Business, Institutions, and Corruption in Latin America

Corruption is a global problem. Although data suggests that there are places that accumulate more harmful practices than Latin American countries, Latin America is perceived as a champion of corruption. This macro vision may hide the distinctive characteristics of each country, as Latin America is a patchwork of idiosyncrasies regarding corruption. However, Latin American countries are narrowing their differences to closer patterns at a considerable pace. Latin America is facing an unprecedented chapter in its history against corruption due to the Organisation for Economic Co-operation and Development (OECD) and other international organizations' recommendations, the Foreign Corrupt Practices Act (the US federal law that addresses accounting transparency requirements for companies that negotiate bonds in the US), and other constraints related to economic globalization. This course will present students with the theoretical literature that aims to explain corruption in Latin America, the technical constraints that have recently reshaped its practices, and the latest most significant cases. From the petty bribery that is essential for people to gain access to basic needs, to the sophisticated structure that is the mainstay of organized crime, corruption embodies an enormous range of different practices. Risk and uncertainty, information asymmetry, and contract enforceability are traditional barriers to the development of ethical business in Latin America in general. However, recent episodes in Latin America have demonstrated that corruption involving politicians and public procurement concretizes huge entry barriers to the free market. One of the aims of this course is to show how this kind of corruption is incorporated within the design of legal statutes and the practices of institutions. Some of the questions raised by this course will address issues including the following: what companies and institutions can do to improve fair trading in Latin America and stop the vicious cycle of corruption; how successful they might be considering Latin America's social and political environment; what challenges are introduced by the Foreign Corruption Practices Act; how political austerity in Latin America relates to the ability to inspect areas that are vulnerable to corruption and criminality; what the recent plea-bargain cases in Latin America, especially Brazil, show about hands-on experience with corruption; and how this knowledge can prepare lawyers to prevent their clients from falling into the same path-dependent dangers. The course is designed for JD candidates and LLM students, but graduate students from other departments are most welcome. Legal jargon is not expected. We will learn through seminar-style discussions and lectures. Elements used in grading are class participation, attendance, and a few reaction papers.