Political corruption is a known issue in the modern world, and it significantly affects multiple areas of governmental functioning. It is characterized by government officials using their power to create illegitimate private gain. The vast majority of countries face the corruption issue to a certain extent, which minimizes the prospects for growth and development. Corruption causes instability and uncertainty and affects capital flow by discouraging capital investments. The economic sector is one of the main fields being influenced by political bribery. Corruption in politics negatively affects economic growth by decreasing foreign investments, undermining the function of specific economic sectors, and lack thereof demonstrates a positive effect on a country’s development.
Corruption in politics is proven to be a major flaw of a country on a higher level, and it affects, first of all, the country’s international position. The presence of corruption in a country can reduce its authority on a global scale. With the growing demand for transparency from a government affected by political corruption, methods of influence are created, such as decreasing international investment. As the assets from the foreign countries become limited, sustainable development and economic growth are no longer ensured, and the poverty levels are rising (Cieslik and Goczek 330). This factor is essential for developing countries that rely the economic stability heavily on international investments.
In addition, developing countries show a higher level of corruption due to poor management and lack of regulation. Therefore, a corrupted political system discourages foreign investors and forms low-growth tendencies.
The decrease in international investments is followed by the undermining function of specific economic sectors. In assessing the most problematic economic sectors, it becomes apparent that some areas of production are not functioning well with poor regulation. For instance, the alcohol industry has always been the subject of law, and it has been debated as to how it may be reduced. However, when the reduction was implemented during the prohibition of alcohol in the US, government officials allegedly started profiting off of it in order to ensure self-gain (Bullok 250).
Therefore, the inequality was reinforced, and the economics suffered significantly, as one of the largest industries halted its production. Another example of political corruption affecting the economic sector is the lack of regulation in industries that are beneficial for people. There is an example of human organ sales that could be useful if legalized and well-regulated (Bullok 301). As people of power have the opportunity to change the system for the better but refuse to change it, there appears a possibility that personal gain is involved in a situation.
Although political corruption is a global issue and most countries suffer from it, studies show that governmental systems where corruption is not present demonstrate positive effects on economics. According to Cieslik and Goczek, the absence of corruption was found to significantly impact the growth rate in developed countries (329). The governments that remain not corrupted are more likely to gain investments from the outside of the country. International investors tend to finance the countries with lower corruption risk; therefore, countries with steady functioning tend to be richer than those without it. Both local and foreign investments are directly involved in the country’s economic system, which proves that the level of investments in the country is connected to the well-being of the community. Therefore, uncorrupted and transparent countries are prone to international financing; consequently, human resources, economic growth, and development are ensured.
However, there is a critique existing that not all countries where bribery is present follow the same pattern. Moreover, the studies on the effects of political corruption show mostly perceptions with the lack of the objective bribery prevalence. In other words, corruption may not be measured by specific numbers, and therefore, the aspects researched in the studies do not imply relatedness to real bribery. When focusing on the lack of investments from other countries that may poorly affect the economics, the way people see corruption is more important than objective measures. The importance of perception lies within the fact of investment decisions being made considering the corruption on the surface in the first place rather than the numbers. Therefore, in investment research, it is acceptable to consider subjective measures of corruption.
In conclusion, corruption in politics or any other sphere is a severe issue limiting economic growth, productivity, and foreign investments. Moreover, corruption in government is associated with inequality between government officials and ordinary citizens, which is proved historically. Corrupted countries do not attract foreign investors due to their unreliability and therefore tend to be less financed than the transparent developed countries. Developed countries report a low level of corruption and tend to be more reliable and financed from the outside. High corruption levels demonstrate the inability of a country to regulate economic sectors that are beneficial for the community. In contrast, the absence of corruption indicates the ensured economic growth and prosperity. Therefore, to control and improve economic growth, it is crucial to eliminate corruption in politics.
Works Cited
Bullock, Richard Harvey, et al. The Norton Field Guide to Writing with Readings and Handbook. 5th ed., W. W. Norton, 2019.
Cieslik, Andrzej, and Lukasz Goczek. “Control of Corruption, International Investment, and Economic Growth–Evidence from Panel Data.” World Development, vol. 103, no. 1, 2018, pp. 323-335.