5 ms·

I'm somewhat confused. Here in America when you want to accomplish something like open a new facility you basically force the potential municipalities into com

I'm somewhat confused. Here in America when you want to accomplish something like open a new facility you basically force the potential municipalities into competing with each other to win your favor. A big company will go to all the Chambers of Commerce in a given area and basically say "we're considering opening a 100,000 Sq ft facility and hiring 300 people. What incentives can you offer me if I build it here?" Then the towns will bend over backwards, gut their taxes, ease their planning zones, and basically contort everything they can to become the most appealing location. Is it just cheaper to skip this step and bribe the city in other parts of the world? Why doesn't this practice work or take place overseas?

AlexanderTheGr8 5y ago
I'm originally from a small part of India, and the logic is quite simple. In your example, 300 jobs = 300 votes. But it would require millions in incentives to the company. But the local politician can just "buy" 300 votes with 300,000 INR (indian currency; 1000 rupees for 1 vote). So there is no point spending so much money on a facility when you can simply buy all the votes you need.
- zelon88 5y ago
  That is terrifying. So is Microsoft literally buying and installing politicians in foreign governments?
  - markdown 5y ago
    Nah, only in the US. https://www.opensecrets.org/orgs/microsoft-corp/summary?id=D000000115 https://www.opensecrets.org/orgs/microsoft-corp/summary?id=D...
- enugu 5y ago
  Election money is important but the role it plays is somewhat different. Politicians do often woo companies to come to their sate. A job (particulary a well paying one) creates a lot of economic activity and can make that region prosperous. Politicians want this both for votes created due to prosperity but more importantly, once the region becomes rich, they have more money for their social schemes and freebies which is a prominent part of how they come to power. Not to speak of more bribes obtained in richer areas.
enugu 5y ago
One issue in India is that local governance at level of cities and towns is very weak(very few know who the equivalent of the mayor of their city is). The state(as in say US states, not federal level) government basically runs the show. So, the state government does woo corporations with incentives to come to their state, but once the company reaches the level of permissions and deals with local officials who are looking for a cut(and in general, it is hard to fire these officials), the companies have to face the bribes process. You can transfer bureaucrats even if you cant fire them(and this does happen though sometimes for the wrong reasons). But the bribe network also involves local politicians. The intractable issue is that the journey to power of the top leaders in the state government involves taking support of local level leaders who either have some local support base or money which can be used for campaigning. In return, these local leaders demand a cut of bribe money which the top leader is obliged to allow or else risk losing their support. Of course, this is not an all encompassing explanation and some leaders are much worse(corrupt far beyond any political necessity) and some better.
maxsilver 5y ago
> What incentives can you offer me if I build it here?". Then the towns will bend over backwards, gut their taxes, ease their planning zones, and basically contort everything they can to become the most appealing location. I mean, that's basically a bribe too, we just don't call it a bribe when we do it on our side. "Woah, woah, woah. You can't just hand government officials money! That's bribery! You have to do business within their specific jurisdiction and trade favours on the planning and setup of your business (favours none of your competitors or existing other business will receive) all on the promise of future increases in tax revenues in exchange, *that's* how you hand government officials money!"
- xmprt 5y ago
  Except they're not really close because in one case, the government is handing you tax payer money in exchange for potential growth and revenue for the city whereas in the other case you are paying a specific government official for personal gain.
Overtonwindow 5y ago
“Here in America…” Parts of the world that require bribes have nothing close to the governmental system of regulations and permitting that America does. It’s not that it’s cheaper, it’s that the system is so mismanaged and corrupt in its entirety, that the only way to achieve a goal without delays, cost overruns, sabotage, and violence, is to just pay the bribe..or else.
jrapdx3 5y ago
Yeah it's happened like that in local communities where I live. Big company says to city government "if you don't give us a big tax break we'll move our [headquarters|factory|operations|etc] to our branch in [that other town]". More often than not the city relents and the tax breaks are enacted. No city officials are paid off, it's all about arm-twisting. Seems to me this is a form of extortion not bribery. Of course extortion is no more ethical than bribery, but it's not illegal to use the threat to take one's business elsewhere. Call it "negotiating", it happens all the time.
igetspam 5y ago
I don't know but that's the way things are. Cultural shifts are difficult. Bribes in India are so common, they made a website: https://ipaidabribe.com/ https://ipaidabribe.com/

