Definition
Corruption is a currupt public official as anyone who while exercising, foreign or international public officer or function, unduly receives, demands or accepts the promise of a gift or other priviledge. Corruption are different forms of bribery and embezzlement. Bribery is the payment in money or kind that is given or taken in a corrupt relationship. Bribery has many names such as facilitating payment, pay off, kickback, or greas money. Embezzlement happenned when employees steal company recources that are hired to administrate, theft from the work place in the brodest sence. So, this is the different meaning of corruption with bribery and embezzlement.
Hamidah Binti Abdul Ghani
Tuesday, October 14, 2008
WHAT CORRUPTION??
Corruption in agents, client, and streams
The term corruption is often vaguely used for any improper money charge and any improper money offer, or even any improper way to acquire money or goods and services. But the concept should be confined to tapping the money flows associated with government administration involving government agents. The necessary condition for talking of corruption is the owner of an asset changing hands (the government or a victimized citicizen) does not approve of it, but is unaware or powerless. this is however not sufficients to talk of corruption like walfare, illegal taxation, paying low wages that would not be accepted under free market choise and so on.
Another halmark if corruption is that it is not a power situation with a winner and a looser, but one where either a public official embezzles money he is trusted with, or one that results from a deal of some sort, reflecting the advantages of the parties and hence the power they perceive to have over each other: you have the document, the medicine, the educaton, I have the money. You produce the diamonds, I have the guns to keep the owning or taxing entity at a distance.Some basic concepts are useful for comprehension and neat discussion. The government spending flow meant to execute government tasks (like education, roads, security) is called the downstream. Under propriety, the flow reaches the (final) executors of the work done. The payments by customers of the public administration (like tax payers, licence holders, customers of paid public services) form the upstream.
Together, customers and executors form the clients of the public administration.
Corruption arises when a public administration individual or agent ceases to behave according to the rules he is hired to follow. He can engage in embezzlement: this is tapping money directly from the downstream or the upstream in his own office to his private property. Corruption can also be done by contract. Then, an executor agrees to "buy" his rights to execute for money by paying money directly to an agent. Or, a customer agrees to "buy" his rights to buy a public service by paying money directly to an agent.Corruption by contract can be by the agent's or by the client's initiative.
Hamidah binti Abdul Ghani
Corruption in agents, client, and streams
The term corruption is often vaguely used for any improper money charge and any improper money offer, or even any improper way to acquire money or goods and services. But the concept should be confined to tapping the money flows associated with government administration involving government agents. The necessary condition for talking of corruption is the owner of an asset changing hands (the government or a victimized citicizen) does not approve of it, but is unaware or powerless. this is however not sufficients to talk of corruption like walfare, illegal taxation, paying low wages that would not be accepted under free market choise and so on.
Another halmark if corruption is that it is not a power situation with a winner and a looser, but one where either a public official embezzles money he is trusted with, or one that results from a deal of some sort, reflecting the advantages of the parties and hence the power they perceive to have over each other: you have the document, the medicine, the educaton, I have the money. You produce the diamonds, I have the guns to keep the owning or taxing entity at a distance.Some basic concepts are useful for comprehension and neat discussion. The government spending flow meant to execute government tasks (like education, roads, security) is called the downstream. Under propriety, the flow reaches the (final) executors of the work done. The payments by customers of the public administration (like tax payers, licence holders, customers of paid public services) form the upstream.
Together, customers and executors form the clients of the public administration.
Corruption arises when a public administration individual or agent ceases to behave according to the rules he is hired to follow. He can engage in embezzlement: this is tapping money directly from the downstream or the upstream in his own office to his private property. Corruption can also be done by contract. Then, an executor agrees to "buy" his rights to execute for money by paying money directly to an agent. Or, a customer agrees to "buy" his rights to buy a public service by paying money directly to an agent.Corruption by contract can be by the agent's or by the client's initiative.
