Today, several socio-economic issues, including the devaluation of national currency, unemployment, elite migration, budget deficit, inflation, environmental crisis and factory closures, are on the minds of politicians and government officials. Corruption and the dismal state of ethical conduct in the administrative apparati are also on this list, but still many of the decision-makers have not felt the necessity of fighting corruption or prioritizing it.
Nasser Zakeri, an economist, prefaced his article for the Persian daily Shargh with this note. A translation of the text follows:
I believe the approach toward prioritizing is the result of a wrong view toward major economic and social issues. Under this view, the spread of corruption in the national economy is insignificant and bearable, whereas under a realistic view, the losses caused by corruption are multiple times greater than that of other problems. The losses inflicted by corruption on the country are outlined below:
Corruption increases the costs of running the country because a part of the budget resources goes into the pockets of corrupt people. The government then has to exert more pressure on economic players to collect more taxes, or it has to ignore some of its obligations to balance its income and expenses.
It imposes costs on economic players which, in turn, increase the end prices of goods and services. Consequently, inflation increases and export revenues decline because goods lose their export market as a result of higher prices.
Corruption disrupts national development by hurting the mutual trust between the government and citizens. In a developing country, the government needs public support and trust to have greater power for administering the economy. The mere existence of a small number of corrupt people in the government is enough to make economic players and citizens distrustful of all government officials. Under the circumstances, the government will face huge hurdles in furthering its development programs.
The damage corruption inflicts on the national economy is adverse enough to prompt those in charge of running the country to launch a relentless campaign against it at the earliest. The fight against corruption is not possible without the support and cooperation of people, the independent media and experienced elites in this field
Financial corruption sets the stage for the emergence of all kinds of vice; it wreaks havoc on the cultural foundation of the society. When corruption becomes commonplace, gradually more and more citizens ignore moral standards; it is the best system for the spread of unethical behavior.
Corruption promotes the belief that one does not need to work, make efforts and be creative to get a higher income; it is enough to disregard moral principles and lobby for gaining privilege. In such a situation, hard work and integrity will be reviled.
As a result, the talent of citizens is used for goals other than development and economic growth; it is used to identify new ways of circumventing the laws and joining the corruption network.
Corruption in a society that preaches spirituality and moral excellence is a negative publicity, as it destroys the cultural credibility of that society in the eyes of the world; the world expects to see such a society among countries with the highest financial probity ratings after all.
Foreign partners will become doubtful about the future of cooperation with a country where corruption is pervasive. Foreign investors will naturally choose countries with a healthier economy for long-term investment and business cooperation. Therefore, the ranking of each country on the list of corruption-free economies has become one of the key indicators for foreign investors which, along with other indexes, determines the strength of the national economy in gaining a suitable position in the global economy.
Corruption lands a double whammy on income distribution and economic growth. On the one hand, the spread of corruption increases income and wealth inequality, which blocks the road to long-term economic growth. On the other hand, in some rare situations, the expansion of corruption network may allow a larger part of the society to enjoy huge incomes from rent-seeking practices.
In a society plagued by restrictive laws and bureaucracy, an economic player may get access to bank loans by bribing to safeguard their business and jobs. However, there is no doubt that misery is the ultimate result of the spread of corruption, even if such consequences do not come to light in the short run.
Now we realize why acting complacently with corruption and prioritizing other goals over the goal of fighting corruption is unreasonable and imprudent. The damage corruption inflicts on the national economy is adverse enough to prompt those in charge of running the country to launch a relentless campaign against it at the earliest. The fight against corruption is not possible without the support and cooperation of people, the independent media and experienced elites in this field.
