Corruption Begets Corruption In Developing Countries - How The Use Of Technology Could Change The Landscape

Abstract

This paper investigates the role technology can play in fostering good business practices that would deter economic corruption and extortion in developing countries.  This paper first provides a problem statement with a brief description of corruption in form of bribery and extortion based on Foreign Corrupt Practices Act (FCPA) and its provisions.  Second, we propose a definition of bribery and extortion.  Our definitions indicate that, contrary to what is often claimed, many of the kinds of payments forbidden by the Foreign Corrupt Practices Act are not instances of bribery, but rather extortion.  Third, we present an economic analysis of bribery and extortion and explain why they are thought to be undesirable practices from an economic point of view.  Fourth, we present two case studies to support the use of technology to mitigate and facilitate business in developing countries that should improve economic and business practices.