While most studies focus on the economic effects of corruption, anecdotal and survey evidence show that the poor bear a considerable and often disproportionate share of the corruption burden. The poor may face outright exclusion when access to public goods and services require a bribe. Given their lack of voice or political influence, in some instances the poor may even be required to pay more than people with higher incomes. Survey results show that although richer households are more likely to pay bribes, the burden of corruption—measured as the fraction of income paid in bribes—is much greater for poorer households. Moreover, when corruption results in shoddy public services, the poor have no options and cannot turn to the private sector (e.g., private schools, hospitals, security or garbage collection). Corruption not only hurts the poor disproportionately, but it is likely to increase income inequality because it allows particular individuals or groups of individuals to take advantage of state activities at the cost of the rest of the population. For example, Tanzi (1998) points out that there are strong indications that the changes in income distribution that have occurred in recent years in transition economies have partly been the result of corrupt actions such non-transparent privatizations. Corruption is also unfair because it imposes a regressive tax that falls particularly heavily on trade and service activities undertaken by small enterprises.
Posted on: Sat, 21 Sep 2013 13:55:59 +0000