Bridging the Ethical Chasm: Business Ethics as a Product of Culture & Politics in the Arab World

Abstract

In surveys and studies analyzing corruption around the globe, Middle Eastern and North African countries consistently rank among the worst in the world with respect to the pervasiveness of corruption in both the public and private sector. The poor business ethics landscape makes it exceedingly difficult to do business in the region, while also undermining the development of effective political and economic institutions. The mismatch between societal virtues of shared prosperity and incentives for short-term, selfish reward amounts to what I call an ethical chasm, a symptom of cultural, political, and structural factors. This makes it critical that businesses and policymakers alike develop reform plans that will improve ethical decision making at the firm and individual level. This paper offers a tangible plan of action for public actors, individual firms, and civil society, with the objective of advancing reform efforts in the Arab World. Before offering these practical changes, it is important to take a step back and look at what might be driving the perceived poor business ethics environment in the region. I begin with a historical survey of business in the Middle East, beginning with the end of the Ottoman Empire to the present day. In doing so, important differences between the region’s economic development and other areas of the world are illuminated. The main finding is that although the Arab world was subject to many of the same forces that brought the developed world into its modern form, these forces, namely globalization, failed to produce the same kinds of economic results in the Middle East. Following this historical survey is a discussion of corruption, its impacts, and its relevant in the business ethics context. Furthermore, I analyze data from corruption surveys to compare the region with its counterparts, as well as to compare sub-regions within the Arab world. With this important context, I lay out what are the major cultural, political, and structural underpinnings to the problem of corruption and business ethics in the region, relying on evidence from faith, cultural norms, violent conflict, and the law. These factors color what constitute ethical or moral behavior in the business context and help focus reformers on important targets for change. Finally, utilizing the framework developed through analysis of the business ethics environment, I propose reforms for public, private, and civil society actors. These reforms, which include plans like stronger anti-corruption enforcement and a greater sense of firm responsibility are designed to be practical, long-term changes to the ethical issues facing business in the Middle East. In doing so, I hope to bolster ongoing reform efforts both in and outside the region, with the goal of helping the Middle Eastern business community reach its full potential.