Corruption is a form of dishonesty or a criminal offense which is undertaken by a person or an

organization which is entrusted with a position of authority, in order to acquire illicit benefits or
abuse power for one's personal gain. Corruption may involve many activities which
include bribery, influence peddling and embezzlement, and it may also involve practices which
are legal in many countries.[1] Political corruption occurs when an office-holder or other
governmental employee acts in an official capacity for personal gain

Definitions and scales[edit]

A billboard in Zambia exhorting the public to "Just say no to corruption".

Stephen D. Morris,[3] a professor of politics, wrote that political corruption is the illegitimate use of
public power to benefit a private interest. Economist Ian Senior defined corruption as an action to
secretly provide a good or a service to a third party to influence certain actions which benefit the
corrupt, a third party, or both in which the corrupt agent has authority.[4] World Bank
economist Daniel Kaufmann[5] extended the concept to include "legal corruption" in which power
is abused within the confines of the law—as those with power often have the ability to make laws
for their protection. The effect of corruption in infrastructure is to increase costs and construction
time, lower the quality and decrease the benefit.[6]
Corruption is a complex phenomenon and can occur on different scales[7]. Corruption ranges
from small favors between a small number of people (petty corruption),[8] to corruption that affects
the government on a large scale (grand corruption), and corruption that is so prevalent that it is
part of the everyday structure of society, including corruption as one of the symptoms of
organized crime (systemic corruption).
A number of indicators and tools have been developed which can measure different forms of
corruption with increasing accuracy;[9][10] but when those are impractical, one study suggests
looking at bodyfat as a rough guide after finding that obesity of cabinet ministers in post-Soviet
states was highly correlated with more accurate measures of corruption.[11][12]

Petty corruption[edit]
Petty corruption occurs at a smaller scale and takes place at the implementation end of public
services when public officials meet the public. For example, in many small places such as
registration offices, police stations, state licensing boards,[13][14] and many other private and
government sectors.[clarification needed]

Grand corruption[edit]
Grand corruption is defined as corruption occurring at the highest levels of government in a way
that requires significant subversion of the political, legal and economic systems. Such corruption
is commonly found in countries with authoritarian or dictatorial governments but also in those
without adequate policing of corruption.[15]
The government system in many countries is divided into the legislative, executive and judicial
branches in an attempt to provide independent services that are less subject to grand corruption
due to their independence from one another.[16]

Systemic corruption[edit]
Systemic corruption (or endemic corruption)[17] is corruption which is primarily due to the
weaknesses of an organization or process. It can be contrasted with individual officials or agents
who act corruptly within the system.
Factors which encourage systemic corruption include conflicting incentives, discretionary
powers; monopolistic powers; lack of transparency; low pay; and a culture of impunity.[18] Specific
acts of corruption include "bribery, extortion, and embezzlement" in a system where "corruption
becomes the rule rather than the exception."[19] Scholars distinguish between centralized and
decentralized systemic corruption, depending on which level of state or government corruption
takes place; in countries such as the Post-Soviet states both types occur.[20] Some scholars argue
that there is a negative duty[clarification needed] of western governments to protect against systematic
corruption of underdeveloped governments.[21][22]
Corruption has been a major issue in China, where society depends heavily on personal
relationships. By the late 20th century that combined with the new lust for wealth, produced
escalating corruption. Historian Keith Schoppa says that bribery was only one of the tools of
Chinese corruption, which also included, "embezzlement, nepotism, smuggling, extortion,
cronyism, kickbacks, deception, fraud, squandering of public money, illegal business
transactions, stock manipulation and real estate fraud." Given the repeated anti-corruption
campaigns it was a prudent precaution to move as much of the fraudulent money as possible
overseas.[23]
As a Post-Soviet Union country - Armenia is also facing corruption-related issues. This has been
transferred to Armenia as well as other Soviet Union Member Republics as a heritage. Armenia
was a pleasant exception. After the Armenian Velvet Revolution in 2018 new government made
the fight against corruption an official top priority.[24] 'Anti-corruption Strategy' seemed to give
results as it upgraded from 105th place in CPI score to 60th in just two years.[25]
In Latin American countries, corruption is permitted as a result of the cultural norms of the
institution. In countries like the United States, there is a relatively strong sense of trust among
strangers, one that is not found in Latin American countries. In Latin American countries, this
trust does not exist, whereas the social norms imply that no stranger is responsible for the
wellbeing or happiness of another stranger. Instead, the trust is found in acquaintances.
Acquaintances are treated with trust and respect—a level of trust that is not found among
acquaintances in countries like the United States. This is what permits for corruption in Latin
American countries. If there is a strong enough trust within an administration that no one will
betray the rest, corruptive policies will take place with ease. In the United States, this could not
occur, as there is not a strong enough trust among the members of an administration to allow for
corruption. In Latin American countries, there is a stronger value in individuality, which includes
that of acquaintances, unlike in countries like the United States, which fails to include
acquaintances.[26]

Causes[edit]
Per R. Klitgaard[27] corruption will occur if the corrupt gain is greater than the penalty multiplied by
the likelihood of being caught and prosecuted.
Since a high degree of monopoly and discretion accompanied by a low degree of transparency
does not automatically lead to corruption, a fourth variable of "morality" or "integrity" has been
introduced by others. The moral dimension has an intrinsic component and refers to a "mentality
problem", and an extrinsic component referring to circumstances like poverty, inadequate
remuneration, inappropriate work conditions and inoperable or over-complicated procedures
which demoralize people and let them search for "alternative" solutions.
According to a 2017 survey study, the following factors have been attributed as causes of
corruption:[28]

• Greed of money, desires.

