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Unlike their American competitors, foreign firms are rarely exposed by their governments for making payoffs. For example, in the '60s, a West German arms maker, Heckler & Koch, managed to elbow out a Belgian rival for an army-rifle contract in Colombia by paying a tribute of $200,000 to the committee of officers who approved the weapon. The rifles have proved extremely unpopular with the troops because they are difficult to maintain and not very efficient. But not a whisper of criticism has been raised in Germany. Last week in Amsterdam, an agent of the French planemaker Dassault went on trial charged with trying to bribe two members of the Dutch Parliament in an attempt to sell the company's Mirage jet. The prosecutor at week's end asked for his acquittal on the ground of insufficient evidence. The case has caused barely a ripple in France.
Competition alone, however, does not explain the pervasiveness of payoffs abroad. Another factor is that so many officials at almost every level are on the take. Part of the reason is that in many parts of the world, notably the Middle East, Asia and Africa, a true market system based on the price and quality of goods has never existed. Instead, commerce is carried on through intricate webs of associations and social connections that are lubricated by many forms of tribute, including money.
Even in a nation as advanced as Japan, there is a bewildering and deeply rooted system of extramarket arrangements that shape and guide the way that business is done. One of these is the custom of On, which requires that all favors be repaid, often in the form of cash. Not only are there no moral qualms about such payments but failure to make them could result in a loss of face. Asked why Lockheed had made its lavish payments to Political Manipulator Kodama, Kotchian replied that the Japanese political-industrial establishment is extremely tightly knit and Lockheed had to have someone in it speaking for the company in order to win any contracts.
Another reason U.S. firms are forced to do business amid a cluster of outstretched palms is that in many developing countries all Western (and even Japanese) companies are regarded as neoimperialists, out to extract all they can from the land and its labor. Such a view overlooks the modernizing benefits such firms can bring to the Third World and considers it almost patriotic to nick foreign companies for as much as possible. Beyond all that, however, much of the bribery that goes on overseas is nothing more than a reflection of the rapacious greed of those in positions of power.
Bribery, in fact, greases all kinds of transactions, from getting a minor import license to selling a fleet of aircraft. An American ambassador in an Arab country asks rhetorically: "You don't think Arab governments equip their armed forces on the basis of sophisticated flypasts or comparative field trials, do you?"