Corruption in the public sector which is generally defined as “the ill-usage of public office for private benefits” is a complex behaviour. At every stage of development, corruption appears to exist and exacerbate the conditions of economic progress and poverty (Chetwynd and Spector, 2003). The costs of corruption can be more significant particularly in countries with pre-existing negative pressure on economic growth as well as the recent political transition to democracy. In a corruption regime, comparative advantage belongs to the business agents with illegal corrupt activities. It is then likely that corruption may lead to a trap which expand wider use of corruption and discourage the legitimate businesses (Rose-Akerman, 1999). Regarding
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Besides, poverty reduction can also be considered as one of the main challenges for developing countries. Regarding to the estimation by the World Bank, 12.7% of the world’s population in 2012 lived under extreme poverty; at or below 1.90 dollars per day (the new poverty line). Since 1990, the attempt to reduce poverty has resulted in a decreasing trend of the numbers of the poor. However, poverty in most countries especially in Africa are still at unacceptable levels and conditions. Shleifer and Vishny (1993) point out that corruption impedes development and most cross-country empirical works found some links between corruption and poverty. Ray (1998) illustrates that poverty have links with the problem of undernourishment and gender inequality. While empirical evidences from the World Bank show that those who live under extreme poverty also face with inadequate healthcare and lack of education. The majority of set goals of the Millennium Development Goals (MDGs) from the United Nations (UN) to be achieved by 2015 accordingly focused on eradicating hunger and poverty and its consequences. Thus, the focus on the precise mechanisms of how corruption worsen poverty and the extents of such effects on poverty confirm further actions to combat with corruption to achieve more rapid …show more content…
A main element of corruption is found to be bribery. (Rose-Akerman, 1997). The report from the Global Corruption Barometer 2013 also suggest that bribery is the most common method of corruption as more than 1 in 4 of the people admit that they have paid a bribe when interacting with the public institutions and services. Bribery basically involves with the improper use of money or gifts in exchange for personal gain. The term, kickbacks and commercial agreements which are all notions of money paid to employees in private enterprises, public officials or politicians are sometimes used as bribery. Rose-Akerman (1999) infers that despite bribes may improve overall efficiency, most cases are not valid arguments to tolerate low level of official corruption. The defense of bribery as a tool for resource allocation appears static according to the assumption of particular sets of laws and requirements of social programmes. Illegal payoffs in a market-based system do not produce efficient outcomes. If bribes can validate an efficient allocation function, corruption should have been legalised. Another way to differentiate the form of corruption is by focusing on their scales: petty corruption, grand corruption and systemic corruption according to Transparency International, (2016). Petty corruption occurs at a small scale of money transaction when citizens
Besides, poverty reduction can also be considered as one of the main challenges for developing countries. Regarding to the estimation by the World Bank, 12.7% of the world’s population in 2012 lived under extreme poverty; at or below 1.90 dollars per day (the new poverty line). Since 1990, the attempt to reduce poverty has resulted in a decreasing trend of the numbers of the poor. However, poverty in most countries especially in Africa are still at unacceptable levels and conditions. Shleifer and Vishny (1993) point out that corruption impedes development and most cross-country empirical works found some links between corruption and poverty. Ray (1998) illustrates that poverty have links with the problem of undernourishment and gender inequality. While empirical evidences from the World Bank show that those who live under extreme poverty also face with inadequate healthcare and lack of education. The majority of set goals of the Millennium Development Goals (MDGs) from the United Nations (UN) to be achieved by 2015 accordingly focused on eradicating hunger and poverty and its consequences. Thus, the focus on the precise mechanisms of how corruption worsen poverty and the extents of such effects on poverty confirm further actions to combat with corruption to achieve more rapid …show more content…
A main element of corruption is found to be bribery. (Rose-Akerman, 1997). The report from the Global Corruption Barometer 2013 also suggest that bribery is the most common method of corruption as more than 1 in 4 of the people admit that they have paid a bribe when interacting with the public institutions and services. Bribery basically involves with the improper use of money or gifts in exchange for personal gain. The term, kickbacks and commercial agreements which are all notions of money paid to employees in private enterprises, public officials or politicians are sometimes used as bribery. Rose-Akerman (1999) infers that despite bribes may improve overall efficiency, most cases are not valid arguments to tolerate low level of official corruption. The defense of bribery as a tool for resource allocation appears static according to the assumption of particular sets of laws and requirements of social programmes. Illegal payoffs in a market-based system do not produce efficient outcomes. If bribes can validate an efficient allocation function, corruption should have been legalised. Another way to differentiate the form of corruption is by focusing on their scales: petty corruption, grand corruption and systemic corruption according to Transparency International, (2016). Petty corruption occurs at a small scale of money transaction when citizens