• Higher levels of market and political monopolization
• Low levels of democracy, weak civil participation and low political transparency
• Higher levels of bureaucracy and inefficient administrative structures
• Low press freedom
• Low economic freedom
• Large ethnic divisions and high levels of in-group favoritism
• Gender inequality
• Poverty
• Political instability
• Weak property rights
• Contagion from corrupt neighboring countries
• Low levels of education
• Lack of commitment to society
• Extravagant family
• Unemployment
• lack of proper policies against corruption
It has been noted that in a comparison of the most corrupt with the least corrupt countries, the
former group contains nations with huge socio-economic inequalities, and the latter contains
nations with a high degree of social and economic justice.[29]

By sector[edit]
Corruption can occur in many sectors, whether they be public or private industry or
even NGOs (especially in public sector). However, only in democratically controlled institutions is
there an interest of the public (owner) to develop internal mechanisms to fight active or passive
corruption, whereas in private industry as well as in NGOs there is no public control. Therefore,
the owners' investors' or sponsors' profits are largely decisive.

Public corruption[edit]
Public corruption includes corruption of the political process and of government agencies such as
tax collectors and the police, as well as corruption in processes of allocating public funds for
contracts, grants, and hiring. Recent research by the World Bank suggests that who makes
policy decisions (elected officials or bureaucrats) can be critical in determining the level of
corruption because of the incentives different policy-makers face.[30]
Judicial[edit]
In the Renaissance fresco The Good and the Bad Judge (Monsaraz, Portugal), the Bad Judge, depicted as
having two faces, is shown taking bribes: the nobleman to the right offers him gold coins from a purse, and
the villein to the left gives him a pair of partridges.

Judicial corruption refers to the corruption-related misconduct of judges, through the receiving or
giving of bribes, the improper sentencing of convicted criminals, bias in the hearing and
judgement of arguments and other forms of misconduct. Judicial corruption can also be
conducted by prosecutors and defense attorneys. An example of prosecutorial misconduct,
occurs when a politician or a crime boss bribes a prosecutor to open investigations and file
charges against an opposing politician or a rival crime boss, in order to hurt the competition.[31]
Governmental corruption of the judiciary is broadly known in many transitional and developing
countries because the budget is almost completely controlled by the executive. The latter
critically undermines the separation of powers, because it fosters financial dependence on the
judiciary. The proper distribution of a nation's wealth, including its government's spending on the
judiciary, is subject to constitutional economics.
The judiciary may be corrupted by acts of the government, such as through budget planning and
various privileges, and by private acts.[32] Corruption in judiciary may also involve the government
using its judicial arm to oppress opposition parties. Judicial corruption is difficult to completely
eradicate, even in developed countries.[33]
Military[edit]
Military corruption refers to the abuse of power by members in the armed forces, in order for
career advancement or for personal gain by a soldier or soldiers. One form of military corruption
in the United States Armed Forces, is a military soldier being promoted in rank or being given
better treatment than their colleagues by their officers, due to their race, sexual
orientation, ethnicity, gender, religious beliefs, social class or personal relationships with higher-
ranking officers in spite of their merit.[34] In addition to that, the US military has also had many
instances of officers sexually assaulting fellow officers and in many cases, there were allegations
that many of the attacks were covered up and victims were coerced to remain silent by officers of
the same rank or of higher rank.[35]
Another example of military corruption, is a military officer or officers using the power of their
positions to commit activities that are illegal, such as skimming logistical supplies such as food,
medicine, fuel, body armor or weapons to sell on the local black market.[36][37] There have also
been instances of military officials, providing equipment and combat support to criminal
syndicates, private military companies and terrorist groups, without approval from their
superiors.[38] As a result, many countries have a military police force to ensure that the military
officers follow the laws and conduct of their respective countries but sometimes the military
police have levels of corruption themselves.[39]
Natural resources[edit]
Within less democratic countries, the presence of resources such as diamonds, gold, oil, and
forestry increases the prevalence of corruption. Corruption includes industrial corruption,
consisting of large bribes, as well as petty corruption such as a poacher paying off a park
ranger to ignore poaching. The presence of fuel extraction and export is unambiguously
associated with corruption, whereas mineral exports only increased corruption in poorer
countries. In wealthier countries, mineral exports such as gold and diamonds are actually
associated with reduced corruption. The international Extractive Industries Transparency
Initiative seeks to create best practices for good governance of gas, oil, and minerals, particularly
focusing on the state management of revenue from these resources. Any valued natural
resource can be affected by corruption, including water for irrigation, land for livestock grazing,
forests for hunting and logging, and fisheries.[40]
The presence or perception of corruption also undermines environmental initiatives. In Kenya,
farmers blame poor agricultural productivity on corruption, and thus are less likely to
undertake soil conservation measures to prevent soil erosion and loss of nutrients. In Benin,
mistrust of government due to perceived corruption led small farmers to reject the adaptation of
measures to combat climate change.[40]
Political[edit]
Main article: Political corruption

A political cartoon from Harper's Weekly, 26 January 1878, depicting U.S. Secretary of the Interior Carl
Schurz investigating the Indian Bureau at the U.S. Department of the Interior. The original caption for the
cartoon is: "THE SECRETARY OF THE INTERIOR INVESTIGATING THE INDIAN BUREAU. GIVE HIM
HIS DUE, AND GIVE THEM THEIR DUES."

