What is Corruption?

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As described by Bardhan (1997), in major cases, corruption refers to the act of misusing public value for private interest, where an agent who is delegated to carry out a task engages in a violation of duty for their own enrichment. Corruption is found to have influence of a country’s economic development. According to Rose-ackerman (1999), corruption decreases the average amount of investment and growth and FDI, hence, high corruption lead to a poorer condition of a country and dissuasion of business investment.

According to Towards Transparency (2013), by looking at the corruption perception index, Vietnam rank 116/177 while German rank 12/177 where 1 indicates the lowest CPI among countries. However, Oustalniol (2013) mentioned that this approach is difficult to compare the country’s relative ranking from one year to the next, since the total number of territories or countries is varies every year. In 2012, a new approach is introduced, which is by using scores. In this case, Vietnam scores 31/100 and German scores 71/100. The base number here is 100 in which 0 indicate highly corrupt and 100 indicate very clean. This shows that Vietnam has a quite high level of corruption as compared to German.
Some factors such as, ethnic diversity, political instability, government accountability and the effectiveness enforcement of anti-corruption law derive such difference. Treisman (2000) observes that ethnic diversity could provoke bias and collusion that has a positive relationship with the control of corruption. While, Wijayanto (2007) mentioned that corruption is common in a country that undergoes an economic transition, normally this transition followed with political, economic and social instability. It is seen that Vietnam in th...

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... and Olken, B. (2012). Corruption in Developing Countries. p.16.

Begovic, B. (n.d.). Economic Inequality and Corruption. pp.2-3.

Beardshaw, P., Cattaneo, B. and Gomes, R. (2012). Managing Political Risk. p.3.

Marsh, (2014). Political Risk 2014. [online] Available at: http://usa.marsh.com/Portals/9/Documents/Political_Risk_Map_MARSH_MAPLECROFT_2014.pdf [Accessed 24 May. 2014].

Broadfoot, R. (2011). Emerging Asia S.W.O.T Report. Hong Kong: Political & Economic Risk Consultancy, Ltd., pp.32,35.

Asia.marsh.com, (2013). Political Risk Trends and Hotspots for 2014 > Marsh Vietnam. [online] Available at: http://asia.marsh.com/vietnam/InsightsSolutions/ThoughtLeadership/ID/34089/Political-Risk-Trends-and-Hotspots-for-2014.aspx [Accessed 24 May. 2014].

Finnerty, J. (2001). International Political Risk Management : Exploring New fonder. 1st ed. Washington, D.C., p.98.

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