Corruption

Felix Carter Applied Business Law 11 Unit1/Individual Work

Corruption

Corruption is a topic in which a lot of people dont that seriously. At first, I didnt as well because I heard of it and never in my life knew much about that until I read it from the site Transparency International at Transparency.org. Corruption is defined as the abuse of entrusted power for private gain. These abuses have brought about much pain and suffering throughout the years. From reading about corruption from that site and other internet sources two question that really concerned me was: What are the costs of corruption? And also how does corruption affect people's lives? Both knowing what we know about these questions is there a way to prevent all this turmoil from happening. The argument behind the cost of corruption brings up a negative and positive standpoint. Both negative and positive side of the standpoints is divided into a four-way issue that consists of it being: political, economic, social, and environmental. Looking from a negative point politically, corruption presents a major problem to democracy and the rule of law. This in general would make offices and institutions lose their legitimacy when they are abused for private advantage; which would be harmful in the established democracies. Economic wise corruption leads to the depletion of national wealth and the hindrance from the development of fair market structures and distorted competition, thereby deterring investment. Whether its believable or not society corruption is the strongest damage of all. It undermines people's trust in the political system, in its institutions and its leadership. Environmental degradation is the final issue of corrupt systems. The non-enforcement of environmental regulations and legislation has historically allowed the North to export its polluting industry to the South. Environmentally

devastating projects are given preference in funding, because they are easy targets for siphoning off public money into private pockets. From a positive view, countries where public sector wages are depressingly low, some maintained that it was natural for civil servants to augment their salaries by other means. It was alleged that corruption could advance economic efficiency by helping restore artificial and administratively determined prices to market-clearing levels. Others maintained that corruption played a useful redistributive role, transferring resources from wealthy individuals and corporations to those of more modest means, or that it could serve as a tool of national integration by allowing ruling elites to entice or co-opt fractious political, ethnic, or religious groups. Finally, some scholars have argued that corruption is a natural stage of development. So both negative and positive standpoints do illustrate both good and bad regulations of corruption. Corruption affects the lives of people in many different ways which can impair them in cases of health, mental status, and physical status and in the worst cases; the people can lose their lives. It has dire global consequences, trapping millions in poverty and misery, while breeding social, economic and political unrest. Corruption is both a cause of poverty, and a barrier to overcoming it. A good strong example would be May 2000, 950 people were injured and 22 killed, when a fireworks factory in Enscheda, the Netherlands, burst into flames. The explosion reached such catastrophic levels because government regulators turned a blind eye to grave security breaches with regard to storing explosives on the factory premises. In return for remaining silent, the officials are said to have received free fireworks for years. Even an illegal enlargement of the factory was legalized by the authorities a posteriori. The local government official in charge of monitoring fireworks factories in the area admitted to not knowing the specific regulations on the storage of explosives. Though considered an expert, he hadn't read the

relevant literature, nor had he taken part in any training seminars. He only followed the instructions of his superiors, one of whom was arrested on corruption charges two years ago.

Reference http://www.transparency.org/news_room/faq/corruption_faq http://www.tia.al/index.php?option=com_content&view=article&id=76:how-doescorruption-affect-peoples-lives&catid=54:faq&Itemi

Robert Klitgaard. 1988. Controlling Corruption. Berkeley and Los Angeles: University of California Press, p. 32.

Shang-Jin Wei. 1997. How Taxing is Corruption on International Investors. Working Paper 6030, National Bureau of Economic Research, Cambridge, MA.