Hamidah binti Abdul Ghani
Cultural intelligent
Cultural intelligent is very important for me and humanities. It is because as a student I must know about the variety and different culture in Malaysia as well. There are many races and religion which is performs a different way to believe. So, we must respect about their believe with one another. Cultural Intelligent teach me the way to control myself. That means, I can easily adapt with another culture. For example, I often communicated with Chinese and Indian in my faculty.Furthermore, as a student we must study a lot about the different culture. This culture living, tech us to respect with one another. So cultural intelligent give me a lot of knowledge and because of that, it is one of the advantages as a human. All of us know, to provide a peaceful living is not easy; instead we can live together with different culture and society in harmony.So, as a conclusion, cultural intelligent is the most important thing to live in peace. It is really useful for human being to beyond their life
Effect of Corruption
Effects on politics, administration, and institutions
Corruption poses a serious development challenge. In the political realm, it undermines democracy and good governance by flouting or even subverting formal processes. Corruption in elections and in legislative bodies reduces accountability and distorts representation in policymaking; corruption in the judiciary compromises the rule of law and corruption in public administration results in the unfair provision of services. More generally, corruption erodes the institutional capacity of government as procedures are disregarded, resources are siphoned off, and public offices are bought and sold. At the same time, corruption undermines the legitimacy of government and such democratic values as trust and tolerance.
Corruption also undermines economic development by generating considerable distortions and inefficiency. In the private sector, corruption increases the cost of business through the price of illicit payments themselves, the management cost of negotiating with officials, and the risk of breached agreements or detection. Although some claim corruption reduces costs by cutting red tape, the availability of bribes can also induce officials to contrive new rules and delays. Openly removing costly and lengthy regulations are better than covertly allowing them to be bypassed by using bribes. Where corruption inflates the cost of business, it also distorts the playing field, shielding firms with connections from competition and thereby sustaining inefficient firms.
Corruption also generates economic distortions in the public sector by diverting public investment into capital projects where bribes and kickbacks are more plentiful. Officials may increase the technical complexity of public sector projects to conceal or pave way for such dealings, thus further distorting investment. Corruption also lowers compliance with construction, environmental, or other regulations, reduces the quality of government services and infrastructure, and increases budgetary pressures on government.
Environmental and social effects
Corruption facilitates environmental destruction. Although even the corrupt countries may formally have legislation to protect the environment, it cannot be enforced if the officials can be easily bribed. The same applies to social rights such as worker protection, unionization and prevention of child labor. Violation of these laws and rights enables corrupt countries to gain an illegitimate economic advantage in the international market.
As the Nobel Prize-winning economist Amartya Sen has observed that "there is no such thing as an apolitical food problem." While drought and other naturally occurring events may trigger famine conditions, it is government action or inaction that determines its severity, and often even whether or not a famine will occur. Governments with strong tendencies towards kleptocracy can undermine food security even when harvests are good.
CORRUPTION AND IMMORALITY
Corruption is a species of immorality, and corrupt actions are species of immoral actions. But not all immorality is corruption, and not all immoral actions are corrupt actions. Minor misdemeanours might count as immoral without being acts of corruption. Negligent actions are sometimes immoral, but not necessarily corrupt. And some serious and intended wrongdoings do not constitute corruption. For example, if a man kills his wife’s lover out of hatred, his action is immoral, but not necessarily corrupt. Finally, harming oneself can be morally undesirable in some instances, e.g. undermining one’s autonomy and health by becoming a heroin addict; but such actions are not necessarily corrupt.
Corrupt actions have a number of properties that other immoral actions do not necessarily possess. Firstly, corrupt actions are not once-off actions. For an action to be properly labelled as corrupt, it has to be a manifestation of a disposition or habit on the part of the agent to commit such an action. Indeed, one of the reasons why noble cause corruption is so problematic in policing, is because it involves a disposition to commit a certain kind of action. Acts of noble cause corruption are not simply once-off actions; they are habitual. At any rate, Joe’s action fails this first test for being a corrupt action.
Secondly, corrupt actions — involving as they do a habit to act in a certain way — are not performed because of a specific non-recurring eventuality. They are rather performed because of an ongoing condition or recurring situation. In the case of noble cause corruption in policing, the ostensible ongoing condition is the belief that the law is hopelessly and irredeemably inadequate, not only because it fails to provide the police with sufficient powers that will result in offenders being apprehended and convicted, but also because it fails to provide sufficiently harsh punishments for offenders. Accordingly — so the argument runs — the police need to engage in noble cause corruption. That is, they need to develop a habit to bend and break the law in the service of the greater moral good of justice. Once again, Joe’s action fails the test for being a corrupt action. Although Joe is motivated to do wrong in order to achieve good, or at least to avoid evil, he is responding to a highly specific — indeed extraordinary — circumstance in which he finds himself, and one that will not necessarily be repeated.4 He has not developed a disposition or habit in response to a felt ongoing condition or recurring situation.
