Corruption is a complex phenomenon. Its roots lie deep in bureaucratic and political institutions, and its effect on development varies with country conditions. But while costs may vary and systemic corruption may coexist with strong economic performance, experience suggests that corruption is one of the most severe impediments to development and growth in emerging and transition economies. Corruption is widespread in many developing and transition economies, not because their people are different from people elsewhere, but because conditions are ripe for it. The motivation to earn income through corrupt practices is extremely strong, exacerbated by poverty and by low and declining civil service salaries. Coupled with a strong motivation is the fact that there are ample opportunities available to engage in corruption. Corruption flourishes where distortions in the policy and regulatory regime provide scope for it and where institutions of restraint are weak. The problem of corruption lies at the intersection of the public and the private sectors. It is a two-way street. Private interests, domestic and external, wield their influence through illegal means to take advantage of opportunities for corruption and rent seeking, and public institutions succumb to these and other sources of corruption in the absence of credible restraints. Even if detection is possible, punishments are apt to be mild when corruption is systemic—it is hard to punish one person severely when so many others are likely to be equally guilty. Corruption violates the public trust and corrodes social capital. A small side payment to obtain or speed up a government service may seem a minor offense, but it is not the only cost. Unchecked, the creeping accumulation of seemingly minor infractions can slowly erode political legitimacy to the point where even noncorrupt officials and members of the public see little point in playing by the rules. Credibility, once lost by the state, is very difficult to regain.
Posted on: Mon, 14 Jul 2014 14:47:51 +0000
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