The corruption of nations

Nearly 50% of the world's nations are corrupt -- according to the Transparency International and a German-based think tank at the University of Passau.

"In some nations, the corruption is as basic as greasing the palms of the village police chief to let a bar stay open an hour past the regular closing time, or paying off a telephone company clerk to expedite installation of a phone line. In other cases, corruption means millions in payoffs, often to secret foreign-bank accounts, where development funds are siphoned that should have been used to expedite roads, schools, bridges or basic health and sanitary facilities designed to improve the lives of their people. "

However, there is doubt that corruption causes great harm to national economies, reports Jakob Svensson, an economist at the World Bank and Stockholm University. "China has been able to grow fast while being ranked among the most corrupt countries," Svensson notes.

Harvard University's Samuel Huntington argued that briberty and other shady practices have a bright side, helping firm operate efficiently in countries hampered by heavy-handed bureaucracies.

Source: "Eight Questions About Corruption", Journal of Economics Perspectives", Summer 2005.