Bribery

By

Sveinn Eldon

• A bribe is a payment for a service • The service consists in a decision which is not

made on its merits but made on the bribe (or influenced by the bribe).

• P accepts a bribe from R if and only if P agrees for payment to act in a manner dictated by R rather than doing what is required of him as a participant in his practice.

• P may decide not to act in the manner dictated by R, we would nevertheless maintain that P has been bribed by R.

Bribery

Costs and Gifts

• Paying for access to an important decsion maker• Paying the decision maker for his time when seeing you• Business gifts• Business entertaining• Trips to inform decision makers, influencers or

gatekeepers• Pharmaceutical companies sponsoring medical

conferences• Pharmaceutical companies paying doctors costs of

attending a medical conference

Violating a duty

• So why is bribery wrong?

• Prevents markets from working effeciently

• It prevents open access to all competitors on equal terms

• Competitors are prevented from competing on the merits of their products or services

• Often leads to higher prices

Bribing abroad...

• Bribery often makes a country less atractive for foreign investors and may thus keep down the standard of living in the country

• American companies are forbidden to pay bribes even abroad. They complain that they are therefore at a disadvantage to non US companies in some markets

A friend in need...

• Should companies be allowed to do abroad what they are forbidden from doing at home?

• Cultural differences between countries should they not be respected?

• Relationships are very important in many cultures. Expensive ”gifts” may be neccessary to establish and maintain such relationships

The choice is yours...

• Can gifts not be given without any intention to influence but just as an expression of respect or friendship?

• If my competitors are paying bribes, do I have a choice?

• How can I hope to suceed in country where it is common practice to pay bribes and decison makers expect it, without paying bribes.

• I may not be able to afford the luxury of staying out of such markets.

Poor guy...

• In some countries public officials have very low pay but are expected to receive bribes which they are expected to share with their bosses and the rest of their entire family.

• Refusing to pay such an official may get him into trouble with his boss and make him a failure in the eyes of his family