) and the Transparency International website (www.transparency.de).

15. This claim ceased to be true for American companies in 1977 with the passage of theAmerican Foreign Corrupt Practices Act. It has also ceased to be true, though lessunambiguously so for corporations headquartered in countries that have signed the 1997 OECDanti bribery convention.

16. For example, there are many countries in the world, Africa in particular, where internationalaid constitutes more than fifty percent of government spending.

17. Preliminary results of research currently being conducted at York University suggests thatsome governments of industrialized countries have played a significant role in aiding andabetting corruption over the past two decades for both political and commercial reasons.

18. Machiavelli The Prince and the Discourses(New York: Modern Library) p. 101.

19. Michael Walzer, Political Action: The Problem of Dirty Hands,Philosophy and PublicAffairs, 1973, p. 168.

20. Ibid, p. 179.

21. Apparent conflicts may of course occur. They may even occur frequently. However, ifmorality is a product of reason, these conflicts will alway be resolvable. Donagan, 1987, p.285

22. See A Critique of Utilitarianism by Bernard Williams in Utilitarianism For and Against(Cambridge England: Cambridge University Press), 1973, at p. 79.

23. Of course, the utilities must be commensurable. If they are not, the right course of actioncannot be determined and genuine moral dilemmas of the sort under discussion are the inevitableresult. One of Williams purposes in the analysis referred to in the previous footnote is to showthat relevant utilities that constitute moral values are not commensurable. Hence utilitarians(like R.M. Hare, for example) are wrong to think that for every dilemma there is always a rightanswer.

24. There are of course serious objections to this version of utilitarianism. Williams (1973)

articulates a number of those objections in Utilitarianism For and Against. What is importantfor present purposes, however, is that this version of utilitarianism has been defended and doeshave the implications here described.

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25. Kai Nielsen, There is no dilemma of dirty hands, South African Journal of Philosophy,1996, 15(1), p. 2.

26. As commentaries likeEconomics of Corruption(Jain, 1998) demonstrate, answers to thesequestions are only now being explored by researchers. The complexities of the analysis requiredputs this kind of research well beyond the grasp of corporations faced with the need to makedecisions within severely constrained time frames.

27. See for example Vito Tanzis analysis in Corruption and the Budget: Problems andSolutions (Jain, 1998).

28. See Kaufmann (1998) at p. 134, for example.

29. This proposed option is bound to be greeted with scepticism by some readers. It is worthpointing out, therefore, that what is being suggested is not unique to business settings. War,

severe civil strife, natural catastrophes like famines also created conditions where moralityceases to guide because there are no right answers. The excruciating character of thesesituations have been best illustrated by accounts of war experience of partisans and others in thesecond world war who were faced with choices imposed by Nazi decree all of which could onlybe described as evil. Existentialist ethics could be said in many respects to constitute a response(though in my view an incorrect one) to such experiences. Triage situations sometimes faced bymedical personal offer a distinct source of examples as do situations occurring in times of severefamine or other natural disasters. Insisting that morality must provide solutions in such cases iswhat is here being challenged. To accept that it must inevitably drives one toward accepting thatthe end justifies the mean or toward some form of irrationalism ethics.

30. Transparency International is an example. It is a non governmental voluntary sectororganization that has come into existence in this decade to find corruption in internationalbusiness transactions. Further information about its work can be obtained by contacting theauthor of this paper.

31. The recently concluded OECD anti-bribery convention together with the new anti corruptionpolicies of International Financial Institutions like the International Monetary Fund (IMF) andthe World Bank are excellent examples of kinds of reforms these conclusions call for.

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