Corruption and growth

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  • Publié le : 23 mars 2011
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Corruption is the misuse of power that has been delegated to private purposes as personal enrichment or for a third party (family, friends ...). It involves a public official, an elected official, adoctor, a sports referee (arbitre), a company employee, who could use their function in exchange for a promise of a gift, a sum of money or fringe benefits. It’s an old century’s phenomenon. However,it has attracted the attention of economists only in recent years because of two reasons. The first is a growing awareness of the persistence and widespread nature of corruption. The second is theimpact of corruption on some indicators like growth, income, investment and trade.

According to the World Bank Institute, the total amount of bribes (pot de vin) paid in a year is about US$ 1trillion. Transparency International (TI) calls corruption one of the most serious obstacles to the removal of poverty.
In fact many economists argue that malfunctioning government institutionsconstitute a severe obstacle to investment, entrepreneur-ship, and innovation.
There is an importance of an efficient judicial system to enforce economic performance. Low security of property rights,profits, and patents (brevets) may reduce opportunities to invest, innovate, and obtain foreign technology.
Dishonest bureaucracies may delay the distribution of permits and licenses, and then slowdown the process by which technological advances become embodied in new equipment or new productive processes.
For example considering developing countries corruption might reduce the effectiveness ofaid flows (flux d’aide), thought the diversion of funds from their intended (destinés) projects, in some cases may lead the donors to scale back (retirer) their assistance.
It also affects publicspending as tax revenues decline with the development of a parallel economy with tax evasion and tax exemptions. Moreover, corrupt regimes prefer the military to school or hospital, and then the...
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