...The Effects of Corruption and Economic Growth Cassandra Rogers Economics 523 Dr. David Dieterle Table of Contents Abstract……………………………………………………………………………………………3 Effects of Corruption on Economic Growth………………………………………………………4 Definition of Corruption..................................................................................................................4 Economic Rent…………………………………………………………………………….4 Bribery…………………………………………………………………………………….5 Trade Restrictions…………………………………………………………………………5 Is Corruption Good or Bad for an Economy………………………………………………………6 Low Levels of Corruption…………………………………………………………………6 Vietnam’s Economic Growth……………………………………………………..7 High Levels of Corruption………………………………………………………………...8 Conclusion………………………………………………………………………………………...8 References………………………………………………………………………………………..10 Abstract Corruption alone is not what fails an economy in growth. There are other factors to consider, such as, a weak and unstable government institution. Corruption can actually bypass these irregularities and possibly create growth in an economy. Studies show that there is no actual link between corruption and economic growth in “free” countries. In fact, low levels of corruption in free countries can be beneficial in economic growth. However, high levels of corruption can damage economic growth no matter the type of government institution or not. Effects of Corruption on Economic Growth If you ask citizens today, a great majority would probably...
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...introduced by the United Nations in support of anti-corruption in emerging markets, such as Principle 10 of the United Nation’s Global Compact. We determined to explore this topic area after realizing a paradox: while the United Nations has recognized the phenomenon of corruption as “one of the world’s greatest challenges”, the sole UN principle that addresses this issue is under-developed and is the least among the four focus areas of the Compact (as compared to human rights, labour, and environment). Furthermore, there are even less initiatives undertaken by the UN that specifically address the prevention of corruption in emerging markets, both in business and government sectors. We begin by providing a literature review of past research in our topic area, followed by a theoretical analysis of the causes of corruption in emerging markets. As part of this theory, we have identified five variables that are our focus: level of poverty, cultural boundaries and differences, access to education, amount of extortion and bribery in government and business, and level of transparency and accountability. Using these variables, we arrive at new conclusions and then provide a discussion on their implications for international managers. Throughout the paper, we also explore the magnitude of the effects that have resulted from the addition of Principle 10 to the Global Compact. Introduction A wide variety of research on corruption has been done over the past century: from studies...
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...Abstract Corruption and corporate and personal integrity is becoming a major problem in the global economy we live in today. Corruption is defined as the abuse of entrusted power for private gain. Numerous national and multinational companies face serious cultural problems including corruption and integrity issues. Today there are many reasons as to why corruption and lack of integrity is harmful to so many countries. Corruption affects a countries politics, economy, society, and overall environment. When the counties leadership is lacking integrity, than a corrupt country cannot develop, which causes the country to become even more corrupt. In addition, the corrupt countries economy suffers with the potential depletion of their national wealth. However, the damage of corruption on society is most damaging of all. Country corruption and unethical behavior diminishes trust in the government, politics, and leadership of their country. This in turn creates the potential for more unethical behavior and corruption in that society. Overall, the environment of that country suffers and only creates a domino effect of more unethical behavior and corruption across the spectrum. Haiti has been ranked as one of the most corrupt country in the World by Transparency International. Once a tourist’s attraction, Haiti was one of the most beautiful mountainous countries of the Caribbean Islands now it is pledge by corruption and a government that lacks moral and integrity. It...
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...– What is corruption and how does corruption affect business in Asian contexts? Choosing two Asian countries examine and compare their anti corruption strategies. Corruption, a problematic issue within business practice throughout modern Asia. Two of Asia’s biggest players, India and China, both are nations of great contrast, a definite distinction between the wealthy upper class and poverty stricken lower class, with an arguably absent middle class. Both nations are rich in tradition and culture, another similarity; an underlying rift of corruption and bureaucracy which plagues the nations. The extent of corruption in India and china, both past and present, will be examined in the essay as to how it affects business within the countries and on a more global level, how this corruption affects its standing with foreign investors. As a result of this widespread corruption, there has been a heavy focus on anti corruption strategies in the areas over the past few decades. Corruption, on its most basic level, is described as “an act done with intent to give advantage inconsistent with official duty and the right of others” (CPIB: What is Corruption. 2012). In economic terms, corruption generally refers to the payment for goods or services, which is not due to the beneficiary. From a historical standpoint, India has an extensive past of corruption, but I will focus on the more recent history of corruption in India, in the period 1950-1980, the Indian economy was subjected...
