Tuesday, April 30, 2019

Economic Development and Corruption Essay Example | Topics and Well Written Essays - 1500 words

Economic Development and Corruption - Essay ExampleIn a developing economy there is improvement in the standard of living of people and focus on environmental stability also increases. Economic stability mint sometime also give find to materialism. People strive hard to make more money and they often use unethical int arrest to achieve their materialistic targets. One such unethical method is bollocks upion. Different people hold contrasting views about the impact of pervertion on the sparing tuition. Many people view it as a barrier to economic development while others believe that it does not impact the society and economic development much (Easterly 2006). This paper is going to discuss various anecdotal evidence and view that people go through about corruption in relation to economic development. Economies in the transition face often get to large number of lobbying efforts going on. These economies are aiming for economic development and hence they do not shell out mu ch about lobbying efforts and governments of these economies are more susceptible to lobbying pressures than a government of a more develop nation. The evidence and research shows that these lobbies often pay huge sum of money to the government pressures to accept their demand. The corrupt political system in these countries makes it possible for people to form lobbies and put pressure on political leaders. These leaders often get right awayions from these lobbies if they pay them well. Since many lobbying groups are fighting for what is undecomposed for their own business, they end up doing well for the society also. The theory of invisible hand comes into play here. The theory states that any natural action done for ones own self motive or win will eventually translate into good for the society. Hence, corruption in all cases is not bad and research on 4000 firms in developing countries shows that corruption has played a role in the economic development of a nation. (Campos & Giovannoni 2007) In another paper, it was argued that corruption is essentially bad for a growing economy. First of all, corruption reduces the value of shareholders. In growing economies where corruption is extremely high, the expected profit that the shareholders expect to make does not materialize. Much of the profit is lost in the corrupt red-lines of bureaucracy and hence shareholder value goes down in the corrupt economies. Many foreign companies therefore try not to invest in corrupt nations fearing that returns on investing in these economies would be far less than if the investment is made in the local setting. This reduces foreign direct investment flows into the corrupt economies and poses a big problem for the economic development. This argument shows us that corruption can be a big barrier in the economic development of a nation. (Weitzel & Berns 2006) In a recent paper written by a well known economist, it was argued that corruption is actually good for the economie s. It increases the flow of wealth in the economy from one hand to another and promotes economic activity which leads to economic development. It was argued that corruption becomes bad when the corruption money goes out from the system. Evidence shows that many political and rich figures in the developing economies put their money in bank accounts in the foreign countries. This is an example of money stream out of the system and this money does not promote any

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