Why Corruption Is Responsible For Slow Economic Growth

3774 words - 16 pages

Why corruption is responsible for slow economic growth
Corruption around the world is believed to be endemic and pervasive and a significant contributor to slow economic growth, to stifle investment, to inhibit the provision of public services and to increase inequality to such an extent that international organizations like the World Bank have identified corruption as ‘the single greatest obstacle to economic and social development’ (World Bank, 2001). More recently, the World Bank has estimated that more than US$ 1 trillion is paid in bribes each year and that countries that tackle corruption, improve governance and the rule of law could increase per capita incomes by a staggering 400 ...view middle of the document...

, & Hatchard, J. (2006). Johnston, (2005) quoting the works of Nye, (1967); Heidenheinmer, (1970); Scott, (1972); Thompson, (1993); Thompson, (1995); Johnston, (1996); Philip, (1997); and Philip, (2002), stated that definitional issues of corruption is a matter of long-running debate and therefore it is always difficult to settle for any specific definition. He said that the decisive role of the state is reflected in most definitions of corruption, and therefore agrees that corruption is conventionally understood, and referred to, as the private wealth seeking behaviour of someone who represents the state and the public authority. It is the misuse of public resources by public officials, for private gains. The working definition used by the World Bank, Transparency International and others is that corruption is the abuse of public power for private benefit (or profit). Another widely used description is that corruption is a transaction between private and public sector actors through which collective goods are illegitimately converted into private-regarding payoffs (Heidenheimer et al. 1989:6). This point is also emphasized by Rose-Ackerman, who says corruption exists at the interface of the public and private sectors (Rose-Ackerman 1978). In Colin Nye’s classical definition, corruption is “behaviour that deviates from the formal duties of a public role (elective or appointive) because of private-regarding (personal, close family, private clique) wealth or status gains“(Nye 1967:416). Samuel Huntington noted that where political opportunities are scarce, corruption occurs as people use wealth to buy power, and where economic opportunities are few, corruption occurs when political power is used to pursue wealth (Huntington 1968).
The modernization thesis of corruption has been articulated among others by Huntington (1968), Myrdal (1968) and Scott (1969). According to Huntington (1968:59-71), corruption is most prevalent during the most intense phase of modernization of a country and tends to decline with institutionalization of advance democracy. However, this view cannot explain the prevalence of corruption in advanced industrial democracies. There is now increasing evidence of political corruption and systematic influence peddling in the US and UK (Amick, 1976; Drewry, 1977; Pinto-Duschinsky, 1977; Benson, 1978; Ashworth, 1981; Johnston, 1982; Doig, 1984; Etzioni, 1984).
For the purpose of this dissertation corruption will be defined as the use of public office for private gain provided by Rose-Ackerman (1975, 1978), Becker and Stigler (1974), Klitgaard (1988, 1991), Shleifer and Vishny (1993), Myint, U, 2000; Johnson D.T & Zimring F.E, 2005) and Transparency International. This in other words, involves the use of official position, rank or status by an office bearer for his personal benefit.
2.3. Forms of Corruption:
There are different forms of corruption, Pedersen and Johannsen (2008); classification by typology, Roebuck and...

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