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...There are three sections to differ the economy system used between Angola and Switzerland which are: * Index of economy freedom * Gross National Income and Gross Domestic Product * DHL Global Competitiveness Index 2013-2014. 1. Index of economy freedom Angola According to the 2014 Index of Economy Freedom, Angola listed as 160th out of 178 countries that are under observation. With total score is 47.7, this nation has a lot of troubles in term of rule of law, open market and government spending. In law, the government uncontrolled the corruption cases and it might become the barrier for international investors to contribute Angola’s wealth because it is risky to set up the business inside the distrust government. For evidence, the corruption perception index 2012 stated that Angola ranked as 22nd country most corrupt. Besides, this country got low score in term of property right which is 15. Based on the information, Angola is one of the strong socialism countries due the government control the income of the business and fail to reform the economy since the weak rule of law and trade freedom. Same with other socialism nations, the government ignore the opinion from their citizens. In fact, the labor freedom score in 2013 was 44.8, less 15.9 point from the average Index of economic freedom while the freedom of the press was under depression as ranked 157th out of 197 nations. Therefore the policy of “property is held in common and not individually, and relationships...
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...punishment and are more likely to remain true to their pledge. There is a caution in this assertion to know the difference between fear and hatred and the recommendation is to be feared, but not hated. Man should strive to be in control of that which is can and not rely on the uncontrollable. Since love is dependent the perception of others and fear is dependent upon actions, man should build on the actions he can control but to do so in such a way as to escape hatred. Pastin and Hooker (1980) state that the Foreign Corrupt Practices Act (FCPA) is legislation designed to prevent bribery of foreign officials and other payments for the purpose of obtaining or retaining business. The legislation is an attempt to address the problem of corruption, but rather than address bribery from a moral perspective, Pastin and Hooker (1980) raise the issue of whether the legislation itself is moral. They offer two tests to assess the morality of the legislation: the End-Point Assessment and the Rule Assessment tests. End-Point rule tests whether the legislation is of benefit to the well-being of society and is sound if the law promotes the well-being of society. Rule Assessment tests whether the rule is categorical or prima facie. Categorical means the rule is unbendable and the prima facie subjective and open to...
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...and corruption in the world that we are currently living based on the mixed economic worldview which is my personal economic worldview which threatens to undermine the stability of economic and political development on both a national and global scale, and which requires both immediate and wide-ranging policy interventions. The recent concern with corruption is attributable, not to any substantive increase in corrupt practices, but rather, to the re-framing of corruption in light of broader shifts and transformations within the global economy. The historical context of globalization covers centuries. This paper reviews the types, forms as well as the consequences of corruption. The paper also reviews the issues associated with globalization and the effect it has on the lives of various individuals. It questions the view that, under certain conditions, corruption may enhance efficiency and argues that though corruption may benefit powerful individuals it will indubitably lead to greater inefficiency and a waste of resources at a macro-economic level. Table of Contents ABSTRACT i INTRODUCTION iii BACKGROUND iv Forms of Corruption vi 1.1 Bribery vi 1.2 Theft and fraud vi 1.3 Embezzlement vi 1.4 Nepotism vi 1.5 Conflict of Interest vi 1.6 Favouritism vii Types of Corruption vii 2.1. Grand corruption vii 2.2 Political corruption vii 2.3 Corporate corruption vii 2.4 Administrative corruption vii 2.5 Petty corruption vii 2.6 Systemic corruption vii ...
