some suggest that although corruption's short-term costs are embarrassingly obvious,graft munificetly paves the way for long-term prosperity."Grease money" amounts to "speed money," in that bribes used to circumvent a blocking bureaucracy accelerate a nation's economic development.
ideas have power. the "efficient grease hypothesis" has long been used as a rationale to ignoer rampant corruption in allocating international development funds; consequently,according to the World Bank,corruption has been"treated as a taboo subject" by the development community for decades.
Facts belie the belief in efficient grease; corruption actually retard economic development.
None of the nineteen impoverished nations that have been granted debt service relief although the Heavily Indebted Poor countries Initiative is rated as having anything better than"serious to severe" governmental corruption.
The rate of invertment in countries wite high and unperdictable rates of corrupion is almost haif of that in low-corruption countries. An analysis of more than a hundred over thirteen years found that when corrupion increases by about two points on a ten-points scale,investment decreases by 4 percent, and gross domestic product fall by half a percent. Corrupion inflatesthe prices of goods by as much as a fifth, and severely curtails income growth for the poor.
Government are not immune. Corruption slsshes government legitimate revenues by as much as haif,and adds from 3 to 10 percent to the cost of public services because citizens must bribe officials to acquire those services.
The dollars lost to global corruption roughly match the annual budget of federal government,so obviously some people-the corruption-are making a ton of money,right? Well,no.Bribery costs even the bribers. Three surveys of 2400 businesses in fifty-eight notion found that firms that pay more bribes are also likely to spend more, not less, management time wite bureaucrates negotiating regulation, and face higher, not lower,costs of capital. The more that firms pay in bribes to corrupt officials, the lower their annual growth rates.
When counties reduce corruption , good things happen:Poverty and child mortality rates decrease, and per capita income and literacy rate increase,among other benefits.