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Giving Compass' Take:
• Efosa Ojomo at Christensen Institute goes over common misconceptions about corruption in poor countries and through research has found that poor countries don’t need to eliminate corruption in order to become prosperous; they must become prosperous in order to eliminate corruption.
• How can donors help support poor countries prosper? What industries in Africa need the most investments?
There’s a common misconception that until corruption in poor countries is eliminated, or at least significantly reduced, these countries will not be able to develop. This line of thinking is understandable, given what know about the phenomenon:
- People living in poverty are disproportionately impacted by corruption. For example, according to research cited by the World Bank, in Paraguay those living in poverty pay 12.6% of their income on bribes while those in high-income households pay barely half that percentage. In Sierra Leone the disparity is even worse. Corruption affects how billions of people already struggling to eke out a living access healthcare, education, justice, and other government services.
- Corruption is both economically corrosive and politically cancerous, and incidences of it create a vicious cycle that is difficult for countries and companies to escape. Anecdotally, I felt the metastasizing nature of corruption when I began discussing the ideas in our book, The Prosperity Paradox. Everywhere I turned, people kept telling me innovation can never work in Country A or Country B because of corruption. The “that country is too corrupt” reputation causes investors—foreign and domestic—to not want to conduct business with and in these nations, resulting in less economic opportunity. The lack of economic opportunity makes corruption more attractive, thereby causing a vicious cycle that is incredibly difficult to escape. Corruption then, not only increases in size and scale, but also continues to disproportionately affect the poor and vulnerable.
Clearly corruption is a force to be reckoned with. But the notion that it must be eradicated for development to occur is not only false, but severely limiting since it hinders investments in innovation that are vital to the development of any country.
Read the full article about corruption by Efosa Ojomo at Christensen Institute.