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Social Implications of Corruption in Developing Countries: Case Study of Pakistan and India

   | 06 lut 2022

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Anti-corruption policy analysis References
Political accountability Political accountability is a baseline factor in rooting out corrupt practices; in a well-democratic system, voters are capable of holding politicians accountable for their corrupt behaviour Caillier (2010), Adsera et al (2003) and Rose-Ackerman (1999)
Institutional reforms Countries where corruption is widespread need institutional reform, which means that on a daily basis, operational problems must be improved through control systems, transparency in the system, robust accountability, improved recruitment, training of official staff and a client-friendly appeal system Johnson (1998)
Technological advancement Technological advancement seems to have played a meaningful role in improving transparency and reducing the level of corruption. Providing mobile texting service to the public in order to report corruption cases can have a positive effect on curbing corruption in Africa. However, it needs to have a decentralised information system that can demolish the opportunities to indulge in corruption Ionescu (2013)
Social audits Social audits should be introduced in developing countries to maintain checks at the organisational level. Social audits mean to identify and report organisational problems as well as to enhance organisational performance. Social audits are important in the health sector; in particular, it ensures greater accountability and improves healthcare services Dhaktode (2016) and Cockcroft et al (2008)

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Theories of corruption Public choice Studies only the decisions taken by individuals, public officials try to maximise their benefit, a decision to take a bribe is a result of rational calculation
Organisational culture theories The cause of corruption lies in group behaviours taking place inside an organisation's structure and culture. The corrupt culture of an organisation determines an individual's corrupt behaviour
Public administration theories Reforms within the sense of the New Public Management undermine traditional functions of the public sector and ultimately have a negative impact on accountability
Collective action problem Corruption arises because agents think that the other agents are also corrupted. Thus, corruption becomes an expected behaviour in a society. Corruption, therefore, becomes a feeding and the most rational strategy

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Sources Keywords Interpretation
Web of Science ‘Corruption in developing countries’ AND ‘the effects of corruption in developing countries’ AND ‘implications of corruption in developing countries’ AND ‘human rights implications of corruption’ AND ‘corruption effects on human right’ AND ‘human development’ (‘social implications*’ OR ‘effects*’ OR ‘impacts’ OR ‘influence*’ ‘poverty and corruption’ OR ‘nexus’ OR ‘health indicators’ OR ‘social indicators’ OR ‘bribery’ OR ‘nepotism’ OR ‘embezzlement’ OR ‘political corruption*’ OR ‘bureaucratic corruption’ OR ‘corrupt practices*’) The existence of keywords was confirmed in the resulting articles
This search resulted in 61 studies

Google Scholar ‘Corruption in developing countries’ AND ‘the effects of corruption in developing countries’ AND ‘implications of corruption in developing countries’ ‘human rights implications of corruption’ AND ‘corruption effects on human right’ AND ‘human development’ (‘social implications*’ OR ‘effects*’ OR ‘impacts’ OR ‘influence*’ ‘poverty and corruption’ OR ‘nexus’ OR ‘health indicators’ OR ‘education indicators’ OR ‘bribery’ OR ‘nepotism’ OR ‘embezzlement’ OR ‘political corruption*’ OR ‘bureaucratic corruption’ OR ‘corrupt practices*’) The existence of keywords was confirmed in the resulting articles
This search resulted in 147 studies

