It’s not just fraud: The human cost of bribery and corruption

The fight for human rights is happening in your compliance training

5 min read

1 hour ago

A photo of two hands pass a wad of cash under the table, implying bribery — Hands pass money “under the table”

For most of us, Bribery and Corruption (B&C) are abstract, white-collar crimes — remote and far less compelling than crimes against a person. But what if I told you that B&C is a primary driver of global inequality?

In fact, in 2021, UN Member States adopted a political declaration which acknowledged:

All forms of corruption can exacerbate poverty and inequality and may disproportionately affect the most disadvantaged individuals in society.

B&C takes many forms as outlined below, but quite simply, it’s “an abuse of power for private gain” (Merkle (2021)). This definition, with its focus on power, is critical to understanding the true, human cost.

Table showing types of corruption. Bribery = Payment (in money or in kind). Embezzlement = Theft of resource(s) by resource managers. Fraud = Economic crime involving deceit. Extortion =Money / other resources extracted by coercion, violence or threats. Favouritism = Cronyism, nepotism, bias, patronage

Whilst calculating the financial cost of B&C is difficult due to its illicit nature, Transparency International highlights some troubling statistics:

In the EU: Around 30% of people admit to use of personal connections to access public services (2021)
In Asia: Nearly one in seven citizens were offered bribes in exchange for votes (2020)
In Africa: The poorest are twice as likely to pay a bribe as the richest, with young people also at risk (2019)

The human cost of B&C: Social (in)justice and exclusion

At a fundamental level, B&C undermines the rule of law. It prevents equal treatment, stifles democracy, and stops impartial justice. B&C doesn’t specifically set out to harm marginalised people, but it amplifies the marginalisation that they already face.

How B&C starve education and healthcare

B&C increases the cost of doing business and correlates with low tax compliance (Lagarde (2016)), which directly impacts funding for services like health and education.

Healthcare: B&C harms provision through financial management (like embezzlement), distribution of supplies (eg. counterfeit drugs), and health worker-patient relationships. Who can forget the UK’s COVID scandal where the government awarded billions in contracts without proper tender processes?
Access: The use of personal connections to access healthcare excludes those without such networks. This makes marginalised groups, like Roma and Sinti people, vulnerable to extortion when seeking care (Merkle et al. (2017)).
Education: Corruption lowers quality and disincentives university attendance, further stifling future economic growth and social development (Merkle (2021)).

Case study: Collective action in Uganda

A billboard reading “Corruption is deadly — Stop it!” stands against a blue sky. On the billboard is a stylised cartoon drawing of a collapsing building, with people running away. — Billboard in Uganda, part of the campaign to tackle corruption

In the mid-1990s only 20% of the Government’s education funds reached the intended schools, with poorer areas disproportionately impacted. A national campaign drove public outrage and meant that by the early 2000s, schools received 80% of their entitlement on average. Enrolment beyond year three and test scores, particularly for girls, improved significantly, with public transparency and accountability playing a major role.

Fuel for extremism and conflict

Corruption erodes trust, creating an environment in which large scale conflict can easily erupt. With Mogghadam’s (2005) staircase to terrorism model, we see that inequality and the perceived inability to exact change can create the social environment in which extremist views can thrive. This is supported by what Chayes (2014) describes as a “remarkable correlation… between severe and systemic corruption and ideological extremism”.

The death of meritocracy: How B&C hampers inclusion

Favouritism, a core component of B&C, actively undermines merit-based inclusion.

It’s not what you know, it’s who you know: In 18 European countries high corruption correlated to low political representation of women, often due to “male dominated patronage networks” (Sundström and Wängnerud (2014)). This exclusion is mirrored in highly stratified societies like Guyana, where political and business leaders from the same ethnic group collude, to the exclusion of ethnic minorities (Edwards (2021)).

Exclusionary decision making: Lack of representation impacts outcomes. In the corporate world, diverse leadership drives innovation derived income (Boston Consulting Group (2018)). Chattopadhyay and Duflo’s (2004) experiment also found that political reservations for women in rural India led to increased investment in infrastructure like drinking water, which disproportionately helped women.

A word of warning: Simply including marginalised people into senior positions can hide issues of corruption if these individuals do not actually have any decision-making power, or if they are part of the same corrupt networks.

Sextortion: The personal and intimate cost of corruption

Sexual extortion, or “sextortion”, is a widespread form of corruption where sexual favours are obtained through abuse of power. It disproportionately impacts women and girls, with factors like age, disability, and undocumented status further exacerbating this risk (Merkle (2021)) as these groups have less ability to access opportunities via traditional means.

Responsible Business practices: The joint solution

It’s easy to get overwhelmed by the thought of what Duflo and Banerjee (2011) describe as “capital letter” INSTITUTIONS. But most of us deal with “lower case” institutions — the systems and organisations we interact with every day, made up of every day people, making every day decisions.

This sort of work in the margins is where we can all make a difference, and it’s why Compliance and DEI teams partner up to dismantle patronage networks and the hidden harms that B&C perpetuates.

The Eurostar solution

Our excellent Compliance team works hard to translate these global, capital letter PROBLEMS into local, lower case solutions:

Writing policies: Our Code of Conduct, sets out our expected behavioural standards, including a zero tolerance approach to bullying, harassment or discrimination.
Evaluating tenders: We ensure suppliers meet ethical supply chains and anti B&C principles. For our new Uniforms project, an enhanced ESG section ensured the labour rights of workers throughout our supply chain are protected.
Embedding transparency: Our Whistleblowing platform provides colleagues with a safe and anonymous way to report issues like harassment, or other abuses of power.

So next time your Compliance training comes around, don’t just sigh and roll your eyes. Remember that you are playing your part to protect the most vulnerable globally and reduce inequality.