Health care professionals in Egypt conduct a stakeholder analysis to help spell out governance principles for Egyptian hospitals.
A hip replacement in the United States, paid for out-of-pocket (i.e., without health insurance), would cost anywhere from $11,000 to $125,000, depending on what hospital you go to, according to a 2013 survey of 100 hospitals featured on National Public Radio. And that was among the hospitals that, when asked, could actually produce a quote – 40 of the 100 hospitals surveyed couldn’t quote a price at all.
Those fortunate enough to have insurance don’t need to worry about price-shopping. When I go to my primary care physician, I pay a $20 co-pay. (Under our previous insurance, provided by my wife’s former employer, it was $10. Why the difference? Who knows?) I have no idea how much my insurance company pays the doctor. I suppose I could find out, but… honestly? There’s really no compelling reason for me to do so. It’s $20 no matter who I see.
And it turns out that, even if there were more incentive for me to price-shop, more expensive hospitals aren’t necessarily better hospitals, according to a 2014 study.
As my colleague Anna Nadgrodkiewicz recently discussed on this blog, corruption is a preeminent threat to developing countries. In Brazil, corruption has been estimated to cost somewhere around $53 billion (approximately 2.3 percent of GDP) in 2013 alone. Because this loss has a corrosive effect on democratic governance and the country’s ability to deliver continued improvement, Brazilians took to the streets in massive protests. As a result the government of Brazil passed the “Clean Companies Act” which began being enforced on January 29.
The new law, like similar legislation in other countries, establishes corporate liability for corrupt practices committed by Brazilian companies as well as foreign companies that have branches or affiliates within the country. Under the act, companies that bribe public officials (foreign or domestic) can be subjected to civil and administrative sanctions including heavy fines, prohibition on receiving state funds, and even dissolution of the firm. The fact that Brazilian president Dilma Rouseff exercised her line-item veto power to make the law more strict than originally drafted seems to signal to the world that Brazil is serious about reining in corruption.
In the wake of the passage of the Clean Companies Act, much talk erupted over the implications for international trade. Since the law closely resembles existing anti-corruption laws such as the U.S. Foreign Corrupt Practices Act and the UK Bribery Act, experts have warned that companies operating in the region can expect Brazilian authorities to cooperate more closely with their counterparts in the US during investigations.
More general discussion has involved the importance of solid compliance programs in multi-national companies (MNCs) if they are to avoid any run-ins with the law. However, such commentary ignores a large audience that should take note of this development: developing countries.
Corruption is one of the biggest challenges facing the developing world: it has a corrosive effect on democratic governance, undermines public trust, and wastes scarce resources. Crucially, corruption also represents a destructive tax on the private sector that hampers economic growth and development prospects.
A new paper by the Center for Strategic and International Studies’ (CSIS) Project on Prosperity and Development, The Costs of Corruption: Strategies for Ending a Tax on Private-sector Growth, estimates that narrowly-defined private sector corruption in 105 developing countries amounts to over $500 billion, 3.7 times the amount of official development assistance in 2011. While businesses are often blamed for corruption, and in particular bribery, the paper recognizes that corruption has both supply and demand sides, and that while businesses may contribute to corruption, they are also victims of it. As such, business must be a part of successful solutions to the corruption problem.
This is the point that CIPE constantly emphasizes – and applies – in its work around the world. In fact, the report cites numerous examples of CIPE’s successful anti-corruption programs, including collective action among leading companies in Thailand, legal reforms to guarantee disclosure of procurement contracts in Egypt, work on corporate governance and SME policy advocacy in Russia, improving public procurement transparency and governance in Kosovo, streamlining Armenia’s tax code, and strengthening property rights and supporting legal institutions in Kenya.
“Corruption was a taboo word in 1996. My advisors were worried about using the c-word in my speech.”
Nearly 20 years have passed since the former World Bank President, James Wolfensohn, gave his groundbreaking speech on the “cancer of corruption” at the World Bank’s 1996 Annual Meetings. And the anti-corruption movement has come a long way.
At the World Bank’s discussion Speak Up Against Corruption, which featured Wolfensohn; Dr. Jim Kim, World Bank Group President; Paul Volcker, Former Chairman of the Federal Reserve; Cesar Purisima, Secretary Finance of the Philippines; and Haguette Labelle, Chair of Transparency International, the panelists reflected on how much work there remains to fight corruption at the international and local levels.
Anti-corruption compliance has become one of the key issues that companies around the world need to tackle, especially if their business involves extensive cross-border value chains.
The responsibility for designing and overseeing a compliance program, at least in larger companies, lies with an ethics and compliance officer or department. That’s not an easy job. Robust compliance requires sufficient resources; a communication strategy – both internal and external – to convey company values, policies, and procedures; a level of trust among employees to voice concerns and flag violations; and above all, a clear commitment from the board and top management.
Not surprisingly, in many companies at least some of the elements necessary for sound compliance need more attention and remain on a compliance officer’s wish list. In a recent blog, Michael Scher, who has over three decades of experience as a senior compliance officer and attorney and work for major companies in New York and the Middle East, shares several such items. Based on 2013 trends Scher complied 10 areas where more needs to be done, which can be summarized in the following categories:
Cartoons demonstrate the ways in which visuals transcend language barriers, expressing ideas in a way that words often can’t. For the second year in a row, the U.S. Department of State’s electronic journal (EJ |USA) has featured winning cartoons from CIPE’s Global Editorial Cartoon Competition.
Last year, EJ |USA featured semi-finalists from the corruption category in its Partnerships Against Corruption issue (shown below). As we celebrate the United Nation’s eighth International Anti-Corruption Day, we are reminded how cartoons show the ways in which combating corruption is universal – regardless of language, culture, or nationality.
Two decades ago, corruption was the problem that no one talked about. “You couldn’t use the words ‘bribery’ or ‘corruption’” at institutions like the World Bank, said Michael Hershman, who helped found Transparency International in 1993.
Thankfully, all that has changed: corruption is now widely recognized as one of the biggest stumbling blocks to economic development around the world — a rot that drains economies and governments, sabotages aid programs, and erodes trust in public and private institutions. This new attitude can be attributed, in large part, to the work of Transparency and its individual country chapters — a history which Hershman shared with CIPE staff at a brownbag discussion this week.