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Corruption in Pakistan
CPI Report (2019) Pakistan ranks 120 out of 180 countries on the Corruption Perception Index, scoring 32 points out of 100 points
World Economic Forum, GCR (2019) Overall institutional performance of Pakistan has a score of 47.7/100 points and the country ranks 107 out of a total of 141 countries. The level of organised crimes has a score of 47.4/100 points, placing the country at 112 rank out of 141 countries. The level of transparency score is 33/100 points, which places the country at 101 position among 141 countries
Ali (2020) Politicisation of state institutions is the biggest problem in Pakistan. NAB fails to investigate high-profile corruption cases due to political influence. Panama case has not been deeply investigated
Verkaaik (2001) During the last three decades, Pakistan's prime ministers have been disqualified on corruption charges. In the 1990s, the accountability commission was introduced, which functioned as a financial check and balance instrument, yet failed to perform its function
Bashir et al (2011) It is perceived that getting work done without having a public officer bribed is not possible. Research shows that 82% of the government employees either saw or experienced misconduct in the last 1 year and 90% people do not report corrupt activities
Anwar and Bilquees (2003) Bad governance affects the poor class of the society by various means, including income inequality and reduced public spending on human development
Miankhail (2009) Due to the lack of accountability and transparency in the public sector of Pakistan, misallocation of resources is the key problem. Public funds have been distorted, protecting the interest of elites
Khan (2016) Having colonial roots and due to political instability (due to civil-military clashes) and high political interference, state institutions have become shallow and no concrete course of action is taken to combat corruption
Chene (2008) In Pakistan, corruption exists in different forms, namely, bribery, nepotism, extortion, political and bureaucratic corruption or abuse of power by influential public officials
CPI Report (2018), Vittal and Mahalingam (2004) The gravity of corrupt activities is dependent on the level of morality in society. Corrupt practices are an integral part of routine activities in Pakistan. The level of corruption in Pakistan has surged
Javaid (2010) Grand corruption is widespread in developmental projects, particularly in public sector procurement. Some estimates show that corruption causes some Rs. 200 billion loss to the economy every year
Farooq et al (2013) Corruption impedes economic growth and weakens the institutions. Similarly, Pakistan's economy has seen a sluggish growth due to a rampant increase in the level of corruption
Paredes-Solis et al (2011) People in Pakistan believe that they are forced to pay bribes to obtain public medical services. In the year 2002, 29% of people and in the year 2004, 24% of people were using the country's public health services. Due to inadequate health facilities, people tend to use (who can afford) available private health services
Coleman (2004) Weak governance, corruption and political instability in Pakistan led to unstable economic and social development. Governments have repeatedly failed to lift millions of people from drowning in poverty
Ahmad et al (2013) The primary education system has been neglected in Pakistan. Political interference ends up in corruption, which in turn reduces the financial resources for the education sector, due to which school staff are not well paid and are untrained
World Bank Report (2015), Choudhry (2014) 25% of the population in Pakistan live below the poverty line. Pakistan's multidimensional poverty headcount ratio is 49.4%, while the country has been ranked 145 on the Human Development Index
Khan (2007), WHO (2014) Pakistan has always been criticised for its public spending priorities. The country spends 2.6% of its total GDP on health care and 2.4% on education
UNIGME, WHO (2018), UNFPA (2019) Child mortality rate is 69.31/1000 live births under 5 years and 46,482.00 between 5 and 14 years of age. Also, more than 30% of children are victims of stunted growth due to malnutrition. Pakistan has the highest maternal mortality rate in South Asia due to unavailability of health facilities
Corruption in India
Transparency International (2019) According to Transparency International (2019) Report, India ranks 80 out of 180 countries on the Corruption Perception Index, obtaining 40 points out of 100
World Economic Forum, GCR (2019) Overall institutional performance of India shows a score of 56.8/100 points and India ranks 59 out of a total of 141 countries. The level of organised crimes has a score of 55.0/100 points, placing India at 91 position out of 141 countries. The level of transparency score is 41.0/100 points, which places the country at 66 position among 141 countries
Transparency International India Report (2005) In 2005, 11 public sector departments had been surveyed; 62% of respondents (citizens) said corruption is a serious issue. They shared a personal experience of paying bribes. The study reveals that the common people pay Rs. 210,680 million as bribe per year
HDI Report (2019) and Global Monitoring Report (2014) India ranks 129 with an HDI value of 0.647; 30% of the world's extremely poor people live in India. Corruption is perceived to be one of the main barriers to human development in India
World Bank (2018) and UNICEF/WHO (2009) 37/1000 children die before their fifth birthday; 26% of India's population does not have access to sanitation, which causes diarrhoea in children that becomes a reason of approximately 386,600 child deaths each year
Global Monitoring Report (2014) Corruption is prevalent in the Indian education system; 71% of the population is dependent on the public education system. The amount of money that goes in petty corruption is nearly INR. 41,370 million per annum
Quah (2008) Corruption in India, either grand or petty, is routinely being practiced. In 2008, the World Bank investigated corruption scandals in India's healthcare projects of $568 million. Indian high-ranking public officials defalcate billions of rupees, while street-level bureaucrats are busy stealing millions
Chauchard et al (2019) Data from India shows that politicians rapidly add up to their financial assets after assuming public offices. A public survey was conducted in 2015, which found that respondents linked politicians’ wealth accumulation to corruption
Rose and Peiffer (2018, p. 13) Governmental regulations favour public servants to receive unofficial payments from entrepreneurs who are in need of urgent legal documentation or need it by overlooking legal requirements. Such people influence laws and regulations for self-interest
Cheng and Urpelainen (2019) In India, a corrupt politician tends to finance a road or highway project rather than a school project due to substantial personal monetary benefits in the form of kickback

