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November 5, 1999

Bribery, Globalization and the Problem of Dirty Hands

A. W. Cragg
George R. Gardiner Professor of Business Ethics
Schulich School of Business
York University
4700 Keele St.
Toronto, Ontario
Canada (M3J 1P3)
E-Mail: wcragg@bus.yorku.ca
Telephone: 416-736-2100 (Ext. 20686)
Fax: 416-736-5687

Bribery is a social phenomenon. It is comes with the exercise of authority. Its goal is to win
some advantage by offering a decision maker, whether a judge, public official, politician or
purchasing officer in a public or private enterprise, an inducement designed to ensure a desired
outcome independently of its intrinsic merits.1 It seems to be more common in some cultures
than in others. And it is as old as human history itself.2
Bribery is a curious as well as a damaging phenomenon. It is a criminal offence to bribe
public officials in virtually all countries with modern legal systems. Respect for the law is an
acknowledged obligation of managers in virtually all modern management systems and theories.
Virtually all companies doing business nationally or internationally regard acceptance of bribes
by their own employees as an offence justifying dismissal. Yet available studies of the
phenomenon suggest that recourse to bribery is a common, perhaps an increasingly common
feature of international business transactions.
Bribery is a curious phenomenon in a second respect. In modern advanced economies,
bribery is acknowledged to be a form of corruption and therefore unethical at least by the
dictates of conventional morality. Nonetheless, bribery is widely thought by many inside and
outside the business world to be simply the cost of doing business internationally. The strength
and influence of this belief is illustrated by the fact that until very recently most governments of
industrialized countries allowed bribes as legitimate business expenses for tax purposes. The
result is the emergence of commercial values systems that condemn bribery when directed
internally against corporations themselves or toward the public officials of the nation state in
which a company is head quartered, but condone bribery when it is thought to be necessary to
gain or retain business in international markets.3

It is the intersection of these two value systems which condemn bribery as morally
unacceptable and worthy of criminal sanctions on the one hand but justified and/or excusable in
the search for competitive advantage internationally on the other hand that I wish to explore in
this paper. Bribery, I want to suggest, can pose a serious ethical dilemma for multi national
corporations with implications for business ethics which are as yet poorly understood.

Bribery, a complex moral phenomenon:


I propose to define bribery as any attempt whether successful or not to persuade someone in a
position of responsibility to make a decision or recommendation on grounds other than the
intrinsic merits of the case with a view to the advantage or advancement of him or herself or
another person or group to which he or she is linked through personal commitment, obligation,
or employment, or individual, professional or group loyalty.
Bribery as just defined is unethical. It normally requires deliberate deception. It
generates unfairness and injustice.4 It corrupts moral character and destroys
reputations.5 It undermines the proper functioning of the democratic process.6 It
conflicts with values central to the operation of a free and competitive market place.7 It
undermines economic development8 and worthwhile public and private sector
initiatives.9 It can be used to rationalize and excuse failure.10
A casual observer might be tempted to assume from this account that the fact that bribery
is wide-spread demonstrates that ethics is of little concern in the conduct of international
business. However, this conclusion is premature. Paradoxically, there are also strong ethical
imperatives that would appear to justify the use of bribery as a business strategy. Corporations
have both legal and moral obligations to their shareholders. The shares of most multi national

corporations are widely held and are likely to include shareholders, for example pension funds
and pensioners, whose material welfare may well be directly dependent on corporate earnings.
Corporations are also widely argued to have obligations to other stakeholders as well, for
example, their employees and their families, their suppliers, their clients and customers and the
communities in which they do business. A corporation that fails to play the game of bribery
may lose business with a consequent fall in share values, the loss of jobs both on the part of
employees and suppliers of goods and services, the loss of tax revenues for dependent
communities and so on.11
Bribery is thus a significantly more complex moral phenomenon than might at first seem
to be the case. This may help to explain why a business strategy that is by one set of
uncontroversial moral standards unethical has none the less become so wide spread.

