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when a person hides earnings in his income-tax return and is later revealed by the civil servant responsible
for auditing his income-tax return. The civil servant offers two options; either he investigates it further or
he disregards it. The first option means that he will be held responsible for his actions, i.e. be fined or
possibly even be sent to prison. The latter, on the other hand, lets him keep the money in exchange for a
small fee to the civil servant who ―helps him‖. Of course, he chooses the second option to save himself
from losing money, but by doing so the government loses the opportunity of collecting his tax. This may
not seem like a major problem but the problem just described is a very common phenomenon in many
developing countries and considerable amounts of money fails to reach the government. It is also common
with so called ―backwashes‖, which is when the civil servant demands more and more money each time
and eventually gets all the profit himself.
The Macroeconomic Theory
The macroeconomic theory explains corruption with economic policies that generally lead to corruption.
This is very common in Africa. Many undeveloped countries, especially in Africa, have fixed the purchase
prices of e.g. agricultural products so that they are abnormally low. This is because the governments want
to keep the prices of food low, especially in the cities where political opposition may occur.
6
The result of this is naturally that the farmers do not get enough money for their merchandise and therefore
the amount of produced agricultural products is reduced or smuggled. This kind of economic policy is
therefore directly linked to
corruption.
Another prevalent form of economic policy that gives rise to corruption is when governments control the
exchange rates of foreign currencies and keep them at unnaturally low rates compared to the indigenous
currency. By doing this, the import prices are kept artificially low and it is usually the government or major
companies owned by rich and influential people that handle the importation. Naturally it means that the
export prices are kept low as well but the exporting companies are few, unorganized and usually not
controlled by the government.
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Therefore they have no say in the matter. This policy results in a queue for currency among the importing
companies where the ones with connections and cash get first in line. Again, an economic policy directly
linked to corruption.
In Brief
6
B. Karlström, op. cit., 17
7
B. Karlström, op. cit., 16
These three theories are not the only theories on corruption but they give three different aspects of the
phenomenon and they help us understand how and why corruption occurs. The principal distinction
between the historic theory and the other two is that it does not let e.g. politicians do something to prevent
corruption. Since corruption is viewed as a natural part in a nation‘s development one has to wait until
the nation is ―mature enough ‖ to accept changes before any major reforms can be made. Whereas the
other two let politicians, as well as others, play a bigger role, i.e. if they want to, of course, in a nation‘s
fight against corruption. These three theories describe some of the common incentives to corruption but
there is one another vital aspect well worth considering when discussing corruption. The salaries for civil
servants and other government employees are extremely low in most developing countries. People
employed by the government in most African countries have insufficient salaries that can not support
them. The salaries are mostly far too low to cover the costs of living even for a single individual. Given the
fact that most Africans live together in large families, one can easily see that the extra income on the side,
that corrupt acts bring, is a most welcome addition to the family budget. This is also the great paradox of
corruption since it is, in a sense, one of the positive sides of it. Even though poor people are hit the
hardest by corruption, it provides money to poor people who would not be able to survive without its
existence. As a result of globalization and democratic development, it has become easier to discover