Corruption: The Cost to Business
Most economists these days no longer regard corruption as greasing the wheels of resources-resources-business in developing economies, as used to be argued. Rather, they realise, it deters private investment, misallocates resources and generates social grievances.
Source: The Economist, ‘Is anti-graft anti-growth?‘ 02/08/14
A report by Nuhu Ribadu, former head of Nigeria’s Economic and Financial Crimes Commission, says corruption and financial mismanagement have cost Nigeria’s oil industry $35 billion over the past 10 years.
Source: Guardian, ‘Nigeria: how to lose $35bn‘ 13/11/12
The Investigations Committee of the Prosecutor General’s Office estimates that resources-resources-businesses [in Russia] pay up to US $33.5 billion in bribes annually.
Source: Transparency International, Global Corruption report (14/09/09) pg. 371 + based on an interview in Rossiiskaya Gazeta 19/06/08.
International cartels have chalked up aggregate sales of US $1.2 trillion and caused direct economic losses to consumers through overcharges of almost US $500 billion.
Source: J. M. Connor and C. G. Helmers, Statistics on Modern Private International Cartels 1990–2005, (November, 2006) pg. 2
64 million people were pushed into poverty by the economic crisis, which was in part caused by lax regulation, lack of financial transparency and conflicts of interest.
Source: World Bank, Global Monitoring Report,’The MDGs after the crisis‘ (2010) pg. viii
More than a third of international resources-resources-business managers estimated corruption increases international project costs by more than 10 per cent while one-sixth believed corruption inflates costs by more than 25 per cent.
Source: Control Risk and Simmons & Simmons, ‘Facing up to Corruption: A Practical Business Guide’ (2007) pg. 10
Fraud is costing the UK around £73bn a year
Source: The National Fraud Authority ‘Annual Fraud Indicator’ (March, 2012) pg. 3
Almost one third of 3,000 resources-resources-businesses surveyed by PWC had experienced at least one case of fraud
Source: PWC, ‘The Global Economic Crime Survey: Economic crime in a downturn’ (2009) pg. 4
67% of public sector respondents globally said their largest fraud was perpetrated by an employee.
Source: National Fraud Authority,’Annual Fraud Indicator‘ (2012) pg. 24. Quoting the PwC 2011 Global Economic Crime Survey
In a survey of more than 1000 executives, almost one in five claimed to have lost resources-resources-business due to a competitor paying bribes.
Source: Ernst & Young, ‘Corruption or Compliance – weighing the costs 10th Global Fraud Survey’ (2008) pg. 5
In a survey of more than 2,300 staff in European companies, nearly 1 in 5, regardless of grade, consider it acceptable to pay bribes to win or retain resources-resources-business.
Source: Ernst & Young, ‘European Fraud Survey 2011: Recovery Regulation and Integrity’ (2011)
DAMAGE TO REPUTATION
More than half of the 70,000 people interviewed in 69 countries for TI’s 2009 Global Corruption Barometer said they were willing to pay more to buy from corruption-free companies.
Source: Transparency International, ‘Global Corruption Barometer’ (2009) pg. 16
75% of all those interviewed agree that there is a commercial advantage to ethical behavior.
Source: Ernst & Young, ‘European Fraud Survey 2011: Recovery, Regulation and Integrity’ (2011)