Corruption: Costs and Mitigating Strategies

May 11, 2016

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Corruption: Costs and Mitigating Strategies, (USA: International Monetary Fund, 2016) accessed November 21, 2024

Disclaimer: This Staff Discussion Note represents the views of the authors and does not necessarily represent IMF views or IMF policy. The views expressed herein should be attributed to the authors and not to the IMF, its Executive Board, or its management. Staff Discussion Notes are published to elicit comments and to further debate.

Summary

In an environment in which growth and employment prospects in many countries remain subdued and a number of high-profile corruption cases have fueled moral outrage, and amid a growing consensus that corruption can seriously undermine a country’s ability to deliver inclusive economic growth in a number of different areas, addressing corruption globally—in both developed and developing countries—has become increasingly urgent. When corruption impairs government functions, it can adversely affect a number of important determinants of economic performance, including macrofinancial stability, investment, human capital accumulation, and total factor productivity. Moreover, when systemic corruption affects virtually all state functions, distrust of government can become so pervasive that it can lead to violence, civil strife, and conflict, with devastating social and economic implications. This Staff Discussion Note focuses on corruption that arises from the abuse of public office for private gain, whether it manifests itself transactionally (for example, a bribe) or through powerful networks between business and government that effectively result in the privatization of public policy. While designing and implementing an anticorruption strategy requires change on many different levels, the IMF's experience in assisting member countries suggests that several elements need to be given priority: transparency, rule of law, and economic reform policies designed to eliminate excessive regulation. Perhaps most important, however, addressing corruption requires building effective institutions, with the clear objective of developing a competent civil service that takes pride in being independent of both private influence and public interference.

Subject: Anti-money laundering and combating the financing of terrorism (AML/CFT), Corruption, Crime, Economic sectors, Financial Sector Assessment Program, Financial sector policy and analysis, Legal support in revenue administration, Public sector, Revenue administration, Tax evasion

Keywords: A number of country, A number of EU member country, Anti-money laundering and combating the financing of terrorism (AML/CFT), Core government function, Corruption, Countries rich, Country, Economic reform, Financial Sector Assessment Program, Functioning government institution, Global, Governance, Government, Government approval, Government decision, Government Finance Statistics Manual, Government function, Government regulation, Growth, IMF, IMF experience, IMF research, IMF support, Institutions, Legal support in revenue administration, Public sector, SDN, Tax authorities

Publication Details

Pages:

47
Volume:

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DOI:

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Issue:

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Series:

Staff Discussion Notes No. 2016/005
Stock No:

SDNEA2016005
ISBN:

9781513594330
ISSN:

2617-6750

Notes

See Also: Christine Lagarde: Addressing corruption – openly (Excerpt from the book: < href="https://www.gov.uk/government/publications/against-corruption-a-collection-of-essays/against-corruption-a-collection-of-essays">Against Corruption: a collection of essays May 2016

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