Political corruption is the abuse of public power, office, or resources by elected government
officials for personal gain, by extortion, soliciting or offering bribes. It can also take the form of
office holders maintaining themselves in office by purchasing votes by enacting laws which use
taxpayers' money.[41] Evidence suggests that corruption can have political consequences- with
citizens being asked for bribes becoming less likely to identify with their country or region.[42]
The political act of graft (American English), is a well known and now global form of political
corruption, being the unscrupulous and illegal use of a politician's authority for personal gain,
when funds intended for public projects are intentionally misdirected in order to maximize the
benefits to illegally private interests of the corrupted individual(s) and their cronies. In some
cases government institutions are "repurposed" or shifted away from their official mandate to
serve other, often corrupt purposes.[43]

The Kaunas "Golden Toilet".

The Kaunas golden toilet case was a major Lithuanian scandal. In 2009, the municipality of
Kaunas (led by mayor Andrius Kupčinskas) ordered that a shipping container was to be
converted into an outdoor toilet at a cost of 500,000 litai (around 150,000 euros). It was to also
require 5,000 litai (1,500 euros) in monthly maintenance costs.[44] At the same time when
Kaunas's "Golden Toilet" was built, Kėdainiai tennis club acquired a very similar, but more
advanced solution for 4,500 euros.[44] Because of the inflated cost of the outdoor toilet, it was
nicknamed the "Golden Toilet". Despite the investment, the "Golden Toilet" remained closed for
years due to the dysfunctionality and was a subject of a lengthy anti-corruption investigation into
those who had created it and[44] the local municipality even considered demolishing the building at
one point.[45] The group of public servants involved in the toilet's procurement received various
prison sentences for recklessness, malfeasance, misuse of power and document falsifications in
a 2012 court case, but were cleared of their corruption charges and received compensation,
which pushed the total construction cost and subsequent related financial losses to 352,000
euros.
On 7 July 2020, Carnegie Endowment for International Peace, a global think tank, released a
report claiming the Emirati city, Dubai, of being an enabler of global corruption, crime and illicit
financial flows. It stated that the global corrupt and criminal actors either operated through or
from Dubai. The city was also called a haven for trade-based money laundering, as it gives
space to free trade zones, with minimal regulatory laws and customs enforcement.[46]
Police[edit]
Main article: Police corruption
Police corruption is a specific form of police misconduct designed to obtain financial benefits,
personal gain, career advancement for a police officer or officers in exchange for not pursuing or
selectively pursuing an investigation or arrest or aspects of the "thin blue line" itself where force
members collude in lies to protect their precincts, unions and/or other law enforcement members
from accountability. One common form of police corruption is soliciting or accepting bribes in
exchange for not reporting organized drug or prostitution rings or other illegal activities. When
civilians become witnesses to police brutality, officers are often known to respond by harassing
and intimidating the witnesses as retribution for reporting the misconduct.[47] Whistleblowing is not
common in law enforcement, one of the main reasons being because officers who do so,
normally face reprisal by being fired, being forced to transfer to another department, being
demoted, being shunned, losing friends, not being given back-up during emergencies, receiving
professional or even physical threats as well as having threats be made against friends or
relatives of theirs or having their own misconduct exposed, in response to reporting the
misconduct of other officers.[48] In America another common form of police corruption, is
when white supremacist groups, such as Neo-Nazi Skinheads or Neo-Confederates (such as
the Ku Klux Klan), recruit members of law enforcement into their ranks or encourage their
members to join local police departments to repress minorities and covertly promote white
supremacy.[49]
Another example is police officers flouting the police code of conduct in order to secure
convictions of suspects—for example, through the use of surveillance abuse, false
confessions, police perjury and/or falsified evidence. Police officers have also been known to sell
forms of contraband that were taken during seizers (such as confiscated drugs, stolen
property or weapons).[50] Corruption and misconduct can also be done by prison officers, such as
the smuggling of contraband (such as drugs or electronics) into jails and prisons for inmates or
the abuse of prisoners.[51][52] Another form of misconduct is probation officers taking bribes in
exchange for allowing paroles to violate the terms of their probation or abusing their
paroles.[53] More rarely, police officers may deliberately and systematically participate
in organized crime themselves, either while on the job or during off hours. In most major cities,
there are internal affairs sections to investigate suspected police corruption or misconduct.
Similar entities include the British Independent Police Complaints Commission.

Private sector[edit]
Private sector corruption occurs when any institution, entity or person that is not controlled by the
public sector company, household and institution that is not controlled by the public sector
engages in corrupt acts. Private sector corruption may overlap with public sector corruption, for
example when a private entity operates in conjunction with corrupt government officials, or where
the government involves itself in activity normally performed by private entities.
Arms Trafficking[edit]
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a worldwide view of the subject. You may improve this section,
discuss the issue on the talk page, or create a new section, as
appropriate. (January 2018) (Learn how and when to remove this
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"Arms for cash" can be done by either a state-sanctioned arms dealer, firm or state itself to
another party it just regards as only a good business partner and not political kindred or allies,
thus making them no better than regular gun runners. Arms smugglers, who are already
into arms trafficking may work for them on the ground or with shipment. The money is often
laundered and records are often destroyed.
It often breaks UN, national or international law.[54] Payment can also be in strange or indirect
[54]

