Question

What is the relationship between corruption in a country (e.g., bribe-taking by government officials) and economic growth? Is corruption always bad?

Looking for an updated original answer from a corporate business manger perspective. A cited source would be appreciated. Thank You

Answer 1

Corruption is the one of the major challenges that every country in the world is facing. Corruption always effects the growth of an economy.

If there is more corruption in the system that it means that the political system itself is corrupted which means that the policians are corrupted and the government is not stable to deal with corruption as the people who involve in government are also corrupted.

Corruption is major issue in any country because for any work to be done people have to pay bribe. People who are above income line will be paying bribe to get their work done where as people below poverty line or income line have to take of burden of bringing that bribe. So they will take illegal ways to earn money as they to want to get work done.

These people are who are taking bribes they will not pay that bribes as taxes as it is black money which is not a legal source of income. So government will not get that amount as tax.

If the corruption is in the grass root level of any economy than any work which should be done for the welfare of the people and country will not be done without taking bribe which means the money of the government will be eaten by these corrupted people. So government spending decrease.

Foriegn direct investment also decreases as they will have a opinion that this country is corrupted where we have to pay bribes to get work done everytime which brings a negative opinion on other countries.

Thus all these effects the economic growth. So corruption is a major issue that every country should consider.