Business Perspectives on
Corruption :
Perception and Recommendations
2014 Survey Results
Goals
• Create awareness against corruption
• Expose business perception of the corruption
• Discuss policy recommendations
Methodology
• A survey is conducted in Istanbul over a sample of 801
respondents, representative of the business community.
• The survey is based on nine in depth interviews in
Istanbul and three focus group meetings in Denizli,
Gaziantep and Antalya; the opinions of 36 business
people in total are taken into consideration.
Corporate demographics
Business line
Small
Medium
Large
Total
Other services
117
43
17
177
Construction
33
25
22
80
Wholesale & retail
68
43
33
144
Accommodation
36
68
30
134
Transport & communication
45
30
5
80
Manufacturing
83
54
49
186
Total
382
263
156
801
Top three problems
Input Prices
Macro Problems
Econ.
Stability
Total
7
Political
Stability Inf.
2
4
Labor
Exch. Int. Gen.
Rates Rates Input Energy Rent Cost
5
5
5
7
8
13
Public sphere problems
Quality Tax
8
14
Bribery
Public Unre- and
Regul. corded Corrupt .
3
10
7
Corruption is frequent and large scale
No idea
%9
Extremely
frequent
%10
Not
frequent at
all
%22
No idea
%8
Extremely
large
%10
Not large
at all
%22
Quite
frequent
%26
Quite
large
%27
Not so
large
%33
Not so
frequent
%33
Frequency
Scale
The perception of frequency and scale is lower in
large companies
0
10
Small
20
30
15
40
50
60
30
70
80
29
90
100
17
8
Extremely frequent
Medium
7
22
32
29
Quite frequent
11
Not so frequent
Not frequent at all
Large
2
26
Total
10
27
0
10
Small
Total
20
22
50
60
70
80
90
16
29
21
33
100
9
8
44
27
No idea
9
28
33
26
10
40
7
22
31
6
2
21
33
30
16
Medium
Large
44
22
7
8
Extremely large
Quite large
Not so large
Not large at all
No idea
Highest perception is in construction;
Lowest perception is in retail business
Other Services
12
Accomodation
13
Transport
33
30
29
8
15
26
22
10
24
25
9
32
Extremely frequent
13
Quite frequent
Not so frequent
Wholesale&Retail
5
21
38
25
12
Not frequent at all
No idea
Construction
9
Manufacturing
46
12
0
19
10
Other Services
20
30
40
50
60
70
3
80
90
31
23
6
23
36
13
9
42
14
Accomodation
30
100
12
38
8
19
9
Extremely large
Transport
6
Wholesale&Retail
6
25
24
37
9
Quite large
Not so large
21
37
25
11
Not large at all
No idea
Construction
10
Manufacturing
46
11
0
33
20
10
20
37
30
40
50
8
24
60
70
80
4
8
90
100
Corruption is on the rise
0
10
20
Manufacturing
Business Line
60
16
17
10
23
31
17
19
31
9
21
30
44
1
21
26
39
39
9
35
48
20
14
13
25
40
100
22
41
Small
90
20
48
Medium
80
29
Transport
Other Services
70
41
37
Accomodation
Company Size
50
32
30
Wholesale&Retail
Total
40
39
Construction
Large
30
5
13
17
19
10
Increasing
Constant
Decreasing
No Idea
…and will keep rising
No idea %10
Will
decrease
%16
Will remain
as it is
%28
Will keep
rising
%46
Unfairness or corruption?
