I joined U4 in August 2019, to lead the work on good governance as well as corruption risk management, but also to work on public outsourcing and anti-corruption’s certification process. I'm an anthropologist, specialised on norms transfer and norms implementation, with a special focus on good governance mechanisms (transparency, accountability and civil participation).

Prior to joining U4, I worked for various organisations and NGOs at the international level, including GIZ, NATO, the NATO Parliamentary Assembly, and International Crisis Group.

I did my PhD at the EHESS (Ecole des Hautes Etudes en Sciences Sociales) in France, on the transfer of good governance norms in Rwanda and Burundi. It highlights how good governance norms are defined and negotiated by development agencies, and how actors at the local level may manipulate, circumvent, or divert instruments and measures during the implementation process.

I also hold a Master degree in International Studies and Diplomacy from the SOAS University (London) and a Master in Competitive Intelligence from Lyon 3 University (France), as well as an LL.M. on International Relations and Political Science from the University of Bologna (Italy).

Economic activities in the private sector is crucial for sustainable economic and social development. Corruption impacts the private sector in many ways. The degree of harm depends on the business environment and governance regime. Some businesses move beyond anti-corruption compliance. They seek anti-corruption impact at systemic levels improving both businesses and the business environment. Find out how donors can work with the private sector to reduce corruption and improve developing country economies.

Corporate actors are part of the problem and the solution for the quality of public governance and the regulation of the market. Entities from the private sector continue to be involved in corruption schemes; state capture remains an issue in many countries; and the outsourcing of public services to the private sector increases corruption risks. However, some private sector initiatives heighten integrity; solutions from the sector can enhance compliance with anti-corruption requirements related to legal and normative frameworks; and private capital is needed to reach Sustainable Development Goals (SDGs). Donors need to understand how best to engage with the private sector to curb corruption and improve developing country economies.

Collusive practices between private and public sectors

While various definitions of private sector corruption place the emphasis on either the corrupter (private sector) or the corrupted (public sector), the main element is the collusion between public officials and the private sector, which may lead to many illegal and illicit practices.

The most common practice is private agents paying bribes to public officials to take actions in favour of their businesses or themselves. A good example is the 

 that takes place in the procurement process, to get public contracts. Another example is 

 to obtain official documents (eg licences). Also included are 

 in which public and private actors are involved for financial gain (money laundering, tax evasion or avoidance, undue influence etc).

Private agents can also try to subvert government policy and decision-making in their favour – a practice referred to as 

. This is particularly true for multinational companies in a powerful position. They are able to exert undue influence on decision makers to create unfair advantages for them or for a particular industry.

, when private organisations lobby public representatives for protection, subsidies, or preferential policies; and one referred to as ‘

 jobs (and vice versa) – leading to conflicts of interest and the support for corporate interests instead of the common good.

Private sector corruption is also linked to 

 revealed how private companies bribed Unaoil middlemen to receive lucrative contracts in the oil industry. Kickbacks, bribes, 

, and collusion among private entities (eg insider trading, cartels) are generally recognised as criminal offences by national laws, as those practices may distort the rules of competition, reduce access to market, and inflate prices. Accordingly, legislation on corruption has to go beyond the definition of corruption as an abuse of public office. International anti-corruption legislation, such as the 

United Nations Convention Against Corruption

 (UNCAC), already includes private‑to‑private corruption.

Private involvement in anti-corruption activities can lead to even more corruption, for instance when the oversight of privatised public services is performed by unscrupulous private auditors, leading to sophisticated 

The privatisation process is itself a major source of risk, as it increases the number of contact points between the public and private sectors and therefore the opportunities for both extractive corruption (by the state) and bribery (by the businesses – to gain contracts and advantages). For example, 

 (but also in many other countries), the privatisation process created rent-extraction opportunities, while reducing the capacity of state institutions to curb corruption in some sectors.

