ABSTRACT
This chapter explores the features of modern developing country markets, using some examples from South Africa, to argue that traditional definitions of private-sector corruption are simply too narrowly focused to capture the range of economic activities that are of widespread contemporary concern to citizens. Many noxious outcomes and behaviours remain legal, such as tax avoidance and evasion, thin capitalisation and deliberate bankruptcy of subsidiaries by ephemeral investment funds. Relatedly, business regulation and corporate law remain weak and porous in many markets. In short, to reduce private-sector corruption requires work to redefine the scope and applicability of the concept itself, in order to better align what the general population view as immoral with what is formally illegal. In order to attempt this redefinition we need to examine more closely the mutable edges of the markets in which private-sector corruption takes place. These have been made particularly complex in the past thirty years or so by neo-liberal economic policies and greater internationalisation and financialisation of developing-country economies. This context has eroded a clear divide between the public and private sector, creating many spaces in which the newer forms of corporate malpractice have grown, including in the mispricing of derivatives which contributed to the 2008 financial crash (Hildyard 2008; Beetham 2011). In this chapter, the argument will be developed using illustrative examples from southern Africa, where development finance institutions and private-equity firms jointly coinvest from tax havens and by so doing maintain a key strategic role in overall economic development (Bracking et al. 2010; Bracking).
