Publication: Removing Impediments to Sustainable Economic Development : The Case of Corruption
Loading...
Date
2013-11
ISSN
Published
2013-11
Author(s)
Editor(s)
Abstract
This paper examines causes and consequences of corruption within the process of economic development. It starts by reviewing some of the factors that, over the past couple of decades, have transformed corruption from a subject on the sidelines of economic research to a central preoccupation of policy makers and donors in many countries. Drawing on a vast treasure trove of experiences and insights accumulated during the postwar period and reflected in a growing body of academic research, the paper analyzes many of the institutional mechanisms that sustain corruption and the impact of corruption on development. This paper argues that many forms of corruption stem from the distributional attributes of the state in its role as the economy's central agent of resource allocation. What is the impact of corruption on public finances and on the characteristics and performance of the private sector? What distortions does corruption introduce in the allocation of resources and in the relationships among economic agents in the marketplace? The paper also addresses the question of what can be done about corruption and discusses the role of economic policies in developing the right sorts of incentives and institutions to reduce the incidence of corruption. Particular attention is paid to business regulation, subsidies, the budget process, international conventions, and the role of new technologies. The paper concludes with some thoughts on the moral dimensions of corruption.
Link to Data Set
Citation
“López Claros, Augusto. 2013. Removing Impediments to Sustainable Economic Development : The Case of Corruption. Policy Research Working Paper;No. 6704. © World Bank. http://hdl.handle.net/10986/16909 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Publication Intergenerational Income Mobility around the World(Washington, DC: World Bank, 2025-07-09)This paper introduces a new global database with estimates of intergenerational income mobility for 87 countries, covering 84 percent of the world’s population. This marks a notable expansion of the cross-country evidence base on income mobility, particularly among low- and middle-income countries. The estimates indicate that the negative association between income mobility and inequality (known as the Great Gatsby Curve) continues to hold across this wider range of countries. The database also reveals a positive association between income mobility and national income per capita, suggesting that countries achieve higher levels of intergenerational mobility as they grow richer.Publication The Impact of Trade Promotion Organizations on Exports(Washington, DC: World Bank, 2025-08-13)This paper examines the impact of trade promotion organizations on exports during the COVID-19 pandemic using a World Bank survey. The results suggest that increased trade promotion organization budgets significantly boosted exports during downturns but had no effect during the recovery phase. Interestingly, e-commerce programs adopted by trade promotion organizations negatively affected exports during downturns as they diverted resources away from productive support, especially for sectors not intensive in online trade. These findings suggest that countercyclical trade promotion organizations budgets may enhance trade resilience during similar global shocks.Publication The Future of Poverty(Washington, DC: World Bank, 2025-07-15)Climate change is increasingly acknowledged as a critical issue with far-reaching socioeconomic implications that extend well beyond environmental concerns. Among the most pressing challenges is its impact on global poverty. This paper projects the potential impacts of unmitigated climate change on global poverty rates between 2023 and 2050. Building on a study that provided a detailed analysis of how temperature changes affect economic productivity, this paper integrates those findings with binned data from 217 countries, sourced from the World Bank’s Poverty and Inequality Platform. By simulating poverty rates and the number of poor under two climate change scenarios, the paper uncovers some alarming trends. One of the primary findings is that the number of people living in extreme poverty worldwide could be nearly doubled due to climate change. In all scenarios, Sub-Saharan Africa is projected to bear the brunt, contributing the largest number of poor people, with estimates ranging between 40.5 million and 73.5 million by 2050. Another significant finding is the disproportionate impact of inequality on poverty. Even small increases in inequality can lead to substantial rises in poverty levels. For instance, if every country’s Gini coefficient increases by just 1 percent between 2022 and 2050, an additional 8.8 million people could be pushed below the international poverty line by 2050. In a more extreme scenario, where every country’s Gini coefficient increases by 10 percent between 2022 and 2050, the number of people falling into poverty could rise by an additional 148.8 million relative to the baseline scenario. These findings underscore the urgent need for comprehensive climate policies that not only mitigate environmental impacts but also address socioeconomic vulnerabilities.Publication The Macroeconomic Implications of Climate Change Impacts and Adaptation Options(Washington, DC: World Bank, 2025-05-29)Estimating the macroeconomic implications of climate change impacts and adaptation options is a topic of intense research. This paper presents a framework in the World Bank's macrostructural model to assess climate-related damages. This approach has been used in many Country Climate and Development Reports, a World Bank diagnostic that identifies priorities to ensure continued development in spite of climate change and climate policy objectives. The methodology captures a set of impact channels through which climate change affects the economy by (1) connecting a set of biophysical models to the macroeconomic model and (2) exploring a set of development and climate scenarios. The paper summarizes the