Gifts, Tips & Bribes

When money or goods are given away, it could be seen as a gift, a tip or a bribe, depending upon the circumstances. We think of a bribe as corruption, but gifts and tips as socially acceptable – but are these lines so easily drawn?

Recently, I have come to wonder about the distinctions between gifts and bribes. If I send one of my books to a potential client, that's a business gift. If I give money to a waitress after the meal, it's a tip. If I give money to the Maître d' to get seated, it's a bribe. But in all three cases, I am giving something to someone else with either the expectation of receiving future benefit (the business gift and the seating bribe) or in return for prior benefit (the waitress' tip). Furthermore, even the distinction of the tip is vague: since custom expects the serving staff to receive a tip (in many countries, at least) it is almost as if I have retroactively given a gift or bribe that I retained the option to withdraw in the event of poor service. In this light, the tip may seem worse than a bribe!

This is tricky ethical ground, and the problems are not easily dismissed. On the one hand, the blurring between these kinds of transactions represents genuine ambiguity (and varies enormously from culture to culture). On the other hand, it is easy to find oneself arguing that corruption is socially normal. If there are lines to be drawn, it is not clear where they lie, but if a line is not drawn where does that leave us?

The US Judge John Noonan in his book Bribes notes that “the Greeks did not have a word for bribes because all gifts are bribes. All gifts are given by way of reciprocation for favours past or to come.” Accepting this, he then suggests that a bribe can be distinguished from a gift in terms of the size and the secrecy involved – if it is given in secret, it's a bribe, or if the size of the gift exceeds the norm it is a bribe. (Charitable donations, however, where no reciprocation is expected, can be both secret and huge). An alternative approach comes from the Organisation for Economic Co-operation and Development, which has composed an acronym for GIFT: Genuine (offered in appreciation for legitimate functions without encouragement), Independent (no effect on future functioning), Free (without obligations) and Transparent (declared openly).

But both of these approaches seem to fail in the case of campaign contributions (especially in the US where these can be very large in size). Such donations to a campaign are done openly, thus dodging Noonan's first complaint, and OECD's fourth, but to expect that such donations are given without obligation or expectation of future effect is naïve: the wealthy elites give campaign contributions precisely because they are expecting the politician to take a particular stance. The contribution might not have been intended to influence the politician's position (because their position is already where the donor wishes it to be) but to suggest this arrangement is free of obligation misses the political realities of campaigning. The politician's obligation is precisely to hold their position. (I am glossing over the highly likely situation that the politician doctors their political position in order to ensure the greatest campaign contributions).

A great deal of attention to this subject has been paid by people in India, where gifts and bribes are far more prevalent than in the West. Nepalese writer Narayan Manandhar suggests that the issue can be seen as a continuum from extortion to gifts. “Bribe becomes extortion when it is demand driven,” he writes. “If a medical doctor asks for a bribe inside an operation theatre or an emergency room, it is clearly a matter of extortion.” Whereas a bribe can be considered a gift when it is supply driven. The gift entreats, but does not demand action. “Gift does not entail a situation of reciprocity - quid pro quo situation. Bribes are demanding. Failure to perform after taking bribe could invite negative reciprocity, i.e., retaliation.”

The award-winning poet, painter and photographer Pritish Nandy takes a different tack, admitting that gifts are “nothing but bribes in another guise.” He suggests: “The value's not the issue; the purpose is. Most gifts are meant to seduce, impress, persuade or make friends with people we need something from.” But he does not entirely condemn this state of affairs, saying: 

Now we all know that bribery is an awful thing. It brings us a bad name and compromises our politics. But the question is: Can we stop it? I don t think so. For bribery is a way of life. In an imperfect economy like ours, bribery - despite its social stigma - actually achieves the impossible. It redistributes wealth. It ensures efficiency, understanding, sometimes even social justice.

In a bold move, Nandy places the blame for corruption upon free market economics:

When you install a free economy, you make a choice. This choice entails moral compromises. The most important being the fact that you no more take responsibility for the poor and the weak. You are driven only by market forces. In such an economy, corruption is inevitable. For money moves by the compulsions of profit, not ethics. Once you have made such a choice, it is silly to pose like King Canute and imagine that you can roll back the waves of corruption and crime.

These problems are intensified by cultural variation. In many African countries, prompt attention from officials presumes a bribe so universally that it is effectively a cost of business. The same is true in many former Soviet nations: try getting into Ukraine without bribing the border guards. Many South American nations have similar issues. According to a paper in the Journal of Third World Studies, South Koreans give gifts to attract the attention of people who could be influential for their business – and these gifts are often cash. Yet this is often seen as ethical behaviour because it is the cultural norm. A massive grey area results where determining what is a bribe depends more on Noonan's second condition – how the size of the gift compares to the norm.

