Sachs: The Global Economy’s Corporate Crime Wave

"Jeff Sachs says rich countries should not be "pointing the finger at poor countries" over corruption:

The Global Economy’s Corporate Crime Wave, by Jeffrey D. Sachs, Commentary, Project Syndicate: The world is drowning in corporate fraud, and the problems are probably greatest in rich countries – those with supposedly “good governance.” Poor-country governments probably accept more bribes and commit more offenses, but it is rich countries that host the global companies that carry out the largest offenses. ...

Hardly a day passes without a new story of malfeasance. Every Wall Street firm has paid significant fines during the past decade for phony accounting, insider trading, securities fraud, Ponzi schemes, or outright embezzlement by CEOs. ... There is, however, scant accountability. ... When companies are fined for malfeasance, their shareholders, not their CEOs and managers, pay the price. ...

Corporate corruption is out of control for two main reasons. First, big companies are now multinational, while governments remain national. Big companies are so financially powerful that governments are afraid to take them on. Second, companies are the major funders of political campaigns in places like the US, while politicians themselves are often part owners, or ... beneficiaries of corporate profits. ...

Even if governments try to enforce the law, companies have armies of lawyers to run circles around them. The result is a culture of impunity, based on the well-proven expectation that corporate crime pays. ...

So the next time you hear about a corruption scandal in Africa or other poor region, ask where it started and who is doing the corrupting. Neither the US nor any other “advanced” country should be pointing the finger at poor countries, for it is often the most powerful global companies that have created the problem..."

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