Chapter 5. Reducing Corruption: Transaction Governance Capacity

The private sector, as we saw in the previous chapters, can be a major facilitator of poverty alleviation through the creation of markets at the BOP. Although managers might be convinced about the opportunity, it is likely that there are lingering doubts about the ability of large firms to operate in these markets. The primary source of this concern is corruption. In many cases, the impact of micro regulations and local customs that are opaque to MNC managers may be interpreted as corruption. For example, the criticality of relationships in Japanese and Chinese business, opaque to the Western MNCs, can appear to be corruption. So will local customs and the set of mutual obligations ...

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