Bribery and globalization


There are two aspects of globalization that are relevant to our discussion. The first is the
fact that globalization has seen the emergence of multi national corporations as very significant
economic and social agents globally. The Global Policy Forum calculates, for example, that of
the twenty-five corporations/governments with the largest budgets, thirteen are governments and
twelve are corporations like Mitsubishi, Mitsui, Itochu, and General Motors.12 Of the fifteen
companies/governments with the worlds largest budgets, six are governments and nine are
corporations. Corporate Watch reports that of the one hundred largest economies in the world,
fifty-one are now global corporations; only forty-nine are countries. They also report that the
worlds largest two hundred corporations generate more than a quarter of the worlds economic

activity. The implications of decisions taken by transnational corporations for the welfare both
of their employees world wide and the people of the countries in which they do business are
therefore substantial.13
The significance of corporate decision making is not directly tied to globalization. On
the other hand, globalization has extended the reach of corporations and enhanced the trend
toward the concentration of wealth thereby increasing the significance of private sector
management decisions for the welfare of increasing numbers of widely dispersed people. The
alleged explosion in the incidence of bribery internationally in the last two decades is just one
indicator of these trends and their importance.14
The second aspect of globalization relevant for our purposes is the way in which it
intersects with the phenomenon of bribery. Understanding the nature of this intersection requires
consideration of the impact of globalization on local economies, the competitive pressures
globalization creates for corporations in search of international markets, the emergence of global
money markets, the phenomenon of international aid, and the geographical boundaries of the
legal systems of nation states. Let us take each of these in turn understanding that their
cumulative impact is significantly greater than the mere sum of their parts.
As already noted, both the theory and the practice of modern management pay
unambiguous homage to obeying the law. However, law is a national phenomenon.
Furthermore, the theory and practice of sovereignty restricts the reach of legal systems for the
most part to the geographical territory of the nation state. Since the preponderance of bribes are
paid by corporations headquartered in industrialized countries and the preponderance of
recipients are in developing or under developed countries, head offices can claim correctly, as

the president of Lockheed did in 1972, that they are not breaking their countrys laws by offering
bribes to public officials in other countries.15 Further, if the obligation of corporations to obey
the law is understood to extend only to laws that are actively enforced or laws whose breach
carries a reasonable risk of detection and punishment -- might it not be argued that when in
Rome one is entitled to do as the Romans do? -- then in many countries in the developing and
under developed world, bribery can also be said to be legal.
Although international aid predates globalization, it none the less plays a significant role
in the global economy.16 Among other things, it places large sums of money in the hands of
governments that have not raised the money they are spending through taxation. It is not
difficult to understand why funds of this nature and the goods they generate might be seen as
free goods by at least some of their recipients. It is perhaps not surprising that accountability
on the part of aid recipients for contracts financed through aid dollars might in practice become
quite tenuous. When the companies bidding for contracts are also foreign, the moral scruples of
local officials and the managers and agents of foreign companies may well become even further
attenuated since the transactions involved are only tenuously connected to local conventions and
local scrutiny in the countries of both the donors and the recipients.17
Globalization of international finance is a third significant factor. Where economic
activity is localized, bribery may still occur. However, the wealth it nets will be spent in one
form or another in the communities in which the wealth is generated. In a global economy, the
proceeds of grand bribery are very unlikely to stay in the communities or countries in which
bribery takes place. Thus, in a global economy, both the source and the destination of funds
generated by grand bribery is likely to be international in character. This serves to put the funds

themselves and their recipients out of reach of the governments of the countries of the bribe
givers and the bribe recipients. Globalization in financial institutions has also made it possible
for vast sums of money to be accumulated and hidden from view in off shore accounts. The
phenomenon of dictators living out their lives after their overthrow in luxury in a foreign country
illustrates this phenomenon only too poignantly.
Finally, globalization is internationalizing local economies. Foreign investment is now
widely thought to be essential to development. UNCTADs World Investment Report 1995
points out for example that two-thirds of world trade in goods and services is accounted for by
transnational corporations. This internationalization exposes local economies to two risks to
which they would not otherwise be vulnerable. First, recent studies now show that bribery on a
grand scale inhibits access to international investment and therefore the funds needed to fuel
development (Kaufmann, 1998). Bribery also takes funds intended for local development and
diverts them to international financial institutions where they are very unlikely to be invested
back into the economies from which they were extracted.

