Global Economy

Saturday 11 December 2010

A2 Macroeconomics: Corruption and development

This excellent BBC website shows a ranking of countries according to how corrupt their citizens perceive them to be. Compare the "corruption score" with poverty levels and GDP - can you spot the inverse relationship?

Corruption is the abuse of public office for one's own personal gain.

Where corruption is rife, the governance of a country becomes ineffective. Investors will not trust the country to defend their property rights, and wealthy individuals may move their funds abroad instead of investing it in the local economy. This video gives examples of how corruption affects Kenyans, and what the government is doing to fight it.

Corruption is bad for investment and economic growth. In some countries, corruption is a way of surviving seemingly arbitrary actions by the state. This is particularly true for countries with civil conflicts.

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