Between these many different positions, certain conclusions can be drawn with confidence. Firstly, whether we are talking about gifts, tips or bribes, there is open acknowledgement that money and goods changes hands in return for attention or influence and that not all such exchanges are corrupt. Secondly, what is acceptable depends in part upon social norms, and varies from culture to culture: there is no absolute approach to delineating corrupt practices in this regard. Thirdly, while the expectation of effectiveness does not make a bribe corrupt, the demand of outcome coupled with a veil of secrecy which conceals that demand crosses into extortion, and hence corruption.

What of Pritish Nandy's accusation that free market economics guarantees corruption? This claim seems reasonable, but it is hard to validate. Was corruption less common in Russia under Communism? How would we make a fair comparison? Is the issue of regulation of the marketplace really the distinguishing factor here? More to the point, even if this claim were verified, what economic model would not open the door to corrupt practices? It is not just the distribution of wealth that helps generate the circumstances amenable to bribery, but also the distribution of power, and neither of these issues seem pragmatically soluble.

The exchange of gifts, bribes or tips constitute an essential part of all cultures, and as such the acquisition of influence and power and the possession of wealth go hand in hand. Those who have the money necessarily have the influence, and this situation is very unlikely to change. The arguable tragedy of this state of affairs is that those living in extreme poverty lack any means of escaping it, for without wealth they necessarily lack influence. Even democratic influence can be lost, since the news sources which allow individuals to make their decisions are controlled by the wealthy who consequently have the capacity to dictate which stories are told, and how they are spun. Small wonder the disenfranchised turn to crime. This is not a problem resolved by escalating law enforcement: perhaps, by virtue of tax-funded social safety nets, the poor must be bribed into innocence?

Lord Acton, writing to Bishop Mandell Creighton in 1887 wrote: “Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men.” Perhaps we should focus our attention not upon resolving problems of corruption in the form of petty bribery, but upon resolving (from culture to culture) the standards of behaviour to which we will hold our officials, elected and appointed. When we lose our sense of outrage at the abuse of power, we tacitly approve of corruption and unseat trust as the basis of governance, allowing extortion and intimidation to become the mechanisms of leadership.

Comments

[zenBen]

"It is not just the distribution of wealth that helps generate the circumstances amenable to bribery, but also the distribution of power, and neither of these issues seem pragmatically soluble."

Well, I see an equitable solution, that can be made practical; the catch is that the cure may be considered worse than the disease.
Clearing forms a hypothetical basis for an economy through balance sheets of credits - you need to pay for something, your balance sheet is debited. You provide something, your balance sheet is credited.
Smart clearing means the credits are actually imbued with the intelligence to know what they were debited or credited for.
Reputed smart clearing means you (i.e. your AI enhanced self) have the capacity to evaluate the history of debit and credit actions of anyone who wants to do business with you.

Its a free market economy of reputation - and in a globalised economy, it should self-regulate toward the highest common denominator.

The catch is that it requires RFID tags in everyone to work, and the chances that every individual can opt into this technology while maintaining safety of personal data, privacy, is low.

[Sirc]

"Small wonder the disenfranchised turn to crime. This is not a problem resolved by escalating law enforcement: perhaps, by virtue of tax-funded social safety nets, the poor must be bribed into innocence?"

Psh. Not only should they escalate law enforcement, they should also make punishment more severe. For example, you steal, you get executed. Shot in the back of the head. No jail. That'll teach 'em.

[Chris]

zenBen: Ha, so your solution is to cure corruption by destroying personal privacy? I think I'd like to opt out of this one! :)

Sirc: I'm going to assume this is a healthy dose of irony, but if you really are a supporter of totalitarian police states a la Judge Dredd, do let me know. :D

[Isegoria]

The key distinction between a gift for a favor and a bribe is whether the recipient is expected to give something of his own in return, or whether he's giving something that belongs to others.

This is an instance of the old principal-agent problem, where the person handing out favors is doling out something that isn't really his to give.

There's nothing corrupt about baking cookies for your neighbor and then having that neighbor watch your house while your away. There's plenty corrupt about paying a government official, who is supposedly making an impartial judgment, for a lucrative government contract, which involves large sums of other people's money.

[zenBen]

"zenBen: Ha, so your solution is to cure corruption by destroying personal privacy? I think I'd like to opt out of this one! :)"

To cure corruption, you could also eliminate scarcity, although the requirement for pragmatism throws a monkey in the wrench there.

