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Root Causes of Corruption

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Submitted By akhilkaushalp
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Akhil Kaushal P



According to The Transparency International 2006 Corruption Perceptions Index:
• Most honest countries – Finland, New Zealand, Iceland, Denmark and Singapore • Most corrupt countries – Haiti, Guinea, Myanmar, Iraq, Bangladesh, Chad, Congo and Sudan • China, Brazil, Ghana, Senegal, Peru, Mexico, Saudi Arabia, India and Egypt all rank in the middle

    




Lack of resources Explosive population growth Need stronger and more effective institutions Lack of democracy Ineffective judiciary Unfair elections Lack of free media



From The Bulging Pocket and the Rule of Law:

Corruption, Inequality, and Trust



Inequality –> Low generalized trust & High in-group trust –> Corruption –> Inequality
The dilemma of low trust in strangers and high trust only in your own group Inequality and in-group trust lead to clientelism This pattern is difficult to break









Two types of inequality: Economic inequality Unfair legal system







Makes it more difficult for the poor to have access to the legal system Shielding people at the top





Democratic institutions are not sufficient to curb corruption Media consumption, centralization, federalism, the nature of the electoral system, the level of wages paid to officials also don't matter



Structural reforms may not matter much for corruption, however:
• Democratic countries are far less corrupt than nondemocracies • Countries with strong democratic practices, especially treating everyone equally, are considerably less likely to be corrupt.



The only institutional factor that matters for corruption is the fairness of the legal system, not the "efficiency" of the legal system Policy also matters: Strangling regulation leads to higher levels of corruption





To combat corruption, you must fight economic inequality. The best way to reduce inequality is through universal rather than means-tested social welfare programs.





It is often difficult to gain public support for universal social welfare programs in highly unequal societies because of:



Envy/jealousy Perceptions that the programs will not deliver the goods because of corruption





These difficulties are among the reasons why unequal countries remain unequal--and corrupt, why inequality often forms a "trap." Without policy change, there is little hope for curbing corruption.

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