Opportunity cost of corruption Essay Example | Topics and Well Written Essays - 2000 words

Opportunity cost of corruption - Essay Example The research is aiming to find the impact of corruption on the economy of the country and the people as individuals. What are the sources and consequences of corruption. The results are based on the empirical study and search work available on the Internet.The results of the study and research leaded to outcome that corruption is a global problem that exists at all levels. Corruption can be defined as the abuse of public power for personal ends. Corruption can be defined as use of authority or power to meet personal ends. It has always existed in the world and now-a-days is being treated as global concern. In a corrupted society, personal enrichment considerations take preference over the establishment of rights for all, resulting in biased decision making. Corruption is not confined to a State or country but is prevalent at a global level. Let's have a look at state of corruption on a worldwide scale. The figures are indeed shocking. According to the Asian Development Bank, one East Asian country is estimated to have lost $48 billion over 20 years due to corruption, surpassing its entire foreign debt of $40.6 billion. It has been calculated that as much as $30 billion in aid for Africa has ended up not in Africa, but in foreign bank accounts. Thirty billion dollars is twice the annual gross domestic product of Ghana, Kenya, and Uganda combined. Corruption, it turns out, costs many governments as much as 50 percent of their tax revenues1. 2. Effects of Corruption When the effects of the corruption are considered they cannot be shown as a direct relation ship with the economic changes. The negative changes in the economy due to the corrupt ideas and deeds can be connected with each other to estimate cost of corruption. For example the subprime market is overloaded with bad loans that smashed the holes into a financial ship. This is due to the fact that the banks are giving loans to the borrowers without substantial proof of their income sources. The disbursal of loans without substantial proof or guarantee will result in bad loans. The loans that are given to the borrowers who have no source to pay are due to corruption. This resulted in 40 percent of sub prime market is made up of these loans. The appraisal will be fraudulent when the officers are corrupted and it costs the bank or any financial organization thousands and millions of dollars in the form of non profitable assets. This in turn will halt or slows down the growth of the economy i n the near future. When the loans are going bad the mortgage companies are making lot of money and the banks are at receiving end. These companies are spending few million dollars and are making money from billions of mortgage loans. As long as the artificial rise of the property continued the