In Many Developing Countries, Corruption Is A Barrier To

In many developing countries, corruption is a barrier to economic growth. Corruption can prevent the fair allocation of goods and services to citizens by trickling to aspects of everyday life. On a macroeconomic level, scholars are of the belief that corruption hinders economic growth and development (Mauro, 1995). Definition Corruption is often described as a cancer, one official simply referred to it as â€Å"the AIDs of democracy† (Johnston, 1996). Corruption has been defined in a variety of ways, including as â€Å"dishonest or fraudulent conduct by those in power, typically involving bribery†. There is no ‘clear-cut’ definition of corruption. Nevertheless, as mentioned in the previous section the World Bank’s definition will be used in this†¦show more content†¦3. A corruption index sold by the International Country Risk Guide (ICRG), a private business consulting company. While the indicators have been widely used in empirical research, some researchers have questioned about the accuracy of these measures and the validity of their use in empirical research (Campbell, 2013). As most estimates of corruption are based on surveys of perception. These perception surveys have the advantage of good coverage—it is much easier to ask someone’s perceptions of corruption than to measure corruption. However, the validity and reliability of perception indicators as measures of corruption, they remain in fact, a reference for people and both businesses and political leaders to make decisions, enabling them to gauge the impact of corruption on the economy. Some would see as better to go in with some information rather than nothing at all. There are two competing views when discussing corruption. The first suggest that corruption creates barriers to a country s development. This is mainly seen in recent literature, for example, Rose-Ackerman (1999) and Knack and Keefer (1995). The second being that corruption can be beneficial for a country’s development as they can easily overcome barriers such as regulation to complete projects- although this is not a popular opinion. This review mainly tackles literature from the school of thought that corruption can be harmful to aShow MoreRelatedChallenges Faced By Developing Countries1310 Words   |  6 Pageschallenges that developing countries face in international trade. It will be linked to statistics and references to support the information. It will end by showing several topics about the argument of import substitution policy and the export-led economic development. Altogether, these concerns will be linked to the circumstances faced by the developing countries wit h links to the World Trade Organization (WTO) regime. 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