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How does government corruption affect small countries? Give examples. They are referring to small countries that...

  • How does government corruption affect small countries? Give examples. They are referring to small countries that are small enough where the citizens do no have any control. The government takes the control.
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Corruption may have consequences on the quality of goods and services by impacts on policy policies. First, if the cost of government goods and services is raised, this may have a similar impact to increasing the price of these goods and services. The loss of efficiency would occur if projects that would be cost-effective at the true cost are no longer cost-effective once the corruption costs are included, and thus not done. Second, corruption by distortions may create additional cost of production. Corrupt officials can't usually steal cash directly as it would be easy to detect; instead, they need to go through a variety of more complicated procedures to extract rent.

Countries with a high degree of corruption are unable to function efficiently or prosper economically, causing society as a whole to suffer.Emerging market economies tend to experience much higher levels of corruption compared to developed countries. Corruption can lead to an unequal distribution of resources as small companies are faced with unfair competition from large corporations that have formed illegal ties with officials.
Resources are inefficiently distributed in a corrupt economy, and businesses that would otherwise not be able to win government contracts are often awarded projects through bribery or kickbacks.

Because little trust can be placed in the legal system of corrupted economies in which legal judgments can be rigged, potential innovators can not be certain that their invention will be protected by patents and not copied by those who know that by bribing the authorities they can get away with it. As a result, developing countries are typically the importers of technology, because such technology is not produced within their own societies.

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