Vol. 7, No. 2, December 2000
CAUSES, CONSEQUENCES AND CURES
The paper stresses the need to keep the issue of corruption squarely in view in the development agenda. It discusses the causes and consequences of corruption, especially in the context of a least developed country with considerable regulation and central direction. Lack of transparency, accountability and consistency, as well as institutional weaknesses such as in the legislative and judicial systems, provide fertile ground for growth of rent seeking activities in such a country. In addition to the rise of an underground economy and the high social costs associated with corruption, its adverse consequences on income distribution, consumption patterns, investment, the government budget and on economic reforms are highlighted in the paper. The paper also touches upon the supply side of bribery and its international dimensions and presents some thoughts on how to address the corruption issue and to try and bring it under control.
There is a growing worldwide concern over corruption at the present time. Several factors are responsible for this. First, a consensus has now been reached that corruption is universal. It exists in all countries, both developed and developing, in the public and private sectors, as well as in non-profit and charitable organizations. Second, allegations and charges of corruption now play a more central role in politics than at any other time. Governments have fallen, careers of world renowned public figures ruined, and reputations of well-respected organizations and business firms badly tarnished on account of it. The international mass media feeds on it and scandals and improper conduct, especially of those in high places, are looked upon as extremely newsworthy, and to be investigated with zeal and vigour. The rising trend in the use of corruption as a tool to discredit political opponents, the media’s preoccupation with it as a highly marketable commodity, and the general public’s fascination with seeing prominent personalities in embarrassing situations have brought
* Former Chief, Least Developed Countries Section, Development Research and Policy Analysis Division, ESCAP. The author now lives in Yangon, Myanmar.
Asia-Pacific Development Journal
Vol. 7, No. 2, December 2000
scandalous and corrupt behaviour, a common human frailty, into the limelight of international attention. Third – and the main issue taken up in this paper – is that corruption can be a major obstacle in the process of economic development and in modernizing a country. Many now feel that it should receive priority attention in a country’s development agenda. This greater recognition that corruption can have a serious adverse impact on development has been a cause for concern among developing countries. In a recent survey of 150 high level officials from 60 third world countries, the respondents ranked public sector corruption as the most severe obstacle confronting their development process (Gray and Kaufmann 1998). Countries in the Asia and Pacific region are also very worried about this problem and they are in substantial agreement that corruption is a major constraint that is hindering their economic, political and social development, and hence view it as a problem requiring urgent attention at the highest level. Increasing public interest and concern over corruption have resulted in a large amount of scholarly research on the subject. Admittedly, there are still wide gaps in the current state of information and knowledge on the matter and much more remains to be done. Nevertheless, theoretical and empirical research that has been conducted thus far has yielded fresh insights into the problem. We now have a clearer understanding of the underlying causes of corruption, its consequences, and ideas and approaches on possible measures to combat it. At the same time, a better...