Thirdly, corrupt actions are typically motivated, at least in part, by individual or narrow collective self-interest. In the case of policing, the interest can be individual self-interest, such as personal financial gain or career advancement. Or it can be the narrow collective self-interest of the group, such as in the case of a clique of corrupt detectives. Since Joe’s action is not motivated by self-interest, it is presumably not a case of corruption. On the other hand, it might seem that so-called acts of noble cause corruption are likewise not motivated by self-interest (or narrow collective self-interest), and thus ought not to be labelled as acts of corruption. But this move is a little too quick.
Corruption is a species of immorality, and corrupt actions are species of immoral actions. But not all immorality is corruption, and not all immoral actions are corrupt actions. Minor misdemeanours might count as immoral without being acts of corruption. Negligent actions are sometimes immoral, but not necessarily corrupt. And some serious and intended wrongdoings do not constitute corruption. For example, if a man kills his wife’s lover out of hatred, his action is immoral, but not necessarily corrupt. Finally, harming oneself can be morally undesirable in some instances, e.g. undermining one’s autonomy and health by becoming a heroin addict; but such actions are not necessarily corrupt.
Corrupt actions have a number of properties that other immoral actions do not necessarily possess. Firstly, corrupt actions are not once-off actions. For an action to be properly labelled as corrupt, it has to be a manifestation of a disposition or habit on the part of the agent to commit such an action. Indeed, one of the reasons why noble cause corruption is so problematic in policing, is because it involves a disposition to commit a certain kind of action. Acts of noble cause corruption are not simply once-off actions; they are habitual. At any rate, Joe’s action fails this first test for being a corrupt action.
Secondly, corrupt actions — involving as they do a habit to act in a certain way — are not performed because of a specific non-recurring eventuality. They are rather performed because of an ongoing condition or recurring situation. In the case of noble cause corruption in policing, the ostensible ongoing condition is the belief that the law is hopelessly and irredeemably inadequate, not only because it fails to provide the police with sufficient powers that will result in offenders being apprehended and convicted, but also because it fails to provide sufficiently harsh punishments for offenders. Accordingly — so the argument runs — the police need to engage in noble cause corruption. That is, they need to develop a habit to bend and break the law in the service of the greater moral good of justice. Once again, Joe’s action fails the test for being a corrupt action. Although Joe is motivated to do wrong in order to achieve good, or at least to avoid evil, he is responding to a highly specific — indeed extraordinary — circumstance in which he finds himself, and one that will not necessarily be repeated.4 He has not developed a disposition or habit in response to a felt ongoing condition or recurring situation.
Thirdly, corrupt actions are typically motivated, at least in part, by individual or narrow collective self-interest. In the case of policing, the interest can be individual self-interest, such as personal financial gain or career advancement. Or it can be the narrow collective self-interest of the group, such as in the case of a clique of corrupt detectives. Since Joe’s action is not motivated by self-interest, it is presumably not a case of corruption. On the other hand, it might seem that so-called acts of noble cause corruption are likewise not motivated by self-interest (or narrow collective self-interest), and thus ought not to be labelled as acts of corruption. But this move is a little too quick.
consequences of corruption
From economic theory, one would expect corruption to reduce economic growth by lowering incentives to invest (for both domestic and foreign entrepreneurs). In cases where entrepreneurs are asked for bribes before enterprises can be started, or corrupt officials later request shares in the proceeds of their investments, corruption acts as a tax, though one of a particularly pernicious nature, given the need for secrecy and the uncertainty as to whether bribe takers will live up to their part of the bargain. Corruption could also be expected to reduce growth by lowering the quality of public infrastructure and services, decreasing tax revenue, causing talented people to engage in rent-seeking rather than productive activities, and distorting the composition of government expenditure (discussed below). At the same time, there are some theoretical counterarguments. For example, it has been suggested that government employees who are allowed to exact bribes might work harder and that corruption might help entrepreneurs get around bureaucratic impediments.
One specific channel through which corruption may harm economic performance is by distorting the composition of government expenditure. Corrupt politicians may be expected to spend more public resources on those items on which it is easier to exact large bribes and keep them secret--for example, items produced in markets where the degree of competition is low and items whose value is difficult to monitor. Corrupt politicians might therefore be more inclined to spend on fighter aircraft and large-scale investment projects than on textbooks and teachers' salaries, even though the latter may promote economic growth to a greater extent than the former.
