Corruption and poverty are inextricably linked to emerging countries. Corruption has long been a roadblock for governments striving to undertake the essential political, economic, and social adjustments for progress. In numerous places, corruption has been both a cause and a result of poverty.
Corruption in the public sector, the private sector, and the general public all have an impact on development initiatives by skewing decision-making, budgeting, and execution methods. When individuals abuse their entrusted power for private gain, corruption limits people’s participation and diverts public resources to private hands. The poor are on the losing end of this tainted system, with little access to public assistance or essential services.
The poor, who are already marginalized, face a double level of exclusion in countries where corruption is the rule of the game, proving corruption results in poverty. In a corrupt environment, wealth is captured, economic disparity develops, and a government’s governance power is diminished, particularly when it comes to serving the needs of the poor. For citizens, these outcomes create a situation in which the poor are trapped and growth is stifled, requiring the impoverished to rely on bribes and other unlawful payments to obtain essential services. More corruption, slower poverty eradication, and diminished sustainable growth are some of the negative implications for a country.
What is poverty?
Poverty is a social phenomenon in which a society is unable to meet even the most basic of human needs. Being poor entails more than just falling below a certain income threshold. Poverty is a multi-faceted problem defined by several characteristics such as access to basic amenities (health, education, sanitation, etc.), basic civil rights, empowerment, and human development.
Incomes are the most generally used metric for determining poverty. If a person’s income falls below a certain threshold for meeting necessities, he or she is termed poor. This means the level is commonly referred to as the poverty line. What is required to provide basic requirements varies across time and countries. There are many Catholic Charities to donate to for the help of those who need your support.
The World Trade Organization
Absolute poverty, relative poverty, and social exclusion are the three most commonly used definitions of poverty today. Absolute poverty is described as a lack of sufficient resources to maintain one’s physical and mental well-being. Relative poverty refers to a person’s income or resources in comparison to the national average. Social exclusion is linked to a lack of material resources; it necessitates full participation in acceptable daily life. It is a new word.
Corruption
Corruption has also been described as “the abuse of public power for private gain in a way that violates the law or deviates from societal norms.” In a broader sense, “corruption” encompasses not only the “improper or selfish exercise of power and influence related to a public office or the particular position one occupies in public life,” but also bribery. D.H. Bailey (Doughlas and Jhonson, 1971) defined it as the abuse of power motivated by personal gain, which does not have to be monetary.
Connection between corruption & poverty
Corruption does not cause poverty on its own. Instead, corruption has a direct impact on economic and governance issues, which operate as mediators in the production of poverty.
According to the “economic model,” corruption causes poverty by affecting economic growth determinants, which then affect poverty levels. To put it another way, rising corruption diminishes economic investment, distorts markets, stifles competition, causes inefficiencies by raising business expenses, and widens income disparities. Poverty is exacerbated by undermining these crucial economic elements. According to the “governance model,” corruption causes poverty via impacting governance characteristics, which then influence poverty levels.
Economic model
There is an inverse relationship between aggregate economic growth and corruption; countries with higher levels of corruption have lower economic growth. Corruption affects economic growth by affecting investment and entrepreneurship, distorting markets, and diminishing productivity. Furthermore, data suggests that corruption exacerbates income disparity and is linked to weaker economic growth. Finally, statistics show that as the rate of economic growth grows, so does the number of people living above the poverty line. You can help those poor in need.
Corruption impedes economic growth
Corruption and economic progress have a complicated relationship. Corruption stifles economic growth in the following ways:
- Corruption deters foreign and domestic investment by raising costs and creating uncertainty, lowering incentives for both foreign and domestic investors.
- Corruption is a tax on entrepreneurship: licenses and permissions are required by entrepreneurs and innovators, and paying bribes for these items reduces profit margins.
- Corruption degrades public infrastructure through diverting public resources to private uses, waiving standards, and diverting cash for operations and maintenance in favor of greater rent-seeking activity.
- Corruption reduces tax revenue: excessive rent taking drives businesses and activities into the informal or grey sector, and taxes are cut in exchange for payoffs to tax officials.
- Corruption diverts talent to rent-seeking: officials who would otherwise be engaged in constructive activities become preoccupied with rent-seeking, which encourages more rent-seeking.
- Corruption alters the mix of government spending: rent-seekers will pursue initiatives where rent-seeking is easiest and best camouflaged, diverting funds from other areas such as education and health.
Governance model
More corruption diminishes governance capability, which leads to rising poverty.
Corruption disrupts governance processes, destabilizes governance institutions, decreases government service provision, undermines the rule of law, and undermines public confidence in government and its institutions. Impaired governance, in turn, diminishes social capital and public faith in governance institutions, reducing public finances available to support effective economic growth initiatives and the government’s ability to assist its residents, particularly the poor.
Adverse effects of corruption
The money slipped to the bureaucrat for the issuance of a new identity card, the unofficial payment to get the family planning pills that should be distributed free of charge at the hospital, or the occasional bribe to the policeman to avoid harassment are all examples of petty corruption in the provision of public services.
While this type of corruption affects society as a whole, the impoverished are the ones who bear the brunt of it. Corruption eats into an already tight budget, and further spending means cuts to other essential services. The impoverished spend a bigger percentage of their income on bribes than the wealthy. The burden that corruption places on the poor is exacerbated by the fact that they rely on public services more than the wealthy. Because the poor cannot afford to use private clinics or schools, they are more exposed to demands for grease money.
The financial consequences of various forms of corruption are not the only ones. They may also have significant economic, moral, and social implications. When rice disappears from a government aid program, poor people’s relationships with community leaders and government officials deteriorate. When a police officer or teacher uses his or her position to extort bribes, it damages their reputation and trust relationships, depleting social capital and lowering moral standards. It also becomes a means of “getting things done,” weakening the rule of law in the process.
Wrapping up
There are numerous myths about corruption that must be debunked if we are to truly confront it. Some of these myths include: corruption has become a way of life and there is nothing that can be done about it, or that corruption is a post-independence phenomenon caused by giving people too much freedom and license in democracy; or that poor people in underdeveloped countries are generally dishonest and untrustworthy by nature and easily tempted, whereas people in developed countries are less prone to corruption, or that corruption only exists at the lower a social level. All of these fallacies are too blatant, and we must avoid them while devising anti-corruption strategies.
We must concentrate on law, procedure, and administration to combat corruption. The structure and behavior of people in certain situations with distinct statuses necessitate laws and norms. Laws should not be written in such a way that they allow for too much discretion. Will citizens in a democratic country ever recognize that they must play a critical part in battling evils such as corruption? In truth, most of the corruption exists as a result of people’s tolerance for it or a complete lack of public outrage, as well as the lack of a robust public forum to fight it. While many intelligent, educated, well-informed, and articulate citizens are concerned about the country’s awful predicament, they are unable to channel their rage into powerful public opposition to it. A united effort by responsible and informed citizens may undoubtedly make a significant difference in the degree of corruption.
