Robert W. McGee

The common view is that insider trading is always unethical and illegal. But such is not the case. Some forms of insider trading are legal. Furthermore, applying ethical principles to insider trading causes one to conclude that it is also sometimes ethical. This paper attempts to get past the hype, the press reports, and the political grandstanding to get to the truth of the matter. The author applies two sets of ethical principles – utilitarianism and rights theory – in an attempt to determine when, and in what circumstances, insider trading is ethical. The views of Henry Manne, an early proponent of insider trading, are critically examined, as are the major arguments against insider trading. Is insider trading good for the company if it is used as a form of executive compensation which makes it possible to pay lower salaries than would otherwise be the case? Does insider trading cause the stock market to work more efficiently? If insider trading does increase efficiency, is that sufficient to call for its total legalization, or are there other things to be considered? Several arguments against insider trading have been put forth over the last few decades but there are problems with all of them. One of the main arguments is the fairness argument. The problem with this argument is that different people have different definitions of unfairness. A closely related argument is the level playing field argument, which advocates wider dissemination of information so that it is less asymmetric. One problem with the level playing field argument is that it is better applied to sporting competitions than to trading in information. Some economists argue that forcing the disclosure of nonpublic information can actually result in more harm than good and must necessarily involve the violation of property rights. Other arguments examined in this chapter include the fiduciary duty argument, the problem of outside traders, the misappropriation doctrine and the restrictions that insider trading laws place on freedom of speech and press. The article concludes by setting forth some principles or guidelines to determine when insider trading should be punished and when it should not.

This chapter discusses and summarizes the Rothbard-Block theory of bribery. Basically, Rothbard and Block’s theory takes the position that bribery is ethical if no one’s rights are violated. They distinguish between commercial bribery and the bribing of government officials. In the case of a commercial bribe, they agree that the person who receives the bribe is acting unethically unless the employer is informed of the bribe and the proceeds are turned over to the employer. Where Rothbard and Block diverge is in the way the person who pays the bribe should be judged. According to the Rothbard version of the theory, those who pay bribes are innocent of any wrongdoing because they do not violate any rights. In the Block version, those who pay bribes are also engaging in unethical conduct because they are aiding and abetting in the crime being perpetrated by the recipient of the bribe. Government officials who receive bribes are acting unethically only if they are abusing their power or violating anyone’s rights. Those who pay bribes to government officials are acting unethically only if the bribe results in the abuse of government power that leads to the violation of someone’s rights.

This paper summarizes the results of 28 studies that were published between 2010 and 2020 on the ethics of bribery. The following 34 political jurisdictions are included: Argentina, Australia, Azerbaijan, Bosnia and Herzegovina, Brazil, Canada, China, Colombia, Egypt, England, Ethiopia, France, Germany, Ghana, Great Britain, Hong Kong, Indonesia, Iran, Iraq, Italy, Kazakhstan, Kosovo, Kyrgyzstan, Macedonia, Mexico, New Zealand, Rwanda, South Africa, South Korea, Taiwan, Turkey, the United Arab Emirates, the United States, and Uzbekistan. It is part of a much larger project on the ethics of bribery and the ethics of tax evasion, which will be published in 2022 and 2023.

The present study is part of a much larger study that examined the ethics of bribery and the ethics of tax evasion from a variety of perspectives. In this study, data were taken from the most recent World Values Survey. Seventy-six countries were included in the survey. Of the 76 countries included in the survey, 49 (64.4%) of the urban and rural populations did not differ significantly in their view of bribe taking. Rural populations considered taking a bribe to be significantly more serious in 15 countries (19.7%). Urban populations considered taking a bribe to be significantly more serious in 12 countries (15.8%).

The present study is part of a much larger study that examined the ethics of bribery and the ethics of tax evasion from a variety of perspectives. Data were taken from the most recent Wave of the World Values Survey. Data were collected in 56 countries. Participants were asked how risky is it to give or receive a bribe, where 1 = no risk at all and 10 = very high risk. Countries were then ranked. The countries where the rank was the lowest were Peru (1), Ukraine (2), Chile (3), Andorra (4), and New Zealand/Venezuela (tied for fifth place). The countries with the highest risk were Ethiopia (56), Jordan (55), Puerto Rico (54), Iraq (53), and Egypt (52). In the aggregate, male and female mean scores did not differ significantly. Females felt significantly more comfortable giving or receiving bribes in two countries: Greece and Mongolia. Men felt significantly more comfortable giving or receiving a bribe in five countries – Malaysia, Mexico, Morocco, the United States, and Zimbabwe.

