The Impact of Corruption on Citizens

Abstract

Although corruption is a problem of governance, development economists have been the leaders in research on the impact of corruption, because it is seen as having a substantial negative effect on economic growth. Corrupt politicians who control national resources and foreign aid may abuse their political power to make sure that they take what they want for themselves. At worst, corrupt rulers have been ‘stationary bandits’, enforcing an undemocratic repressive order to maintain a flow of personal riches from the exploitation of their country’s people and resources. Macroeconomists have used the Corruption Perceptions Index to produce quantitative estimates of the loss of the full benefit of development expenditure due to the inefficiencies and ineffectiveness that national corruption may have on economic growth. Whatever methods are used, the cost of corruption is estimated to be billions of dollars annually and cumulatively tens of billions.