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...and most investment-friendly countries and is ranked one as the freest nation in its region. The country is known for its orderly and prosperous culture, with a modern market economy, and is a member of the European Free Trade Association. Switzerland has a developed infrastructure for scientific research, companies spend generously on R&D, intellectual property protection is generally strong and the country’s public institutions are transparent and stable. Switzerland's major industries include tourism, the provision of banking, insurance and financial services, watch-making, precision instrument manufacturing and chemical manufacturing. The service sector contributes more than 70% of Switzerland's economy, and much of that is financial services. Over 200 thousand Swiss jobs are in banking, which represents~ 5% of the whole Swiss workforce, and they are not the worst paid ones. Switzerland is said to be the world's biggest center of private banking, with more than a third of all private wealth based there. Economic Indictors Switzerland hosts approximately eight million citizens with a GDP country rank of 37 out of 192 countries as of 2013. GDP Per Capita PPP steadily increased over the past five years from $47,317 in 2009 to $53,750, an average increase per year of 3%. The country’s economy experienced significant growth with a GDP Grow Rate of -1.94% in 2009 increased to 2.95% in 2010 and slightly decreasing to 2% in 2013. Switzerland also has experienced a low...
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...e were hampered by a poverty of medicalsupplies. Causes of Poverty Poverty is the state for the majority of the world’s people and nations. Why is this? Is it enough to blame poor people for their own predicament? Have they been lazy, made poor decisions, and been solely responsible for their plight? What about their governments? Have they pursued policies that actually harm successful development? Such causes of poverty and inequality are no doubt real. But deeper and more global causes of poverty are often less discussed. Behind the increasing interconnectedness promised by globalization are global decisions, policies, and practices. These are typically influenced, driven, or formulated by the rich and powerful. These can be leaders of rich countries or other global actors such as multinational corporations, institutions, and influential people. In the face of such enormous external influence, the governments of poor nations and their people are often powerless. As a result, in the global context, a few get wealthy while the majority struggle. Poverty Facts And Stats Most of humanity lives on just a few pennies a day. Whether you live in the wealthiest nations in the world or the poorest, you will see high levels of inequality. The poorest people will also have less access to health, education and other services. Problems of hunger, malnutrition and disease afflict the poorest in society. The poorest are also typically marginalized from society and have little...
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...emerging markets. They are driving the global economy. Investing in emerging markets is a wise decision as the growth can be witnessed and also have better return on investment for future. It is anticipated that Emerging economies will mature two to three times more rapidly than developed nation like the US, as predicted by International Monetary Fund estimates. Corporate profits incline to grow faster when economic growth is higher. Likewise, US companies have done well in the last 12 months is because of their growth in non-US markets. Emerging markets also prove beneficial to investors as they create diversification as they act differently than developed markets. Emerging Markets Index of Morgan Stanley's consists of Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Jordan, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey (Forbes). Russia is one of the booming emerging markets in the East. However, Russia is not always an investor favorite as it is a booming market in global oil and gas demand. Russia has tons of both. It is the world's prominent natural gas producer and exporter and has the 8th largest oil reserves in the world. Russia is considered as a bargain for equity, but that is mostly due to country risk. (Forbes) During the recession in 2008, world markets in developed countries crashed but the emerging markets saved the global economy, mainly Brazil, India and China. The global credit crisis was one of the longest...
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...the world’s economies; it helps to increase productivity, which can raise the standard of living. It is driven by technology advancements in communications and transportation and motivated by the desire for free markets. “Globalization can be technological (the Internet), economic (trade, pro- duction), cultural (television). Globalization can also foster international solidarity. But the dominant view is that globalization means increased commercial relations between people of different countries” (Unknown, 2009). Globalization is the opportunity for developing countries to tap into the world’s economy, which will allow the opportunity to sell many goods to as many people around the world. Globalization includes markets and production. “Globalization of markets refers to the merging of historically distinct and separate national markets into one huge global marketplace and the globalization of production refers to sourcing goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production (such as labor, energy, land and capital)” (Hill, 2011). Globalization is an opportunity for big corporations as well as for small businesses; it is the movement of jobs, goods, finances, and investments. With the advancement of technology there are more business trading in more markets. With all of this advancement some are questioning whether globalization is a positive or negative for the economy. The answer...
