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Business Studies Research Task
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Corruption
Prepared for: Reddam House Atlantic Business Studies Department
Date: 28th of February
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Proposal #: How does corruption in South Africa affect the economy?

Luke Kilian

Contents

Cover Page| Page 1|
Table of contents| Page 2|
Introduction| Page 3|
Review of literature| Page 4-8|
Methodology| Page 9|
Processing of findings| Page 10-13|
Conclusion| Page 14|
Reference list| Page 15|

Introduction

How does corruption in South Africa affect the economy? In dealing with this multifaceted question, all aspects have to be taken into account and focused on separately. These aspects will contribute in illustrating the negative impact that corruption has on not only our economy, but also our country. Chapters of our business curriculum that will be incorporated in research are Ethics, Public and Private sectors, Micro Environment, Legislation. Corruption has been described “as the abuse of public office for private gain.” This refers to a gain of any sort such as a gain in finance, in status- by an individual or a group. It includes bribery, patronage, nepotism, embezzlement etc… These various forms of corruption have ultimately been to our economies detriment and have impeded on socio-economic rights, investment (foreign or not) and growth. Overall these are but just a highlighted few of the factors that contribute to the decay of the South African economy and therefore South Africa itself. Further research will be discussed on the pages to follow.

Review of Literature

Article commenting on the impact of corruption on governance and social-economic rights. (summarised).

Corruption impedes a state’s ability to use its available resources to progressively achieve the full realization of [socio-economic] rights because national resources are instead diverted into the pockets of public officials, or because development aid is mismanaged, misused or misappropriated. Corruption is costly. The state loses revenue from abuse of taxes, customs levies, licensing fees and traffic fines. It also leads to high spending due to corruption loadings and fronting on state contracts. The distortion of policy and resource and resource allocations increases inefficiency. Corruption also impacts on investment and growth, especially in countries in need of foreign productive capital. Foreign investors, especially those likely to make long-term contributions to development, are discouraged. Furthermore, corruption in aid programmes means less for those most in need and may compromise future funding.

Corruption is costly, not only for the general public but mainly for the poor as resources are diverted away from them. Service delivery and related policy is distorted if allocation and prioritisation are determined by bribes. It means a few benefit at the expense of many which reinforces existing socio economic inequality and makes the poor even more vulnerable. Structural inequality leads to many being denied access to education, to information, and therefore to knowledge about their rights that could enable them to challenge abuse of power. “The roots of corruption lie in the unequal distribution of resources in a society. Corruption thrives on economic inequality. Economic inequality provides a fertile breeding ground for corruption – and, in turn, it leads to further inequalities.”

Paul Kilian (my father) commenting on corruption (summarised)

“Son, corruption undermines the rule of law, democratic governance, accountability and sustainable development. It breaks that contract between citizens and public officials, and this has huge consequences for the hope of a successful government. It is a consequence of a collapse of governance and is a cause for its continued failure. How can you not know...
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