Corruption: Its ill-effects and persistence nevertheless

Corruption has been and still is a feature of both the developed as well as the developing world. Whether corruption is a curse or a blessing in disguise has been debated vociferously over a long period of time and the jury is still out on it. However, it must be appreciated that the role of corruption is country-specific (also, history-specific, type of government-specific, etc.) and there cannot be any universally acceptable stance on it. However, in this paper, I focus on the ill-effects of corruption. Section 1 draws heavily on an empirical study to show that corruption is detrimental to investment and economic growth. Given the result in section 1, section 2 explains (using Mauro's model of strategic complementarity) why, in spite of corruption being an obstacle to growth, countries have been unable or even unwilling to root out corruption that is its persistence.

Section 3 lays out another empirical study indicating that the low level of education and health in developing countries could be a consequence of the high level of rent seeking by government officials in such countries. Finally, in section 4, I assert that the success of NREGA might have been overstated if there indeed, as sections 3 and 4 suggest, has been theft of high proportion of government expenditure by corrupt government officials or the administration and/or the motive of a corrupt government of introducing NREGA is to derive rent and personal benefits from this programme.