Bribery and the problem of dirty hands


What then is the significance of these reflections for an understanding of bribery? The
answer is both simple and complex. Bribery is prima facie unethical virtually everywhere
judged by the standards of prevailing conventional morality. Certainly, this statement is true of
all countries in the industrialized world. However, in at least some circumstances, refusal to
engage in bribery can have far reaching impacts on the success and even the survival of
companies seeking to compete in international markets with obvious, serious implications for

their shareholders and other stakeholders. Managers put in this position face an ethical dilemma.
Doing right may require that they do wrong. That is to say, meeting legal and moral obligations
to their shareholders and other stakeholders may require bribery.
The possibility that one's responsibilities might require and therefore justify
unethical conduct under certain conditions is one that has been extensively discussed by
moral philosophers and others for centuries. The focus for those discussion, however, has
not traditionally been business. Rather, the focus has been the realm of public affairs. At
issue in these discussions is the view that people in positions of public trust fail in their
responsibilities when they put conventional moral standards ahead of their obligations as
public servants. Machiavelli summarizes this view well when he advises that:
A Prince cannot observe all those things which give men a reputation for virtue,
because in order to maintain his state he is often forced to act in defiance of good
faith, of charity, of kindness, of religion. And so he must have a flexible
disposition, varying as fortune and circumstances dictate. ... he should not deviate
from what is good, if that is possible, but he should know how to do evil, if that is
necessary.18
A modern defence of that view is offered by Michael Waltzer who argues that:
It is by his dirty hands that we know [the moral politician]. If he were a moral
man and nothing else, his hands would not be dirty; if he were a politician and
nothing else, he would pretend that they were clean ...19
Walzer goes on to say:
Politicians necessarily take moral as well as political risks committing crimes that
they ... think ought to be committed.20
Thus, for Walzer as for many others, public servants, particularly politicians, may face
situations where it is their public duty to over ride basic moral and legal imperatives in

the public interest.


It would appear that similar arguments can be made for corporate decision
makers as well. Competitive pressures in global economy being what they are, corporate
decision makers may face situations where achieving success may require that, like their
political counterparts, they dirty their hands. In both cases, failure to do so is arguably
a failure on the part of the decision maker to live up to his or her ethical responsibilities.

The ethics of dirty hands dilemmas


To summarize, the view that the responsibilities of public and corporate office
may sometimes require that one get one's hands dirty implies that: (i) over riding moral
rules can be justified by an appeal to the consequences of not doing so; (ii) immoral
means can be employed for beneficial as well as evil ends; and (iii) when morally
reprehensible means are used to advance or protect an important good or avoid a greater
evil, their use is morally defensible.
The realities of international markets suggest that situations involving bribery
may sometimes have this character. Managers who find themselves in such a situation
face a dilemma. All the alternatives available to them will have an unethical dimension.
To offer a bribe will be to become entangled in a web of deceit. Refusal will mean serious
failure in the pursuit of a legitimate business venture with seriously negative implications
for corporate stakeholders.
Obviously, not all situations in which bribery is a possibility will fit this
description. However, realism suggests that some will. When that happens, how is the
dilemma to be resolved? Philosophical reflection suggests four possible options.
The first option is to argue that it can never be right to do wrong. To suggest
otherwise is to accept the possibility that morality can generate contradictions or
contradictory imperatives. Philosophers who have taken this position (sometimes
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referred to a moral absolutists but perhaps more accurately described as moral


rationalists, in my view) argue that morality is an expression of human rationality
(Donagan, 1984). On this (Kantian) view, it is not possible for moral principles to
conflict in a fundamental way.21 If they do, they have been inadequately articulated or
applied. The task then, when faced with a dilemma, is to reason through to the correct
solution.
Utilitarianism in a least some of its formulations offers a variation on this same
theme. Utilitarianism is a form of consequentialist moral thinking that claims that the
moral value of any action lies in its consequences22 The right action is always, on this
view, the one whose consequences maximize resulting utilities however they are
measured.23 Only one action will normally have this outcome. That will be the right
action in the circumstances.24
In summary, option one responses to moral dilemmas take the view that there
always is in principle a right answer.
A second view, option two, argues that while there are situations where people are
faced with extremely difficult choices that involve choosing between or among evils, there
is no dilemma of dirty hands. What these situations require is the will to choose the
lesser evil. A person forced to choose the lesser evil does not in process do wrong in order
to do right. Rather in choosing the lesser evil, such a person fulfills his/her ethical
obligations. Option two and option one are similar in as much as both agree that in
doing what we ought to do, we cannot do wrong.25
Do either of these options provide a practical solution to resolving dirty hands
dilemmas posed by the practice of bribery? It is hard to see that they do. The problem is
a practical one. However, it poses serious theoretical challenges.
Bribery will only generate an ethical dilemma where the costs of refusing to bribe
are very substantial for the company involved. This will occur when the survival of a
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company or alternatively its capacity to complete successfully in a market in which it