ways like arms paid for in post-war oil contracts, post-war hotel ownership, conflict diamonds,
corporate shares or the long term post-war promises of superfus[clarification needed] future contracts
between the parties involved in it, etc...
Main article: Mitterrand–Pasqua affair
In 2006 Transparency International ranked Angola a lowly 142 out of 163 countries in
the Corruption Perception Index just after Venezuela and before the Republic of the Congo with
a 2.2 rating.[55][56] Angola was at 168th place (out of 178 countries) on Transparency
International's Corruption Perceptions Index (CPI), receiving a 1.9 on a scale from 0 to 10.[57] On
the World Bank's 2009 Worldwide Governance Index, Angola had done very poorly on all six
aspects of governance assessed. While its score for political stability improved to 35.8 in 2009
(on a 100-point scale) from 19.2 in 2004, Angola earned especially low scores for accountability,
regulatory standards, and rule of law. The score for corruption declined from an extremely low
6.3 in 2004 to 5.2 in 2009.[58][59]
The country is regarded poorly and that corruption is wounding the economy badly despite the
emerging oil industries wealth.[58]
The Mitterrand–Pasqua affair, also known informally as Angolagate, was an
international political scandal over the secret and illegal sale and shipment of arms from the
nations of Central Europe to the government of Angola by the Government of France in the
1990s. It led to arrests and judiciary actions in the 2000s, involved an illegal arms sale to Angola
despite a UN embargo, with business interests in France and elsewhere improperly obtaining a
share of Angolan oil revenues. The scandal has subsequently been tied to several prominent
figures in French politics.[58]
42 individuals, including: 42 people, including Jean-Christophe Mitterrand, Jacques
Attali, Charles Pasqua and Jean-Charles Marchiani, Pierre Falcone. Arcadi Gaydamak, Paul-
Loup Sulitzer, Union for a Popular Movement deputy Georges Fenech, Philippe Courroye [fr] the
son of François Mitterrand and a former French Minister of the Interior, were charged, accused,
indicted or convicted with illegal arms trading, tax fraud, embezzlement, money laundering and
other crimes.[58][60] "[61]
Corporate[edit]
See also: Corporate crime

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Petrobras headquarters in downtown Rio de Janeiro.

In criminology, corporate crime refers to crimes committed either by a corporation (i.e.,

a business entity having a separate legal personality from the natural persons that manage its
activities), or by individuals acting on behalf of a corporation or other business entity
(see vicarious liability and corporate liability). Some negative behaviours by corporations may not
be criminal; laws vary between jurisdictions. For example, some jurisdictions allow insider
trading.
Examples[edit]
Petróleo Brasileiro S.A. — Petrobras, more commonly known as simply Petrobras (Portuguese
pronunciation: [ˌpɛtɾoˈbɾas]), is a semi-public Brazilian multinational corporation in the petroleum
industry headquartered in Rio de Janeiro, Brazil. The company's name translates to Brazilian
Petroleum Corporation – Petrobras. The company was ranked No. 58 in the 2016 Fortune
Global 500 list.[62] From 2014 to 2021, an investigation known as Operation Car Wash examined
allegations of corporate and political collusion and corruption by Petrobras.[63]
Odebrecht is a privately held Brazilian conglomerate consisting of businesses in the fields of
engineering, real estate, construction, chemicals and petrochemicals. The company was founded
in 1944 in Salvador da Bahia by Norberto Odebrecht, and the firm is now present in South
America, Central America, North America, the Caribbean, Africa, Europe and the Middle East. Its
leading company is Norberto Odebrecht Construtora [pt].[64] Odebrecht is one of the 25 largest
international construction companies and led by Odebrecht family.
In 2016, the firm's executives were examined during Operation Car Wash part of an
investigation over Odebrecht Organization bribes to executives of Petrobras, in exchange for
contracts and influence.[65][66][63] Operation Car Wash is an ongoing criminal money
laundering and bribes related corporate crime investigation being carried out by the Federal
Police of Brazil, Curitiba Branch, and judicially commanded by Judge Sérgio Moro since 17
March 2014.[67][68][69][63]
Education[edit]
Corruption in education is a worldwide phenomenon. Corruption in admissions to universities is
traditionally considered one of the most corrupt areas of the education sector.[70] Recent attempts
in some countries, such as Russia and Ukraine, to curb corruption in admissions through the
abolition of university entrance examinations and introduction of standardized computer-graded
tests have met backlash from part of society,[71] while other appreciate changes. Vouchers for
university entrants have never materialized.[72] The cost of corruption is in that it impedes
sustainable economic growth.[72]
Endemic corruption in educational institutions leads to the formation of sustainable corrupt
hierarchies.[73][74][75] While higher education in Russia is distinct with widespread bribery, corruption
in the US and the UK features a significant amount of fraud.[76][77] The US is distinct with grey
areas and institutional corruption in the higher education sector.[78][79] Authoritarian regimes,
including those in the former Soviet republics, encourage educational corruption and control
universities, especially during the election campaigns.[80] This is typical for
Russia,[81] Ukraine,[82] and Central Asian regimes,[83] among others. The general public is well
aware of the high level of corruption in colleges and universities, including thanks to the
media.[84][85] Doctoral education is no exception, with dissertations and doctoral degrees available
for sale, including for politicians.[86] Russian Parliament is notorious for "highly educated"
MPs[87] High levels of corruption are a result of universities not being able to break away from
their Stalinist past, over bureaucratization,[88] and a clear lack of university autonomy.[89] Both
quantitative and qualitative methodologies are employed to study education corruption,[90] but the
topic remains largely unattended by the scholars. In many societies and international
organizations, education corruption remains a taboo. In some countries, such as certain eastern
European countries, some Balkan countries and certain Asian countries, corruption occurs
frequently in universities.[91] This can include bribes to bypass bureaucratic procedures and
bribing faculty for a grade.[91][92] The willingness to engage in corruption such as accepting bribe
money in exchange for grades decreases if individuals perceive such behavior as very
objectionable, i.e. a violation of social norms and if they fear sanctions regarding the severity and
probability of sanctions.[92]
Philosophy[edit]
The 19th-century German philosopher Arthur Schopenhauer acknowledged that academics,
including philosophers, are subject to the same sources of corruption as the societies which they
inhabit. He distinguished the corrupt "university" philosophers, whose "real concern is to earn
with credit an honest livelihood for themselves and ... to enjoy a certain prestige in the eyes of
the public"[93] from the genuine philosopher, whose sole motive is to discover and bear witness to
the truth.
To be a philosopher, that is to say, a lover of wisdom (for wisdom is nothing but truth), it
is not enough for a man to love truth, in so far as it is compatible with his own interest,
with the will of his superiors, with the dogmas of the church, or with the prejudices and
tastes of his contemporaries; so long as he rests content with this position, he is only a
φίλαυτος [lover of self], not a φιλόσοφος [lover of wisdom]. For this title of honor is well
and wisely conceived precisely by its stating that one should love the truth earnestly and
with one's whole heart, and thus unconditionally and unreservedly, above all else, and, if
need be, in defiance of all else. Now the reason for this is the one previously stated that
 the intellect has become free, and in this state, it does not even know or understand any
other interest than that of truth.[94]
Healthcare[edit]
Corruption, the abuse of entrusted power for private gain, as defined by Transparency
International[95] is systemic in the health sector. The characteristics of health systems with
their concentrated supply of a service, high discretionary power of its members controlling
the supply, and low accountability to others are the exact constellation of the variables
described by Klitgaard, on which corruption depends.[96]: 26 
Corruption in health care poses a significant danger to the public welfare.[97] It is widespread
and yet, little has been published in medical journals about this topic and as of 2019 there is
no evidence on what might reduce corruption in the health sector.[98] Corruption occurs within
the private and public health sectors and may appear as theft, embezzlement, nepotism,
bribery up til extortion, or as undue influence.[99] and occurs anywhere within the sector, be it
in service provision, purchasing, construction and hiring. In 2019, Transparency International
has described the 6 most common ways of service corruption as follows: absenteeism,
informal payments from patients, embezzlement, inflating services also the costs of services,
favouritism and manipulation of data (billing for goods and services that were never sent or
done).[100]
Labor unions[edit]
Labor unions leaders may be involved in corrupt action or be influenced or controlled by
criminal enterprises.[101] For example, for many years (the Teamsters) was substantially
controlled by the Mafia.[102]

