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
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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 actors as essential the “Mexico’s endless loop of public corruption scandals.” In an NPR interview (2012), journalist Eduardo Garcia discusses bribery as the “modus operandus” in Mexico with it being used to expedite standard business processes, especially when opening new businesses. Archibold (2012) discusses similar findings, while also discussing the occurring bribes paid to health inspectors by a long time food …show more content…
As a developing country, it is especially prone to corruption due to its poor institutions and large levels of bureaucracy. Despite the negative effects that corruption has on Mexico’s economy it continues to exist and thrive. This is in large part because corruption is self-perpetuating and breaking the cycle is not an easy feat. Perhaps more disheartening, players with more power and money than the Mexican government appear to benefit significantly from the corruption. Of course, Wal-Mart, which has yet to be charged, continues to have Mexico as its second largest market (Bartstow 2012). The United States government may also potentially benefit from the corruption. Cracking down on offenses does not impact investment within the US, which could potentially increase it if companies begin to worry about sanctions because of their actions abroad. The US is also collecting fines from the offenses, while Mexico is not. There appears to be little incentive for the corruption to desist, which ultimately impacts the citizens of Mexico, who have the least amount of control, more than any other
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 actors as essential the “Mexico’s endless loop of public corruption scandals.” In an NPR interview (2012), journalist Eduardo Garcia discusses bribery as the “modus operandus” in Mexico with it being used to expedite standard business processes, especially when opening new businesses. Archibold (2012) discusses similar findings, while also discussing the occurring bribes paid to health inspectors by a long time food …show more content…
As a developing country, it is especially prone to corruption due to its poor institutions and large levels of bureaucracy. Despite the negative effects that corruption has on Mexico’s economy it continues to exist and thrive. This is in large part because corruption is self-perpetuating and breaking the cycle is not an easy feat. Perhaps more disheartening, players with more power and money than the Mexican government appear to benefit significantly from the corruption. Of course, Wal-Mart, which has yet to be charged, continues to have Mexico as its second largest market (Bartstow 2012). The United States government may also potentially benefit from the corruption. Cracking down on offenses does not impact investment within the US, which could potentially increase it if companies begin to worry about sanctions because of their actions abroad. The US is also collecting fines from the offenses, while Mexico is not. There appears to be little incentive for the corruption to desist, which ultimately impacts the citizens of Mexico, who have the least amount of control, more than any other