Corruption Like A White Ants

(Syed Maqsood Hashmi, )

Definition of Corruption What is corruption? There are several answers to this question. Analytically speaking, the most promising answer is the one made by Vito Tanzi: “Corruption is the intentional non-compliance with the arm’s-length principle aimed at deriving some advantage for oneself or for related individuals from this behavior.” There are three basic elements of this definition.

1. The first element deals with the arm’s-length principle as it requires that personal or other relationships should play no part in the economic decisions that involve more than one party. Equal treatment of all economic agents is essential for a well-working market economy. Bias towards particular economic agents defi nitely violates the arm’s-length principle and fulfills a necessary condition for corruption. “If there is no bias, there is no corruption”.

There are two additional necessary conditions for corruption, or rather conditions that must be fulfilled for observed bias (“non-compliance with the arm’s-length principle”) to be specified as corruption. The first condition is that the bias must be intentional accidental violation of the arm’s-length principle because of, for example, imperfect information, does not represent corruption.

2. Second, there must be some advantage for the individual who commits a violation of the arm’s-length principle; otherwise, there is no corruption. Violating impartiality may sometimes represent racism, but it is not corruption.

Deriving some advantage, or seizing some benefit for the corrupted economic agent, can have diff- erent forms. It is a rather widespread notion that corruption is receiving money (this form of corruption is most often called bribery), but similar gain can imply expensive gifts or various favors returned. Giving expensive jewelry to the wife of the person who violated the arm’s-length principle and providing a well paid job (with little work) for his son is definitely corruption.

3. Seizing some benefit or deriving some advantage can be carried out simultaneously with a violation of the arm’s-length principle, but those two actions can be taken at different times. Namely, biased behavior of the one who is corrupted makes an informal, but sometimes binding obligation of the corruptor to return or repay the favor, and that obligation does not grow obsolete, so that seizing the benefits from the one who is corrupted moves into the future. If the returned favor is a well-paid job for the son, and the son has just started college, it is obvious that there is a time gap between the two actions. Furthermore, in formulating the corruption contract, the returned favor is sometimes not even specified, but the obligation is assumed.

There is an alternative definition of corruption frequently used by the World Bank that specifies corruption as “the abuse

Consequences of Corruption As to the consequences of corruption, it should be recognized that the bribe itself is nothing but a redistribution of income. In other words, the bribe itself is not a welfare loss – the scale of social welfare does not change, only its distribution. Although strictly speaking this is true, emphasizing only distributional aspects of corruption is one of the major fallacies of corruption research.

The first reason is the existence of huge transaction costs from corruption. As it has been pointed out, corruption is an illegal contract, and therefore its transaction costs are massive. And transaction costs are real costs:
At last I wouold like to say the opportunity, if we are not prevent corruption in our all department’s province level or area level Region level a time soon coming when we like a wood condition in which the white ants eat all .inside. The Holy Quran and Allah order teach us all aspects to stop the Corruption.

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