European Journal of Law and Economics

, Volume 35, Issue 3, pp 349–366 | Cite as

Corrupt intermediaries in international business transactions: between make, buy and reform

  • Johann Graf Lambsdorff


Attempts to deter corruption have little recognized the operation of intermediaries. This study takes a New Institutional Economic-perspective, supported by a variety of case studies, to identify firms’ choices of when to engage corrupt intermediaries (buy) and how to approach reform. It argues that firms should be held unbendingly liable for the operation of their intermediaries. Reform may also focus on certifying “good” intermediaries and holding the certifier liable for the performance of its agents. Prohibiting intermediaries is not advisable, as intermediation can be either arranged in-house (make) or mixed with legal services. Registration and auditing of intermediaries provides a more promising avenue for reform. Legislators should balance the additional regulatory burden by granting a wage premium to registered intermediaries and denying legal recourse to unregistered competitors.


Trust Opportunism Enforcement Liability Regulation Vertical integration 

JEL Classification

L14 K42 


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Copyright information

© Springer Science+Business Media, LLC 2011

Authors and Affiliations

  1. 1.University of PassauPassauGermany

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