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Determinants of corporate corruption: : an investigation of the supply-side of corruption in development projects financed by multilateral development banks

Student thesis: Doctoral Thesis

International development projects represent a fertile ground for corporate corruption. This form of corruption emanating from the supply-side has become pervasive and entrenched in the corporate world. In recent years, an increasing number of corporates have been sanctioned by multilateral development banks for their participation in corruption schemes. While international development banks seek to support governments in their development agenda, corporate corruption can significantly undermine such action. This is a big challenge for donors in their quest of increasing investment in development.

The primary purpose of this research is to identify the main determinants that encourage corporate corruption in development projects financed by multilateral development banks. The research questions explore the challenges facing corporates; the effectiveness of multilateral development banks’ sanction regime; the definition of project success in relation to such projects and how corporate corruption is instigated and facilitated by corporates. This research uses a mixed method approach, comprising: survey, case study, interview and content analysis.

This study identifies tension between the corporate pecuniary objectives and the compliance landscape of multilateral banks. Based on the empirical findings, corporate corruption is established to be a symptom of ‘corporate brain disorder’ - which needs to be addressed from the supply-side. This research contributes to knowledge on corporate corruption by identifying the determinants of corporate corruption namely; minimising of competition; maximising of profit; institutional blindness, and avoiding uncertainty. In light of the increasing compliance landscape, it is recommended that multinational corporations mitigate corruption risks based on the proposed Narrainen’s Project Governance Framework. It is also argued that the definition of project success needs to be extended so that the corporate objectives are aligned with the compliance requirements.

This research offers insights to policy makers in addressing corporate corruption risk. The findings will contribute to guiding donor agencies in their anti-corruption strategies with more focus on the supply-side. There are significant research opportunities associated with this, including further exploration of corporate dynamics and top management perspectives.
Original languageEnglish
Awarding Institution
Supervisors/Advisors
Award dateMar 2019
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ID: 14418309