AlexanderTheGr8 5y ago

I'm originally from a small part of India, and the logic is quite simple. In your example, 300 jobs = 300 votes. But it would require millions in incentives to the company. But the local politician can just "buy" 300 votes with 300,000 INR (indian currency; 1000 rupees for 1 vote). So there is no point spending so much money on a facility when you can simply buy all the votes you need.

zelon88 5y ago
That is terrifying. So is Microsoft literally buying and installing politicians in foreign governments?
- markdown 5y ago
  Nah, only in the US. https://www.opensecrets.org/orgs/microsoft-corp/summary?id=D000000115 https://www.opensecrets.org/orgs/microsoft-corp/summary?id=D...
enugu 5y ago
Election money is important but the role it plays is somewhat different. Politicians do often woo companies to come to their sate. A job (particulary a well paying one) creates a lot of economic activity and can make that region prosperous. Politicians want this both for votes created due to prosperity but more importantly, once the region becomes rich, they have more money for their social schemes and freebies which is a prominent part of how they come to power. Not to speak of more bribes obtained in richer areas.

enugu 5y ago

One issue in India is that local governance at level of cities and towns is very weak(very few know who the equivalent of the mayor of their city is). The state(as in say US states, not federal level) government basically runs the show. So, the state government does woo corporations with incentives to come to their state, but once the company reaches the level of permissions and deals with local officials who are looking for a cut(and in general, it is hard to fire these officials), the companies have to face the bribes process. You can transfer bureaucrats even if you cant fire them(and this does happen though sometimes for the wrong reasons). But the bribe network also involves local politicians. The intractable issue is that the journey to power of the top leaders in the state government involves taking support of local level leaders who either have some local support base or money which can be used for campaigning. In return, these local leaders demand a cut of bribe money which the top leader is obliged to allow or else risk losing their support. Of course, this is not an all encompassing explanation and some leaders are much worse(corrupt far beyond any political necessity) and some better.

maxsilver 5y ago

> What incentives can you offer me if I build it here?". Then the towns will bend over backwards, gut their taxes, ease their planning zones, and basically contort everything they can to become the most appealing location. I mean, that's basically a bribe too, we just don't call it a bribe when we do it on our side. "Woah, woah, woah. You can't just hand government officials money! That's bribery! You have to do business within their specific jurisdiction and trade favours on the planning and setup of your business (favours none of your competitors or existing other business will receive) all on the promise of future increases in tax revenues in exchange, *that's* how you hand government officials money!"

xmprt 5y ago
Except they're not really close because in one case, the government is handing you tax payer money in exchange for potential growth and revenue for the city whereas in the other case you are paying a specific government official for personal gain.

Overtonwindow 5y ago

“Here in America…” Parts of the world that require bribes have nothing close to the governmental system of regulations and permitting that America does. It’s not that it’s cheaper, it’s that the system is so mismanaged and corrupt in its entirety, that the only way to achieve a goal without delays, cost overruns, sabotage, and violence, is to just pay the bribe..or else.

jrapdx3 5y ago

Yeah it's happened like that in local communities where I live. Big company says to city government "if you don't give us a big tax break we'll move our [headquarters|factory|operations|etc] to our branch in [that other town]". More often than not the city relents and the tax breaks are enacted. No city officials are paid off, it's all about arm-twisting. Seems to me this is a form of extortion not bribery. Of course extortion is no more ethical than bribery, but it's not illegal to use the threat to take one's business elsewhere. Call it "negotiating", it happens all the time.

igetspam 5y ago

I don't know but that's the way things are. Cultural shifts are difficult. Bribes in India are so common, they made a website: https://ipaidabribe.com/ https://ipaidabribe.com/