Why Bribe?

One dramatic scene in a Hong Kong produced movie (1) about the infamous Inspector Lei Luo in the 60s, aka Tiger Lei, vividly demonstrates the notoriety of "black gold". It was with which Tiger Lei catapulted himself to the position of Inspector and, subsequently, immense power and fortune. As a street boy-turned-CID of the Hong Kong Police, rather than engaging himself alongside his uniformed counterparts on the frontier against the rioting public (as a result of some frenzied social movement egged on by the spillover of patriotic sentiment from across the mainland border), he was leaning back behind the barricade of police trucks against the back of one of those, and blatantly negotiating the price for an Inspector's position with the retiring British Chief Superintendent sitting leisurely inside another one at a short distance nearby. Perhaps it was not so blatant, as they were bargaining through the exchange of visible gestures signaling the price of the coveted position, with each finger representing a million in sum, in the distance between the two trucks. However, the deal was struck, with the consequence of a stepping stone to power, fame and fortune for one, and a luxurious retirement for another, but no doubt at an immeasurably huge cost of externality to the society.

One would wonder where did Tiger Lei amass the millions of dollars from for his coveted prize. The story had it that his father-in-law, a triad's head, backed him up. Without getting hung up on the accuracy of details, it was a very convincing story - triads and corrupted governing officials in power usually go hand in hand together. And the saga neatly summed up what the society of Hong Kong was like in the old days. That may well be unimaginable for the contemporary generation of citizens there, which is generally considered as among the relatively "cleaner" economies on earth nowadays.

Why bribe?

A person usually bribes to win a coveted prize, get access to a desired position, have somebody else help keeping a secret or turning a blind eye to some misdeed, basically to solicit the help of a second person or third party to get a certain thing done, for which the chance of success would otherwise be very slim, if not zero. For a person to bribe, generally speaking, one must facing an unsolvable problem, and there must be somebody else whom the person believes to be able to offer a solution.

Except for a purely altruistic deed, as an intuitive calculation of cost and benefit going on in the mind, the person in the position to offer help will naturally and logically first think about the expected return to any effort he may have to make in order to deliver the solution. It is a rational process of reasoning, but for the question of legitimacy in the context concerned. In the big scheme of evolution of human interaction, it is indeed logical to discern that bribery is as old as, if not older than, civilization, and is but one side to the bargaining process. Corruption of course forms the other side to it. Without the counterpart of a corrupted mind, there could not possibly be any bribing will. But matched together, they make possible all sorts of economic transaction, despite the shakiness in legitimacy.

But legitimacy is also a definition of mankind, also depending on the different political regimes and legal systems around the world. In fact, it is even questionable whether bribery is outright illegitimate in some parts of the world. In many countries of the developing world with a large bureaucratic machine harbouring layers of low-paid civil servants, it is commonplace for the general public to resort to oiling palms to get simple things done, e.g., application of a passport and getting custom clearance of imported items - things that could otherwise be painfully dragging, though painlessly and efficiently procured in the more developed parts of the world. When if you get caught by a roadside policeman for contravening a traffic regulation of some sort, proffering up the right number of bank-notes should always readily get you off the hook.

Where commercial interests are at stake, the extorting force is no doubt even more rampant. In all those places where "vague and overlapping regulations can seem expressly designed to enrich predatory officials", bribery is perhaps the only realistic way to obtain the necessary licenses for getting on with business. Ask the anonymous "Ivan", the reluctant briber who bribed his way through Russia and Ukraine to sustain his entrepreneurship, as he attested to the Economist (2).

"It was the best of times, it was the worst of times..."

Indeed graft is by no means the unique feature of any particular country, although it seems to be more resonating with headlines or the undertone in the despotic, monarchical and communist states. For businessmen even from the liberal Western countries, bribing foreign officials was not illegal until the late 1990s mostly outlawed it. Nor is it only restricted to the big names making the headlines. Trading partners readily transcend all frontiers of race and ideology, certainly more so in today's age of globalization than in the past. But it remains all the same. It could indeed be anywhere and anytime in history where the corrupted minds could extort black money from the reluctant or all-too-willing bribers in different walks of life, not necessarily restricted to the big-ticket items of oil and gas, weaponry, telecommunications and aviation in today's age. For as long as the desire for circumvention and the greed for extortion lurk around, the under-table and back-room slippery trade of brown envelopes and special favours will continue to flourish.

Conscience could also be readily numbed and compromised when bribes are usually so well dressed up in a variety of euphemisms that the line of legitimacy becomes conveniently blurred. Political campaign donations, kick-back gifts or even service tips for extra favours, though smacking of the same nature, may not readily cross the mind as bribes.

It works, what's the problem?

If it is so prevalent that it even becomes the norm of a particular place at a particular time, as in Hong Kong in the 60s when the Police Force blatantly extorted from the street hawkers, where everybody has to pay up to be in the game, isn't it just becoming another egalitarian system that bribes can simply be dispensed as the routine costs of doing business, despite all pervading hassles? In the big scheme of things, should businessmen care about graft anymore than they do about tax or, as in any capitalist economies, agency cost?

But the similarity to the other economic costs is an illusion. Legitimacy by law remains the bottom line, without which, businessmen would be entirely at the mercy of the bloodsucker's whim. Tiger Lei might have shrewdly established a seemingly fair and organized system for all those extorted to succumb and conveniently pay their dues, but those dues were never fairer than any other sums as arbitrarily decided and dictated by the big brother, i.e., they could all change at one person's whim anytime.

