Combating Corruption: A Private Sector Approach

01.04.2011 | Guides & Tools

Introduction

Corruption occurs in all societies, but threatens the economic and political fortunes of developing countries the most. Bribery, conflicts of interest, and illegal deals impose heavy costs on the economy while distorting development policies and undermining confidence in public institutions.

The Center for International Private Enterprise (CIPE) believes that private sector participation in the fight against corruption is key to success. Although some companies may benefit in the short term from corrupt deals, corruption causes most companies to suffer in the long term from higher costs, greater insecurity, and an inhospitable business climate. Companies have good reasons to join this fight and can tackle the supply side of the problem in ways that governments cannot.

Equally important, CIPE believes that corruption must be treated as the product of institutional failures, not simply individual moral failings. Building a system of strong, balanced institutions is the best way to reduce corruption. This means creating a set of reliable incentive structures that reward honesty and transparency and punish bribery and abuse of public office. The private sector can make extremely valuable contributions to reforming political and economic institutions.