Corruption: The World's Largest Obstacles To Economic Growth

Corruption is one of the world’s largest obstacles to economic development and growth. Research shows that bribery no doubt have grim opposing effects on economic growth, inequality and poverty and on the allocation of public spending on education, health and infrastructure.

Corruption is often defined as the manipulation of public power for private benefit. It applies to any transaction between the public and the private sectors where public goods illegally are transformed into private benefits.

ACC key provision against corruption applies to both public and private sectors and states: «Any person who a) for himself or other persons, requests or receives an improper advantage or accepts an offer of an improper advantage in connection with

It hampers resources from being spent on development and poverty reduction.

It is estimated that illicit capital flows from developing countries such as Namibia to be ten times greater than the international aid to the same countries. Tax evasion and mispricing is believed to consist of 2/3 of the illicit capital flight, while criminal activity accounts for the remaining third. It is important to support efforts to stop these flows, such as through support for the development of effective tax laws, tax directorates, openness and transparency in public administration.

Corruption increases the costs of investments and challenges the companies’ competitive conditions. Poor people are required to pay for services which should otherwise be free. While large-scale corruption has significant social consequences, small-scale corruption has significant consequences for individuals and can lead to families becoming unable to afford schooling or to utilize health services. Corruption reduces the trust in the public sector and threatens thus the stability of the democratic institutions like in our

We have to also assess the corruption in the society at large, outside the Namibian funded project. This is important to understand how corruption can potentially undermine our efforts and whether other measures are needed.

Another challenge is to find good ways of measuring corruption and the results of the initiatives we support. Good risk analysis based on previous studies and evaluation can identify challenges and force measures to reduce risk. Such analysis will also give those who will make decisions a better and more thorough basis for determining whether a partnership is possible.

The globalization of the world in general and the financial sector in particular, the existence of tax havens and the interests of states in using these, makes it necessary to fight corruption across borders. Although we know that the existence of tax havens have very adverse effects on developing countries, the forces supporting their existence is still stronger than those