Empirical evidence based on cross-country comparisons does indeed suggest that corruption has large, adverse effects on private investment and economic growth. Regression analysis shows that a country that improves its standing on the corruption index from, say, 6 to 8 (0 being the most corrupt, 10 the least) will experience a 4 percentage point increase in its investment rate and a 0.5 percentage point increase in its annual per capita GDP growth rate (Mauro, 1996). These large effects suggest that policies to curb corruption could have significant payoffs. The association between corruption and low economic growth remains broadly unchanged when estimated for a group of countries with extensive red tape. Therefore, there is no support for the claim that corruption might be beneficial in the presence of a slow bureaucracy. The most important channel through which corruption reduces economic growth is by lowering private investment, which accounts for at least one-third of corruption's overall negative effects. At the same time, the remaining two-thirds of the overall negative effects of corruption on economic growth must be felt through other channels, including those mentioned above. While it is difficult to disentangle those other channels, there is some evidence that one of them--the distortion of government expenditure--plays a significant role.
Based on cross-country comparisons, it seems that corruption alters the composition of government expenditure: specifically, corrupt governments spend less on education and perhaps health, and probably more on public investment. Regression analysis shows that a country that improves its standing on the corruption index from 6 to 8 will typically raise its spending on education by 1/2 of 1 percent of GDP, a considerable impact. This result is a matter for concern, because there is increasing evidence that educational attainment fosters economic growth.
One specific channel through which corruption may harm economic performance is by distorting the composition of government expenditure. Corrupt politicians may be expected to spend more public resources on those items on which it is easier to exact large bribes and keep them secret--for example, items produced in markets where the degree of competition is low and items whose value is difficult to monitor. Corrupt politicians might therefore be more inclined to spend on fighter aircraft and large-scale investment projects than on textbooks and teachers' salaries, even though the latter may promote economic growth to a greater extent than the former.
Empirical evidence based on cross-country comparisons does indeed suggest that corruption has large, adverse effects on private investment and economic growth. Regression analysis shows that a country that improves its standing on the corruption index from, say, 6 to 8 (0 being the most corrupt, 10 the least) will experience a 4 percentage point increase in its investment rate and a 0.5 percentage point increase in its annual per capita GDP growth rate (Mauro, 1996). These large effects suggest that policies to curb corruption could have significant payoffs. The association between corruption and low economic growth remains broadly unchanged when estimated for a group of countries with extensive red tape. Therefore, there is no support for the claim that corruption might be beneficial in the presence of a slow bureaucracy. The most important channel through which corruption reduces economic growth is by lowering private investment, which accounts for at least one-third of corruption's overall negative effects. At the same time, the remaining two-thirds of the overall negative effects of corruption on economic growth must be felt through other channels, including those mentioned above. While it is difficult to disentangle those other channels, there is some evidence that one of them--the distortion of government expenditure--plays a significant role.
Based on cross-country comparisons, it seems that corruption alters the composition of government expenditure: specifically, corrupt governments spend less on education and perhaps health, and probably more on public investment. Regression analysis shows that a country that improves its standing on the corruption index from 6 to 8 will typically raise its spending on education by 1/2 of 1 percent of GDP, a considerable impact. This result is a matter for concern, because there is increasing evidence that educational attainment fosters economic growth.
corruption
What do we know about corruption, how do we know it, and what steps do we need to take to improve our understanding of corruption and enhance governments' effectiveness in combating it?
Over the last few years, the issue of corruption--the abuse of public office for private gain--has attracted renewed interest, both among academics and policymakers. There are a number of reasons why this topic has come under fresh scrutiny. Corruption scandals have toppled governments in both major industrial countries and developing countries. In the transition countries, the shift from command economies to free market economies has created massive opportunities for the appropriation of rents (that is, excessive profits) and has often been accompanied by a change from a well-organized system of corruption to a more chaotic and deleterious one. With the end of the cold war, donor countries have placed less emphasis on political considerations in allocating foreign aid among developing countries and have paid more attention to cases in which aid funds have been misused and have not reached the poor. And slow economic growth has persisted in many countries with malfunctioning institutions. This renewed interest has led to a new flurry of empirical research on the causes and consequences of corruption.
Economists know quite a bit about the causes and consequences of corruption. An important body of knowledge was acquired through theoretical research done in the 1970s by Jagdish Bhagwati, Anne Krueger, and Susan Rose-Ackerman, among others (Mauro, 1996). A key principle is that corruption can occur where rents exist--typically, as a result of government regulation--and public officials have discretion in allocating them. The classic example of a government restriction resulting in rents and rent-seeking behavior is that of an import quota and the associated licenses that civil servants give to those entrepreneurs willing to pay bribes.
