The Negotiator Magazine

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NEGOTIATING WITH EXTORTIONIST GOVERNMENT FUNCTIONARIES

by Bruce Horowitz

In 1850, during his career in the law, Abraham Lincoln advised a younger colleague:

Resolve to be honest at all events: and if in your own judgment you cannot be an honest lawyer, resolve to be honest without being a lawyer. Choose some other occupation, rather than one in the choosing of which you do, in advance, consent to be a knave.1

Seven score and a dozen years later, at a Harvard Business School symposium on how to handle extortion demands made by foreign public functionaries, the only alternatives suggested were to:

  1. Walk away and lose the deal
  2. Find a local partner to "solve" the situation
  3. Be "pragmatic" in the present situation, but work to improve government ethics in the future2

If only these three alternatives are available when a public functionary demands a bribe, then no one but Lincoln's "knave" would attempt to secure government contracts, services, permits, or timely payment for services rendered. If there are no other alternatives, then Lincoln's best alternative to a negotiated agreement (BATNA) would be either to stop all work that requires government approval, or to "choose some other occupation" in which one can act honestly.

1Carta de Abraham Lincoln, "[1 de julio de 1850(?)]". ANGLE, P.E., and MIERS, E.S., eds. THE LIVING LINCOLN. Barnes & Noble (New York, 1955, ed. 1992), p. 143.

2In Silverthorne, Sean, Editor. "Wrap-up: Careers, Corruption, and Intellectual Capital". HBS WORKING KNOWLEDGE. 25 Feb 2002, published 6 Sept 2005. www.library.hbs.edu/bakerbooks/faculty/lwells.html
"Ira Belkin, former China Legal Exchange Officer for the U.S. Department of Justice, took a hard stand, saying there is never any justification for breaking the law. He said that even if bribes are a standard way of doing business, you don't want to be the one person caught and prosecuted."
....
"But David Kang, professor of political science at Dartmouth, took a softer stance. While not advocating bribery, he suggested that the best way around the question is to find a joint venture partner in the country who can solve the situation."
...
"A third view came from an audience member, who encouraged a "pragmatic" approach. If you quit doing business with corrupt countries, the only victims are the people who live in that country and rely on foreign commerce. Instead, he said, the best way is bring about reform slowly and from within, by working with country officials over time."

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September 2007