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Fighting corruption: How binding commitments of business firms can help to activate the self-regulating forces of competitive markets

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  • Pies, Ingo
  • Hielscher, Stefan

Abstract

Corruption is a serious and complex challenge for modern societies. Fighting and preventing corruption thus requires constructive learning processes. In this paper, we systematically integrate a market ethics perspective with a business ethics perspective constitutive for the study of 'ordonomics'. In doing so, we argue that, first, companies have a(n) (common) interest in actively fighting corruption using collective forms of self-regulation and, second, we show what companies can do about it internally. We derive the first argument from a market ethics perspective that shows how companies suffer from a race to the bottom that results from corruption under market competition. The second argument is based on a business ethics perspective that shows how cartels of silence within companies can create significant obstacles for well-meaning top management to address the problem effectively.

Suggested Citation

  • Pies, Ingo & Hielscher, Stefan, 2019. "Fighting corruption: How binding commitments of business firms can help to activate the self-regulating forces of competitive markets," Discussion Papers 2019-04, Martin Luther University of Halle-Wittenberg, Chair of Economic Ethics.
    • Handle: RePEc:zbw:mlucee:201904
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    References listed on IDEAS

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    1. Ingo Pies & Markus Beckmann & Stefan Hielscher, 2010. "Value Creation, Management Competencies, and Global Corporate Citizenship: An Ordonomic Approach to Business Ethics in the Age of Globalization," Journal of Business Ethics, Springer, vol. 94(2), pages 265-278, June.
    2. Hielscher, Stefan & Beckmann, Markus & Pies, Ingo, 2014. "Participation versus Consent: Should Corporations Be Run according to Democratic Principles?1," Business Ethics Quarterly, Cambridge University Press, vol. 24(4), pages 533-563, October.
    3. Lambsdorff, Johann Graf, 2002. "Making corrupt deals: contracting in the shadow of the law," Journal of Economic Behavior & Organization, Elsevier, vol. 48(3), pages 221-241, July.
    4. Pies, Ingo & Beckmann, Markus, 2009. "Whistle-Blowing heißt nicht: "verpfeifen" - Ordonomische Überlegungen zur Korruptionsprävention durch und in Unternehmen," Discussion Papers 2009-19, Martin Luther University of Halle-Wittenberg, Chair of Economic Ethics.
    5. Sass, Peter & Pies, Ingo, 2005. "Selbstverpflichtung als Instrument der Korruptionsprävention bei Infrastrukturprojekten," Discussion Papers 2005-4, Martin Luther University of Halle-Wittenberg, Chair of Economic Ethics.
    6. Johann Graf Lambsdorff, 2006. "Causes and Consequences of Corruption: What Do We Know from a Cross-Section of Countries?," Chapters, in: Susan Rose-Ackerman (ed.), International Handbook on the Economics of Corruption, chapter 1, Edward Elgar Publishing.
    7. Pies, Ingo & Hielscher, Stefan & Beckmann, Markus, 2009. "Moral Commitments and the Societal Role of Business: An Ordonomic Approach to Corporate Citizenship," Business Ethics Quarterly, Cambridge University Press, vol. 19(3), pages 375-401, July.
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