The present study is part of a much larger study that examined the ethics of bribery and the ethics of tax evasion from a variety of perspectives. Data were taken from the most recent Wave of the World Values Survey. Data were collected in 82 countries. Participants were asked how frequently voters were bribed. The options were 1 = very often, 2 = fairly often, 3 = not often, and 4 = not at all often. Weighted averages were calculated, and countries were ranked from most frequent to least frequent. The five countries where voters were bribed the most were Albania (1), Colombia (2), Nigeria (3), Puerto Rico (4), and Mexico (5). The five countries where voters were bribed least often were Sweden (82), Germany (81), Denmark (80), Singapore (79), and Tajikistan (78). Perhaps the reason Tajikistan was ranked so high was that the President of Tajikistan has never had any serious opposition, with the result that bribery is not necessary.

The present study is part of a much larger study that examined the ethics of bribery and the ethics of tax evasion from a variety of perspectives. In this study, a survey was distributed to 64 students at a university in Mexico City. They were asked to place a number from 1 to 100 in the appropriate space to reflect their view on the seriousness of 75 acts, where 1 = not serious and 100 = extremely serious. The four bribery scenarios were ranked about in the middle. Paying a bribe when pressured to do so was significantly less serious than the other categories of bribery – offering to pay a bribe, accepting an unsolicited bribe, and soliciting a bribe. The other three categories of bribe were found to be equally serious (p > 0.05).

While most people assume that all bribery is unethical, the literature provides examples and philosophical arguments to support the proposition that some bribery may actually be ethical, based on utilitarian grounds. This book provides a theoretical and empirical examination of bribery from an ethical perspective. It examines empirical data from over 80 countries and reports on attitudes toward bribery examining demographic variables such as gender, age, ethnicity, education, income level, religion and social class. Multi-country comparisons are provided to determine whether views toward bribery differ by geographic location.

The present study is part of a much larger study that examines the ethics of bribery and the ethics of tax evasion from a variety of perspectives. In this study, data were taken from the most recent World Values Survey. The main demographic variable examined was religion. Overall, nearly 70% believed that accepting a bribe could never be justified. Attitudes toward bribery were ranked on the basis of religion. The Jewish respondents were least opposed to accepting a bribe, while the Muslim respondents were most opposed. Religion was a significant demographic variable. Overall, women were slightly more opposed to accepting a bribe. Christian women were significantly more opposed to taking a bribe than were Christian men. Other male-female comparisons of mean scores by religion were not significant.

The present study is part of a much larger study that examined the ethics of bribery and the ethics of tax evasion from a variety of perspectives. In this study, data were taken from the most recent World Values Survey. Forty-seven countries were included in the study. In some cases, education was a significant demographic variable, while in other cases it was not. The correlation between education level and attitude toward receiving a bribe was not clear. Several different patterns were found. The findings in the present study confirm the findings in several other studies.

The present study is part of a much larger study that examines the ethics of bribery and the ethics of tax evasion from a variety of perspectives. In this study, data were taken from the most recent World Values Survey. Overall, opposition to taking a bribe was strong. All demographic variable tested were significant. Women were significantly more opposed to bribe taking than were men. Opposition to bribe taking increased with age. With regard to marital status, the least opposition to bribe taking was among the group who were living together as married; the divorced group showed the strongest opposition. Opposition increased with the level of education. Those at the highest income level showed the least opposition to bribe taking. The retired/pensioned group showed the strongest opposition to bribe taking. Those in the upper class were least opposed to bring taking. The very happy group had the strongest tolerance to bribe taking. The relationship between degree of happiness and acceptance of bribe taking was curvilinear. Those on the right side of the political spectrum showed the least opposition to bribe taking. Those who worked in the private, nonprofit sector were the least opposed to bribe taking, while those who worked for government institutions had the strongest opposition. The group that had a great deal of confidence in the government showed the lowest opposition to bribe taking, while the group that had no confidence at all in the government had the strongest opposition.