The effects of corruption on economic development
On 28 April 2004 Daniel Kaufmann, global governance director of the World Bank Institute, commented on the costs of corruption, stating that: ‘A conservative approach to such measurement gives an estimate for annual worldwide bribery of about $1 trillion dollars.’
Corruption can take many forms that vary in degree from the minor use of influence to institutionalized bribery. Transparency International’s definition of corruption is: “the abuse of entrusted power for private gain”. This can mean not only financial gain but also non-financial advantages.
The definition of corruption and how much money it involves is not a particularly challenging notion to tackle. This paper, rather, brings to the attention of the reader the economic importance of combating corruption. The aim is to show the reader: 1- the role law plays in economic development, 2- the negative effects of income inequality on sustainable economic development and importance of redistribution on grounds of the Marginal Utility theory, 3- redistribution as the most effective method of eradicating poverty, 4- the negative effects of low approval ratings (unhappiness) on sustainable economic development and 5- the negative effects of corruption on redistribution as well as approval ratings and consequently on sustainable economic development…
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Corruption has a detrimental effect on any economy. It creates unfair advantages, anti-competitive practices and a generally unfavorable business environment.
The Libya Herald reported on 16 April 2013 that ‘the IMF confirmed its forecasts on Libya of 20.2 per cent GDP growth in real terms for 2013’.