The underworld is also far from egalitarian. For deals in the superlative league of greed to be struck, there is no nobler cause than the desire to get ahead of the pack. Far from the games in which everybody has to pay up to stay for some share of a pie, those at the pinnacle is one in which the winner takes all and the vanquished perishes, like competing for a contract of monopolistic nature. But when success depends on the stake of bribery rather than any act of business acumen or diligence, there is simply no place for the average businessmen in this part of the world - under or open.

The underworld also has no concern for the efficiency of resource allocation in any society and the cost of economic distortions or even fiascoes in the open world. Where, for example, cronyism is at work with friends in high places scratching each other's back and dictate where the banks should invest or who to lend money to, huge amount of debts turned bad and irrecoverable in no time whenever economic conditions take the unfavourable turn - a calamity various countries from Asia to South America had the misfortune to vividly demonstrate during the different rounds of financial crisis in the past two decades.

Greed is good?

Like two sides to the same coin, it is perhaps the same greed that Adam Smith effectively endorsed for the sake economic growth that is accountable for the corrupted mind, if not the bribing will. As such, it is also accountable for the mirror, though distorted, images of growth in the underworld. But the numbers involved are beyond estimation, as is the amount of economic value destroyed. Yes, it bounds to be destroying value as a net result, considering all economic costs incurred on the mass society, against the fattened bank accounts of the corrupted few. As such, prevalent and even pragmatic though graft is, it should be for no less an ideological cause to fight it than the human quest for liberal democracy and free trade. But it certainly is no easier.

Righteousness, more often than not, is at odds with pragmatism. Although, arguably, bribery is a matter of choice to a large extent, especially for deals to be struck at high places, where the tall orders of extortion are reaching down, however, it may become harder to resist and bribery more difficult to avoid. For example, let alone those vicious acts of blatant extortion for civil matters and on the street level, if every hotel operator in town knows that a sizable kick-back being the pre-requisite for getting the lucrative bookings from the government officials, could a particular hotel survive in forgoing this part of business altogether, with Howard Roark's unyielding integrity in Ayn Rand's "Fountainhead"? Perhaps, the Hong Kong street hawkers could leave the streets and the anonymous Ivan could leave Russia, but hardly more readily than the Detroit car workers and the Korean farmers could find alternative means of making a living for the virtue of free trade - let those who do it best do it. Ironically, Ivan did leave Russia but for exactly the opposite reason, that in the wake of the "orange revolution" of 2004, he no longer knew who, when and how much to bribe, a situation not unlike Indonesia in post-Suharto era.

A Serious Change of Wind

That is not to suggest there is no attempt of resistance, far from it. Even not entirely out of human deliberation, the sheer economic force of liquidity grown out of the proliferation of public capital markets around the world is itself one major power which brings to the wide open many economic activities that were inevitably subject to fickle whims and greasy palms once upon a time in the past, like who to lend money to. Nowadays, by and large, return on investment dictates where liquidity flows and companies, particularly conglomerates, may choose where and with whom to do business with and, arguably, avoid graft.

But greed can blind scruple and people can still do evil at will. Fundamentally, therefore, it is not any economic force, but some strong and virtuous political will - though hard to come by in reality - which has the only real chance of curbing the dark magic. For example, only after those Western countries had ratified OECD convention against the bribery of foreign officials in the late 1990s did so many wrongdoing scandals linked to the big names start coming to light. Yet potential culprits are more readily indemnified than indicted when national interests are considered at stake, as is often the case with oil and arms trade.

Unfortunately, clowns who pay lip service but are corrupted themselves and bandits who shamelessly extort from the public coffers are more easily found than saviours on all political stages the world over. But no one should pretend that this is a perfect world. For all the virtues of liberal democracy, there is no shortage of despotic strongmen and communism dies hard; for all the merits of free trade, advocates for protectionism abound and the Doha round of trade talks never has an easy time getting kick-started since its launch six years ago; and for all the vices of bribery and corruption, the underworld of black money should come as no surprise to anyone. But reality does not define the ideal and cannot defy its virtue. A world without integrity, where ambulance attendants demand "tea-money" before taking a sick person and firemen solicit "water-money" before turning on the hoses to put out a fire, like Hong Kong in its not-so-good old days, is a horrible one to live in.

Fortunately, though clowns and bandits abound, there is also no shortage of success stories. The extradition from England back to Hong Kong of Peter Godber, the real-life Chief Police Superintendent in Tiger Lei's era with HK$4.3m worth of unexplained assets, to stand trial of corruption and related charges, and his eventual imprisonment epitomized the serious change of wind in a society rotten to its core.

Prior to that, the Anti-Corruption Office formed part of the Hong Kong Police, effectively just another major account to which the brown envelop content was to be deposited, therefore, was never taken seriously, but rather readily circumvented. But Godber's flee from town became the last straw for the right political will to precipitate, culminating in the establishment of Independent Commission Against Corruption (ICAC) - the very agent bringing him to justice. With ICAC since its inception not only curbing under-table activities by pressing charges against the culprits, but reaching out persistently to the general public with education campaigns and making it easy for people to report extortion, law and order reigned back and defeated the monstrous power of Tiger Lei and the likes of him - police, triads or businessmen. They are still around, no doubt, but have a real hard time finding their way round back alleys without getting caught. Suspects shudder at the invitation for "a cup of coffee" to an ICAC office. For that triumph alone, if not for any other reason, the British who had ruled the capitalistic enclave for over a century up to 1997 could readily look back and take pride: "It is a far, far better thing that I do, than I have ever done; it is a far, far better rest that I go to than I have ever known."

(1) "Wu Yi Tan Zhang Lei Luo Zhuan" (1991) aka "Lee Rock - a legend of Hong Kong" acted by
Andy Lau.

(2) Volume 381 Number 8502 / November 4th-10th 2006 / Page 74 Face value "The
reluctant briber".