Remarkably, all countries treat bribery practices as criminal on their law books. The World Values Study, moreover, finds that people across the world consider bribery more egregious than acts such as buying stolen goods, evading taxes, and even committing suicide. It is no surprise, then, that worldwide agreements such as those established by the Organization for Economic Cooperation and Development (OECD) and the Organization of American States (OAS) attempt to prevent and severely punish bribery in cross-national business dealings.

Both academic and anecdotal evidence, however, suggests that bribery continues to flourish in all types of businesses across the world. In particular, managers admit to frequent and expected bribery of local officials in their home countries. It appears that bribery is so commonplace and expected that companies actually use the supplying of bribes to local officials as part of their business strategy. To investigate why so many companies supply bribes, we analyzed responses from nearly 4,000 firms in 38 countries worldwide. We found that companies facing greater financial problems and obstacles, operating in more competitive environments, are more likely to bribe local officials.

In addition to characteristics of the local business environment, we also examined cultural and institutional characteristics of the home countries in which these firms do business. We found that countries with cultures that are more achievement-oriented, individualistic, and with lower emphasis on humane values experience greater levels of bribery by local companies. Further, countries that have fewer social welfare programs and less stable political environments experience greater bribery. An interesting finding of the study, however, is that social welfare programs and political constraints can either diminish or exacerbate the effects of cultural values on bribery by local firms. Our findings inform business decision makers about bribery pressures they may face, based on home country conditions and the local competitive environment. The findings also allow managers to better understand their competitive situation, as rivals may actively supply bribes as part of their own firm strategy. Finally, the results may advise international policymakers about potential benefits of stronger social welfare programs and greater political constraints in reducing bribery.