2.2. How companies behave in low income and OECD countries
Figure 6, below, analyses the results of the BPI 2006 from the perspective of respondents in Low Income Countries (LICs)1 and OECD countries. Among the most salient results are:
- Italy’s performance in LICs is particularly poor. With a score of just 4.9, this is consistent with what is reported by African respondents;
- Companies from Hong Kong perform badly in LICs, falling from a score of 6.0 in the full sample to 5.1 in this sub-sample; and
- When viewed only by respondents in the OECD countries, the performance of companies headquartered in the United Arab Emirates, Singapore, Mexico and Hong Kong is considerably better than in the full sample, causing Mexico, Singapore and UAE to move up from the second to the first cluster, and Hong Kong to move from the third to the second cluster.
- Figure 6: Comparison of the views of respondents in Low Income and OECD countries
Note: the changes highlighted here are countries that have moved between clusters.
Perhaps the most significant finding regarding the comparison of assessments by respondents in LICs and OECD countries is the apparent double standard employed by foreign companies in the two groups. While the scores for companies from the majority of countries tend to be considerably higher in the OECD than in the full sample, their performance falls when looking at scores in LICs. Thus it would seem that many foreign companies do not resort to bribery while operating in the ‘developed’ world, where institutions are strong and there is a significant threat of legal retribution for illegal activities. However, in LICs, many of which are characterised by poor governance and ineffective legal systems for dealing with corruption, it appears that many companies resort to corrupt practices. The result is that the countries least equipped to deal with corruption are hardest hit, with their anti-corruption initiatives undermined. This helps trap many of the world’s most disadvantaged people in chronic poverty.
The greatest difference in score when looking at responses from OECD countries and from LICs relates to companies from the United Arab Emirates. Responses from OECD countries give these companies a score of 7.9. Taking account of assessments by LICs, it falls 2.6 points to just 5.3. Similar changes in behaviour are evident for the majority of the countries covered in the BPI. The deterioration of companies’ behaviour of the worst performing countries in the BPI - India, China and Russia - when operating in LICs is also alarming. India stands out with a score of just 3.6, a fall of 1.9 points from its score in the OECD countries.
1 There are 54 Low Income Countries as defined by the World Bank (see www.worldbank.org for further information), 27 of which were included in the survey. Assessments by respondents from these countries make up the analysis.