Tackling International Corruption: No Longer Taboo

Courtesy Reuters

After years of being tolerated with a mixture of apathy, cynicism, and denial, corruption is becoming a target of serious international action. Where once they looked the other way, the World Bank, International Monetary Fund (IMF), and other international organizations are now seeking to curb bribery and other corrupt practices. These expanding efforts add up to a reform movement whose most significant achievement to date is the Convention on Combating Bribery of Foreign Public Officials of the Organization for Economic Cooperation and Development (OECD).

The convention, signed in 1997 and now undergoing ratification by the legislatures of 34 nations, will end the competitively damaging isolation of the United States, which banned bribing foreign public officials in 1977. Bribery scandals in half a dozen countries led the United States to pass the Foreign Corrupt Practices Act in hopes that other countries would follow suit. But the act was derided as misguided American moralism, and foreign competitors remained free to use bribes to win commercial orders. Many countries, including Germany and France, even allowed their deduction as business expenses. The United States also promoted a U. N. treaty to ban bribery, but that effort fizzled. The developing world saw the proposed treaty merely as an opportunity to bash multinational companies.

Conventional wisdom saw corruption as a chronic characteristic of human behavior that, in any event, was not of debilitating proportions in the developed world. Although admittedly widespread in the Third World, endemic corruption was not seen as impeding rapid growth in countries such as Indonesia, South Korea, Malaysia, and Thailand. Some economists even saw bribery as grease for the wheels of progress in overregulated societies.

During the last half-dozen years, however, there has been a dramatic change in the tolerance of corruption. A wave of bribery scandals hit all parts of the world. In Asia, the downfall of Indonesian President Suharto followed swelling protests against his refusal to undertake reforms, especially regarding his family's ill-gotten billions from state-connected enterprises. Corruption charges played a critical role in

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