As for opting in or out, when large scale social systems get put in place, options seem to recede. You could theoretically opt out of the debt-based money system we have today, but you'd be hard pressed to maintain anything resembling the life you've built to date.

[Chris]

Isegoria: But the lines aren't that easy to draw, are they? What about a pharmaceutical company flying doctors to a conference in Hawaii. Which side of the "line" do you put this? The corporation has the money to give, and the doctors don't believe they are being influenced in their decision to order drugs - but seriously, do we believe them?

I appreciate your link to the principal-agent problem (economics is the one scientific field I have barely touched!) I do wonder how this applies in the case of politicians, however. Every political act is not the politicians to give, yet the operations of most political entities depends upon the exchange of such favours - consider the US senate/congress for instance. Without this give and take, forming a large enough majority simply wouldn't happen most of the time.

I appreciate the attempt to draw a firm line, but I don't think this line can be drawn in this way. Especially not if you take into account cultural variation in acceptible practices. It gets very sticky very quickly! :)

zenBen: "As for opting in or out, when large scale social systems get put in place, options seem to recede."

Hence the motive to resist them before they get installed, of course. :)

Thanks for the comments!

[Peter Crowther]

Hence the motive to resist them before they get installed, of course.

This from someone who has lived in (at least) the UK and US, both of which are/have pretty large scale social systems.

[Isegoria]

But the lines aren't that easy to draw, are they? What about a pharmaceutical company flying doctors to a conference in Hawaii. Which side of the "line" do you put this? The corporation has the money to give, and the doctors don't believe they are being influenced in their decision to order drugs — but seriously, do we believe them?

By the criterion I laid out, yes, flying doctors to Hawaii so that they will prescribe your drug to unsuspecting patients is bribery, if not the most destructive form.

Flying doctors out to look at time-shares in Hawaii, on the other hand, wouldn't be bribery at all.

Economics is the one scientific field I have barely touched!

I love economics, and I love science, but I would say that most of economics' worst flaws have come from trying to look like a science.

Arguably a game designer should be familiar with one branch of economics — game theory — even if it's tangential to "real" games, and anyone interested in how the world works should learn to look at problems in terms of incentives.

I do wonder how this applies in the case of politicians, however. Every political act is not the politicians to give, yet the operations of most political entities depends upon the exchange of such favours — consider the US senate/congress for instance. Without this give and take, forming a large enough majority simply wouldn't happen most of the time.

Democratic institutions complicate things, since, as you point out, no one can really be held accountable for any particular decision, but I think the greater point holds, that paying a politician to vote the way you want is in your interest and his interest, but not in the greater interest of the polity.

That's why the people get nickeled and dimed. The pain of, say, a sugar tariff, is barely noticeable to any one consumer, but it funnels a tremendous amount of money into the hands of a few agricultural corporations, so it's well worth their effort to lobby, and it costs the politician very little to accept their donations to his cause.

This raises another issue. If you're operating within a system where "everyone's doing it," should you eschew "bad" behavior. Most people like to think, clearly, yes, but this is a tragedy of the commons, where doing what's right hurts you without reducing the problem.

[Peter Crowther]

I'd strongly recommend a look at Eric D. Beinhocker, "The Origin of Wealth". It looks at complexity economics - the idea that economics comes from lots of people doing lots of different things with their own imperfect knowledge. It's a good counter to the classical view of economics - originally formulated by a failed mathematician using the maths he understood rather than the maths that was correct for the job.

[Chris]

Isegoria: I'm quite au fait with game theory, since this forms part of the computer science curriculum (I have a Masters degree in advanced computer science/cognitive science). Similar, I'm familiar with the tragedy of the commons from philosophy/ethics. It seems all the good stuff in economics ends up in other fields! :)

"...but I think the greater point holds, that paying a politician to vote the way you want is in your interest and his interest, but not in the greater interest of the polity."

Ah, but what about the situation of paying a politician to *hold* his or her position, which is the more common state of affairs (and encourages the politicians to set off with positions which are amenable to superior campaign funding). This isn't strictly bribery, surely? Or do you see all campaign funding as bribery?

Peter: Thanks for the tip! I've added it to my reading list... don't know when I'll get to it, but that's the joy of bookshelves. :)

Update: having looked, why is the paperback more expensive than the hardback? And the two books have completely different subtitles to boot. This is very strange. I'm also not keen on books that are 500+ pages. I might keep my eyes open for this in the second hand book stores rather than ordering it.