National Competitiveness and Perception of Corruption

By Samanta, Subarna K.; Sanyal, Rajib N. | Advances in Competitiveness Research, January 1, 2010 | Go to article overview

National Competitiveness and Perception of Corruption


Samanta, Subarna K., Sanyal, Rajib N., Advances in Competitiveness Research


ABSTRACT

This paper examines the relationship between a nation's economic competitiveness and the perceived level of corruption in the form of bribe taking in that country. In analyzing data from the World Competitiveness and Corruption Perception Index over four years for 51 countries, there is strong evidence that highly competitive countries are less likely to be corrupt and vice versa. The results indicate that corruption is a significant factor affecting national competitiveness. Implications for public and corporate policy are discussed.

Keywords: Bribery, Corruption, Corruption Perception Index, Competitiveness, Foreign Investment

INTRODUCTION

The advent of the forces of globalization has led most nations of the world to open their economies to market forces. This has also enabled international capital and expertise to flow across borders. Many national governments eager to obtain a share of such capital and expertise and to spur economic growth have put in place public policies and programs that encourage private enterprise and foreign investment. Potential investors now have a wider range of countries to choose from to locate their business facilities or to put in their resources for profit. Not all countries are equally attractive to foreign investors; some are more than others. Increasingly, countries are being calibrated on the basis of how competitive they are as places to do business in.

The conduct of international business in many places of the world is accompanied by bribe giving. Bribery is defined as "the offering, promising, or giving something in order to influence a public official in the execution of his/her official duties" (OECD Observer, 2000). Bribes take the form of money, other pecuniary advantages, such as a scholarship for a child's college education, or non-pecuniary benefits, such as favorable publicity. Bribery has been one of the enduring ethical challenges in international business. It is generally acknowledged that bribery undermines public and business confidence, breeds cynicism, increases inefficiency, and leads to other crimes such as money laundering (Theobald, 1990). Honest businesses lose out in obtaining contracts because of their refusal to acquiesce to corrupt practices. Bribes also add to the costs of doing business and extensive corruption in a country tends to depress investment and economic growth (Mauro, 1997).

Given this, the competitive status of a nation can be hurt if bribery is part of the prevailing culture of doing business in that country. Rampant bribe taking in certain countries will likely discourage investment and orderly business activities. Investors are likely to bypass such countries for those that are perceived to have a more ethical business climate. Thus, the competitiveness of a nation can be affected by the level of bribe taking activity prevalent therein. It is this relationship that this paper examines.

INTERNATIONAL COMPETITIVENESS

As national economies have deregulated, privatized, and opened up to international competition, countries have become conscious of the need to adopt policies that will create a favorable climate for business activities and offer incentives that will encourage foreign investments. Countries are often in a race with each other to attract resources to enhance their economic wellbeing. Competitiveness of nations may be defined as the facts and policies that shape the ability of a nation to create and maintain an environment that sustains more value creation for its enterprises and more prosperity for its people. It implies that businesses depend a great deal on the national environment in which they operate. However, competitiveness is not a zero sum game - enhanced competitiveness of one country does not have to come at the expense of another; many countries can improve their productivity and prosperity at the same time. Of course, some countries support competitiveness more than others by actively creating and maintaining a climate that facilitates the competitiveness of firms and encourages long-term sustainability. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

National Competitiveness and Perception of Corruption
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.