Doing Business in Emerging Markets by Gonclaves Marcus.;Arcot Rajabahadur.;Alves Jose.;

Author:Gonclaves, Marcus.;Arcot, Rajabahadur.;Alves, Jose.;
Language: eng
Format: epub
Publisher: Business Expert Press
Published: 2014-10-14T16:00:00+00:00

Figure 4.3 The 50 least developed countries in the world

Source: UNCTAD

To identify corruption is not difficult, but it is harder to see the layers it can have, especially under the more formal, even legal forms of corruption. It is easy to assume that these formal forms are not even an issue because they are often part of the laws and institutions that govern national and international communities of which many of us are accustomed to. If a president of an emerging country gets paid a bribe and as a result taxes are reduced to benefit certain corporations or even markets, what do we, the general public, know?

Corruption promotes, and often determines, the misuse of governments’ resources by diverting them from sectors of vital importance such as health, education, and development. Hence, the people who have the most needs, the poor people, are the ones deprived of economic growth and development opportunities, which in turn causes significant income inequalities and lack of social mobility. Corruption also siphons off goods and money intended to alleviate poverty. These leakages compromise a country’s economic growth, investment levels, poverty reduction efforts, and other development-related advances.

At the same time, petty corruption saps the resources of poor people by forcing them to offer bribes in exchange for access to basic goods and services, many of which may be free by law, such as healthcare and education. With few other choices, poor people may resort to corruption as a survival strategy to overcome the exclusion faced when trying to go to school, get a job, buy a house, vote or simply participate in their societies. Consequently, the cost of public services rises to the point where economically deprived people can no longer afford them. As the poor become poorer, corruption feeds poverty and inequality.

Combating poverty and corruption, therefore, means addressing and overcoming the barriers that stand in the way of citizen engagement and a state’s accountability. While most emerging economies claim that the equal participation and rights of citizens exist, in reality they rarely apply to the poor. Hence, to be effective, pro-poor anti-corruption strategies must look more closely at the larger context that limits opportunities for poor citizens to participate in political, economic, and social processes.

The Importance of Political Participation and Accountability

Corruption in the political sphere attracts growing attention in more and more countries. The demand for accountability of political leaders and the transparency of political parties has begun to trigger reform in those areas. Private businesses also have become a focus of anti-corruption reform. Besides being the object of state oversight, this sector has started its own initiatives to curb corruption.

Linking the rights of marginalized communities and individuals to seek government’s accountability is a fundamental first step for developing a pro-poor anti-corruption strategy. Citizens giving their governments the power to act on their behalf shape a country’s policies. Corruption by public and private sector officials taints this process, distorts constitutions and institutions, and results in poverty and unequal development. Strengthening political accountability would result in policies

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