Abstract

Extortion is one of the ways that the formal economy leaks. Like bribery, extortion is not adequately documented because perpetrators are unlikely to record it. Like bribery, it raises the cost of business. It is similar to facilitating payments in that neither seeks something to which the payer is not entitled and so they may seem less harmful than outright bribery. Both are however harmful and lead to worse forms of corruption,. This paper explains how extorters operate and proposes a framework of what characterizes every incident.The paper examines 159 victim narratives of experiences of extortion of fifty-five postgraduate students. In a challenging economy where businesses struggle for profitability, a discussion of money leakages is relevant. Understanding how extortion works will make it easier to recommend anti-extortion mechanisms. The extortion cycle proposed depicts the incidence and spread of corruption through self-perpetuation. Adopting the style of Nielsen the paper concludes by suggesting a bidirectional approach to fighting extortion—one aiming at creating a more enabling environment for ethical behaviour and another at forestalling individual unethical behaviour.