Module 2: Corruption Within Society Quiz

TOTAL POINTS 10
1.
Question 1
Which of the following is NOT a true statement about the distorting and misallocating effects of
corruption (check all that apply)?
1 point
Bribes are not often used to become the “exclusive” supplier of some good or service
Corruption can lead to physical injuries and death, not just financial and economic harms
Government agencies only exercise significant influence over the economy through regulation and
enforcement
Corruption simply results in a transfer of value, or “rent,” from one actor to another
2.
Question 2
In Lecture 1, an example is provided in which a country had developed 11 different institutions to deal
with business disputes. Assume this has led to the multiplication of costs that could be handled more
efficiently in a centralized system. This is primarily an illustration of which problem associated with
“parallel institutions”:
1 point
Lack of regulation
Lack of economies of scale
Lack of the ability to measure costs
Lack of access
3.
Question 3
A “high quality” bribe is one that:
1 point
Is successful in achieving the desired result
Is very large
Is in a form that makes it easier for the person being bribed to use
Is in the form of something like diamonds or gold, as opposed to currency
4.
Question 4
Assume a decision-maker hires her son for an important post in an organization. Although the son does
not have the qualifications and background for this job, in fact he has the necessary skills to perform it
well, and he does so. As a result, there’s little reason to believe this hire might have negative
consequences for the organization.
1 point
False
True
5.
Question 5
Lecture 2 discusses some popular perceptions regarding corruption that are NOT accurate and that it is
important to avoid. They include (check all that apply):
1 point
Many corrupt bureaucracies have no honest workers
No other options are correct
Businesses don’t need to be concerned about the functioning of bureaucracies
When corrupt officials “buy” positions, they often pay more than they will earn in salary
6.
Question 6
In some new political regimes emerging in the 1980s and 1990s, systems were called “democracies”
when in fact they operated as kleptocracies. The resulting “confusion" in these systems can make it
even less likely that real democracy will emerge. This is because effective democracies require:
1 point
Education
Wealth
Political parties
Participation
7.
Question 7
Generalized trust is important because it (check all the apply):
1 point
Facilitates innovation
Tends to be strong enough to not be damaged by corruption
Increases enforcements costs
Lowers transactions costs
8.
Question 8
In Lecture 4, an example is given in which researchers deconstructed a road, found that the road was
made with materials of lesser quality than what had been promised in the contract to build the road, and
then found that the contracting agents and construction companies had engaged in suspect financial
transactions. This is primarily an example of which negative outcome of corruption, discussed in
previous lectures?
1 point
Confusion
Misallocation
Cronyism
Parallel Institutions
9.
Question 9
The fact that corruption leads to increased infant mortality rates is an illustration of what broader
phenomenon?
1 point
Corrupt countries do not have qualified medical professionals
Corruption leads to increases in terrorism
Corruption leads to psychic harm
The bad effects of corruption tend to fall on the less powerful in a given society

0.
Question 10

Evidence that corruption causes serious psychic damage includes:

1 point
The United Nations’ consideration of corruption as a human rights violation
The lengths people in corrupt systems are willing to go to protest corruption
All options are correct
First person testimonials
Module 3: Costs of Corruption Quiz
TOTAL POINTS 10
1.
Question 1
Bribery by individual business firms used to be analyzed in a “static” and “exogenous” manner, but is
now better analyzed in a “dynamic” and “endogenous” manner. What was the key insight that led to
this shift in the analytical framework?
1 point
Bribes today are provided in a wider variety of currencies and items of value
Bribes have gotten larger and larger over time
Bribes are effective at “greasing the wheels”
Bribes are not isolated incidents
2.
Question 2
Bribery is like adultery because:
1 point
It is often a personal betrayal
The primary injury is to a third party who did not participate in the transgression
Once it occurs, it can be a secret that hangs over the bad actor and can be used against that actor
It is acceptable in some cultures
3.
Question 3
Based on Lecture 2, which of the following activities is likely to be most effective in curtailing bribery
among employees a large company?
1 point
Closely tracking funds to catch potential bribes
Promulgating highly detailed rules against bribes
Setting up fake transactions to test whether employees make a bribe offer
Having company leaders set a strong example through their behavior showing that bribes are not
tolerated at the firm
4.
Question 4
Choose the answer option that best completes the following sentence:
Several different types of business relationships can be damaged by corruption, but the evidence of
damage to ____ is less definitive than the evidence as to others.
1 point
none of the other options fits well in the sentence; the evidence of damage is similar for all three
relationships
relationships with other businesses
relationships with customers
relationships with financial institutions
5.
Question 5
Lecture 3 discusses “indirect” costs associated with corruption and explains that they can be grouped
into Level 1, Level 2, or Level 3 costs. Below are four lists of costs; in which is the Level 1 cost listed
first, the Level 2 cost listed second, and the Level 3 cost listed third?
1 point
Negative press coverage; monetary fine imposed by regulatory agency; fees paid to lawyers in
negotiating the amount of a fine
Monetary fine imposed by regulatory agency; fees paid to lawyers in negotiating the amount of a
fine; negative press coverage
Fees paid to lawyers in negotiating the amount of a fine; monetary fine imposed by regulatory agency;
negative press coverage
Monetary fine imposed by regulatory agency; negative press coverage; fees paid to lawyers in
negotiating the amount of a fine
6.
Question 6
Why are Level 3 costs more difficult to predict and quantify than Level 1 costs?
1 point
No other options are correct
Level 1 costs are completely non-negotiable
Level 3 costs are a new phenomenon
There is limited historical or official guidance to look at when attempting to predict and quantify
Level 3 costs, as compared to Level 1 costs
7.
Question 7
Level 3 costs have the potential to be the most damaging to a corrupt business because:
1 point
They can harm the business’s reputation
Level 1 and 2 costs are too small to cause real damage
They have a direct and obvious connection to decreased revenues
They differ by country
8.
Question 8
Which of the following countries does NOT criminalize bribery of its own bureaucrats?
1 point
Morocco
Belize
Chile
Canada
None of the other options are correct
Switzerland
South Korea
9.
Question 9
Firm A from Country X enters into a contract to provide microchips to Firm B in Country Y. In order to
secure the contract for itself, Firm A bribes certain lower-level officials at Firm B. Later, Firm B does
not pay what it owes under the terms of the contract, and Firm A attempts to collect these sums through
an international arbitration proceeding. Which of the following statements is true with respect to what
might occur in that proceeding (check all that apply)?
1 point
The arbitrator may initiate its own investigation into whether corruption occurred in the transaction
The arbitrator may report the corruption to relevant legal authorities
If corruption is found, the arbitrator may find the contract unenforceable (i.e., Firm A will be barred
from collecting the money owed)
Firm A is likely to be able to successfully argue that the bribe should not be held against it because it
was forced to pay the bribe in order to secure the contract
10.
Question 10
Administrative sanctions, like those imposed by the Word Bank, differ from criminal sanctions because
the former:
1 point
Never involve investigations led by government agencies
Do not have major impacts on businesses
Cannot be imposed for transnational behavior
Do not include imprisonment
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https://courses.lumenlearning.com/suny-good-corporation-bad-corporation/
chapter/10-corruption-in-international-business/
http://www.china.org.cn/english/China/208460.htm
https://www.nytimes.com/search?dropmab=true&query=corruption%20china
%20education&sort=best
https://www.nytimes.com/2015/12/05/world/asia/china-renmin-university-admission-
bribery.html#commentsContainer
https://www.chinadaily.com.cn/2013-12/23/content_17189932.htm
Politics, money, and the people who mud-wrestle in both arenas have been and always will be historical
phenomena. Power -- and typically white male notoriety -- is the name of the game.

