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Introduction
Corruption is one of the most harmful dangers to human rights, democracy, the tradition of law, goodness, and social justice. It impedes economic development and is associated with countries’ proper and equitable functioning. It also has negative financial consequences for citizens, companies, states, and international institutions. According to a broader definition, corruption is an abuse of confidence. In general, there are different understandings of corruption, but it is always an unfair distribution of public resources motivated by private interests. It is not only about money, and it can be services, goods, or opportunities of any type. Thus, it is appropriate to study the phenomenon of corruption and its adverse impact on the processes in society.
The Reasons for the Growth of Corruption
In modern science, it is traditional to mention a plurality of causes of corruption, distinguishing economic, institutional, and socio-cultural factors. Economic factors of corruption are, first of all, low salaries of civil servants and their high power to influence the activities of firms and citizens (Rothstein and Varraich 120). Corruption flourishes wherever government officials have extensive authority to dispose of any scarce benefits. This is especially evident in emerging and transitional countries, but it is also apparent in developed nations. In the United States, for example, there is a significant amount of corruption in implementing the subsidized housing program for needy families (Rothstein and Varraich 125). Institutional grounds of corruption are considered to be the high level of closedness in the work of government agencies.
In addition, the unpredictable system of accountability and absence of transparency in the system of legislative drafting. Besides, the poor personnel policy of the state permits the spread of corruption and opportunities for promotion independent of the actual results of the employees’ activity (Rothstein and Varraich 134). Socio-cultural grounds for corruption are demoralization of society, insufficiently informed and organized citizens, and public passivity concerning the arbitrariness of “those in power.” In countries where all three groups of factors are present, primarily developing and post-socialist countries, corruption is highest (Rothstein and Varraich 131). On the contrary, in the societies of Western European civilization, these elements are less strong, which is why corruption is more temperate in these nations.
Impact on the Economy
Corruption is directly related to the shadow economy, which decreases tax revenues for the budget. As a consequence, the state loses financial control over the economy, and social issues are aggravated by the default on budgetary obligations. The shadow economy accounts for almost ten percent of GDP in the UK, about fourteen percent in the Northern European countries, and about twenty-five percent in many Southern European ones (Rosid et al. 42). Therefore, the competitive mechanisms of the market are disrupted, since often the winner is not the competitive one, but the one who was illegally able to gain an advantage. This reduces market efficiency and discredits the idea of market competition. At the same time, a decrease in corruption will affect the shadow economy and will attract an increase in tax revenues, which will enhance public expenditures (Rosid et al. 47). Thus, the state will finance the development of infrastructure, services, and social projects.
The Social and Political Consequences of Corruption
The development of corruption in the political and social sphere has caused the loss of enormous amounts of capital that could have been used for social advancement. This aggravates the budget crisis and impairs the authorities’ ability to solve social issues. It perpetuates and increases the dramatic property inequalities and poverty of the majority of the population (Rothstein and Varraich 102). Thus, corruption supports the unfair redistribution of funds in favor of narrow groups at the expense of the most helpless elements of society. Another adverse effect of corruption is the discrediting of law as the main instrument of regulating the life of the state and community (Rothstein and Varraich 101). In the public consciousness, a perception is formed that citizens are defenseless both before the crime and in the face of authority. Moreover, corrupt law enforcement agencies contribute to the strengthening of organized crime. The latter, having merged with corrupt groups of officials and businessmen, strengthens further through access to political influence and possibilities for money laundering (Ibodullaevich and Usmanova 2). Eventually, social tensions grow, damaging the economy and threatening the political stability of the nation.
The political impact of corruption includes a displacement of policy goals from national development to ensuring the rule of certain clans. At the same time, the trust in the authorities is diminishing, and their alienation from society is increasing. In general, the country’s prestige in the international arena is reduced, and the threat of its economic and political isolation is growing (Ibodullaevich and Usmanova 3). Political competition is also becoming corrupted and declining, and citizens are disappointed in the values of democracy, leading to the slow destruction of democratic institutions. Accordingly, corruption has a significant negative influence not only on citizens’ standard of living but also on the existence of democracy in public life.
The Contrasting Influence of Corruption
Some ideas consider that corruption also has some benefits. For example, a bribe accelerates some slow bureaucratic processes. At the same time, a person may offer a bribe, for instance, in a hospital for a service, without realizing that citizens’ taxes have already paid for it. Therefore, in such a case, people are sure that they receive better treatment and service due to such actions. It is generally accepted that corruption creates inequality and reproduces poverty because of distorted government expenditures (Fisman and Golden 75). Corrupt politicians invest and prioritize most in areas where corrupt revenues may be higher.
In addition, political and economic instability accompanies corruption. As a result of corruption, economic growth is reduced because a corrupt economic environment is not conducive to investment. The Economist, based on the 2011 Corruption Index and the Human Development Index, developed a chart indicating the relationship between poverty and corruption (Zikai 44). That is, the less perceived corruption in a state, the higher the human development index. Characteristics in the areas of health, education, and standard of living were considered (Zikai 44). Hence, the short-term effect of expediting specific bureaucratic procedures or gaining benefits cannot exceed the adverse impact that corruption has on society.
Conclusion
Hence, the spread of political corruption poses a threat to democratic institutions and the balance of power. At the same time, economic corruption reduces the efficiency of market institutions and the regulatory activity of the state. The influence of corruption on the economy is especially dangerous because it levels the state’s economic policy and creates the basis for the growth of the shadow economy. As a consequence, there is a violation of tax laws and rules of entrepreneurial operations. Accordingly, a decrease in GDP leads to a reduction in tax revenues and the social security of citizens. In this way, the standard of living of ordinary people declines, which produces a crisis in all areas of private and public life.
Works Cited
Fisman, Raymond, and Miriam Golden. Corruption: What Everyone Needs to Know. Oxford University Press, 2017.
Ibodullaevich, Khidirov Khoshim, and Usmanova Gulbahor Kholmomin Kizi. “Types, Forms of Corruption, Causes and Consequences.” Scientific progress, vol. 1, no. 4, 2021, pp. 1-6.
Rosid, Arifin, Chris Evans, and Binh Tran-Nam. “Tax Non-compliance and Perceptions of Corruption: Policy Implications for Developing Countries.” Bulletin of Indonesian Economic Studies, vol. 54, no. 1, 2018, pp. 25-60.
Rothstein, Bo, and Aiysha Varraich. Making Sense of Corruption. Cambridge University Press, 2017.
Zikai, Tim. “An Overview of Economical Corruption in USA and Analysis of its Future.” Journal of Humanities Insights, vol. 2, no.1, 2018, pp. 43-50.
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