would otherwise be competitive is at risk. This risk will not occur uniformly for all
companies in a given competitive situation. Options available to some companies will
not be available to others. Hence the implications of refusal can vary significantly
depending on the situation and the company involved. As a result, there can be no easy
calculation of consequences or straightforward application of moral principles in the
abstract. All calculations of costs or application of moral principles will be heavily
context dependent. But this is not the only obstacle to discerning the right answer in
particular circumstances.
Resolving a genuine dilemma through the application of moral principles (a
Kantian solution) or through a calculation of consequences (a utilitarian solution) will
require understanding the implications of offering or refusing to bribe on both the supply
and the demand side. It is arguable that calculations of the implications of bribing or not
bribing for the company and its stakeholders are commonplace for managers. They are
the kind of calculation for which management is trained. Assessing the implications of
bribing or refusing to bribe for the individual, government, economy or society on the
demand side is quite another matter. The identify of the beneficiary of a bribe may not
be known with any certainty. It may be impossible to determine whether the bribe will
serve to further entrench existing patterns or extend corruption in new directions, for
example into new areas of government activity. It may be impossible to determine
whether a bribe will draw people into a web of corruption who had hithertofore been
immune. Neither will it be possible always or perhaps even occasionally to ascertain the
impact of a corrupt transaction on the market place, other players, political, judicial or
economic institutions and practices, economic policy or development and so on.
Unfortunately, this is not the end of the difficulties that will be faced by a decision
maker faced with a bribery dilemma. Corruption has some of the characteristics of
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pollution. Taken separately, the pollutants added to a river system, for example, may
pose no serious problem. However, the cumulative effect may be very serious. Which is
the ethical perspective? Looked on as a single action, the implications of a bribe may not
be very serious. Looked on as reinforcing or enlarging an existing pattern, a bribe may be
thought to have serious impacts. In this latter case, however, the actions of a corporation
seeking to gain or retain business are now constrained by the unethical actions of others,
hardly a fair requirement in a competitive environment.
What all of this indicates is that corruption is a very complex phenomenon. As
Daniel Kaufmann points out (Kaufmann, 1998), the incidence of bribery in a particular
cultural setting may be high or low, individualized or systemic, organized and centralized
or disorganized and decentralized, rising or falling and so on. Which combination of
these factors prevails will significantly affect any assessment of who is likely to be affected
and how they will be affected.26
The effects of corruption can also be direct or indirect. A decision to offer a bribe
to get a contract may result in a reduced quality of goods and/or services to be provided.
This will be a direct effect. Or it may additionally or alternatively contribute to the
perhaps serious distortion of public policy.27
Finally there is the problem of measurement. While there is a general consensus
among researchers that corruption has negative social and economic consequences,
available research findings are suggestive, not conclusive.28 It is unlikely that any
individual corporation would have research tools at its disposal capable of more accurate
assessments than those achieved by an international research community of scholars.
The cumulative effect of these uncertainties is to render any decision about
whether bribing or refusing to offer a bribe constitutes the lesser evil virtually impossible.
Neither is the uncertainty a decisive factor only for a utilitarian or consequentialist. To
the contrary, the uncertainties obfuscate any assessment whose focus is duties and
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obligations on the one hand or rights on the other. For example, it is now generally
conceded that extensive bribery is likely to distort public policy. Thus, research by Mauro
(1997) suggests an inverse correlation between corruption on the one hand, and
education expenditures, poverty, and income inequality on the other. The same would
appear to be true for health. If this is true, it is clear that corrupt practices undermine
social and economic rights. Offering bribes can also affect the exercise of human rights,
the right to a fair trial and the right to the equal protection of the law, to take just two
examples. But equally, the refusal to offer a bribe may have negative implications for the
rights of shareholders and other corporate stakeholders.
And so we return to our main thesis. Business people faced with the option of
winning or retaining business by offering a bribe may be able to work around the
problem without breaking fundamental ethical strictures. However, they may not. And
when they find themselves in such a situation, they will be faced with a genuine moral
dilemma.

