Page last updated at 15:51 GMT, Wednesday, 23 September 2009 16:51 UK

Corruption 'stifling economies'

Dollar bills
Bribery is just one form of corruption highlighted in the report

Bribery and price-fixing are unduly influencing global public policy and costing countries billions of dollars in lost revenues, a report has claimed.

Such activities undermined fair competition and stifled economic growth, Transparency International's latest Global Corruption Report said.

Corruption was widespread, it added, and not confined to poor countries.

The study focuses on malpractice involving private sector firms, based on detailed research in 45 nations.


Among the specific findings, the report said that almost two out of five businesses surveyed had been asked to provide government officials with bribes.

And half of the international businesses executives polled estimated that corruption added at least 10% to project building costs.

Tackling corruption is also important for financial and economic stability and the ongoing reforms of the global financial architecture
Christiaan Poortman
Transparency International

The report said that clear-cut bribery was only part of the problem.

It pointed to nepotism, favouritism and informal understandings between businesses, officials and politicians in many places that led to inefficiency and gross waste of resources.

The "revolving doors" between public office and the private sector were also a path to "deceitful public procurement deals where non-competitive bidding and opaque processes lead to immense waste and unreliable services or goods", it said.

Lobbyist impact

The group's global programmes director, Christiaan Poortman, said he hoped the weight of the financial crisis would not lead policymakers at the G20 summit in Pittsburgh to water down corruption-fighting efforts.

"It is not just a question of tackling corruption in business - it is also important for financial and economic stability and the ongoing reforms of the global financial architecture," the report said.

And Mr Poortman argued that corruption acted as a catalyst for the global financial crisis - because ratings agencies had a conflict of interest and "turned a blind eye to high levels of risk", something he said was "a form of corruption".

Transparency International said that while many firms had committed to fighting corruption - their efforts often fell short of what had been promised.

It called on companies to issue regular reports on action they were taking to fight corruption, and to reveal any financial support they gave to political parties, lobbyists and governments.

The report points to the corrosive impact of 16,500 lobbyists working to influence the European Union in Brussels.

And in the US, corporations spent an average of $200,000 a year on lobbying every politician elected to state legislatures, it said.

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