CORRUPTION AND DEVELOPMENT SIMAD UNIVERSITY LECTURER: MOHAMED SHEIKH AHMED

CHAPTER OUTLINE Definition Aspects of corruption Types of corruption Causes of corruption Why Corruption is differs in different countries Consequences of corruption and it’s impact on development

CORRUPTION AND DEVELOPMENT Definition Corruption is the use of public office for private gain. It includes bribery, fraud, embezzlement and extortion. Corruption can be defined from two major aspects i.e. the political aspect and the economic aspect;

Definition Continued….  Political corruption-decisions are swayed by policy maker to benefit his/her interests, but are made within the already set framework.  Economic corruption is a scenario where an official entrusted by the public with carrying out a task engages in some sort of misuse for his/her own private gain.  More generally, economic corruption is quite similar to the general definition of corruption and refers to the use of public office for private gains.

 There are different types of corruption because corruption prevails in various organizations, not in a single one. So the types are also different, and all of them affect adversely in its way. Let’s have a look at the kinds of corruption.  Political corruption  Governmental corruption  Systematic corruption  Judiciary corruption

 Organizational corruption  Social corruption  There are many other types of corruption, but these are the highlighted one who put an obstacle in the way of the development of the country because these all types of corruption are present in the developing countries

CAUSES OF CORRUPTION  Paying civil servants very low wages causing them to resort to bribes.  Institutional inefficiencies e.g political instability, weak legislative and judicial systems.  High risks and uncertainty about the future.  Poverty and severe inequality in income.

 The political elites, which remain in the politics from generation and their aim is to make money rather than serving the masses is the great cause of corruption.  Increasing population is also the cause of corruption as the government is not able to meet the demands of the people.

 Illiteracy is also the cause of corruption.  Poverty also leads to corruption.  Weak law and order system is also a helping hand in the way of corruption.  Lack of ethics and morals in the life of peoples.  Tolerance of people towards corruption

WHY CORRUPTION DIFFERRS IN DIRREFENT COUNTRIES Developed countries are characterized by high welfare and incomes levels among individuals. This reduces their incentive to be corrupt. Countries that have several strict regulations tend to have higher levels of corruption Differences in social norms. Natural Resource endowments

CONSEQUENCES OF CORRUPTION AND IT’S IMPACT ON DEVELOPMENT Negative consequences Poor quality of services and output: Bribery exists mostly where there are high rents. Low cost firms are more likely to have access to deals through competitive beading. This could compromise on the quality of services and output.

 Negative effects on private investment. Decreases incentives for private investment. Bribes at initial stages of investment translate into increased fixed costs for potential private investors. Large amounts of fixed costs are disincentives to private investors.

 Distorting or falsifying the composition of government expenditure: corrupt governments spend more on items whose value is difficult to monitor which could have a higher impact on economic development as compared to the former.  Decreasing tax revenues: bribes offered by investors to tax authorities to avoid paying taxes eventually result into large tax losses for the economy

 Undermines the state’s legitimacy; incidences produced by private rating agencies grade countries on their levels of corruption. Countries rated with extremely high levels of corruption discourage donors hence reducing opportunities for aid

 Poverty  Poor Health  Lack of Education  Violence/Crime  Economic Instability  Political Instability  Lack of Infrastructure

Positive consequences Corruption improves efficiency by helping entrepreneurs get around bureaucratic weaknesses. The “speed money” offered by these entrepreneurs usually avoids queuing and avoidable delays and thus speeds up delivery of services.

 Ethics and morals should be taught to the children’s at very early age so that, they must know that what is legal and what is illegal.  The law and order system should be foolproof so that people must have trust in judiciary instead of going to the wrong way. And they have fear too that if they caught they must be punished for the corruption.  Access of all the people to the speedy and inexpensive justice should reduce corruption.  Accountability and transparency in the governmental sector is must.  Don’t tolerate corruption

 We all know that we cannot eliminate corruption completely but we can put our efforts to eliminate it at the extent that it become tolerant.  The electoral body must be transparent because corruption took birth from there.  Judiciary system must be clean from corruption. But for all that we all need to join hands together.  It is not the duty of only the government, its duty of our all. So put your efforts,  at least think and accept that corruption is hurdle in the way of development.  Take this initial step and you will want to go till the end of the corruption

THANK YOU