INTRODUCTION Corruption is the main cause of poverty and inequality in Asia. Government officials may use their authority for private gain in designing and implementing public policies (Gupta S, Davoodi H and Terme RA, 1998). This is defined as corruption. Corruption will lead to both poverty and inequality. Poverty is defined as needs of essential assets and opportunities that every human is entitled (Webster N, 2007). There are two types of poverty, absolute poverty and relative poverty. Poverty can also mean lack of nutrition and poor access to basic housing and education and primary health services. Inequality is defined as a wide gap between the high and low incomes. There is domestic and international inequality.
ANALYSIS
Corruption does not only affect the growth rate of income but also affect inequality and poverty. Corruption affects poverty by first impacting on economic growth factors. Corruptions will lead to lower economic activities, creates inefficient by increasing the business thus hinders income inequality then leads to poverty in economic. In the economic model, corruption discourages foreign and domestic investment (Chetwynd E, Chetwynd F and Spector B 2003). For example, the increasing costs will create uncertainties which reduce the incentives for the foreign investor to invest in the country
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Corruption impacts in many ways such as in economy and governance way. It restricts the economic growth by discourages the incentives for the foreign investor to invest in the country thus creates poverty as well as inequality in income distribution. Besides, in governance way, it reduces governance capacity in expanding the country which creates corruption such as inequality in health care and education as well as increases the poverty rate. Alternatively, poverty invites corruption as it weakens economic, political and social institution (Negin V, Rashid ZA and Nikopour H,