A Theoretical Perspective of Corruption and Development

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Corruption is a complex issue that lacks a consistent theoretical framework, as it varies across different regions, cultures, and economic levels. However, there is a correlation between the level of economic development and the incidence of corruption. Generally, more developed countries tend to have lower levels of corruption compared to less developed economies. Additionally, income inequality plays a role in corruption, with countries that have more equal income distribution experiencing lower levels of corruption.

It is worth noting that higher-income earners often exhibit higher levels of corruption. This may be due to their increased responsibilities and desires, which grow faster than their income. This suggests that there is no diminishing utility of money among the wealthy. For example, Heads of States should ideally not be corrupt, employers should not exploit employees, and individuals in employment should not seek bribes from employment seekers.

The lifestyle of luxury and comfort of the elite class in Nigeria may also be detrimental to economic development especially with the insatiable appetite for foreign goods and services of exquisite quality. The destination weddings and vacations, the quest for foreign education, medical tourism, which contribute to capital flight impede economic development and encourage corruption. The new movie The Black Book produced by Nollywood and featured on Netflix show how corruption will always fight back yet all things being equal will good prevail over evil.

The fight against corruption has proven to be a challenging battle, as every economy has some degree of corruption. Transparency International’s corruption index demonstrates the varying levels of corruption among different countries, with higher scores indicating lower corruption and lower scores indicating higher corruption. Nigeria’s score remains at zero and ranked 150 out of 180 countries while Somalia is ranked 180. However, it is more economically productive to focus on fighting poverty rather than solely combating corruption. The battle against poverty is more likely to yield earlier victories compared to the battle against corruption.

The productivity theory of corruption proposes that corruption can lead to income redistribution, benefiting development. If the proceeds of corruption are wisely invested, preferably in the domestic economy, it can contribute to faster economic growth through higher levels of savings and investments. On the other hand, hiding the proceeds of corruption in foreign banks hinders development. Capital flight driven by corruption is a depletion of our national assets which significantly impacts the economy.

As poverty increases, propelled by factors such as insecurity, lack of infrastructure, currency devaluation, capital flight and the removal of subsidies without a corresponding increase in earned income, economic policies should shift rapidly away from individualistic and market-oriented approaches towards social and welfare-focused policies. This shift can also help in addressing corruption, as there appears to be a direct proportion between corruption and poverty.

An abstract from a keynote Address by Sam Aluko: A Theoretical Perspective of Corruption and Development. – Rewritten by Bunmi Sodade

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