One of the frustrating things about doing business in a region in turmoil is that it’s hard to know who to bribe. When gangsters or dictators run the place, you bribe them. When “democrats” are in charge it’s a little more difficult to know which palms need an application of grease, according to a "reulctant briber" featured in this article in the Economist.
Call him Ivan. When The Economist met him, on a flight from Moscow to Ukraine, Ivan was perplexed. Before the “orange revolution” of 2004, he said, “I knew who, when and how much” to bribe, on behalf of the small minerals company he co-owned in Ukraine. All the new talk of wiping out corruption was making business impossible. Ivan mostly works in Russia, his homeland. He is just the sort of small entrepreneur that the country needs to flourish, if its economy is to rely less on oil and gas, and its society to be stabilised by the growth of a middle class. Ivan has the strong stomach and dark sense of humour needed to survive the everyday perils of doing business in Russia. As he proved in a series of meetings over the last year, he is also enlighteningly candid.
Like many successful Russian businessmen, Ivan, who is in his 50s, had a scientific training, which meant he was not too exposed to Soviet indoctrination. He owes the once unthinkable lifestyle he now enjoys—foreign holidays, overseas education for his children—mostly to his dealings as a commercial-property developer. When The Economist saw him next, he was finishing a profitable project near Moscow. It was profitable not only for him. “It's like the last days of Pompeii,” he said of the bribe-taking that consumed roughly a tenth of his costs, the same proportion, he said, as criminals extorted in the 1990s.
Fortunately, we in the United States enjoy a much more stable system of corruption. We know exactly who to bribe. They’re called Congressmen. And the trick is to spread the wealth around as widely as possible, with a bias toward the Democratic Party. Yesterday’s New York Times carried this story on the performance of stocks and earnings from companies that make campaign contributions. There is a strong correlation between bribessupporting lots of congressional candidates, on the one hand, and better stock performance and earnings growth on the other. And the party that brings the best returns to corporations making political donations is the Democrats. (For some reason we can't fathom, the Times coverage of the study that produced these results left out the fact that paying off more Democrats is the more successful political investment strategy.)
So go long on those Democratic donors, kids.
The reluctant briber [Economist]
The Share-Price-to-Campaign-Contribution Ratio [New York Times]