effects of corruption
Answers
Explanation:
Corruption erodes the trust we have in the public sector to act in our best interests. It also wastes our taxes or rates that have been earmarked for important community projects – meaning we have to put up with poor quality services or infrastructure, or we miss out altogether.
Answer:
It has many different shapes as well as many various effects, both on the economy and the society at large. Among the most common causes of corruption are the political and economic environment, professional ethics and morality and, of course, habits, customs, tradition and demography.
Explanation:
institutionalized bribery. Transparency International’s definition of corruption is: “the abuse of entrusted power for private gain”. This can mean not only financial gain but also non-financial advantages.2
Definition of Corruption
The definition of corruption and how much money it involves is not a particularly challenging notion to tackle. This paper, rather, brings to the attention of the reader the economic importance of combating corruption. The aim is to show the reader:
the role law plays in economic development,
the negative effects of income inequality on sustainable economic development and importance of redistribution on grounds of the Marginal Utility theory
redistribution as the most effective method of eradicating poverty
the negative effects of low approval ratings (unhappiness) on sustainable economic development and
the negative effects of corruption on redistribution as well as approval ratings and consequently on sustainable economic development.
The argument simply put is as follows:
empirical studies show that countries with a better redistribution of wealth enjoy longer periods of economic development.
Redistribution of wealth is justified by the idea that if utility is the building block of economic policy then redistribution of wealth is a favourable on the grounds that it brings upon well being to the greatest possible number of people (since the poor’s benefit is much greater than the rich’s loss out of the redistribution process).
Redistribution (based on the idea of Marginal Utility) should only limited by the idea of Efficiency Cost (when it robs production from individual incentive)3
Countries suffering from corruption cannot implement sound redistributional policies and thus are not expected to take benefit from sustainable economic development despite embarking upon economic growth from time to time for some reason or the other.
The argument, simply put, as well, has it that empirical studies show that countries with higher approval ratings (happiness index) enjoy longer periods of economic development. Countries suffering from corruption have low approval ratings because of the public’s frustration of their legitimate expectations, impressions of unfair treatments, expectations of unequal treatment which impose a great risk on individual incentive to produce (Efficiency Cost).
Whereas some would differentiate between bad and good corruption arguing that only corruption4 which is associated with poor institutions has a negative effect on GDP growth whilst residual corruption (corruption which is uncorrelated with other governance characteristics) is positively related to GDP growth with poor institutions. This line of thought has it that an analysis of financial data is positively correlated with capital accumulation and productivity growth in developing countries and that these empirical findings are consistent with the theory that corruption helps overcome inefficient barriers.
This article argues that all forms of corruption are intrinsically bad (from an economic point of view) justifying the contemporary global practice of combating corruption.
The paper will show how corruption, if left unchallenged, undermines a country’s attempts to:
fight poverty and inequality (redistribution of wealth)
increase approval ratings (happiness index)
consequently, engage in sustainable development. The paper attempts to do so by reflecting upon the role of law in economic development as well as shedding some light on current economic development policies and how paramount combating corruption features in them.
It is worth mentioning in this regard that the United Arab Emirates legal market takes benefit from the presence of Al Tamimi & Company’s Financial Crime practice, which is the only specialized team of experts in the field of combating corruption in any regional Arab law firm.