The Prevalence Of Corruption And Its Effect On Economic Development

1282 Words Apr 29th, 2016 6 Pages
In 2012, the New York Times published an article reporting extensively on the rampant corruption in the business practices of Wal-Mart’s Mexican branch, Wal-Mart de Mexico. The article reported that the company paid more than $24 million in order to obtain things such as building permits and beneficial environmental impact reports as a way of facilitating unprecedented large growth (Barstow 2012). Due to these practices, Wal-Mart has come under scrutiny of the United States’ Foreign Corrupt Practices Act (FCPA), which seeks to punish American companies that participate in illegal practices abroad. This article also lead to a rise in scholarship and articles about the inherent corruption in the Mexican business culture as well as general public functioning. This paper seeks to look at the prevalence of corruption in Mexico. This in turn spills over into the causes of corruption and its effect on economic development, especially in relation to FDI. Reports of all kinds discuss the prevalence of corruption, especially bribery, in everyday proceedings in Mexico. For example, Sarsfield (2012) does a specific study looking at “mordida,” a term specifically subscribed to bribes paid to get out of traffic violations, which is widely practiced in Mexico City. Bartstow’s (2012) New York Times articles pays close focus to Wal-Mart de Mexico’s use of “gestores,” who act as middlemen between corporations and public officials and actually facilitating bribes. Barstow describes these…

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