Business community is a bit confused
0%
10%
20%
30%
40%
50%
60%
70%
1st Group
Offer advantage to public officials to procure an irregular service
3.1
Offer advantage to public officials to get a legal and regular job done
3.3
3rd Group
2nd Group
Offer part of the progress payments to public officials in public contracts
2.9
Request of donation to certain foundations, associations or clubs by public officials in return to
the job done
3.4
Request of donation of money or equipment to their own public institutions by public officials
3.2
New year and religious holiday gifts such as calendars, memo books, etc. to public officials
3.3
New year and religious holiday gifts such as garments, jewelry, etc. to public officials
3.0
Offer transport, accomodation and catering opportunities to public officials
2.8
Provide non-monetary advantages (such as employment for a relative) to the public officials
Company employees obtaining personal advantages from other companies in B2B relations
4th Group
80%
2.5
2.3
Collusion of companies in public tenders in order that one of them gets the contract
3.1
Illegal use of certain public resources and services
3.1
Market manipulation of the largest companies of an industry
3.3
Use of unrecorded economic activities in order to remain competitive in an industry
3.3
Abuse of rights of the small investors in corporations
Absolutely not corruption
Not exactly corruption
Can be considered as corruption
3.4
Absolutely corruption
No idea
90%
100%
Top three causes of corruption:
Inequality, power seeking and lack of enforcement
0
Income inequality
Low level of salaries of public officials
Low level of education in the country
Inadequacy of the education of ethical values
Insufficiency of the religeous education
Status of the corruption as part of the routine operation
Profit and power seeking impulse of the public officials
Politicians considering corruption as a convenient tool for their goals
Irresponsability and unaccountability
Lack of enforcement of the legislation
Frequent modifications of the legislation
Lack of independent institution of auditing and inspection
Shortcomings in the judicial independence
Lack of independent media institutions
5
10
15
20
25
30
35
40
45
50
The cost of corruption is higher for small companies
%0
%1-5
%6-10
%11-15
%16-20
%21-25
61.3
13.1
11.8
5.2
3.9
4.7
4.6
Medium 55.9
19.6
9.6
1.4
4.6
8.9
4.1
Large
30.1
19.2
1.3
1.3
1.3
3.7
Small
46.8
Average
Economic impact: Unfair competition and shaken investor confidence
Social impact : Insecurity
0
10
Corruption increases costs of doing business
5
Economic Impact
Corruption causes unfair competition
Corruption shakes the confidence of the investors
20
11
2
7
8
Corruption slows down the economic growth
2
8
Corruption shakes the confidence of people to the business community
Definitely disagree
Rather disagree
Social Impact
4
1
65
1
1
27
6
Partially agree
3
31
32
54
63
29
30
3
13
31
1 5
3
2
18
29
6
100
59
19
8
90
50
28
1 5
80
66
37
11
Corruption hampers EU membership process of Turkey
70
48
51
Corruption raises the real estate prices
60
33
Corruption speeds up the economic growth
Corruption weakens ethical valuesof the society
50
27
3
Corruption destroys social confidence in public institutions
40
23
2 4
Corruption reduces the ability of the business people to plan for the future
Corruption weakens the state of law
30
Definitely agree
3
7
3
2
62
1
62
2
64
No idea
14
2
Corruption is a part of a whole
What is to be done?
• Improving income distribution and reducing
economic inequalities
• Education
• Judiciary independence and effective
enforcement of the current legislation
Private sector still has its own to do list …
• 46% of the companies don’t have an ethical
guidelines document.
• I wouldn’t report a corruption (%60) because
Education
•
•
•
•
•
•
There is no legal reporting procedure (%30)
It wouldn’t yield a result (%12)
I don’t want to wear myself out (%5)
The system won’t reward me (%7)
I am afraid that my identity will be revealed. (%6)
I think today it's me, tomorrow it will be you (%1)
A solution proposal:
Collective Action
Goal: to create equal conditions in the market for all
Examples:
1) Anti-Corruption declaration
2) Honesty agreement
3) Principle-oriented enterprises
4)
Coalitions of certified companies
The participants supports Collective Action
67-77% of the participants state that the four kind of
collective action may curtail corruption or raise awareness
of its ill effects.
HOWEVER
Legal enforcement, auditing and clear sanctions are
required. (%54)
Policy recommendations…
Public
Authorities
NGO
Private Sector
Thank you…