Religious organizations[edit]
Main articles: Simony, Cardinal-nephew, Benefice § Pluralism, Mental reservation, Casuistry
§ Early modern times, and Detraction § Controversies involving detraction

Wikiquote has
quotations related
to Corruption in
religion.

The history of religion includes numerous examples of religious leaders calling attention to
the corruption which existed in the religious practices and institutions of their time. The
Jewish prophets Isaiah and Amos berate the rabbinical establishment of Ancient Judea for
failing to live up to the ideals of the Torah.[103] In the New Testament, Jesus accuses the
rabbinical establishment of his time of hypocritically following only the ceremonial parts of the
Torah and neglecting the more important elements of justice, mercy and
faithfulness.[104] Corruption was one of the important issues which led to the Investiture
Controversy. In 1517, Martin Luther accused the Catholic Church of widespread corruption,
including the selling of indulgences.[105]
In 2015, Princeton University professor Kevin M. Kruse advances the thesis that business
leaders in the 1930s and 1940s collaborated with clergymen, including James W. Fifield Jr.,
in order to develop and promote a new hermeneutical approach to Scripture which would de-
emphasize the social Gospel and emphasize themes, such as individual salvation, which
were more congenial to free enterprise.[106]
Business leaders, of course, had long been working to "merchandise" themselves through
the appropriation of religion. In organizations such as Spiritual Mobilization, the prayer
breakfast groups, and the Freedoms Foundation, they had
linked capitalism and Christianity and, at the same time, they likened the welfare state to
godless paganism.[107]
Methods[edit]
In systemic corruption and grand corruption, multiple methods of corruption are used
concurrently with similar aims.[108]

Bribery[edit]
Main article: Bribery

An election leaflet with money stapled to it.

Bribery involves the improper use of gifts and favours in exchange for personal gain. This is
also known as kickbacks or, in the Middle East, as baksheesh. It is a common form of
corruption. The types of favors given are diverse and may include money, gifts, real
estate, promotions, sexual favors, employee benefits, company
shares, privileges, entertainment, employment and political benefits. The personal gain that
is given can be anything from actively giving preferential treatment to having an indiscretion
or crime overlooked.[109]
Bribery can sometimes form a part of the systemic use of corruption for other ends, for
example to perpetrate further corruption. Bribery can make officials more susceptible to
blackmail or to extortion.

Embezzlement, theft and fraud[edit]

Main article: Embezzlement
Embezzlement and theft involve someone with access to funds or assets illegally taking
control of them. Fraud involves using deception to convince the owner of funds or assets to
give them up to an unauthorized party.
Examples include the misdirection of company funds into "shadow companies" (and then into
the pockets of corrupt employees), the skimming of foreign aid money, scams, electoral
fraud and other corrupt activity.

Graft[edit]
Main article: Graft (politics)
The political act of graft is when funds intended for public projects are intentionally
misdirected to maximize the benefits to private interests of the corrupt individuals.

