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When corruption is endemic and structural

Tom Fox | June 4, 2017

When commentators consider endemic corruption they are usually considering a plethora of rules and regulations that allow low-level government functionaries to hold their collective hands out. This attitude in turn then permeates the entire culture, whether directly from the government or in a state-owned enterprise. One of things becoming apparent in the ever-burgeoning Brazilian corruption scandal, however, is that access to capital can be a prime mover in creating endemic corruption. To overcome such a structural component, it may require a radical reordering of Brazilian political structures.

The most recent corruption settlement in Brazil centers on meat-packing company JBS, which agreed to the largest fine ever for bribery and corruption, $3.2bn in Brazil. JBS engaged in widespread bribery of meat and poultry inspectors, but its widest swath of bribery was to obtain access to capital in the form of low interest loans from the country’s national bank, BNDES. To keep the...

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