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The Problem of Monopolies & Corporate Public Corruption
Abstract
Defining corruption as the exercise of public power for private, selfish ends, many theorists have argued that individuals can be corrupt even if their actions are legal. This essay explores the knotty question of when legal corporate action is corrupt. It argues that when corporations exercise public power, either through monopolistic control of a market or through campaign contributions and support of governmental actors, they are subject to the same responsibilities of anyone who exercises public power. Therefore, as a theoretical matter, we should call corporations corrupt when they exercise public power selfishly, in a way that puts their own interests over the public’s interests. Because they make legal corporate corruption less likely, global anticorruption campaigns should therefore emphasize antimonopoly laws and campaign finance laws.
... It has been argued that, in many contexts, political contribution (including campaign finance) and anti-corruption reforms will be required to restrain corporate influence in policymaking and politics. 89,[99][100][101][102] Important measures identified during the review include bans, limits, and real-time disclosure of political contributions from corporations 103,104 ; tightly regulating, through bans, waiting periods, and disclosure laws, the 'revolving door' between legislators and regulators and high-level positions in corporations 105 ; and the implementation of mandatory lobby registers and 'ministers' diaries' that require detailed real-time disclosures for corporate engagement with public officials. 106, 107 In the United States, many commentators have specifically called for an overruling of the 2010 Citizens United v. Federal Election Commission decision, which permits unlimited election spending by corporations using treasury funds. ...
Background: In many sectors of the economy, for-profit business corporations hold excessive power relative to some governments and civil society. These power imbalances have been recognised as important contributors to many pressing and complex societal challenges, including unhealthy diets, climate change, and widening socio-economic inequalities, and thus pose a major barrier to efforts to improve public health and health equity. In this paper, we reviewed potential actions for addressing excessive corporate power. Methods: We conducted a scoping review of diverse literature (using Scopus, Web of Science, HeinOnline, and EBSCO databases), along with expanded searches, to identify state and collective actions with the potential to address excessive corporate power. Actions were thematically classified into overarching strategic objectives, guided by Meagher’s ‘3Ds’ heuristic, which classifies actions to curb corporate power into three groups: dispersion, democratisation, and dissolution. Based on the actions identified, we proposed two additional strategic objectives: reform and democratise the global governance of corporations, and strengthen countervailing power structures. Results: We identified 178 documents that collectively cover a broad range of actions to address excessive corporate power. In total, 18 interrelated strategies were identified, along with several examples in which aspects of these strategies have been implemented. Conclusion: The proposed framework sheds light on how a diverse set of strategies and actions that seek to address excessive corporate power can work synergistically to change the regulatory context in which corporations operate, so that broader societal goals, including health and equity, are given much greater prominence and consideration vis-à-vis powerful corporate interests.
... Similar recommendations are meaningful in agriculture [106][107][108]. The national leadership theme can be brought in correspondence to the "naturally" monopolistic intentions of corporations [109], although it is also linked to corporations' ability to undergo major transitions [110]. The related issues have been discussed only occasionally relatively to agriculture [111,112] because the market of this industry is often dominated by small and medium players. ...
Strategic communication is essential to corporations in all industries, including agriculture. In this paper, the idea of corporate web positioning is developed using the example of agricultural corporations (agroholdings) in Russia. This idea reflects companies’ self-understanding communicated online to its customers, partners, competitors, broad public, and state. In our study, webpages of 50 Russian agroholdings were examined to judge their web positioning. The principal approach was qualitative identification of the common themes, which was followed by the analysis of the frequency of these themes. The content analysis of the webpages allowed identification of five general themes of corporate web positioning, namely customer satisfaction, national leadership, the company itself, business focus, and innovative technologies, and three supplementary themes such as natural/ecological products, healthy products, and own products (full-cycle production). It was established that customer satisfaction and national leadership are the most common general themes (two-thirds of all considered corporations). Our other finding was that the supplementary themes were registered for a third of the analyzed corporations. All themes matched the urgent aspects of the modern agriculture. Further interpretations show that the Russian peculiarities of the corporate web positioning in agriculture can be explained within the national socio-economical context. It is recommended that top managers of agroholdings should realize the already existing diversity of web positioning and try to explore new themes for effective strategic communication.
