Topic 7: Corruption
3/12 and 10/12
Types of corruption
Bribery - dishonestly persuading someone to act in one’s favour by a payment or other
inducement.
Embezzlement - to steal, misdirect or misappropriate
Facilitation payment - small payment, also called a “speed” or “grease” payment
Fraud - intentionally and dishonestly deceiving someone in order to gain an unfair or illegal
advantage.
Collusion - An arrangement between two or more parties designed to achieve an improper
purpose.
Extortion - The act of harming, or threatening to impair or harm, to influence improperly the
actions of a party.
Patronage, clientelism and nepotism - support given by a patron
What are the factors that facilitate corruption?
A variety of economic, political, administrative, social and cultural factors enable and foster
corruption. What you often see is corruption working as a collective, so if more people are
corrupt, you are more likely to be corrupt - going beyond private gain to encompass broader
interests and benefits. It is likely to thrive in conditions where accountability is weak and
people have too much discretion, where politicians are not transparent.
Collective and systemic character of corruption that makes it so entrenched and difficult to
address.
Democracy does not in itself lead to reduced corruption.
What are the effects of corruption on growth and broader development?
The effect of corruption on macroeconomic growth remains contested, and corruption has
not been a determining factor constraining growth.
Corruption has a negative effect on both inequality and the provision of basic services, so it
affects poor people disproportionately.
Lack of trust, reduced legitimacy and lack of confidence in public institutions can be both a
cause and an effect of corruption. Simple things like standing in a queue disappear.
Corruption has a negative effect on domestic investment and tax revenues. People are more
likely to cheat doing their taxes.
It also leads to inefficiency, it imposes additional costs on growth for companies, everyday
transactions. Especially in terms of their performance and productivity. The right people are
not doing the right job.
It can be a source of conflict but has also been an important stabilising factor in some
settings.
Negative consequences for the environment.
Graphs
People were asked how many times they had payed bribes, in the developing world that
percentage is on average 0%.
People were asked if they had asked for bribes, the same countries appear from the other
graph. Less corrupt societies are generally more developed, this I not a causal relationship.
3/12 and 10/12
Types of corruption
Bribery - dishonestly persuading someone to act in one’s favour by a payment or other
inducement.
Embezzlement - to steal, misdirect or misappropriate
Facilitation payment - small payment, also called a “speed” or “grease” payment
Fraud - intentionally and dishonestly deceiving someone in order to gain an unfair or illegal
advantage.
Collusion - An arrangement between two or more parties designed to achieve an improper
purpose.
Extortion - The act of harming, or threatening to impair or harm, to influence improperly the
actions of a party.
Patronage, clientelism and nepotism - support given by a patron
What are the factors that facilitate corruption?
A variety of economic, political, administrative, social and cultural factors enable and foster
corruption. What you often see is corruption working as a collective, so if more people are
corrupt, you are more likely to be corrupt - going beyond private gain to encompass broader
interests and benefits. It is likely to thrive in conditions where accountability is weak and
people have too much discretion, where politicians are not transparent.
Collective and systemic character of corruption that makes it so entrenched and difficult to
address.
Democracy does not in itself lead to reduced corruption.
What are the effects of corruption on growth and broader development?
The effect of corruption on macroeconomic growth remains contested, and corruption has
not been a determining factor constraining growth.
Corruption has a negative effect on both inequality and the provision of basic services, so it
affects poor people disproportionately.
Lack of trust, reduced legitimacy and lack of confidence in public institutions can be both a
cause and an effect of corruption. Simple things like standing in a queue disappear.
Corruption has a negative effect on domestic investment and tax revenues. People are more
likely to cheat doing their taxes.
It also leads to inefficiency, it imposes additional costs on growth for companies, everyday
transactions. Especially in terms of their performance and productivity. The right people are
not doing the right job.
It can be a source of conflict but has also been an important stabilising factor in some
settings.
Negative consequences for the environment.
Graphs
People were asked how many times they had payed bribes, in the developing world that
percentage is on average 0%.
People were asked if they had asked for bribes, the same countries appear from the other
graph. Less corrupt societies are generally more developed, this I not a causal relationship.