, its policies to reform civil service by downsizing it and promoting liberalisation ‘were largely ineffective’. In some places, it may have impacted the quality of public service delivery by worsening conditions for civil servants, hampering motivation and morale, and consequently increasing risks of petty corruption. Yet, this 

 is even part of the International Monetary Fund’s (IMF) conditions to access loans.

It is worth reiterating that private sector corruption is a danger for political systems (damaging democracy and public trust), public interests (harming public finances or sector opportunities), private interests (distorting competition), and societal issues (generating inequalities). For development practitioners, curbing private sector corruption is directly related to reaching 

 (SDGs) – in particular SDG 8 (inclusive and sustainable economic growth), SDG 16 (justice and inclusive institutions), and SDG 10 (reducing inequalities).

Why does corruption take place in the private sector?

Drivers for corruption can be similar in the public and private sector, such as for enrichment, status, and power purposes. Yet some differences can also exist and need further explanation.

The rationale for private sector corruption is essentially an economic one, and its typical causes are: profit maximisation; surviving economic hardship; overcoming the competition or gaining a competitive advantage; accessing new markets and ensuring growth; and solving operational problems.

Yet, what appears as a cost-benefit rationale from the private company’s viewpoint (ie the benefits from corruption far outweigh the perceived risks), can be viewed differently by the employees. For example, studies of the 

 scandals present different attitudes to corruption between management and staff, highlighting the importance of organisational factors, such as the performance-related pressures placed on employees, deficiencies in compliance systems, and a corporate culture that is prone to corruption.

A private enterprise’s engagement in corruption therefore depends on many internal and external factors – from their operational capabilities and leadership commitment, to peer pressures and external opportunities, such as a change in government and policies. Private companies can adapt to government policies and practices quickly. When corrupt governments are in place, they tend to attract unscrupulous companies, influencing negatively the business environment. When corruption is systemic, it becomes an accepted way of doing business. Even companies suffering corruption schemes from other companies are not willing to expose them, as that would mean revealing their own involvement in corruption.

National and international legal frameworks

 (FCPA) was the first law enacted in the USA to prevent its citizens and private entities from bribing foreign government officials. (This 

 explores the FCPA further.) In 1999, the 

 was established to reduce political corruption and corporate crime, by implementing standards and measures to deal with bribery in international business transactions carried out by companies based in those countries that are signatories to the Convention. Further guidance and 

 to assist countries in implementing the Convention were issued in 2009.

 had a broader scope than the OECD Anti-bribery Convention, specifically tackling bribery in the private sector and requiring it to be regarded as a criminal offence. Finally, the 

 (2003) has the broadest scope and is the most ambitious international legal tool, providing three fundamental pillars for action: preventive measures, criminalisation and law enforcement, and international cooperation.

In line with the UNCAC, more recent national laws include stricter provisions covering both in-country and overseas business activities. For example, with the UK’s 2010 

 it is now the responsibility of private companies 

 in place to prevent bribery. While convictions under the Bribery Act are not a common occurrence, the Act prompted ‘

’ in the adoption of anti-corruption measures within UK enterprises.

law on transparency, anti-corruption, and economic modernisation

 (the Sapin II law) requires large companies to have a duty of care to prevent corruption and put in place anti-corruption programmes. Five years later, the law 

significantly improved anti-corruption standards

) and the business environment. However, it covers only those companies (and groups of related companies) which have their headquarters in France. They must also have at least 500 employees and revenues in excess of 100 million euros. Consequently, these conditions limit the law’s reach.

Owing to these new legal frameworks, private sector compliance requirements with anti-corruption laws and standards are on the rise globally. Key private sectors, such as financial institutions, have to integrate sustainability and compliance measures. For example, BMCE Bank of Africa received 

the ISO 37001 anti-bribery certification in 2019

. Moreover, the tightening of laws regarding bribery of public officials has also had an indirect impact on the business environment.

Yet, the impact of those legal frameworks is still limited. For example, complex corruption schemes, such as the 2020 

, reveal how international or transnational companies can circumvent anti-corruption laws via tax havens and enablers (such as the ‘Big Four’ auditing companies, law firms, and corporate service providers). Different factors prevent the 

, such as political corruption (political elites wanting to 

 power as a result of corruption), bureaucratic corruption, lack of independence or lack of resources for the judiciary, a culture of impunity, etc.