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...on the research carried out, the benefits of investing in Armenia exceed the risks associated with the Armenian economy and as a result I would recommend our company to set up a business in Armenia. The Armenian economy is growing at a fast rate due to its political stability, free-economic zones, trade agreements with key partners, and an abundance of natural resources. Gross domestic product and foreign direct investment are increasing at fast rates and this has led to recent improvements in social and human development in the country. This will also improve skilled workforce in the country in the near future. Armenia is getting involved with the leading countries in the world which is impacting Armenia to increase its capacity to gain a competitive advantage in the global economy (Global Edge, 2014). Country description: Armenia was ranked first among CIS (Commonwealth of Independent State) and CEE (Central and Eastern Europe) countries in GDP per-capita growth rates from 2000 to 2008. Growth slowed at the end of 2008, and actually declined in 2009, primarily due to the effects of the global economic crisis. But in 2010-2011, the economy experienced renewed growth. After the upturn in economic activity in 2011, the economy slightly slowed in 2012, limited by less favourable external conditions (Global Egde, 2014). Armenia is very dependent on the Russian economy and investment is the main contributors to economic growth. The country is engaged in the construction of a number...
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...Global Business and Economics Research Journal ISSN: 2302-4593 Vol. 2 (5): 102 - 115 The impact of petroleum on economic growth in Nigeria Michael Baghebo Niger Delta University, Bayelsa State, Nigeria baghebomichael@yahoo.com Timothy Okule Atima Niger Delta University, Bayelsa State, Nigeria Abstract The study examines the impact of petroleum on economic growth of the Nigerian economy. Data covering the period 1980-2011 was collected from the Central Bank of Nigeria Statistical Bulletin, and transparency international Agency annual publications and analyzed using econometric approach. The stationary status of the time series data was examined using Augmented Dickey Fuller test. The regressand is Real Gross Domestic Product (RGDP), The regressors are Foreign direct investment (FDI), Oil revenue (OIL), Corruption index (CI), External debt (EXDEBT). The series attained stationary after differencing. The Johansen cointegration test was conducted to ascertain the long run equilibrium condition of the variables in the model. The variables were cointegrated because four cointegrating equations were found. The Parsimonous model was established to account for the short run dynamic adjustments required for stable long run equilibrium. It was discovered that the variables: oil revenue and corruption index impacts negatively on Real GDP, while FDI and EXDEBT have positive impact on the growth of the economy. This means that the resource curse theory is proven to be true in Nigeria. The...
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...country’ problem before it becomes the world’s largest economy . A big part of Fareed’s focus in this article is about China’s challenges likes debt, pollution and corruption. In this article showed how China’s financial crisis and the global economy slowdown based on it’s economic imbalances . The basic economy’s problem is that for almost a decade, China's economic growth has been fueled by cheap credit and government spending--a classic developing-nation problem .The country’s total debt level was estimated at 215% of GDP in 2013.Besides financial problem, China also have serious challenges in environment. Air and water pollution has become a major public health issue in the country.The last challenges in 2014 is the corruption’s problem ,it seriously increasing among the Communist Party. According to this article, China’s president has launched an anticorruption campaign for this unethical problem . In closing, Fareed Zakaria says that ,he not ready to bet against China if China’s leader did not manage this transition well.If China’s leaders manage this transition well.the country will emerge stronger and more stable and become the largest economy in the world. INTRODUCTION International business is much more complicated than domestic business because countries differ in many ways. (Charles W.L.Hill, 2013) .China has become the world's second largest economy, with Japan surrendering its 42-year-old ranking after its economy shrank in the final months of 2010 (Moore, 2011)...
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...Corruption is a form of dishonest or unethical conduct by a person entrusted with a position of authority, often to acquire personal benefit. Corruption may include many activities including bribery and embezzlement, though it may also involve practices that are legal in many countries. https://www.google.com.ph/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=corruption Political corruption is the use of powers by government officials for illegitimate private gain. An illegal act by an officeholder constitutes political corruption only if the act is directly related to their official duties, is done under color of law or involves trading in influence. Forms of corruption vary, but include bribery, extortion, cronyism, nepotism, gombeenism, parochialism patronage, influence peddling, graft, and embezzlement. Corruption may facilitate criminal enterprise such as drug trafficking, money laundering, andhuman trafficking, though is not restricted to these activities. Misuse of government power for other purposes, such as repression of political opponents and general police brutality, is also considered political corruption. The activities that constitute illegal corruption differ depending on the country or jurisdiction. For instance, some political funding practices that are legal in one place may be illegal in another. In some cases, government officials have broad or ill-defined powers, which make it difficult to distinguish between legal and illegal actions...
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