Is Corruption Always Bad For Economic Development And Growth? Economics Essay Samples

Assignment 5

Assignment 5

Is Corruption Always Bad For Economic Development And Growth? What Are Some Counter-Arguments?

Corruption has always been linked with dwindling economic growth and development. Nevertheless, this is not often the case based on the counter-arguments that have continually emerged as regards the same. Economists positing that in the context of cumbersome and pervasive regulations, especially in the developing countries, the acts of corruption, may improve efficiency, which can aid the growth of the economy, have provided some of these counter-arguments. These economists have added that in societies with pre-existing distortions of policy inductions, the additional distortions of smuggling, black-marketeering, and other forms of corruption may improve the welfare of the economy when some of the resources have to be spent in the activities.

Should Corruption Be Seen As “Sand In The Wheels Of Prosperity” Or “Grease For The Squeaking Wheel Of Rigid Administration”?

Corruption should be considered as grease for the squeaking wheel of rigid administration, especially for the non-economists. That is, provided a government or any form of the administrative organ has erred in most of its decisions, the courses made possible through the actions of corruption may be elemental. In addition, for the economic element, one of the most harmful aspects of the society is rigid, dishonest, and over-centralized bureaucracy (Drury, Krieckhaus, & Lusztig, 2006). As such, this statement as regards efficiency-improving corruption, suggests that acts of corruption can also be sands in the wheels of prosperity, suggesting that it has adverse effects on the economy of the society.

Is Corruption More Of A “Moral/Cultural Issue” Or “Governance/Bureaucracy Issue” Or “Both”?

Corruption is both a moral or cultural and government or bureaucracy issue. For the moral or cultural part, individuals have to maintain a distinction between corruption and immorality. For instance, when paying blackmailers, one may consider them as immoral, but the reason for the payment is to stop them from revealing some unpleasant information or act in similar ways, which may not be corrupt (Laffont, 2002). On the other hand, it is also a government or bureaucracy issue in terms of the democracy issue in the governments. Non-democratic governments suffer economic effects from corruption while corruption has no significant effect of democratic bureaucracies.

What Are Some Ways Of Alleviating Corruption? To What Extent These Policies Work?

Corruption can be alleviated through various ways. Monitoring and punishments are some of the ways. In this practice, individuals are tasked with monitoring as well as enforcing various forms of punishment. Some of these monitoring avenues include conducting of audits. Monitoring is elemental in the reduction of corruption because it calls for a constant review of operations to reduce corruption. Selection is another way of alleviating corruption. It encompasses selecting of various individuals, such as politicians, based on propensity band evaluating their corruptive nature. Incentives are another way of alleviating corruption based on the performance measures. The extent to which these policies work is dependent on their suitability and plausibility, and the honesty of the individuals tasked with the measures of alleviating the acts of corruption, especially in policies such as monitoring and offering of incentives.

Should Foreign Donors Care About Corruption In Developing Countries?

Foreign donors have to care about corruption in the developing countries. The high levels of corruption in the developing countries limit the growth and investment in these countries, leading to ineffective governments. Most of these developing countries are transitioning from socialism. As such, with ineffective governance fueled by the corruption rates affects the implementation of elemental programs (Olken, 2012). For this reason, the foreign donors have to be aware of this state in order to develop measures and identify the various avenues to use to assist these countries. That is; they have to establish methods and use measures that will eliminate the issues of corruption in their quest to support or assist people in these regions.

 References

Bardhan, P. (1997). The Economics of Corruption in Less Developed Countries: A Review of Issues. Journal of Economic Literature, 35, 1320-1346.
Drury, A. C., Krieckhaus, J., & Lusztig, M. (2006). Corruption, Democracy, and Economic Growth. International Political Science Review, 27(2), 21-136. doi:10.1177/0192512106061423
Laffont, J. J. (2002). Corruption and Development.
Mo, P. H. (2001). Corruption and Economic Growth. Journal of Comparative Economics, 29, 66–79. doi:10.1006/jcec.2000.1703
Olken, B. (2012). Corruption in Developing Countries.