Exchange Students

When it comes to conducting international business, not all countries are equally honorable. The 1995 Corruption Index, a survey comparing the reputations of nations across the globe, found Pakistan, China and Indonesia are widely considered the most corrupt countries in the world; New Zealand, Denmark and Singapore are considered the least corrupt.

Published by Transparency International, a Berlin-based organization that seeks to raise awareness of international corruption, the Corruption Index is not a scientific survey but reflects the results of various polls of financial journalists and international business interests.

"Corruption is of particular concern to small and medium-sized businesses," says Nancy Zucker Boswell, Transparency International USA's managing director. For one thing, Boswell says, corruption makes it more difficult to negotiate abroad without a well-known name and a lot of leverage. Bribery is an especially big barrier for U.S. small-business exporters. "With few exceptions," she says, "Europeans and Japanese don't have laws prohibiting bribery of a foreign official."

The good news, Boswell says: There's growing recognition of the damaging effects of bribery, and some countries with not-so-sterling reputations are working to change their image. According to Boswell, "Many countries are beginning to look at their laws and say, 'What can we do to make sure our country is not contributing to the problem?' "

This article was originally published in the February 1996 print edition of Entrepreneur with the headline: Exchange Students.