Extortion and blackmail[edit]

Main article: Extortion
While bribery is the use of positive inducements for corrupt
aims, extortion and blackmail centre around the use of threats. This can be the threat
of physical violence or false imprisonment as well as exposure of an individual's secrets or
prior crimes.
This includes such behavior as an influential person threatening to go to the media if they do
not receive speedy medical treatment (at the expense of other patients), threatening a public
official with exposure of their secrets if they do not vote in a particular manner, or demanding
money in exchange for continued secrecy. Another example can be a police officer
being threatened with the loss of their job by their superiors, if they continued with
investigating a high-ranking official.

Influence peddling[edit]
Influence peddling is the illegal practice of using one's influence in government or
connections with persons in authority to obtain favors or preferential treatment, usually in
return for payment.

Networking[edit]
Main article: Business networking
Networking (both Business and Personal) can be an effective way for job-seekers to gain a
competitive edge over others in the job-market. The idea is to cultivate personal relationships
with prospective employers, selection panelists, and others, in the hope that these personal
affections will influence future hiring decisions. This form of networking has been described
as an attempt to corrupt formal hiring processes, where all candidates are given an equal
opportunity to demonstrate their merits to selectors. The networker is accused of seeking
non-meritocratic advantage over other candidates; advantage that is based on personal
fondness rather than on any objective appraisal of which candidate is most qualified for the
position.[110][111]

Euro bank notes hidden in sleeve.

Abuse of discretion[edit]
Main article: Abuse of discretion
Abuse of discretion refers to the misuse of one's powers and decision-making facilities.
Examples include a judge improperly dismissing a criminal case or a customs official using
their discretion to allow a banned substance through a port.

Favoritism, nepotism and clientelism[edit]

Main article: Nepotism
Favouritism, nepotism and clientelism involve the favouring of not the perpetrator of
corruption but someone related to them, such as a friend, family member or member of an
association. Examples would include hiring or promoting a family member or staff member to
a role they are not qualified for, who belongs to the same political party as you, regardless of
merit.[112]

Relationship to economic growth[edit]

Corruption is strongly negatively associated with the share of private investment and, hence,
it lowers the rate of economic growth.[113]
Corruption reduces the returns of productive activities. If the returns to production fall faster
than the returns to corruption and rent-seeking activities, resources will flow from productive
activities to corruption activities over time. This will result in a lower stock of producible inputs
like human capital in corrupted countries.[113]
Corruption creates the opportunity for increased inequality, reduces the return of productive
activities, and, hence, makes rentseeking and corruption activities more attractive. This
opportunity for increased inequality not only generates psychological frustration to the
underprivileged but also reduces productivity growth, investment, and job opportunities.[113]

Prevention[edit]
According to the amended Klitgaard equation,[114] limitation of monopoly and regulator
discretion of individuals and a high degree of transparency through independent oversight by
non-governmental organisations (NGOs) and the media plus public access to reliable
information could reduce the problem. Djankov and other researchers[115] have independently
addressed the role information plays in fighting corruption with evidence from both
developing and developed countries. Disclosing financial information of government officials
to the public is associated with improving institutional accountability and eliminating
misbehavior such as vote buying. The effect is specifically remarkable when the disclosures
concern politicians' income sources, liabilities and asset level instead of just income level.
Any extrinsic aspects that might reduce morality should be eliminated. Additionally, a country
should establish a culture of ethical conduct in society with the government setting the good
example in order to enhance the intrinsic morality.
In 1969,[a] Christian anarchist Dorothy Day argued that God will resolve economic abuses
such as corruption. She wrote,[116]
Fortunately, the Papal States were wrested from the Church in the last century, but there is
still the problem of investment of papal funds. It is always a cheering thought to me that if we
have good will and are still unable to find remedies for the economic abuses of our time, in
our family, our parish, and the mighty church as a whole, God will take matters in hand and
do the job for us.

Enhancing civil society participation[edit]

Creating bottom-up mechanisms, promoting citizens participation and encouraging the
values of integrity, accountability, and transparency are crucial components of fighting
corruption. As of 2012, the implementation of the "Advocacy and Legal Advice Centres
(ALACs)” in Europe had led to a significant increase in the number of citizen complaints
against acts of corruption received and documented[117] and also to the development of
strategies for good governance by involving citizens willing to fight against corruption.[118]

Anti-corruption programmes[edit]
See also: List of anti-corruption agencies
 United Nations Convention against Corruption

The Foreign Corrupt Practices Act (FCPA, USA 1977) was an early paradigmatic law for
many western countries i.e. industrial countries of the OECD. There, for the first time the old
principal-agent approach was moved back where mainly the victim (a society, private or
public) and a passive corrupt member (an individual) were considered, whereas the active
corrupt part was not in the focus of legal prosecution. Unprecedented, the law of an industrial
country directly condemned active corruption, particularly in international business
transactions, which was at that time in contradiction to anti-bribery activities of the World
Bank and its spin-off organization Transparency International.
As early as 1989 the OECD had established an ad hoc Working Group in order to explore
"the concepts fundamental to the offense of corruption, and the exercise of national
jurisdiction over offenses committed wholly or partially abroad."[119] Based on the FCPA
concept, the Working Group presented in 1994 the then "OECD Anti-Bribery
Recommendation" as precursor for the OECD Convention on Combating Bribery of Foreign
Public Officials in International Business Transactions[120] which was signed in 1997 by all
member countries and came finally into force in 1999. However, because of ongoing
concealed corruption in international transactions several instruments of Country
Monitoring[121] have been developed since then by the OECD in order to foster and evaluate
related national activities in combating foreign corrupt practices. One survey shows that after
the implementation of heightened review of multinational firms under the convention in 2010
firms from countries that had signed the convention were less likely to use bribery.[122]
In 2013, a document[123] produced by the economic and private sector professional evidence
and applied knowledge services help-desk discusses some of the existing practices on anti-
corruption. They found:

• The theories behind the fight against corruption are moving from a principal
agent approach to a collective action problem. Principal–agent theories seem not
to be suitable to target systemic corruption.
• The role of multilateral institutions has been crucial in the fight against
corruption. UNCAC provides a common guideline for countries around the world.
Both Transparency International and the World Bank provide assistance to
national governments in term of diagnostic and design of anti-corruption policies.
• The use of anti-corruption agencies have proliferated in recent years after the
signing of UNCAC. They found no convincing evidence on the extent of their
contribution, or the best way to structure them.
 • Traditionally anti-corruption policies have been based on success experiences
and common sense. In recent years there has been an effort to provide a more
systematic evaluation of the effectiveness of anti-corruption policies. They found
that this literature is still in its infancy.
• Anti-corruption policies that may be in general recommended to developing
countries may not be suitable for post-conflict countries. Anti-corruption policies
in fragile states have to be carefully tailored.
• Anti-corruption policies can improve the business environment. There is
evidence that lower corruption may facilitate doing business and improve firm's
productivity. Rwanda in the last decade has made tremendous progress in
improving governance and the business environment providing a model to follow
for post-conflict countries.[123]
• Armenia aims to achieve zero corruption through raising awareness on the
societal hazards. After the lavish spending accusations on the Armenian anti-
corruption council, through action strategies with implementation and observing
instruments progress is noticeable.[124]

In popular culture[edit]
See also: Kleptocracy Tour
In some countries people travel to corruption hot spots or a specialist tour company takes
them on corruption city tours, as it is the case in Prague.[125][126][127][128] Corruption tours have
also occurred in Chicago,[129] and Mexico City[130][131]
Films about corruption include Runaway Jury, The Firm, Syriana, The Constant Gardener,
and All the President's Men.

Legal corruption[edit]
Though corruption is often viewed as illegal, a concept of legal corruption has been
described by Daniel Kaufmann and Pedro Vicente.[5][132] It might be termed as processes
which are corrupt, but are protected by a legal (that is, specifically permitted, or at least not
proscribed by law) framework.[133]

Examples[edit]
In 1994, the German Parliamentary Financial Commission in Bonn presented a comparative
study on "legal corruption" in industrialized OECD countries[134] They reported that in most
industrial countries foreign corruption was legal, and that their foreign corrupt practices
ranged from simple, through governmental subsidization (tax deduction), up to extreme
cases as in Germany, where foreign corruption was fostered, whereas domestic was legally
prosecuted. The German Parliamentary Financial Commission rejected a Parliamentary
Proposal by the opposition, which had been aiming to limit German foreign corruption on the
basis of the US Foreign Corrupt Practices Act (FCPA from 1977), thus fostering national
export corporations.[135] In 1997 a corresponding OECD Anti-Bribery Convention was signed
by its members.[136][137] It took until 1999, after the OECD Anti-Bribery Convention came into
force, that Germany withdrew the legalization of foreign corruption.[138]
Foreign corrupt practices of industrialized OECD countries 1994 study[edit]
The Foreign corrupt practices of industrialized OECD countries 1994 (Parliamentary
Financial Commission study, Bonn).[134]
Belgium: bribe payments are generally tax deductible as business expenses if the name and
address of the beneficiary is disclosed. Under the following conditions kickbacks in
connection with exports abroad are permitted for deduction even without proof of the
receiver:
 • Payments must be necessary in order to be able to survive against foreign
competition
• They must be common in the industry
• A corresponding application must be made to the Treasury each year
• Payments must be appropriate
• The payer has to pay a lump-sum to the tax office to be fixed by the Finance
Minister (at least 20% of the amount paid).
In the absence of the required conditions, for corporate taxable companies paying bribes
without proof of the receiver, a special tax of 200% is charged. This special tax may,
however, be abated along with the bribe amount as an operating expense.
Denmark: bribe payments are deductible when a clear operational context exists and its
adequacy is maintained.
France: basically all operating expenses can be deducted. However, staff costs must
correspond to an actual work done and must not be excessive compared to the operational
significance. This also applies to payments to foreign parties. Here, the receiver shall specify
the name and address, unless the total amount in payments per beneficiary does not exceed
500 FF. If the receiver is not disclosed the payments are considered "rémunérations occult"
and are associated with the following disadvantages:

• The business expense deduction (of the bribe money) is eliminated.