More recently, researchers have begun to test some of these long-established theoretical hypotheses using new cross-country data. Indices produced by private rating agencies grade countries on their levels of corruption, typically using the replies to standardized questionnaires by consultants living in those countries. The replies are subjective, but the correlation between indices produced by different rating agencies is very high, suggesting that most observers more or less agree on how corrupt countries seem to be. The high prices paid to the rating agencies by their customers (usually multinational companies and international banks) constitute indirect evidence that the information is valuable. These indices are obviously imperfect owing to their subjective nature, but can yield useful insights.
Over the last few years, the issue of corruption--the abuse of public office for private gain--has attracted renewed interest, both among academics and policymakers. There are a number of reasons why this topic has come under fresh scrutiny. Corruption scandals have toppled governments in both major industrial countries and developing countries. In the transition countries, the shift from command economies to free market economies has created massive opportunities for the appropriation of rents (that is, excessive profits) and has often been accompanied by a change from a well-organized system of corruption to a more chaotic and deleterious one. With the end of the cold war, donor countries have placed less emphasis on political considerations in allocating foreign aid among developing countries and have paid more attention to cases in which aid funds have been misused and have not reached the poor. And slow economic growth has persisted in many countries with malfunctioning institutions. This renewed interest has led to a new flurry of empirical research on the causes and consequences of corruption.
Economists know quite a bit about the causes and consequences of corruption. An important body of knowledge was acquired through theoretical research done in the 1970s by Jagdish Bhagwati, Anne Krueger, and Susan Rose-Ackerman, among others (Mauro, 1996). A key principle is that corruption can occur where rents exist--typically, as a result of government regulation--and public officials have discretion in allocating them. The classic example of a government restriction resulting in rents and rent-seeking behavior is that of an import quota and the associated licenses that civil servants give to those entrepreneurs willing to pay bribes.
More recently, researchers have begun to test some of these long-established theoretical hypotheses using new cross-country data. Indices produced by private rating agencies grade countries on their levels of corruption, typically using the replies to standardized questionnaires by consultants living in those countries. The replies are subjective, but the correlation between indices produced by different rating agencies is very high, suggesting that most observers more or less agree on how corrupt countries seem to be. The high prices paid to the rating agencies by their customers (usually multinational companies and international banks) constitute indirect evidence that the information is valuable. These indices are obviously imperfect owing to their subjective nature, but can yield useful insights.
corruption
Corruption is both a major cause and result of poverty around the world. It occurs at all levels of society, from governments, civil society, judiciary functions, military and other services and so on. The impact of corruption in poor countries on the poorer members of those societies is even more tragic.
The issue of corruption is very much inter-related with other issues. At a global level, the “international” economic system that has shaped the current form of globalization in the past decades requires further scrutiny for it has also created conditions whereby corruption can flourish and exacerbate the conditions of people around the world who already have little say about their own destiny.
A difficult thing to measure or compare, however, is the impact of corruption on poverty versus the effects of inequalities that are structured into law, such as unequal trade agreements, structural adjustment policies, so-called “free” trade agreements and so on. It is easier to see corruption. It is harder to see these other more formal, even legal forms of “corruption.” It is easy to assume that these are not even issues because they are part of the laws and institutions that govern national and international societies and many of us will be accustomed to it—that is how it works, so to speak.
That is not to belittle the issue of corruption, for its impacts are enormous too.
The issue of corruption is very much inter-related with other issues. At a global level, the “international” economic system that has shaped the current form of globalization in the past decades requires further scrutiny for it has also created conditions whereby corruption can flourish and exacerbate the conditions of people around the world who already have little say about their own destiny.
A difficult thing to measure or compare, however, is the impact of corruption on poverty versus the effects of inequalities that are structured into law, such as unequal trade agreements, structural adjustment policies, so-called “free” trade agreements and so on. It is easier to see corruption. It is harder to see these other more formal, even legal forms of “corruption.” It is easy to assume that these are not even issues because they are part of the laws and institutions that govern national and international societies and many of us will be accustomed to it—that is how it works, so to speak.
That is not to belittle the issue of corruption, for its impacts are enormous too.
Saturday, October 11, 2008
Strategy to abolish corruption in Malaysia
Believing is important to constucting a community with full of integrition, morallity and ethics. So to make sure that this dreams come true, our country must clean from corruption. So goverment need the strategy to abolish corruption. The first one is the party in goverment must show a very good value with avoid their self from doing a wrong job like use the folk or goverment money to them self. The example, use the money and go to the overseas for holiday or buy something like an expensive car or house. Next strategy is developd one's Ombudsman for take care something interconnected with not healthy practice for a social responsibility in cotporate. Beside this strategy, it's still have more strategy to avoid corruption in Malaysia.