... Public corruption differs from private sector corruption because the government has a monopoly over specific goods and services (e.g., licenses, business permits, public contracts, most schools, court adjudication), so there is no place else to go to obtain these services (Bauhr, 2017;Tanzi, 2002;Teachout, 2018). Public corruption can also be considered a more serious threat because it undermines confidence in government, and the legitimacy of government institutions in the eyes of citizens. ...
International expert groups have identified the largest problems in the world. This address will connect these disparate global problems, showing how corruption either created them or made them much worse. The world has turned to structural reforms to institutions, laws, and policies to control corruption, but success has been uneven, as unethical people continue to exploit both corrupt and non-corrupt environments, aggravating the world’s largest problems and creating new ones. A commitment to ethics education and training can generate more ethical choices and principled responses that would increase individual accountability. It is argued that the largest problems in the world can be reduced in size only through more ethical decisionmaking, which is a precursor to reducing corruption, as the common feature of the world’s largest problems.
... In fact, the spread of episodes of corruption among politicians and public officials contributes to delegitimizing the political-administrative system, alters the democratic circuit of political representation, affects the correct exercise of public powers and promotes the waste of public resources. Moreover, the phenomenology of corruption has become increasingly more complex, given that the traditional subjects of criminal law, public subject corrupted and private-corrupting subject, very often overlap other subjects with the task of mediating illegal transactions (Teachout, 2018). ...
This article discuses the concept of democracy, corruption and the relationship between. Democracy and corruption have been perceived to be in a close and complex relationship with each other. Scholars have argued that a solid link exist between them. When democracy weakens, we can almost certainly expect an increase in corruption due to the attrition of institutional checks and balances, independence of courts and frequent restriction of the space for civil society actions and political rights of citizens. The paper analyses the large impact corruption has on democracy, and the states sustained efforts to limit corruption can improve the strength of democracy by promoting just and competitive elections, ensuring better quality and delivery of public services and improving citizens' trust in political institutions and governments. The paper in the second part observes the legal norms approved by the European legislation concerning the fight against corruption, it seems possible to outline an emerging model of corruption prevention by concluding that the effort of European and national legislation to limit corruption should be a contribution to the consolidation of democratic regimes and efforts to improve the quality of governance.
... All actors should have equal possibilities to pursue their interest and should be equal before the law. However, privileges and unequal treatment exist for different reasons social, political, related to the national interest, ideological, religious, etc. (Teachout, 2018) The combination between the equality principle and the existence/creation of privileges is the main challenge in the analysis of state capture. ...
The objective of this paper is to present a method to measure and quantitatively assess the prevalence of state capture. This phenomenon refers to the emergence of private interests which, in the course of modernization and growth tend to become dominant (in a sector, in the economy or globally). The assessment of this phenomenon is controversial and depends on the dominant perceptions of norm and deviation from the norm embedded in laws and regulations. In the context of the European civilizational model, and the Webe- rian state ideal, the norm postulates that all interests and actors should be regarded equal and no specific privileges should exist. The paper is based on the idea that the functional nature of the capture process (the acquisition of privileged status) can be achieved not only by influencing the adoption of regulations and rules but also through other mecha- nisms. At a general level, state capture could be described as virtual privatization of the state functions which ensures a systemic privilege for captors. Depending on who the captors are (business, government officials, parties, politicians, etc.) capture could in- clude combinations of multiple base mechanisms. The concrete state capture assessment methodology used focuses exclusively on business capture and includes three groups indicators of state capture: business capture pressure assessment, institutional enablers, environmental enablers. This theoretical structure has been tested using factor analysis. Pilot test data from five countries have been merged to produce 1605 different institu- tional assessments. The factor analysis generally confirms the initial theoretical assump- tions about the structure of indicators necessary to assess state capture vulnerabilities.
