What is Anti-Corruption Collective Action?
When acting jointly, businesses, civil society and the public sector can more effectively tackle corruption.
Anti corruption Collective Action initiatives can include industry standards, multi-stakeholder initiatives, and public-private partnerships. The focus is generally on the "supply" side of bribery because companies engage with other stakeholders to tackle the payment of bribes.
The World Bank Institute describes anti-corruption Collective Action as ...
‘a collaborative and sustained process of cooperation amongst stakeholders. It increases the impact and credibility of individual action, brings vulnerable individual players into an alliance of like-minded organizations and levels the playing field between competitors.’
World Bank Institute (2008) Fighting Corruption Through Collective Action: A Guide for Business (The World Bank, Washington, DC)
Three Types of Collective Actions
In practice, we identify these categories of Collective Actions:
- an anti-corruption declaration
- a standard setting or principles based initiative, which can also include
a certification model to monitor and audit adherence to an agreement not to bribe
- an Integrity Pact
The Business Case for Collective Action
Companies have begun to acknowledge that clean business is good business.
Many companies have embraced the implications of new anti-corruption laws and regulations that have swept across the world in the last decade or so; they acknowledge that clean business is good business, and live up to this by rejecting bribery, even going so far as to disengage from a market or business sector if the corruption risks cannot be adequately mitigated. Taking such a step is not something undertaken lightly by any company, and in highly competitive business environments it can sometimes be extremely difficult to opt out of a market entirely.
Companies face a prisoner's dilemma.
In countries where corruption is systemic or entrenched and contracts between the private and public sectors involve government or government entities, the legal and reputational risks for companies can be very high. Where this is the case, an oft quoted example that describes this situation from an economic perspective is the 'prisoner's dilemma'.
The 'prisoner's dilemma' has been used to explain how companies react to bribe solicitation where all have an incentive not to pay, particularly if they are subject to anti-corruption laws that are enforced in their home country. At the same time, companies fear the loss of business if they fail to pay bribes, and risk becoming uncompetitive in emerging markets. Companies that refuse to pay bribes and opt out risk being denied the opportunity of obtaining the business. The best outcomes to such dilemmas and the unfairness associated with free riders are subjects of analysis and discussion by economists and social scientists.
Collective Action provides a way out of the dilemma.
For companies seeking a practical solution, Collective Action may provide a means to redress the risks for companies and improve the wider business environment. Engaging with competitors, local authorities, government agencies and civil society stakeholders to confront bribery risks that are common to market participants can be an efficient way to reduce corruption.
Companies have the local market knowledge to craft useful Collective Action initiatives.
Companies use corruption risk assessments, examining factors such as: geography, sector, transactions, business opportunities and third party relationships. Combined with local market knowledge, companies are well able to identify the opportunities for solicitation, and whether it affects only the specific sector, or is a wider phenomenon cutting across several, or even all, industries. Such knowledge should be used to seek out opportunities to develop effective coalitions and alliances to tackle bribery risks.