While improvements in the rule of law, good governance, and the business environment can help to curb corruption, the private sector’s compliance with anti-corruption laws and standards is likely to be slow in countries facing systemic corruption. When designing effective development programmes, country- and sector-specific elements should be considered to ensure better results.

Involving the private sector in development goals

Expectations towards businesses are increasing to face today’s complex social, economic, and environmental issues. For the World Bank, mobilising 

 is a necessity for reaching SDGs, for example through 

. As a consequence, development aid agencies see more possibilities for co-financing programmes or projects.

Examples of private sector involvement in development projects

Foreign, Commonwealth and Development Office

 (FCDO) supported Adam Smith International with the 

 is delivered through private sector companies. Another example is the support from the 

 (USAID) to the private sector for ideological reasons, such as supporting the 

conversion of state-owned enterprises into private entities in Ukraine

Private companies are – by definition – profit-driven and therefore their primary purpose is not to care for the common good. While negative corporate duties are formally determined (such as the 

 in the French anti-corruption law, or the ongoing EU legislation on 

corporate due diligence and accountability

, and the disclosure of financial information for listed companies), 

 (the self-regulating business models) are subject to interpretation.

On the one hand, private companies are not subject to the same public scrutiny as public entities, and they might have a legitimate reason to ensure their activities remain confidential. On the other hand, anti-corruption practices and requirements related to 

 (CSR) are on the rise, with initiatives such as the 

OECD Guidelines for Multinational Enterprises

 (Article 12). Yet, there is no international authority that can enforce positive duties, eg soft laws and standards. Accordingly, the level of responsibility that one should expect from private companies is not clear-cut, and different standards for accountability may apply.

The potential outcomes for public services

This lower level of accountability for the private sector becomes problematic when public interests are at stake. Within sectors operating under financial constraints (eg health, energy, transport), public services tend to externalise part of their activities, through public outsourcing or public–private partnerships. The length of contracts, their high financial stakes, and the complexity of certain partnerships can all generate potential exposure to corruption. The consequences are real: 

the collapse of buildings with deadly consequences

, etc. Other adverse effects are more hidden, but are no less harmful, such as inflated costs for public contracts, biased judicial rulings, market monopolisation or the nurturing of 

Paradoxically, with the establishment of new anti-corruption standards, detection capacities increase, fraud cases become more visible, and voices for enforcement become more audible. As corruption becomes more visible, trust in public institutions may erode and 

trust in the private sector can also decrease

. Donors looking to achieve their development goals and involve target populations in their projects should also consider those negative outcomes in their project design.

Solutions to curb corruption and enhance integrity can be found both within the public and private sectors. First of all, new international anti-corruption standards are developed by the International Standard Organisation (ISO) – a non-governmental organisation (NGO) – to support any organisation in its management processes. The 

 on designing and implementing anti-bribery management systems, provides a framework to 

incorporate the legal requirements within management processes

 for whistleblowing management systems and 

 for compliance management systems. Those standards could become mandatory before private companies can win public contracts.

Moreover, many private companies also offer solutions to manage corruption risks within organisations. For example, 

 provide digital tools to convert legal regulations into management processes.

Small and medium-sized enterprises (SMEs) can also play a strategic role in 

preventing corruption and ethnic clientelism

. In fact, SMEs may have an interest in curbing corruption when some private companies have favourable access to procurement, direct subsidies, and privileged status (ie the selective application of control and sanctions), and anti-monopoly laws are ineffective. A collective-action approach, through formal professional associations, has the best potential to achieve this goal by enforcing social and organisational norms that prohibit corruption.