Fraud is an ever-growing problem for financial institutions in Nigeria, with criminals using a wide variety of methods. Unfortunately, employees were fingered in most of these fraudulent activities. Previous studies focused on contextual and organizational antecedents of motivating engagement in fraudulent practices and less on employees' dispositional factors. This study examined the role of personality traits and ethical beliefs on fraudulent behaviour among bank employees. The study was a cross-sectional study. Three hundred and fifty-three (353) employees in the middle to junior level management cadre were selected through stratified sampling technique from banking organisations operating in the Ibadan metropolis. The respondents responded to a self-report questionnaire measuring fraudulent behaviour intention and red flags; personality traits and Ethical position questionnaire. Two hypotheses were tested using multiple regression, Pearson correlation analysis and ANOVA at p≤0.05. Results demonstrated that conscientiousness personality trait was the only predictor of fraud intent behaviour among the personality variables. Employees with Absolutist ethical principles reported lower fraud intent behaviour than those with subjectivist ethical philosophy. The study concludes that personality traits and ethical beliefs were powerful motivators for fraud behavior. Thus, fraud and HR experts were enjoined to utilize psychological profiles in fraud investigations and selection of employees.
A recent definition of state building, which is a similar concept, is the political and institutional structures that negotiate the mutual demands between state and citizen.
Let us start with looking at where we are trying to get. The purpose of Anti Corruption is part of a package of interventions aimed at improving the well being of its citizens in the long term.
Some consensus on what sort of picture this presents has been arrived at in western countries. The picture is commonly displayed as a temple. Others have used the metaphor of the Birds Nest.
We come back about the implications of these metaphors later; however, they are an attempt to characterise a core or less complex set of structures that sustain this relationship between citizens and the state.
Microeconomics assumes that business firms respond to changing costs and prices. Taxes impose costs of businesses, and tax breaks help industries grow. This paper discusses the dynamics of government actions, drawing on the end of the Bell System in the 1970s, and then reviews the history of tax breaks to a variety of large industries, from the oil industry to finance and real estate. It closes by placing the whole discussion in the framework of corruption as it should be defined, not as the Supreme Court defines it now.
The insidious practice of corruption cripples institutions, consumes communities, and cuts deeply into the very structure of people’s lives. It destroys nations and saps their moral fiber. Corruption is invasive and unforgiving, degrading governance, distorting and criminalizing national priorities, and privileging acquisitive rent-seeking, patrimonial theft, and personal gains over concern for the commonweal. It also costs an estimated $1 trillion annually–roughly a loss of 2 percent of global GDP–and disproportionally affects the most needy countries and their peoples. This opening essay shows that these baleful results need not occur: the battle against corrupt practices can be won, as it has been in several contemporary countries and throughout history. Ethical universalism can replace particularism. Since collective behavioral patterns and existing forms of political culture need to be altered, anticorruption endeavors must be guided from the apex of society. Consummate political will makes a critical difference. Anticorruption successes are hard-won and difficult to sustain. This essay and this special issue show what can and must be done.
Despite the focus placed on combating corruption over the last quarter-century, practical results have been disappointing. A small number of "success" stories cannot mask the fact that corruption continues to blight the lives of millions of citizens. This essay argues that part of the reason for the broad failure of anticorruption policies is that we have not specified clearly enough what we are seeking to address, and have paid insufficient attention to changes in how and where different forms of corruption operate in practice. Rather than sticking to unrealistic aspirations to "defeat" corruption, this essay argues that we should pay more attention to the positive promotion of integrity, supported by a better understanding of the drivers of individual behavior, particularly how these are more complex than suggested by the incentives-based literature. The final section of the essay outlines some practical measures we can take, underlining the need to focus reform efforts at both supra- and subnational levels in order to help move beyond what has become a sterile conversation about corruption.
