Daft on graft

IN 2008 Siemens, a German conglomerate, was fingered for handing out bribes in emerging markets. It has since spent a staggering $3 billion on fines and internal investigations to atone for its sins. Half of that has gone to advisers of one sort or another. Walmart, an American retailer, will soon have spent $800m on fees and compliance stemming from a bribery investigation in Mexico. The most complex bribery probes used to take three years. Now they last an average of seven.

In recent years lots of big economies, from Britain to Brazil, have followed America’s lead in tightening anti-bribery enforcement (see article). Offences that once drew a slap on the wrist now attract fines in the hundreds of millions of dollars as well as prison terms for palm-greasing managers. It is right that bribery should be punished. The economic effects of graft are insidious. Bribery distorts competition and diverts national resources into crooked officials’ offshore accounts. But the cost and complexity of...

from The Economist: Leaders http://ift.tt/1zFDHET