The definition of corruption

Synthesizing the literature, we define corruption as “an illegal activity (bribery, fraud,
financial crime, abuse, falsification, favoritism, nepotism, manipulation, etc.) conducted
through misuse of authority or power by public (government) or private (firms)
officeholders for private gain and benefit, financial or otherwise.” Our definition of
corruption captures three important characteristics of corruption in the international
business context. The first is that the person or firm is conducting some form of illegal
activity. The second is that the person or firm is misusing power or authority in violation of
existing rules and regulations or acting beyond legal limits. The third characteristic is that
the person or firm is using a position of power to reap personal benefits (financial or
otherwise) instead of benefiting the nation or the shareholders. Our definition is intended to
be inclusive of all forms of corruption, including bribery, fraud, financial crimes, abuse,
falsification, favoritism, nepotism, manipulation, and misrepresentation by public or private
officials, domestically or internationally, in a social, business, or governmental context.

Conclusion
Based on our in-depth review of corruption in international business, we have several policy
recommendations. First, strong international laws are needed to minimize the negative
impact of corruption on foreign direct investment, trade, business, and firms. Second, firms
are the key players in international business. Therefore, managers and policymakers need to
consider corruption when formulating the firms’ organizational structure and creating
strategies to increase operational efficiency and performance. Third, the establishment of an
organizational anti-corruption architecture system in firms is essential to overcome
corruption in international business. Finally, corruption challenges some key assumptions of
existing theories of management. Scholars need to test and expand these existing theories
by considering corruption as an important issue in international business.
CORRUPTION THE LACK OF ACADEMIC INTEGRITY
https://link.springer.com/chapter/10.1007/978-3-319-77407-7_5#Sec7

CORRUPTION IN HIGHER EDUCATION (CHINA CASE)

Top universities face exams for corruption[1]- Chinadaily.com.cn

Paragraph 1 (5-10 sentences) — Write a short factual background for the incident of corruption (a
lengthy factual background is not necessary; provide links to outside resources if you feel additional
background is needed). You must provide at least one (1) link to an article or other third-party
resource discussing your incident.Then, using the information provided in the lectures in Week 1,
describe how the event you have chosen fits within the definition of corruption, i.e. “abuse or
misuse of power or trust for personal benefit rather than the reasons for which that power or
trust was given.” Consider questions like: what person or entity had the “power or trust” in this
situation and what was the nature of that “power or trust”? How was that “power or trust . . . abused
or misused…for personal benefit”? The important thing is to demonstrate that you understand the
core components of the definition of corruption provided in this course.

This is a clever case of “trust for personal benefit rather than the reasons for which that power or trust
was given”
Corruption in higher education is possible to use in different cases, perhaps the prevalence of
corruption specific to the education sector are hard to determine but in this particular chose subject I
add my experience living for many years in China and need to explain de concept of guanxi, which
refers to the reciprocal obligations and benefits expected from a network of personal connections. A
person with a powerful level of guanxi is considered a preferred business partner because such a person
can utilize connections to obtain business or government approvals. Guanxi can derive from extended
family, school friends and alumni, work colleagues, members of common clubs or organizations, and
business associates. The key expectation in guanxi networks is reciprocity in the granting of favors; the
failure to reciprocate is considered a breach of trust; In itself, guanxi is not corrupt. However, strong
guanxi connections and obligations can serve as an incentive to corruption
In Chinese culture, it is widely understood that one of the benefits of public office is the opportunity to
accrue personal wealth through manipulation of the system. Appointments to senior government
positions are granted as rewards, a recognition that the appointee has earned a turn to loot. Just as
incentives, when commonplace, loose their incentive value, corrupt practices, when pervasive, become
the norm.
Gatekeepers at different levels of the education system introduce corruption around the particular
opportunities and benefits they control. Their motivation is often economic, to supplement their
income, but may also be an effort to extend their status or power, create future career opportunities, or
conform to expectations of those whose patronage they seek.
Corruption in such field is typically used as a generic term for a wide range of actions, including
favouritism, advantage granting, and other activities: nepotism, inappropriate involvement on corporate
boards, and gross financial excess.
A high-ranking official responsible for accreditation is placed in charge of a university, for
which he and/or she recently worked; to conspire to commit actions aimed to deceive or
commit fraud with the objective of illicit financial gain. Patronage is another form of
favouritism in which a person is selected, regardless of qualifications or entitlement, for a job
or government benefit because of political affiliations or connections