Any assessment of the role of corruption in the worldís economies must also address its political dimensions. These include corrupt activities them- selves, corruption as a political issue, and the overall health of a nationís politics. Corruption raises important political questions about the rela- tionships between state and society and between wealth and power. It affects political processes and outcomes, but its meaning, and the sig- nificance of particular cases, are also influenced by the clash of political interests. Corruption tends to accompany rapid political and economic change, but its significance varies from one society to another: it topples some regimes while propping up others. And corruption is, of course, an increasingly important political and trade issue among nations and in international organizations. At the same time, many other forces affect a countryís well-being, and it is risky to use corruption to explain too much. As Colin Leys (1965, 222) argued, ìIt is natural but wrong to assume that the results of corruption are always both bad and important.î Corruption occurs in many forms, with contrasting patterns and political implications (Johns- ton 1986). Its effects are notoriously difficult to measure: they must be gauged, not against ideal political and economic results, but rather against what would have happened without corruptionóa very different, often
Deep confusion reigns over federal insider trading law, even over the essential elements of an insider trading violation. On the one hand, this uncertainty seems to have encouraged the Securities and Exchange Commission (SEC) and some lower courts to push the boundaries well beyond the limits previously established by the U.S. Supreme Court. On the other hand, influential academics continue to express normative skepticism as to why there is even a ban on insider trading at all. Without a satisfying theory of what constitutes insider trading and why it is wrong, doctrinal development in the lower courts has reached a crisis, with the economic stakes only getting higher. This Article offers a new theory of insider trading law. It maintains that insider trading is a form of private corruption, defined as "the use of an entrusted position for self-regarding gain." The corruption theory not only provides answers to the normative skeptics but, as compared to the two leading alternatives, the property theory and the unjust enrichment theory, more closely aligns with the core features of the received insider trading doctrine. And, on careful analysis, the corruption theory reveals an implicit and previously unappreciated coherence to the doctrine. Finally, the corruption theory provides relatively concrete guidance in hard cases, which is the sort of pragmatic theory that the SEC and the courts desperately need.
This paper presents a theory of competition among pressure groups for political influence. Political equilibrium depends on
the efficiency of each group in producing pressure, the effect of additional pressure on their influence, the number of persons
in different groups, and the deadweight cost of taxes and subsidies. An increase in deadweight costs discourages pressure
by subsidized groups and encourages pressure by taxpayers. This analysis unifies the view that governments correct market
failures with the view that they favor the politically powerful: both are produced by the competition for political favors.
This paper presents a simple model to evaluate alternative payment schemes for tax inspectors in the presence of corruption. The authors consider problems of both moral hazard, whic h arises because taking bribes cannot be observed without costly monitoring, and adverse selection, since not all potential tax inspectors can be identified as being honest or dishonest. The autho rs identify three wage regimes. First, one could pay the same wage that a tax inspector could earn elsewhere--his reservation wage. Second, one could pay a wage which solves the moral hazard problem, i.e. deters bribery. This they call an efficiency wage, by analogy with recent models examined in macroeconomics. Third, the government could pay a wage below the reservation wage, at which onl y the dishonest become tax inspectors--the capitulation wage. The authors make precise the conditions under which each yields the greatest amount of tax revenues, net of administrative costs. Copyright 1993 by Royal Economic Society.
As when Siemens spent millions of dollars paying executives to win contracts at a state-owned utility in Israel
As when Siemens spent millions of dollars paying executives to win contracts at a state-owned
utility in Israel. "Siemens to Pay to Settle Bribery Case," Reuters, May 26, 2016, http://www
.reuters.com/article/israel-siemens/siemens-to-pay-israel-43-mln-to-settle-bribery-case-israel
-idUSL5N17Z2N6.
448 [defining corruption as "the misuse of public power for one's own personal profit"]. For an argument that morality is essential to understanding corruption, see Laura S. Underkuffler, Captured by Evil: The Idea of Corruption in Law
- Joseph J Senturia
and Joseph J. Senturia,
"Corruption, Political," in Encyclopaedia of the Social Sciences, ed. Erwin R. A. Seligman and Alvin
Johnson (New York: Macmillan, 1931), 448 [defining corruption as "the misuse of public power for one's own personal profit"]. For an argument that morality is essential to understanding
corruption, see Laura S. Underkuffler, Captured by Evil: The Idea of Corruption in Law (New Haven,
Conn.: Yale University Press, 2013).
s description of Louis Brandeis's battle with Boston Elevated. Melvin I. Urofsky, Louis D. Brandeis: A Life
- Melvin See
- Urofsky
See, for example, Melvin Urofsky's description of Louis Brandeis's battle with Boston Elevated.
Melvin I. Urofsky, Louis D. Brandeis: A Life (New York: Schocken, 2012), 135-139.
How Google Took Over the Classroom
- Natasha Singer
Natasha Singer, "How Google Took Over the Classroom," The New York Times, May 17, 2017,
https://www.nytimes.com/2017/05/13/technology/google-education-chromebooks-schools
.html?mcubz=0.
Corporations Don't Have to Maximize Profits
- Lynn For
- Stout
For example, see Lynn Stout, "Corporations Don't Have to Maximize Profits," The New York
Times, April 15, 2015.