Does international trade increase or decrease corruption?
Challenging corruption has recently become one of the main priorities in a number of countries around the globe. Mainly because the negative effects of corruption have been widely recognized in practice and by the academics. The adverse effects of corruption vary; in developed countries corruption is relatively curbed; however in the underdeveloped world corruption usually accounts for enormous amount of the Gross National Product. There are a number of different approaches to fighting corruption as well as there are different causes of it. This essay paper argues openness to international trade has a positive effect in decreasing political corruption. Deriving from neoliberal ideas, international trade widens the scope of free market which results in less substantive powers for the government officials. Corruption flourishes when there is lack of perfect competition in the bureaucracy; monopoly power among officials is combined with discretional powers and low accountability. Another argument discussed in this paper favours the idea of reducing corruption by lowering tariff rates for international trade. An empirical study is being presented which analyses the correlation between corruption and import shares.
Transparency International accounts corruption as the abuse of the ones entrusted with power for private gain. Corruption negatively affects everyone whose life, livelihood or general happiness depends on the integrity of people in a position of authority. Corrupt activities hold back economic development, prevent the conditions free market and equal opportunities for businesses and consumers as well as exploits already marginalised groups of people. In some cases, s...
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The runaway corruption in the country harms the business environment and causes collapse of various established institutions and industries.
Professor Nichols. “The list of countries that have been politically or economically crippled by corruption remains to develop, and businesses with continuing benefits abroad will ultimately be harmed by any plans that include bribery.”
Corruption has always been a problem built into institutions that hold power. Corruption is unavoidable in institutions that delegate the power. It would come with no surprise that every country has an institution which distributes or delegates the decisions that the country takes which in other words gives them power. One institution that could be used as an example of corruption would be the Dominican Government. Dominican Republics is known for being a third world country, for its poverty, culture, and for its corrupt government. Dominican Republic government is known for making back door deals, stealing money from the people, and neglecting the countries problems. It is believed that Leonel Fernandez is at the center of all of the corruption. It is believe that he has stolen and embezzled millions of dollars, made contracts with other countries selling away the countries resources for personal gain. According to the people none of the money being paid by foreign countries has been invested into the countries progression.
The use of media can be an extremely powerful tool to help combat corruption when everyone is on the same page. Global Integrity is an organization based in Washington, D.C. which reports international corruption trends (Heller, 2007). Global Integrity is exactly what is needed in order to combat corruption across the globe. Unfortunately Global Integrity is not a source in which information is easily obtained by a normal citizen. In order to combat corruption it is in the hands of everyday citizens to do their part to help. Corruption is not often fought by politicians, as many misinformed people would think, as they are often the ones partaking in these practices, or condoning them. Although Global I...
Probable Causes of Corruption – Different things motivate different people. Some can motivate people to perform beyond expectations and some can lead astray from moral and ethical values.
Rose-Ackerman, Susan. Corruption and Government: Causes, Consequences, and Reform. N.p.: Cambridge University Press, 2007. Print.
Prenzler, T, Ransley, J 2002, Corruption and Reform: Global Trends and Theoretical Perspectives, Hawkins Press, Annandale.
Corruption is a severe problem that the world is facing at the moment and has been going on for quite a while now. “ The problem of business ethics is infinitely more complex in the international marketplace because value judgments differ widely among culturally diverse groups” (Cateora, Gilly and Graham, International Marketing). What American managers opinion as fundamental, others interpret as a sign of misuse. Performing in an ethically and socially accountable way should be the stamp of every business performance, international or domestic. There are many economic effect of corruption such as weakening the economic expansion, falsifying the competitive playing field and diminishing the excellence of government services and organization. As a business manager or employee if you knowingly know about a bribe it is best to report a
Bray, J. (2005). The use of intermediaries and other alternatives to bribery. The New Institutional Economics of Corruption, London und New York, 93-111.
While some of this bribery can simply expedite decisions and actions, other situations may involve a distortion of business outcomes. Meanwhile, government officials in positions to alter the firm’s overall profitability may receive substantial payments. Funds that rightfully belong to the public may be diverted into private hands. Firms that would have paid fees to the government may be able to reduce their financial obligations. Corruption distorts free market outcomes, resulting in business and government decisions that reduce efficiency and so reduce a nation’s aggregate production. Some investors may reject potential business dealings in certain cultures because of the presence of corruption. Recent years have witnessed global attempts to reduce corruption, and many nations now treat corruption as a crime. In this context, management encounters issues that challenge ethical positions and that involve risks of legal prosecution, as well as impacting potential
Stereotypes exist that display only the poorer, lesser-developed nations are filled with corruption. Actually, corruption is as much a problem for the wealthier developed nations as it is for the poor countries. The proportion of corruption in all countries is determined by their adopted controls and checks. Corruption is found on a wide scale when the attraction meets tolerance of such behavior. Somalia and Afghanistan are two countries that are generally plagued with the worst of corruption. Corruption has gone way beyond what is typical or acceptable in Afghanistan. The continual catastrophe in Somalia has been caused by a succession of oppressive rulers and their terrible policies.
The development of a country depends generally on the work and values of its society. The image of a country can be severely damaged by certain actions and behavior of their citizens, like bribery. When a country is known as a corrupt nation, not only will the facade of the country be affected, but also the economy. Establishing measures to eradicate corruption are urgently necessary. Corruption has been around since the begging of time, but currently is more common in business, more specifically, international business. Although some organizations have been formed, and conventions have been signed in order to end it, corruption is still one of the mayor problems around the world. An ethical view might bring more insight to why bribery and corruption is not a moral act and why more severe measures should be taken into consideration.
The UN Convention against Corruption (UNCAC) (UN General Assembly 2003) is the first international attempt to establish a standard of anti-corruption policy in order to reduce problems related to corruption (Hechler et al. 2011) like an adverse impact on economic growth (Mauro 2004). In spite the fact that the approach of UNCAC is based on large empirical evidence about the causes of corruption (Judge, McNatt, and Xu 2011) corruption remains in some countries a persistent problem (Hechler et al. 2011). A ex ante analysis by Hechler et al. (2011) identified the lack implementation as one of the major pitfalls of the UNCAC and this essay seeks to find a theoretical explanation by drawing on the literature of policy diffusion, which applies for UNCAC as the policy choices of signing countries affect the policy choices of other countries (Meseguer 2006). This constitutes an interesting case for testing the assumptions of the two main mechanism identified by Gilardi (2003), who distinguishes between mechanisms of diffusion focused on rational problem-solving or symbolic purposes (Meseguer 2006). However, this essay narrows the field of possible answers by arguing that the concept of rational learning (Meseguer 2006) does not apply and therefore advocates a critical assessment of the underlying premise of mimetic isomorphism that countries imitate each other but are more concerned about legitimacy rather than functional efficiency (Hall and Taylor 1996). Testing mimetic isomorphism against the implementation process of UNCAC will highlight under which conditions the theoretical framework is more likely to explain the outcome of anti-corruption policy. This may yield key insights on the antecedents of failure in decreasing...
In this essay,we have seen evidence that corruption leads to instability in the economy,increases the transactional cost,decreases efficiency, hinders the growth of a healthy marketplace and harms the social and economic development.Therefore,it’s fair to say that Corruption has had a serious effect on the Indian Economy.If left unchecked,India is bound to lose FDI investments as investors will lose trust in the economy. “Lost opportunities caused by corruption in regards to growth,jobs and investment; India has lost up to $45-50 billion a year”(Singh 2010).
Montesh, M. (n.d.). Conceptualizing Corruption: Forms, Causes, Types and Consequences. Retrieved May 4, 2014, from