By J. Ibarra A. Angeles
IN MANY COUNTRIES, the private sector is both victim and willing accomplice of government corruption.
According to a 2008 study by the Center for International Private Enterprise (CIPE), acts of corruption—such as bribery, illegal deals, and conflicts of interest—drag down national economies, warp development policies, and reduce public confidence in government institutions.
Harming business and nation
In its study, CIPE said corruption harms business, and ultimately, the larger society, by diverting resources that could have been put to productive uses. Officials make decisions that benefit themselves and not the people. It’s taxpayers who foot the bill.
Corruption makes it riskier for foreign and local investors to put money into the country. The message they get is that the rule of law, and thus property rights, are not always respected, making investments a risky proposition. Corruption in government reduces competition and efficiency. The losers? Consumers who must pay more for lower quality and limited product offerings.
Fewer jobs are created because of corruption. By making it more expensive to operate, business companies are less likely to grow, and less likely to generate more employment. Inevitably, this means adding to what could very well be already high poverty levels because corruption lowers the income potential of the poor. They are deprived of more opportunities in the private sector. It also constricts their access to good healthcare and education services
The private sector that is either based or operating in developing countries is particularly vulnerable because these countries tend to have weaker regulations and inconsistent enforcement of anti-corruption laws. Moreover, because it can be very profitable, a culture of corruption remains entrenched within the private sector and government institutions in these countries.