Lessons and conclusions


We have now canvassed two possible answers to the kind of dirty hands dilemma
that business people may confront in dealing with the problem of bribery. A third
common solution is to accept -- applying the logic of politics as articulated by Walzer and
others in the tradition of Machiavelli to business -- that business people faced with
situations of the sort described simply have to learn to dirty their hands. On this account,
others, for example shareholders, other stakeholders and the public generally will have to
accept that competing successfully in international markets will require business people
to make hard, unethical and perhaps illegal choices.
The prevalence of bribery in international markets would suggest this course of
action captures current conventional wisdom. However, it is in many respects a counsel
of despair. For it provides little by way of moral incentives for the already wealthy and
13

powerful to seriously confront a problem which is undermining the capacity of the


developing world to work its way out of the poverty with which it is obviously plagued.
There remains, however, a fourth option. I want to suggest that faced with the
kinds of dilemmas our discussion rests on, morality simply breaks down. That is to say, it
may well be characteristic of serious moral dilemmas of the sort that business people do
sometimes encounter, that there just are no morally acceptable solutions available. What
one decides to do, faced with this sort of dilemma, then, is best seen simply as a matter of
choice governed either by personal convictions or alternatively non moral considerations.
To put it in another way, it is a mistake to think that there must be a morally acceptable
solution to all moral dilemmas. Some apparently intractable moral dilemmas may be
just that, intractable.
It is important to differentiate this option clearly from the first two and the third.
What this fourth option suggests is that it may well be the case that competition in
international markets will require decisions that have an unavoidably unethical
dimension and for which there are no morally acceptable solutions. What this implies is
that those caught in situations of this nature are not and should not be held morally
culpable for failing to do the "right" thing. In these cases, none of the options, from
which a course of action will have to be chosen, will be morally justifiable. It follows that,
in these kinds of situations, the decision is bound to be controlled by non-moral
considerations.29
Leaving the matter here, however, is clearly unsatisfactory. More needs to be said.
For anyone who understands the central role of ethics in the building of sound social
relationships, the suggestion that individuals might find themselves having to decide on a
course of action where the chief options were neither justifiable nor unjustifiable, morally
speaking, requires deeper analysis. It requires, at the very least, that one acknowledge
what is easily forgotten, namely, that morality has to do not simply with guiding
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individual choices but also with shaping and evaluating social environments.
What needs to be emphasized, here, is the deeply problematic character of any
environment in which individuals are required to choose among options all of which
require that important moral values be sacrificed or overridden on all available options.
Addressing the social, political or economic forces that drive individuals into having to
cope with intractable moral conflict is, or should be, one of the central functions of moral
criticism.
Business ethics, then, is not just about ethical management or ethical decision
making. It is also, perhaps even primarily, about shaping the social, economic and
political environment of business. A central criterion for measuring the ethical quality of
that environment is the extent to which those working in it find themselves driven
toward "dirty hands" decisions, decisions for which there are, morally speaking, no right
answers. Intractable moral dilemmas point not to unethical business people. Rather,
they point to corrupt business environments. Ethical companies will recognize this fact
and remove themselves and their employees from them in so far as they are able. They
will also support efforts on the part of governments, voluntary sector coalitions30 and
industry wide alliances whose goal is systemic reform.
This view of business and business ethics, based as it is on a particular view of
morality and moral theory, has several virtues. It leaves those faced with what are
appropriately described as impossible moral choices free of moral censure. Nevertheless,
it does not condone their decisions. Rather, it isolates those decisions as exceptions,
significant deviations from normal business practice, and symptomatic of moral
pathology in the business environment. In contrast, option three, the Machiavellian
option, sees these decisions as simply an unavoidable consequence of business or politics.
Option four, unlike option three or options one or two, has the virtue, therefore of
bringing the focus of moral critique to bear on the reform of the social, political and
15

economic environments in which business is conducted. It is an approach to reform that


acknowledges that moral values like efficiency, honesty, and fairness in the effective,
efficient and ethical operation of market economies are or ought to be regarded as norms
of sound business practice. At the same time, it is an approach which acknowledges that
globalization has set the stage for practices that generate genuine unresolvable moral
dilemmas for managers and the corporations they mange. Once acknowledged, this
approach shifts the focus of ethical critique from the evaluation of the actions of
corporations and senior managers to the reform of the political, economic and social
environments in which business is conducted.31

