Corruption and Development - pogar

Figure 4: Linkages between corruption and poverty
Reduces economic
growth & worsens
inequality
Corruption
Poverty
Reduces the
goverment’s
capacity to respond
to people’s needs
There are two models that are useful in
understanding the impact of corruption on poverty,
the Economic Model and the Governance Model
(Chetwynd 2003). Both these models demonstrate
that corruption does exacerbate and promote
poverty, but this pattern is complex and moderated
by economic and governance factors. The Economic
Model postulates that corruption affects poverty by
first impacting economic growth factors, which, in
turn, impact poverty levels. Corruption turns
government investment away from socially
valuable services such as education and health
care and impairs the access to, and the quality of,
existing services and infrastructures, because
kickbacks on equipment purchases are lucrative
(World Bank 2000). In addition, corruption also
exacerbates income inequality by allowing some to
benefit more than others by distorting the economic
as well as legal and policy frameworks.
Corruption makes lower income households and
businesses pay a higher proportion of their income
in bribes than middle- or upper-income households
(Chetwynd 2003). The burden of petty corruption
falls disproportionately on poor people (e.g., petty
corruption in public health or the police service).
Many case studies reveal that poor people are
expected to pay bribes to teachers to obtain reports,
for school uniforms, and for scholarships, thus
affecting their right to education. Similarly, even
though health care is free in many developing
countries, patients in line for heart surgery are
reportedly required to pay a bribe to hospital staff
to move them up in line for surgery (Pilapitiya 2004).
Corruption also reduces the progressiveness of the
tax system and increases the inequality of income
and wealth.
Box 5: Voices of the poor on the effect of corruption
The World Bank study entitled ‘Voices of the Poor 1999’ found that poor households value issues of
transparency and financing of local government. In Ha Tinh Province, Viet Nam, people had many
complaints about the level of fees and contributions levied by the local authorities. These contributions
were over and above their nationally mandated agriculture tax, and raised the overall burden of taxes
and contributions by up to 25-40 percent of total household income. Furthermore, many of these
contributions were levied on a per capita basis, which, since poorer households are often bigger, had a
regressive effect.
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