Understanding Corruption

Abstract

This study underscores the critical importance of prioritizing efforts to combat corruption within the development agenda. Focusing on least-developed nations characterized by extensive regulation and central planning, the chapter delves into the roots and ramifications of corruption. In such contexts, institutional deficiencies within legislative and judicial systems, coupled with a dearth of accountability, transparency, and consistency, create fertile ground for the proliferation of rent-seeking behavior. Beyond catalyzing the growth of shadow economies and incurring substantial societal costs, corruption exerts detrimental effects on investment, consumer behavior, income distribution, government finances, and economic reforms. Moreover, the study sheds light on the global pervasiveness of bribery and its underlying supply-side dynamics, while offering insights into strategies aimed at combating and preempting corrupt practices.