Effects of corruption on the economy
Corruption affects the economy in many ways. its impact is felt by the economy and society too. Corruption can either be political, professional, habitual, traditional, and location. Corruption affects the growth of the economy, jobs, businesses, payment of taxes, investments in various fields, and provision of financial aid to the underdeveloped countries.
Corruption in businesses
Corruption affects businesses where small companies or developing ones are involved. The big ones can evade or getaway when associated with issues such as misuse of funds easily unlike the small companies since most big businesses/companies are politically protected.
Corruption in jobs
In most cases, to get a job one needs’ to know someone’. This makes the jobs go to the less qualified people who have no or less experience since they pay in return for the favor.
Corruption in investments
This is evident in the total investments, quality, and size of the investment and the investment projects involved. The parties involved end up delivering no or less than what was required.
Corruption in taxes
Some well-known people end up evading payment of taxes while some tax officials end up putting the money in their pockets hence the country having less money than what it could have.
Corruption in the provision of financial aid both state and international
Corruption mostly reduces the effectiveness and trustworthiness of those who offer financial aid (both state and international), as funds “cannot be accounted” and does not reach those that are in need or has not done the task for which it was meant to.
References
Anyanwu, J. C. (2012). Why Does Foreign Direct Investment Go Where It Goes?: New Evidence From African Countries. Annals of Economics & Finance, 13(2). Freckleton, M., Wright, A., & Craigwell, R. (2012). Economic growth, foreign direct investment, and corruption in developed and developing countries. Journal of economic studies.