LEADERSHIP & RESPONSIBILITY: Corruption

Name: University: Course: Tutor: Date: Leadership and Responsibility Introduction Corruption is a social evil that has serious effects on the economy. It is an activity that affects both the developed and developing countries though at the levels differ. In the article ‘Corruption: Its Nature Causes and Effects: Suggestions on the Way Forward’, Swatantra gives an analytical review on this subject. He begins his article by defining corruption as misappropriation of public resources that a public figure is entrusted with and misuses the same for their own private use. It is a self seeking activity mostly in the character of politicians and other bureaucrats who at times engage themselves in this selfish behaviour which leads to obvious neglect of the public’s expectations and interest. Corruption is likely to happen in those areas where the state and the public are likely to interact. It is mainly found in public institutions such as in the judiciary, public procurement, issuing of licences and is more prevalent in huge budget projects. It is prevalent in big budget projects because of the possible kickbacks that may be available for the politicians. Bottle-labelling machine was bought at a price that was many times as high as compared to a cheaper, but just as efficient a machine because a politician was to receive a kick back. Corruption is also highly present in privatisation as there is lack of transparency in the process. The privatisation process will in most cases be a harried process. This means that valuation is done incorrectly. Wrong valuation affects the bidding process that only favours the financial institutions and the corrupt officials. The process is again met by lack of transparency. Swatantra supports this lack of transparency in privatisation by quoting Stiglitz. Due to corruption, the Russian privatisation program didn’t receive the expected pre-condition for growth results but on the contrary resulted to a pre-condition for decline, an increase in the rate of inflation and also to asset stripping (Stiglitz, 2002). Measurement of corruption Dealing with corruption will start with an acceptance that the act exists within the government systems. It is therefore important for a country to know the level of corruption as compared to other countries and as compared to the previous results for this particular country’s past records. Due to the complexities in corruption activities, it is difficult to objectively measure the level of corruption. The commonly accepted and authoritative measurement method is the Transparency International compiled Corruption Perceptions Index (CPI). The index uses statistical methods to calculate results of surveys that have been carried out on the views by prominent business people and politicians on the level of corruption within their respective countries. The CPI measurement is a trusted method by most countries that are surveyed as it is an indicator of how serious and deep the act is in the society. They use the measurement as the basis from which they fight corruption as they try to make improvements. Those government authorities who are serious in dealing with corruption will use the index measurement. What causes corruption? Poverty is one of the reasons for corruption as there is a direct connection between poverty and level of corruption. According to Eigen chairman TI, there is a continuous cycle that evolves around poverty and corruption. According to the CPI analysis poor developing countries with a higher need for economic development and social programs are the same ones with a high corruption rate. All the 19 countries that received debt relieve service as Heavily Indebted Poor Countries (HIPC) in the year 2005 had a CPI of less than 4. There is a continuous cycle of poverty and corruption and this cycle of are hard to break from. Another characteristic that is related to corruption rate is the level of democracy. The more democratic a country is, the lesser the level of corruption. This is because in a democratic country, there is higher level of accountability, unlike in undemocratic country with archaic, dictatorial and irregular laws and regulations. In such countries it is hard to fight corruption as the existing rules, if any are hardly implemented. The Effects of corruption to a country Corruption has a ser...