Hamidah Abdul Ghani
Believing is important to constucting a community with full of integrition, morallity and ethics. So to make sure that this dreams come true, our country must clean from corruption. So goverment need the strategy to abolish corruption. The first one is the party in goverment must show a very good value with avoid their self from doing a wrong job like use the folk or goverment money to them self. The example, use the money and go to the overseas for holiday or buy something like an expensive car or house. Next strategy is developd one's Ombudsman for take care something interconnected with not healthy practice for a social responsibility in cotporate. Beside this strategy, it's still have more strategy to avoid corruption in Malaysia.
Hamidah Abdul Ghani
Sunday, October 5, 2008
Cultural Intelligence NORZAITON AKMAR
Cultural Intelligence is very important to our life and all people not only for someone in business. We easily cross boundaries when we travel from country to country it isn’t easy to cross cultural boundries. Cultural Intelligence very important when we go to another country. We must follow the cultural in the country we visited. I like read article about cultural not only cultural our country but another country I also like because I can learn about other country each country have different and very unique cultural.
Effect Corruption ( Norzaiton akmar binti arpa’i )
Effect for this problem is politics, administration and institutions. Elihu Vedder ask that corruption poses a serious development challenge. In the political realm, it undermines democracy and good governance by flouting or even subverting formal processes. Corruption in elections and in legislative bodies reduces accountability and distorts representation in policymaking; corruption in the judiciary compromises the rule of law and corruption in public administration results in the unfair provision of services. More generally, corruption erodes the institutional capacity of government as procedures are disregarded, resources are siphoned off, and public offices are bought and sold. At the same time, corruption undermines the legitimacy of government and such democratic values as trust and tolerance.
Economic effects
Corruption also undermines economic development by generating considerable distortions and inefficiency. In the private sector, corruption increases the cost of business through the price of illicit payments themselves, the management cost of negotiating with officials, and the risk of breached agreements or detection. Although some claim corruption reduces costs by cutting red tape the availability of bribes can also induce officials to contrive new rules and delays. Openly removing costly and lengthy regulations are better than covertly allowing them to be bypassed by using bribes. Where corruption inflates the cost of business, it also distorts the playing field, shielding firms with connections from competition and thereby sustaining inefficient firms. Corruption also generates economic distortions in the public sector by diverting public investment into capital projects where bribes and kickbacks are more plentiful. Officials may increase the technical complexity of public sector projects to conceal or pave way for such dealings, thus further distorting investment. Corruption also lowers compliance with construction, environmental, or other regulations, reduces the quality of government services and infrastructure, and increases budgetary pressures on government.
Environmental and social effects
Corruption facilitates environmental destruction. Although even the corrupt countries may formally have legislation to protect the environment, it cannot be enforced if the officials can be easily bribed. The same applies to social rights such as worker protection, unionization and prevention of child labor. Violation of these laws and rights enables corrupt countries to gain an illegitimate economic advantage in the international market.
Economic effects
Corruption also undermines economic development by generating considerable distortions and inefficiency. In the private sector, corruption increases the cost of business through the price of illicit payments themselves, the management cost of negotiating with officials, and the risk of breached agreements or detection. Although some claim corruption reduces costs by cutting red tape the availability of bribes can also induce officials to contrive new rules and delays. Openly removing costly and lengthy regulations are better than covertly allowing them to be bypassed by using bribes. Where corruption inflates the cost of business, it also distorts the playing field, shielding firms with connections from competition and thereby sustaining inefficient firms. Corruption also generates economic distortions in the public sector by diverting public investment into capital projects where bribes and kickbacks are more plentiful. Officials may increase the technical complexity of public sector projects to conceal or pave way for such dealings, thus further distorting investment. Corruption also lowers compliance with construction, environmental, or other regulations, reduces the quality of government services and infrastructure, and increases budgetary pressures on government.
Environmental and social effects
Corruption facilitates environmental destruction. Although even the corrupt countries may formally have legislation to protect the environment, it cannot be enforced if the officials can be easily bribed. The same applies to social rights such as worker protection, unionization and prevention of child labor. Violation of these laws and rights enables corrupt countries to gain an illegitimate economic advantage in the international market.
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