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Nkomo
Mar 3
What are the three ways in which corruption impacts economic development in a country?
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Mar 3
1. Reduced investment: Corruption creates an uncertain business environment, discouraging both domestic and foreign investment. Investors are less likely to commit their resources to a country where corruption is rampant, as they fear that their investments may be lost or that they will be subject to unfair treatment.
2. Inefficient allocation of resources: Corruption distorts the allocation of resources in an economy, as decisions are often made based on personal connections or bribes rather than economic efficiency. This can lead to misallocation of resources, lower productivity, and slower economic growth.
3. Undermined public trust: Corruption erodes public trust in government institutions and undermines the rule of law. When citizens believe that their government is corrupt, they are less likely to pay taxes, follow regulations, or participate in the formal economy. This can lead to a lack of public services, weak governance, and overall hindered economic development.
2. Inefficient allocation of resources: Corruption distorts the allocation of resources in an economy, as decisions are often made based on personal connections or bribes rather than economic efficiency. This can lead to misallocation of resources, lower productivity, and slower economic growth.
3. Undermined public trust: Corruption erodes public trust in government institutions and undermines the rule of law. When citizens believe that their government is corrupt, they are less likely to pay taxes, follow regulations, or participate in the formal economy. This can lead to a lack of public services, weak governance, and overall hindered economic development.
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