Fighting Corruption
In broad terms, USAID focuses on corruption as the misuse of public office for private gain. It encompasses abuses by government officials such as embezzlement and nepotism, as well as abuses linking public and private actors such as bribery, extortion, influence peddling, and fraud. Corruption arises in both political and bureaucratic offices and can be petty or grand, organized or unorganized. Though corruption often facilitates criminal activities such as drug trafficking, money laundering, and prostitution, it is not restricted to these activities. For purposes of understanding the problem and devising remedies, it is important to think of crime and corruption as two separate problems.
Corruption poses a serious development challenge. In the political realm, it can seriously undermine democracy and good governance. Corruption in elections and in legislative bodies reduces accountability and representation in policymaking; corruption in the judiciary suspends the rule of law; and corruption in public administration results in the unequal provision of services. More generally, corruption weakens government institutions by disregarding official procedures, siphoning off the resources needed for development, and selecting or promoting officials without regard to performance. At the same time, corruption undermines the legitimacy of government and such democratic values as trust and tolerance.
Corruption also undermines economic development. In the private sector, corruption increases the cost of business through the price of bribes themselves, the management cost of negotiating with officials, and the risk of breached agreements or detection. Although some claim corruption reduces costs by cutting red tape, an emerging consensus holds that the availability of bribes induces officials to contrive new rules and delays. Corruption can also shield companies with connections from fair competition, thus allowing inefficient firms to survive.
Corruption also generates economic distortions in the public sector by pulling public investment away from education and into projects where bribes and kickbacks are more plentiful. Corruption also lowers compliance with construction, environmental, or other regulations; reduces the quality of government services; and increases budgetary pressures on government.
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