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1. Like a good deal else to be discussed in what follows, this description of the goal of bribery
has an ironic dimension. For it is certainly within the realm of possibility though for the most
part unlikely that the goal of a bribe might be simply to ensure that a bid for a contract or a
proposal for a project was evaluated on its own merits. For example, in an environment in which
bribery was common, a company wishing to compete for a project and confident of the
competitive merits of what it had to offer might simply want to ensure that the decision makers
evaluated all bids solely on their merits. This then would be the purpose of the bribe. Whether
such a strategy was likely to be effective in a corrupt business environment is, of course, another
matter.
2. Daniel Kaufmann (1998, p. 139) quotes from a treatise called The Arthashastra by Kautilya
(the preceptor and Kings advisor in ancient India), circa 400 B.C., which identifies forty ways
in which a government servant can embezzle funds from the government. The passage quoted
asserts that it is impossible to construct a system in which no funds are siphoned off by public
servants for their own private purposes.
3. I return to this point below. For an illustration of these values at work, see the defence by
Carl Kotchian, CEO of Lockheed Aircraft Corporation, of his decision (1972) to authorize the
bribery of Japanese officials to ensure the purchase of the Tristar passenger aeroplane by All
Nippon Airways (Boatright 1997, p. 28 ff for example).
4. Richard T. de George explores of this and the other themes identified in this paragraph in
Competing with Integrity In International Business, (Oxford, 1994), particularly Chapter
Six:Ethical Dilemmas, Conflicting Norms and Personal Integrity pp. 96-112. See also
Corruption and the Global Economy cited in note 1 above.
5. de George explores this theme also at some length in the book and chapter referred to in the
previous note. See also note 10 below.
6. See for example Vito Tanzis discussion of Corruption and the Budget in Economics of
Corruption (Jain, 1998), p. 122.
7. See, for example, Susan Rose-Akermans discussion of The Political Economy of
Corruption in Corruption and the Global Economy (Jain, 1998).
8. The World Bank and the International Monetary Fund have denounced corruption as an
impediment to economic development and have taken a number of steps to
address the problem (Elliot, 1997).
17

9. The previous note is relevant here as well.


10. An intriguing example of this occurred in Canada earlier in this decade as a result of Air
Canadas decision to buy the European Airbus rather than its Boeing competitor. Boeing is
alleged to have subsequently complained that bribery had influenced the final decision. Air
Canada officials denied the suggestion. Nonetheless, the RCMP (Canadas national police force)
undertook an investigation that resulted in requests for bank account information from Swiss
authorities. One of the accounts was identified as belonging to Brian Mulroney who was at the
time of the Airbus purchase the Prime Minister of Canada. When the news of the letters of
request and the on-going investigation were reported in a Canadian newspaper, Brian Mulroney
sued the Canadian Government for liable. Eventually the Canadian Government settled the law
suite for several millions of dollars. The initial accusations were taken seriously in part no doubt
because bribery is widely thought to be common in the aerospace industry. This, combined with
could be surmised to be a desire to explain away a significant failure to obtain a contract, was
central to an embarrassing episode in Canadian political history.
11. The dilemma faced by Carl Kotchian, president of Lockheed Aircraft Corporation in the
early 1970's, is a case in point. The company was on the edge of bankruptcy. Failure to win a
contract to supply passenger jets to All Nippon Airway was vital to the survival of the company.
Bribes in excess of $12 million secured contracts for planes and ensured the companys
survival. The bribes were not significant relative to the size of the contract amounting to less
than 3% of the total value of the resulting contracts. They expedited the contracting process,
appeared to build certainty into the hazardous process of complex negotiations, and resulted in
the supply of a quality product to the airline. Had Lockheed not paid the bribe, a competitor
company almost certainly would have done so leaving little to be gained by refusing to accede to
a practice widely thought to be a condition of doing business in Japan at the time, or so it might
be argued. At the same time, refusal to play the game would have put at risk the livelihood of
the companys employees and the welfare of the communities that depended on the company for
their economic welfare.
12. See the Global Policy Forums website at
http://www.globalpoicy.org/socecon/tncs/tncstat.htm.
13. Corporate Watch:Http://www.corpwatch.org/trac/corner/glob/ips/top200.html. The
decisions of small and medium sized firms can also have a significant impact on the welfare of
people thousands of miles from their home base. This influence can result from collective
actions whether formally coordinated or not. The flight of capital from the tiger economies of
Asia in the mid nineties is a good example. Even the decisions of small corporations can also
have surprisingly significant impacts. This phenomenon is well illustrated by the activities of
Bre-X, a junior Canadian gold mining company, in Indonesia. In this case, claims of a major
gold discovery led several multi national gold mining companies into a competition for the right
to develop the deposit. In pursuit of their objectives, members of the Marcos family were hired
as agents, and special arrangements made with people closely connected to the Marcos
dictatorship. When the gold play turned out to be fraudulent, significant numbers of small
18