results for five countries, highlighting the sources and magnitudes of their vulnerability --- with estimated gross domestic product losses in 2050 exceeding 10 percent of gross domestic product in some countries and scenarios, although only a small set of impact channels is included. The paper also presents estimates of the macroeconomic gains from sector-level adaptation interventions, considering their upfront costs and avoided climate impacts and finding significant net gross domestic product gains from adaptation opportunities identified in the Country Climate and Development Reports. Finally, the paper discusses the limits of current modeling approaches, and their complementarity with empirical approaches based on historical data series. The integrated modeling approach proposed in this paper can inform policymakers as they make proactive decisions on climate change adaptation and resilience.Publication Climate Vulnerability and Job Accessibility(Washington, DC: World Bank, 2025-08-11)Many developing cities are facing rapid population growth and extreme climate events. This paper examines the link between job accessibility and climate vulnerability, using data from Antananarivo, Madagascar, which frequently experiences flooding. As in other countries, the analysis finds that men’s commutes are longer than women’s, who tend to walk to work or use public transport. Even after controlling for observables and the potential endogeneity bias associated with commute time, the findings show that climate vulnerability negatively impacts wages, as people avoid commuting long to work due to anticipated potential climate risks. Building climate resilience into urban transport is therefore essential. As predicted by theory, the evidence also shows that the value of commuting is positive, and walking is disadvantageous. Motorized commuting yields higher returns, which could lead to overuse of private cars and taxis, posing decarbonization challenges.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Republic of Belarus : Corruption Vulnerability Scan(Washington, DC, 2007-05-23)The Corruption Vulnerability Scan (CVS) is an internal Bank document aimed at providing a better understanding on the Bank's vulnerability in extending assistance to Belarus, and making suggestions as to how to reduce risks in the use of Bank funds, while improving results on the ground. The CVS team visited Belarus in March 2007. Its main conclusion is that the vulnerability to corruption of Bank funds and activities funded from loan proceeds in Belarus is low, as long as Bank fiduciary procedures are used and implementation is closely supervised. The report is in three parts: Corruption and Anti-Corruption in Belarus, Public Finance Management and the Bank Portfolio.Publication The Moral Compass of Companies(International Finance Corporation, Washington, DC, 2009-02-15)This publication targets private sector stakeholders who want to reduce a company s risk and vulnerability to corruption. It aims to provide guidance and recommendations for integrating ethics programs into corporate governance mechanisms to safeguard against corruption. Anti-corruption attitudes have changed significantly over the past two decades. Corruption is no longer regarded as a subject to be avoided and is now widely condemned for its damaging effect on countries, industries, governments, and the livelihoods of individual citizens. More importantly, the view of the private sector in the corruption equation is changing. Companies are no longer viewed only as facilitators of corruption - they are increasingly recognized as victims and a valuable source of working solutions, and anti-corruption efforts seen as integral to good corporate governance, Predictable, competitive, and fair economic environments free of corruption are central to sustainable business, economic growth and national development. It has been an easier task to raise this awareness than to reduce the corrosive effects of corruption, especially its worst manifestation of state capture. And though the challenge defies simple solutions, significant progress is being made. Today we have in place numerous international conventions and global collective action initiatives that set higher standards of transparency and accountability in corporate and public governance. More importantly, such standards are buttressed by a growing convergence of ethical values that set the tone for 'doing the right thing' in both the public and private sectors.Publication Drivers of Corruption : A Brief Review(Washington, DC: World Bank, 2014-10-15)Corruption is motivated by the possibility of securing something of value for oneself and one s allies. The desire to secure benefits is a human trait and generally positive for development; various forms of rewards drive humans to get up in the morning, do a good job, and act responsibly. The discussion now turns to the opportunity to secure more benefits than are entitled to within the existing rules of the game ; specifically, the opportunity to grab at the expense of society. A decision maker has the authority to influence an outcome that matters to the briber. For steering a decision in the briber s direction, the decision maker is compensated with a bribe. The steered decision and the bribe now become assets that usually exceed what at least one of the players would have obtained without the corrupt act. The opportunity to seize assets through some form of power misuse differs across sectors, organizations, and decision-making situations. This chapter describes the circumstances in which the risk of corruption is particularly high in other words, where the drivers of corruption can be found.Publication Papua New Guinea - Anti-Money Laundering and Combating the Financing of Terrorism : Mutual Evaluation Report(Washington, DC, 2011-07)Papua New Guinea (PNG) faces very serious risks of Money laundering (ML) from various criminal activities including domestic corruption (misappropriation of public funds), which is considered a serious problem. PNG is experiencing rapid economic growth, very large scale foreign investment and an escalating crime rate. While the Financial Intelligence Unit (FIU) is building its capacity, there is no clear political level commitment to 'follow the money' to tackle corruption and other crimes, and no demonstrated commitment to regulate and supervise AML obligations by financial sector regulators, which severely hampers the authorities ability to tackle financial aspects of corruption. Misappropriation of government funds occurs using government payments which, according to the authorities, are generally placed through the banking sector in PNG and used to purchase real estate, high-value vehicles, distributed in cash or moved offshore. This report provides a summary of the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) measures in place in PNG at the time of the mission or shortly thereafter. The report was produced by the World Bank as part of the Financial Sector Assessment Program (FSAP) of PNG.Publication Changing Norms is Key to Fighting Everyday Corruption(World Bank, Washington, DC, 2011-10)One of the biggest impediments to anticorruption efforts is the fact that corrupt practices have become so institutionalized in everyday society that citizens view them as fixed and incontestable. To break down such an entrenched mind-set, the public s ignorance of their rights, cynicism, fear of reprisal, and mentality of submission to the status quo must first be defeated. Perhaps most important, the efficacy challenge needs to be addressed. Citizens generally must believe that they can actually do something about corruption in order to summon the courage to act upon that belief. Based on CommGAP s interactions with the global anticorruption community as well as earlier research, we were able to collate 18 representative instances (case studies) from around the world, with real-life examples of citizens coming together to speak up against corruption and social norms vis-à-vis corruption or to change public services affected by corrupt practices. This report is a one-step-up analysis of the collated case studies, which is intended to shed light on practical approaches, tools, and techniques that have been successful in bringing citizens together to stand against the daunting phenomenon of corruption.
Users also downloaded
Showing related downloaded files
Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.Publication Remarks to the Annual Meetings 2020 Development Committee(World Bank, Washington, DC, 2020-10-16)David Malpass, President of the World Bank Group, announced that the Board approved a fast track approach to emergency health support programs that now covers 111 countries. Most projects are well advanced, with average disbursement upward of 40 percent. The goal is to take broad, fast action early. The operational framework presented back in June has positioned the Bank to help countries address immediate health threats and social and economic impacts and maintain our focus on long-term development. The Bank is making good progress toward the 15-month target of 160 billion dollars in surge financing. Much of it is for the poorest countries and will take the form of grants or low-rate, long-maturity loans. IFC, through the Global Health Platform, will be providing financing to vaccine manufacturers to foster expanded production of COVID-19 vaccines in both part 1 and 2 countries, providing production is reserved for emerging markets. The Development Committee holds a unique place in the international architecture. It is the only global forum in which the Governments of developed countries and the Governments of developing countries, creditor countries and borrower countries, come together to discuss development and the ‘net transfer of resources to developing countries.’ The current International Financial Architecture system is skewed in favor of the rich and creditor countries. It is important that all voices are heard, so Malpass urged the Ministers of developing countries to use their voice and speak their minds today. Malpass urged consideration of how we can build a new approach to debt restructuring that allows for a fair relationship and balance between creditors and debtors. This will be critical in restoring growth in developing countries; and helping reverse the inequality.Publication Argentina Country Climate and Development Report(World Bank, Washington, DC, 2022-11)The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.Publication World Development Report 2011(World Bank, 2011)The 2011 World development report looks across disciplines and experiences drawn from around the world to offer some ideas and practical recommendations on how to move beyond conflict and fragility and secure development. The key messages are important for all countries-low, middle, and high income-as well as for regional and global institutions: first, institutional legitimacy is the key to stability. When state institutions do not adequately protect citizens, guard against corruption, or provide access to justice; when markets do not provide job opportunities; or when communities have lost social cohesion-the likelihood of violent conflict increases. Second, investing in citizen security, justice, and jobs is essential to reducing violence. But there are major structural gaps in our collective capabilities to support these areas. Third, confronting this challenge effectively means that institutions need to change. International agencies and partners from other countries must adapt procedures so they can respond with agility and speed, a longer-term perspective, and greater staying power. Fourth, need to adopt a layered approach. Some problems can be addressed at the country level, but others need to be addressed at a regional level, such as developing markets that integrate insecure areas and pooling resources for building capacity Fifth, in adopting these approaches, need to be aware that the global landscape is changing. Regional institutions and middle income countries are playing a larger role. This means should pay more attention to south-south and south-north exchanges, and to the recent transition experiences of middle income countries.Publication World Development Report 2006(Washington, DC, 2005)This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.