Economic Analysis of Corruption Essay - 550 Words

Economic Analysis of Corruption (Essay Sample) Content: Name:Instructor:Course:Date:Economic analysis of corruptionCorruption is a breeding ground for many ills in society. It is something that happens on different levels of government and society in different contexts and thus, there is no specific definition of what it is. This paper looks at the economic analysis of corruption in four different categories. It is widely considered that corruption is the abuse of a public office for personal interest in a way that compromises the laid down procedures of operations (Aidt 2). From that description, discretionary power, economic rents and weak institutions have to exist for corruption to sprout. The four analysis of corruption are:Efficient corruptionsAccording to Aidt (3), the notion of corruption being efficiency enhancing is as a result of the thinking that it speeds up a process that could have been rather slow if the formalities were to be followed. If the traffic rules of a country dictate that the driving license is i ssued two months after completing the driving course, by use of corruption, one can give an incentive and receive his license in 2 weeks. In this way, the pre-existing government failure to offer the license in the appropriate time has given a room for corruption to sprout and bring about efficiency. This ideology views corruption as a market response to the failures of governments.Corruption with a benevolent principalAccording to this theory, corruption arises when decision-making authority is transferred from the central agent to a second party. In this case, the likelihood of corruption occurring is based on the costs and benefits of providing a standard institution. If a government official is going to gain more from bribe than what his or her wages can provide, he is likely to be corrupt provided that the structures in place are not effective enough to detect that he misinformed the government for personal gain. With the consideration that even if he is caught and the penalty is bound to be lower than what he is going to gain from corruption, the official would rather be corrupt. Corruption thrives because of a poor rewarding system for officialsSelf-reinforcing corruptionThis theory says that corruption levels depend on the history of institutions in having corrupt officials. The reward to corruption according to an individual lies significantly on how other people on the same level had been corrupt in the prior years. This notion is based on the facts that it is hard to audit and bring out corrupt officials in a system where the activity has been practiced for long. This is because corrupt officials aim to maintain their group of corrupt friends and carry with the vice as it had been in the past. Corruption therefore, keeps re-inventing itself in such a culture.ConclusionThe economic analysis of the various categories of corruption gives a picture of how corrupti...