investors, who relied in part on the listing of Bre-X on both the Calgary and Toronto stock
exchanges, lost savings affecting directly their quality of life in retirement for example.
14. Evidence pointing to increases in the incidence of bribery world wide is suggestive not
definitive. It is not clear for example whether the reports of corruption point to it growth or
simply to more consistent and effective reporting. For discussions of this issue see Jain (1998),
Kimberly (1997) and the Transparency International website (www.transparency.de).
15. This claim ceased to be true for American companies in 1977 with the passage of the
American Foreign Corrupt Practices Act. It has also ceased to be true, though less
unambiguously so for corporations headquartered in countries that have signed the 1997 OECD
anti bribery convention.
16. For example, there are many countries in the world, Africa in particular, where international
aid constitutes more than fifty percent of government spending.
17. Preliminary results of research currently being conducted at York University suggests that
some governments of industrialized countries have played a significant role in aiding and
abetting corruption over the past two decades for both political and commercial reasons.
18. Machiavelli The Prince and the Discourses (New York: Modern Library) p. 101.
19. Michael Walzer, Political Action: The Problem of Dirty Hands, Philosophy and Public
Affairs, 1973, p. 168.
20. Ibid, p. 179.
21. Apparent conflicts may of course occur. They may even occur frequently. However, if
morality is a product of reason, these conflicts will alway be resolvable. Donagan, 1987, p.285
22. See A Critique of Utilitarianism by Bernard Williams in Utilitarianism For and Against
(Cambridge England: Cambridge University Press), 1973, at p. 79.
23. Of course, the utilities must be commensurable. If they are not, the right course of action
cannot be determined and genuine moral dilemmas of the sort under discussion are the inevitable
result. One of Williams purposes in the analysis referred to in the previous footnote is to show
that relevant utilities that constitute moral values are not commensurable. Hence utilitarians
(like R.M. Hare, for example) are wrong to think that for every dilemma there is always a right
answer.
24. There are of course serious objections to this version of utilitarianism. Williams (1973)
articulates a number of those objections in Utilitarianism For and Against. What is important
for present purposes, however, is that this version of utilitarianism has been defended and does
have the implications here described.
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25. Kai Nielsen, There is no dilemma of dirty hands, South African Journal of Philosophy,
1996, 15(1), p. 2.
26. As commentaries like Economics of Corruption (Jain, 1998) demonstrate, answers to these
questions are only now being explored by researchers. The complexities of the analysis required
puts this kind of research well beyond the grasp of corporations faced with the need to make
decisions within severely constrained time frames.
27. See for example Vito Tanzis analysis in Corruption and the Budget: Problems and
Solutions (Jain, 1998).
28. See Kaufmann (1998) at p. 134, for example.
29. This proposed option is bound to be greeted with scepticism by some readers. It is worth
pointing out, therefore, that what is being suggested is not unique to business settings. War,
severe civil strife, natural catastrophes like famines also created conditions where morality
ceases to guide because there are no right answers. The excruciating character of these
situations have been best illustrated by accounts of war experience of partisans and others in the
second world war who were faced with choices imposed by Nazi decree all of which could only
be described as evil. Existentialist ethics could be said in many respects to constitute a response
(though in my view an incorrect one) to such experiences. Triage situations sometimes faced by
medical personal offer a distinct source of examples as do situations occurring in times of severe
famine or other natural disasters. Insisting that morality must provide solutions in such cases is
what is here being challenged. To accept that it must inevitably drives one toward accepting that
the end justifies the mean or toward some form of irrationalism ethics.
30. Transparency International is an example. It is a non governmental voluntary sector
organization that has come into existence in this decade to find corruption in international
business transactions. Further information about its work can be obtained by contacting the
author of this paper.
31. The recently concluded OECD anti-bribery convention together with the new anti corruption
policies of International Financial Institutions like the International Monetary Fund (IMF) and
the World Bank are excellent examples of kinds of reforms these conclusions call for.

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