Nepotism: a form of favouritism based on acquaintances and familiar relationships whereby

someone in an official position exploits his or her power and authority to provide a job or
favour to a family member or friend, even though he or she may not be qualified or deserving
A student is admitted, or a faculty member is hired/promoted, based only on his/her personal
connections and/or family relations; academic achievement and other relevant competencies
are not considered

A student cheats on his/her written assignment, or a faculty member plagiarizes in his/her

paper;

A staff member falsifies an admission application;

A significant amount of a research grant goes to other purposes than what is indicated in the
research proposal;

Universities expect a contribution from students receiving financial support

An influential government official opts for employment as a university rector

illegal acts of bribery or fraud: There are ample examples of blatant fraud and bribery, in which
education officials at all levels demand some form of payoff for themselves, family, or friends in return
for their help in shaping the outcome of 4 contracts, implementation efforts, distribution systems, etc.
While mechanisms may vary, there is wide agreement that these practices are corrupt.

Paragraph 2 (5-7 sentences) - Analyze the harms/costs that have resulted, or could result, from this
incident of corruption. Using the information provided in the lectures in Weeks 2 and 3, answer the
question: what are the societal or individual harms/costs that have flowed, or could flow, from the
incident of corruption you have identified? You may choose to focus on one specific harm or review
several different types of harm. If the incident is recent, or you haven’t found information about
specific harms/costs that have resulted, you should use the tools provided in Weeks 2 and 3 to
describe the kinds of harms/costs that could result from the incident or other incidents of the same
type. The important thing is to demonstrate that you understand why corruption hurts society at
large and the individual firms/people involved.
To calculate the costs is not so easy and would require the inclusion of other variables in order to dis-
incentivize them form reporting illegal acts to higher administration, however the real value is the
perception of an institution’s integrity. Is undervaluated the importance of a good reputation or the
damage of bad publicity. Sadly enough, in some instances, as we have seen in the course lesson the
conclusions are perverse: highly corrupted people (in this case university officials/ administrators) are
sometimes regarded favorably because for their wealth and entrepreneurial spirit.
The cost of reputational damage in a globalized world is high; corrupt universities are unlikely to
attract foreign talent, not to mention internationally-recognized scholars. Not surprisingly, when it
comes to world university rankings, they are nowhere to be found.
The most direct, and in some ways the most inconsequential, cost of corruption is the waste of the
financial resources that get misdirected. Talent is misallocated due to promotion being awarded on the
basis of bribery rather than merit.., When corruption is so pervasive that it comes to be viewed as a
basic mechanism of social and economic interaction, it instills a value that is highly destructive to
social and economic development of a country.

Paragraph 3 (5-7 sentences) - Provide a recommendation or recommendations for how the type of
corruption discussed in your chosen incident could be better controlled. Using the information
provided in the lectures in Week 4, consider questions like: is this type of corruption best controlled
by firms, industries, politics, or some combination thereof? How do local circumstances affect what
control measures can or should be put into place? The important thing is to demonstrate that you
understand some of the strategies that exist for controlling corruption.

This type of corruption in China, is controlled by leaders and politics. Honest leaders can be a powerful
force in reducing corruption. Conversely, when top leadership is corrupt, they lack the moral platform
to demand honesty in others. Implementing honest practices can be tricky, possibly dangerous, even for
highly committed leaders. In such culture, it is widely understood that one of the benefits of public
office is the opportunity to accrue personal wealth through manipulation of the system. Appointments
to senior government positions are granted as rewards, a recognition that the appointee has earned a
turn to loot. Just as incentives, when commonplace, loose their incentive value, corrupt practices, when
pervasive, become the norm. Those not participating may be considered naive, odd, or stupid, even by
those who suffer the negative consequences. Consequently, effective leadership to reduce corruption
often requires considerable personal courage. Leaders have to withstand criticism, often overt
opposition, from colleagues who see their own selfinterest threatened by the introduction of more
transparent and honesty practices; things are chnaging but this installed system, in my personal opinion,
unfortunately, will take long to disappear.

Another factor in minimizing corruption is that educators and government officials need a clear code of
conduct. Teachers who violate it can lose their teaching license and administrators/ officials involve
should lose their jobs.