• For corporations and other legal entities, a tax penalty of 100% of the
"rémunérations occult" and 75% for voluntary post declaration is to be paid.
• There may be a general fine of up 200 FF fixed per case.
Japan: in Japan, bribes are deductible as business expenses that are justified by the
operation (of the company) if the name and address of the recipient is specified. This also
applies to payments to foreigners. If the indication of the name is refused, the expenses
claimed are not recognized as operating expenses.
Canada: there is no general rule on the deductibility or non-deductibility of kickbacks and
bribes. Hence the rule is that necessary expenses for obtaining the income (contract) are
deductible. Payments to members of the public service and domestic administration of
justice, to officers and employees and those charged with the collection of fees, entrance
fees etc. for the purpose to entice the recipient to the violation of his official duties, can not
be abated as business expenses as well as illegal payments according to the Criminal Code.
Luxembourg: bribes, justified by the operation (of a company) are deductible as business
expenses. However, the tax authorities may require that the payer is to designate the
receiver by name. If not, the expenses are not recognized as operating expenses.
Netherlands: all expenses that are directly or closely related to the business are deductible.
This also applies to expenditure outside the actual business operations if they are
considered beneficial to the operation for good reasons by the management. What counts is
the good merchant custom. Neither the law nor the administration is authorized to determine
which expenses are not operationally justified and therefore not deductible. For the business
expense deduction it is not a requirement that the recipient is specified. It is sufficient to
elucidate to the satisfaction of the tax authorities that the payments are in the interest of the
operation.
Austria: bribes justified by the operation (of a company) are deductible as business
expenses. However, the tax authority may require that the payer names the recipient of the
deducted payments exactly. If the indication of the name is denied e.g. because of business
comity, the expenses claimed are not recognized as operating expenses. This principle also
applies to payments to foreigners.
Switzerland: bribe payments are tax deductible if it is clearly operation initiated and the
consignee is indicated.
US: (rough résumé: "generally operational expenses are deductible if they are not illegal
according to the FCPA")
UK: kickbacks and bribes are deductible if they have been paid for operating purposes. The
tax authority may request the name and address of the recipient."
"Specific" legal corruption: exclusively against foreign countries[edit]
Referring to the recommendation of the above-mentioned Parliamentary Financial
Commission's study,[134] the then Kohl administration (1991–1994) decided to maintain the
legality of corruption against officials exclusively in foreign transactions[139] and confirmed the
full deductibility of bribe money, co-financing thus a specific nationalistic corruption practice
(§4 Abs. 5 Nr. 10 EStG, valid until 19 March 1999) in contradiction to the 1994 OECD
recommendation.[140] The respective law was not changed before the OECD Convention also
in Germany came into force (1999).[141] According to the Parliamentary Financial
Commission's study, however, in 1994 most countries' corruption practices were not
nationalistic and much more limited by the respective laws compared to Germany.[142]

Development of the shadow economy in (West-) Germany 1975–2015. Original shadow

economy data from Friedrich Schneider, University Linz.

Particularly, the non-disclosure of the bribe money recipients' name in tax declarations had
been a powerful instrument for Legal Corruption during the 1990s for German corporations,
enabling them to block foreign legal jurisdictions which intended to fight corruption in their
countries. Hence, they uncontrolled established a strong network of clientelism around
Europe (e.g. SIEMENS)[143] along with the formation of the European Single Market in the
upcoming European Union and the Eurozone. Moreover, in order to further strengthen active
corruption the prosecution of tax evasion during that decade had been severely limited.
German tax authorities were instructed to refuse any disclosure of bribe recipients' names
from tax declarations to the German criminal prosecution.[144] As a result, German
corporations have been systematically increasing their informal economy from 1980 until
today up to 350 bn € per annum (see diagram on the right), thus continuously feeding their
black money reserves.[145]

Siemens corruption case[edit]

In 2007, Siemens was convicted in the District Court of Darmstadt of criminal corruption
against the Italian corporation Enel Power SpA. Siemens had paid almost €3.5 million in
bribes to be selected for a €200 million project from the Italian corporation, partially owned by
the government. The deal was handled through black money accounts
in Switzerland and Liechtenstein that were established specifically for such
purposes.[146] Because the crime was committed in 1999, after the OECD convention had
come into force, this foreign corrupt practice could be prosecuted. It was the first time a
German court of law convicted foreign corrupt practices like a national practice, although the
corresponding law did not yet protect foreign competitors in business.[147]
During the judicial proceedings it was disclosed that numerous such black accounts had
been established in the past decades.[143]
Historical responses in philosophical and religious
thought[edit]
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Philosophers and religious thinkers have responded to the inescapable reality of corruption
in different ways. Plato, in The Republic, acknowledges the corrupt nature of political
institutions, and recommends that philosophers "shelter behind a wall" to avoid senselessly
martyring themselves.
Disciples of philosophy ... have tasted how sweet and blessed a possession philosophy is,
and have also seen and been satisfied of the madness of the multitude, and known that
there is no one who ever acts honestly in the administration of States, nor any helper who
will save any one who maintains the cause of the just. Such a savior would be like a man
who has fallen among wild beasts—unable to join in the wickedness of his fellows, neither
would he be able alone to resist all their fierce natures, and therefore he would be of no use
to the State or to his friends, and would have to throw away his life before he had done any
good to himself or others. And he reflects upon all this, and holds his peace, and does his
own business. He is like one who retires under the shelter of a wall in the storm of dust and
sleet which the driving wind hurries along; and when he sees the rest of mankind full of
wickedness, he is content if only he can live his own life and be pure from evil or
unrighteousness, and depart in peace and good will, with bright hopes.

— Plato, Republic, 496d

The New Testament, in keeping with the tradition of Ancient Greek thought, also frankly
acknowledges the corruption of the world (ὁ κόσμος)[148] and claims to offer a way of keeping
the spirit "unspotted from the world."[149] Paul of Tarsus acknowledges his readers must
inevitably "deal with the world,"[150] and recommends they adopt an attitude of "as if not" in all
their dealings. When they buy a thing, for example, they should relate to it "as if it were not
theirs to keep."[151] New Testament readers are advised to refuse to "conform to the present
age"[152] and not to be ashamed to be peculiar or singular.[153] They are advised not be friends
of the corrupt world, because "friendship with the world is enmity with God."[154] They are
advised not to love the corrupt world or the things of the world.[155] The rulers of this world,
Paul explains, "are coming to nothing"[156] While readers must obey corrupt rulers in order to
live in the world,[157] the spirit is subject to no law but to love God and love our neighbors as
ourselves.[158] New Testament readers are advised to adopt a disposition in which they are "in
the world, but not of the world."[159] This disposition, Paul claims, shows us a way to escape
"slavery to corruption" and experience the freedom and glory of being innocent "children of
God