Corruption In A Country

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The world of corruption Introduction Corruption is defined as an act, which is in a dishonest or illegal manner, by people in power, usually of authoritative positions, which seeks to improperly or unlawfully benefit those people in power. Corruption is thought to have many adverse effects on a country’s economy and on fiscal policies set in place by government. This essay seeks to highlight (if any) these effects and the impact such effects induce on a country’s economy. Economy An economy is the state of a country, which includes networks of interactions between producers, distributors, and consumers, in terms of the production and consumption of goods and services and the supply of money. Economics also emphasises the efficiency and effectiveness…show more content…
In this case the economic impact of corruption affects those who are poverty stricken. This materially affects the standard of living of a country and causes the gap between the poor and the rich to increase (in terms of their standards of living). Reducing confidence from foreign investors does not necessarily spawn from corruption, but it is a by-product of it. One of the crucial factors that foreign investors use to determine whether to invest in a country is dependent on the state of the economy of that country. For example, if a country has an unstable political climate then foreign investors will be wary as to whether the (expected) returns outweigh the risks associated with that country. Recent reports have shown how corruption can cripple an economy. A common example of this can be seen by countries which are ruled by despots. Through their tyranny and misuse of their power (due to their political position or military artillery) they enforces laws and legislations that seeks to keep them in power regardless of the adverse effects this has on the economy or the people of that country. Some countries have even suffered serve inflation and recessions due to such corrupt…show more content…
The fiscal costs of corruption are: weakening state capacity to impose and collect tax, disheartening of genuine taxpayers, lower revenue collection due to tax/fee avoidance, heavy debt overdue and defaults, the raising of projects and reduced effectiveness of public spending. The weakening of a state’s capacity to impose and collect tax as well as lower revenue collection due to tax/fee is induced by the disheartening of genuine taxpayers. A local example of this is the boycotting of the electronic tolling (e-toll) system. This has had an effect on the collection of government revenues since tax payers refuse to pay for the costs incurred through the e-toll

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