Unmasking the Mindset: Why Good People Make Bad Choices in Business and Governance

Corruption often appears in unexpected places, perpetuating cycles that affect not only the reputation and efficiency of public institutions but also the lives of citizens, business owners, and executives. But to tackle corruption effectively, it’s vital to understand the psychology and contexts that give rise to it. Corruption isn’t solely the product of “bad” people; rather, it’s frequently the outcome of complex motivations and subtle rationalizations.

The Psychology of Corruption

Dr. David Halpern, Chief Executive of the Behavioral Insights Team, observes in the U.K. Anti-Corruption Manifesto that we often misinterpret why people engage in corrupt behavior. He suggests that we tend to attribute corruption to individual self-interest, assuming it’s carried out by inherently “bad” people. Behavioral economics and psychology, however, paint a different picture. Dan Ariely, a professor at Duke University, describes this rationalization of minor dishonesty as the “fudge factor”—a cognitive space that allows people to justify small unethical acts without considering them outright wrong. This gradual normalization makes corruption insidious, slipping into daily practices without setting off moral alarms.

In Bangladesh’s regulatory framework, this “fudge factor” manifests in many ways, often because the initial step into corruption is unintentional. Take, for example, entrepreneurs applying for permits or documentation for a new business venture. A typical process may involve acquiring up to ten types of permits and approvals, from environmental clearances to building permissions. Missing just one requirement can lead to delays and frustrations, resulting in a scenario where “speed money” is suggested as the only way forward. Over time, such exchanges become routine, a habit that fosters the misconception that bribery is the only effective way to get things done.

Mindset Behind Non-Compliance: Beyond the Surface

Non-compliance isn't always about ignoring the law. Often, a mix of financial, operational, or social pressures creates an environment where such behavior thrives. Many companies fail to comply not because they want to break the law, but because they don't fully understand the regulatory standards or have untrained staff who don't know the details of compliance processes.

This mentality is common in both private businesses and public offices, where a "just get it done" approach prevails. For instance, an industrialist in Bangladesh once said that if bribery in customs stopped, his company could raise salaries. This shows how systemic pressures make bribery seem like a normal part of business. However, corruption doesn't fix underlying problems—it makes them worse and hinders economic growth.

Incompetence in Knowledge and Skills: The Knowledge Gap

Another key factor driving corruption is the lack of adequate knowledge and skills in both businesses and public offices. This skills gap means that even when people try to comply with regulations, they often fail due to poor training or understanding of complex rules. In Bangladesh, some business executives handling documentation lack the expertise to navigate multi-layered procedures. Even minor mistakes can cause delays and rejections. This often leads to hiring brokers, who facilitate government paperwork but also encourage corrupt practices.

Imagine a mid-level executive trying to register a manufacturing facility. Faced with complex documentation requirements, they might unknowingly submit incorrect paperwork, leading to rejections. Brokers then offer to "smooth" the process, further entrenching corruption. This cycle shows how inadequate professional knowledge leads to reliance on corrupt intermediaries.

Breaking the Cycle: Solutions for a Culture of Integrity

To combat corruption, Bangladesh's regulatory and business environments need more than just penalties—they need proactive, skill-focused approaches. Here's how:

1. Promoting Professional Training: Effective compliance starts with comprehensive knowledge. Training programs should cover both technical and ethical aspects of regulations. Public officials and business professionals need access to workshops, online courses, and certifications that address regulatory requirements, ethics, and best practices, tailored to Bangladesh's needs.
2. Executive Education and Continuous Learning: Executives and managers need skills that promote long-term strategic compliance. Executive education programs can teach ethics, behavioral psychology, and regulatory frameworks, fostering a culture of compliance.
3. Behavioral Audits and Integrity Councils: Companies can conduct behavioral audits to find areas where employees face ethical dilemmas. Integrity councils within organizations can provide a platform for discussing ethical challenges, making integrity central to corporate culture.
4. Collaborative Compliance Initiatives: Industry associations can encourage transparency and ethical practices across sectors. By working with public agencies to create standard operating procedures, they can reduce compliance ambiguity and manipulation.

Conclusion: Building an Ethical Workforce

Addressing corruption requires more than just blaming others—it requires a mindset change. A skilled, ethically committed workforce can create a ripple effect throughout the regulatory framework. Professional training and continuous education are the foundation for building a culture of integrity.

Investing in professional development and executive education isn't just about compliance; it's about empowering individuals to make informed choices that reject corruption. When organizations commit to educating, knowledgeable, and ethically accountable employees, they contribute to a more transparent, efficient, and trustworthy Bangladesh.

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Mostafa Shakil is a logistician and international trade consultant and President & CEO at the Centre for Logistics Leadership (CFLL). Views expressed in this article are the author's own.