When the Crowd Fights Corruption

Posted: 10 May 2013  

Paul M. Healy

Harvard Business School; National Bureau of Economic Research (NBER)

Karthik Ramanna

Harvard University - Harvard Business School; University of Oxford - Blavatnik School of Government

Date Written: 2013

Abstract

Corruption is the greatest impediment to conducting business in Russia, according to leaders recently surveyed by the World Economic Forum. Indeed, it's a problem in many emerging markets, and businesses have a role to play in combating it, according to Healy and Ramanna. The authors focus on RosPil — an anticorruption entity in Russia set up by Alexey Navalny, a crusader against public and private malfeasance in that country. As of December 2011, RosPil claimed to have prevented the granting of dubious contracts worth US$1.3 billion. The organization holds corrupt politicians' and bureaucrats' feet to the fire largely through internet-based crowdsourcing, whereby often-anonymous people identify requests for government-issued tenders that are designed to generate kickbacks. Should entities like RosPil be supported, and should companies fashion their own responses to corruption? On the one hand, there are obvious public-relations and political risks; on the other hand, corruption can erode a firm's competitiveness, the trust of customers and employees, and even the very legitimacy of capitalism. The authors argue that heads of many multinational companies are well positioned to combat corruption in emerging markets. Those leaders have the power to enforce policies in their organizations and networks, and they enjoy the ability to organize others in the industry against this pernicious threat.

Keywords: corruption, emerging economies, Crime and Corruption, Entrepreneurship, Ethics, Globalization, Russia, Georgia (nation, Asia), India

Suggested Citation

Healy, Paul M. and Ramanna, Karthik, When the Crowd Fights Corruption (2013). Harvard Business Review, Vol. 91, No. 1/2, 2013; Harvard Business School Research Paper. Available at SSRN: https://ssrn.com/abstract=2262440

Paul M. Healy

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Harvard Business School ( email )

Soldiers Field
Boston, MA 02163
United States
617-495-1283 (Phone)
617-496-7387 (Fax)

Karthik Ramanna (Contact Author)

Harvard University - Harvard Business School ( email )

Boston, MA 02163
United States

University of Oxford - Blavatnik School of Government ( email )

10 Merton St
Oxford, Oxfordshire OX1 4JJ
United Kingdom

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