Walmart's Mexico Bribes

http://www.futureofcapitalism.com/2012/12/walmart-mexico-bribes

The New York Times has a 7,500-word major investigative article that runs under the headline "The Bribery Article: How Wal-Mart Used Payoffs To Get Its Way In Mexico." From the article:

Thanks to eight bribe payments totaling $341,000, for example, Wal-Mart built a Sam's Club in one of Mexico City's most densely populated neighborhoods, near the Bas?lica de Guadalupe, without a construction license, or an environmental permit, or an urban impact assessment, or even a traffic permit.

Let me stipulate loud and clear that I am against bribes. But what the article doesn't really explore is the link between regulation and corruption. One of the reasons that these extensive regulations are often a bad idea is that they don't actually achieve their stated goals. Instead, they create opportunities for regulators to shake down companies and individuals for either clearly illegal gifts like bribes or borderline legal benefits like campaign contributions, revolving-door job offers, or the prospect of lucrative future consulting work or speaking fees.

The article makes Walmart (and by extension, big business or global capitalism) out as the villain. But equally culpable are the Mexican officials who accepted the bribes. The Times article seems to let them off pretty easily.

I'm not familiar with how it works in Mexico. But in cities I have covered here in America, you get these environmental or traffic permits by hiring former city or county government officials as consultants to write reports and meet with their former colleagues. Or by hiring lobbyists who also work as campaign consultants and campaign fundraisers for the politicians who make the decisions. It may not be as nakedly corrupt as Mexico, but it's the same general idea of regulations that, rather than protecting people, serve to enrich the people who write the regulations.

by Editor ?|? Dec 17, 2012 at 10:26 pm Related Topics:? Press, Regulation receive the latest by email: subscribe to the free futureofcapitalism.com mailing list

Source: http://www.futureofcapitalism.com/2012/12/walmart-mexico-bribes

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