what is the relation between corruption in a country and economic growth?

Question

bribe taking by government officials and is corruption always bad?

Answer 1

They're inversely correlated.

If someone has to bribe multiple people to, say, start a business or build a house......that creates an incentive NOT to start a business or build a house.

Answer 2

Corruption creates incentives for companies to be inefficient. Let me explain this through an intuitive, if a little long,example.

The president of a country wants to create contracts for two companies that compete in a natural duopoly. The contract estipulates the amount of money to be given to a company to produce goods at a competitive price. This contract should be based on the costs the company incurrs.

The president, then, sets up a comission that can investigate whether a company is efficient; that is whether it has high costs or low costs. In an economy without corruption, the commission will alway tell the truth and the contracts given will be optimal of the first degree.

Now, lets imagine the commission is corrupt. Through simple reasoning, we can see that the commission is only willing to lie if the company has low costs. In particular, the commission can tell the president that the company has high costs, get the money for a high cost company, and split it with the company.

So if the commission says low costs, there is no question the costs are low, but if the commission says high?

In real life, governments in countries with high corruption solve this problem by giving a contract that is pondered by the probability that the "commission" is corrupt. In many cases the company realizes that the government will give them this contract which is less than if their costs are high so they have incentives to maintain high costs, and therefore, be inefficient.

Clearly, inefficient companies create serious lags in economic growth.

Regulation is tricky but it gets extra tricky in corrupt countries.

Hope I didnt confuse you.

Answer 3

Money + power = corruption. Its the downfall of nearly every civilization. Corruption is a fact of life. Ancient Roman Emporers were corrupt. The British Monarchs were corrupt. The French Monarchs, corrupt. Humans cannot handle money and power in those vast amounts.

Answer 4

Corruption will impair economics growth. Imagine money suppose to spend to improve infrastructure and lives are used to line the pockets of the corrupted officials.

Answer 5

It is similar to corruption in the body. Where the body is suffering from malnutrition and is out of shape corruption deteriorates it. Where the body is over weight, corruption may help it loose weight temporarily.

Sadly, though, it chooses to abide where it thrives, than where it may be exposed soon enough and resisted. As to the question about whether it is bad or good… vaccines are made of the viruses we want to make ourselves immune from because those viruses are destructive right?

Answer 6

Economic growth is inversely proportional to corruption. The more corruption - the less the growth. Corruption is an economic 'tax'.

Answer 7

corruption is always bad because it's led by a corrupt person. a corrupt person hasn't been taught the proper right from wrong.

increased corruption leads to decreased economic growth b/c generally the corrupt people are only in worried about themselves, not the people in the nation.

Answer 8

Britan China relationship has no longer been tremendous, some uk officials recieved the Dalai lama in 2010 or 2011 and the chinese has because refused to formally habit visits to the united kingdom at the same time as going to each and each neighbouring united states of america in Europe boosting monetary and cultural exchanges. (very last visit from a chinese head of state became in 2010, virtually 3 years).