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Corruption and public spending
Tanzi (1998) and Mauro (1996) Corruption considerably reduces public spending, and the argument is contentious; one school of thought argues that corruption increases public spending as a percentage of GDP, while another school of thought believes that corruption has no effects on public spending
Shleifer and Vishny (1993) Public spending in corruption-prevalent countries is believed to be less effective; the involved corrupt agents nominate projects which give them more financial benefits in the form of bribes and kickbacks
Tanzi and Davoodi (1997) Public investment on human capital is distorted as a result of corruption, specifically education. Corrupt public officials tend to invest in new construction projects rather than on human development
Delavallade (2006) Public spending is the main tool for human development; curbing corruption must be the main goal of emerging economies to ensure securing an applaudable place in Human Development Index ranking
Sen (1999, p. 275) Corruption is one of the key constraints which makes government policies ineffective and pushes all investments away from lucrative projects; also, it promotes and safeguards the mafia
Chen and Neshkova (2020) Fiscal transparency increases budgetary matters and public sector performance and ensures accountability to curb corruption. More fiscally transparent economies are perceived to be less corrupt
Sviderskyi and Lubentsov (2020) Effects of bad governance exist in every dimension of life, which hampers the development of the modern world. Moreover, it does negatively affect public funds and the public's trust in government officials to control corruption
Machoski and De Araujo (2020) The funds allocated for public health are diverted by public officials, which ultimately leaves effects on public health services and causes reduced economic growth
Impacts of corruption on human development
Akacay and Gebeye (2006) The framework of human development includes the broadening of choices, which is acquired by enhancing human ability through social capital (education, health, nutrition)
Saeed et al (2018) Governance is often correlated with human development (health and education) and per capita income. Countries that are well developed are perceived to be less corrupt due to high per capita income and better ranking in the Human Development Index
Gupta, Davoodi and Tiongson (2000), Kaufamann, Kraay and Zoido-Lobaton (1999) Corruption either makes public services unaffordable or decreases their quality. Nevertheless, empirical studies show that corruption decreases life expectancy and education level and also increases the death rate of children
Akhter (2004) and Tran (2008) Politicians and bureaucrats involved in corruption instigate poverty; corruption affects human development. The mechanism of CC depends on HC, higher literacy ratio and life expectancy
Hu and Mendoza (2013) Good governance, reduced level of corruption and well-functioning bureaucracy bring a breakthrough in controlling mortality rate
Justesen and Bjornskov (2014) The study finds out that poor people are comparatively much more vulnerable to corrupt practices of public officials since these people highly depend on public goods and services due to an increased level of poverty
Buscaglia (2003) Corruption paves the path for organised crimes in every society; there exists a robust relationship between organised crimes and corruption