Going further with collaborative approaches

Through collective actions, multi-stakeholder partnerships (MSPs) are another way to ensure high business standards. By mixing different types of actors (private companies, public entities, and civil society), 

, and combining their resources and competencies, MSPs can collaborate to solve 

. In fact, respect for ethics, trust, and security are essential elements for creating a stable business environment. All stakeholders are likely to have a common interest to define rules of behaviour and sanction free riders. Stakeholders engaged within MSPs can endorse integrity goals by encouraging a government to embrace integrity standards; promoting transparency and business regulation; and/or facilitating the adoption of an integrity norm. Increasingly, development agencies support public–private initiatives, which can take different forms:

 as a way to improve standards at the national, sectoral, or international level. For example, in Kenya the 

Deutsche Gesellschaft für Internationale Zusammenarbeit

 (GIZ), monitors compliance with policies regulating water services, including corporate governance. FCDO supported the 

Medicines Transparency Alliance (MeTA) Initiative

, involving civil society and the private sector to enhance standards in the medicine supply chain in seven countries

for the detection, prevention, investigation, and sometimes even prosecution of corrupt practices.For instance, in 

Swiss Agency for Development and Cooperation

 (SDC), and other donors are supporting the National-Anticorruption System (

) to coordinate anti-corruption efforts. Even if private sector participation is 

, private companies are involved in policy discussions.


to implement and manage specific programmes. Development agencies and the private sector can be involved both as funding partners or implementers, such as within the 

Global Alliance for Vaccines and Immunization

Sector-specific anti-corruption initiatives, 

 (MACN). Their aim is to curb corruption and improve the business environment in a specific sector. For example, in Argentina, the MACN claims a 

 and the resolution of MACN members’ grievances, as a result of its action. Private companies are directly involved in the governance of those organisations, even if their levels of engagement may vary. Development agencies and public sector leaders could benefit from a structured dialogue on how they jointly could increase integrity and address corruption though MSPs.

Of course, these initiatives do not guarantee that anti-corruption standards will be complied with. Companies may continue their illegal activities despite the implementation of regulation mechanisms and their own involvement in multi-stakeholder initiatives. For instance, Siemens launched its 

 to support organisations that counter corruption and fraud through collective action, while themselves being involved in 

Similarly, compliance mechanisms can be viewed merely as ‘window dressing’ measures or ‘greenwashing’ tools that are used to embellish the image and reputation of private companies. Alstom, while praising its ‘

’, was prosecuted in 2019 and 2020 for corruption practices taking place in 

How can donors support the private sector effectively?

When supporting and partnering with the private sector, development agencies should carefully assess reputational and institutional risks. Various corporate characteristics can be examined within due diligence assessments to reduce corruption risks – such as company reputation, quality of risk control systems, use of anti-bribery standards, 

age, financial information (such as extreme profitability), ownership, and management structure

The diagnosis of corruption vulnerabilities through speaking with business associations, expert interviews, and conducting surveys can also be a useful approach.Moreover, one concern for donors is the lower threshold for transparency and accountability within private companies. Key factors in establishing a shared evaluation culture are:defining standards with a clear terminology and accurate indicators; and 

Implementing appropriate measures and strategies

One possible way of mitigating the corruption risks that stem from public outsourcing is to involve final beneficiaries during reporting and monitoring activities. 

 are all essential tools in reducing corruption and alleviating potential distrust.Of course, those tools may not prevent the more hidden practices arising from the management process and outsourcing (procurement frauds, kickbacks, clientelism, cronyism, etc). Specific tools can be put in place to 

reduce private sector engagement in grand corruption

 during the award of public contracts, concessions, and licences.

Donors may also contribute to improving the business environment within specific sectors through the use of 

. Engaging with and supporting SMEs’ formal associations, civil society initiatives, or multi-stakeholder partnerships can help to counterbalance large corporate interests and ensure higher integrity standards.

Finally, in a Whole of Government Approach (WoGA), donors have a role to play in enforcing 

, supporting private sector and developing countries by providing technical assistance or facilitating information flows, or building political will. The use of 

 or ISO anti-corruption standards (such as ISO 37001) can help to level up compliance with anti-corruption frameworks within private and public organisations.

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