Business Ethics

Business ethics examine the ways in which conflicts between a society’s moral demands and economic requirements can be solved.

Dominik Enste / Christina Heldman ·
IW-Report No. 2 ·
25 January 2017

Causes and Consequences of Corruption

Corruption is a main threat in many countries around the world. Therefore, the causes and consequences of corruption are analyzed in various empirical studies. Since the results are quite mixed, we have summarized the findings of the central empirical literature from the last two decades for a comprehensive overview.

IW Trust Index ·
Press Release No. 42 ·
27 July 2015

Lack of trust in crisis countries

Crises like the ones in global finance markets and in the European monetary union tend to have one thing in common: they are caused, or at least aggravated, by a lack of trust. This is also evident when looking at the current Greek crisis, as indicated by the new trust index developed by the Cologne Institute for Economic Research (IW).

According to the theories, markets and morals do not have to disagree: Because of the market’s “invisible hand”, the sum of individual economic choices increases the overall welfare. A baker for instance does not primarily bake for altruistic reasons, but in order to make a living.

Instances exist in which conflicts arise between entrepreneurial pursuit of profit and a society’s legitimate interests. However, these can be resolved in a constructive manner. The government can intervene with regulations (systemic ethics), companies can act responsibly (corporate social responsibility) and individuals can act morally (individual moral).