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Continuing on my Blog postings of the last few days “Britain engulfed in Corruption” , I now wish to share with the reader-however briefly- the costs and consequences of corruption. I should also emphasise that when it comes to corruption, fraud and wrongdoings, the British experience is hardly unique...
As it has been noted, corruption is a burning moral and human rights issue, affecting the whole fabric of society and community. Corruption infringes the fundamental human rights to fair treatment, unbiased decision-making, and safe and secure civil and political status.
There are a number of definitions of corruption.
This Blog defines it as “the act by which ‘insiders’ profit at the expense of ‘outsiders’ ” (conveying the ideas of abuse of position, offending against relationships, and underhandedness). It may flourish both in overregulated and deregulated economies, under democracy or dictatorship. Following from this definition, examples of corrupt behaviour would include: (a) bribery, (b) extortion, (c) fraud, (d) embezzlement, (e) nepotism, (f) cronyism, (g) appropriation of public assets and property for private use, and (h) influence peddling.
There is a growing worldwide concern over corruption at the present time. Several factors are responsible for this. First, a consensus has now been reached that corruption is universal. It exists in all countries, both developed and developing, in the public and private sectors, and more. Second, allegations and charges of corruption now play a more central role in politics than at any other time. Governments have fallen, careers of world renowned public figures ruined, and reputations of well-respected organizations and business firms badly tarnished on account of it. Third, that corruption has a major economic consequence; destroying the possibility of creating prosperity and well-being for all.
Costs & Consequences of Corruption
According to the World Bank, “The consequences of corruption for economic and social development are detrimental. Corruption deters investment and hinders growth. It spurs inequality and erodes macroeconomic and fiscal stability. It reduces the impact of development assistance and provides an incentive to exploit natural resources, further depleting our environmental assets. It reduces the effectiveness of public administration and distorts public expenditure decisions, channelling urgently needed resources away from sectors such as health and education to corruption-prone sectors or personal enrichment. It erodes the rule of law and harms the reputation of and trust in the state. In short, it increases wealth for the few at the expense of society as a whole, leaving the poor suffering the harshest consequences.”
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“Britons love to lecture the world about integrity and the rule of law, but the News of the World phone hacking scandal has laid bare a web of collusion between money, power, media and the police.”- Peter Apps
Peter Apps is political risk correspondent for Europe, the Middle East and Africa, covering a range of stories on the interplay between politics, economics and markets. Previously, he was emerging markets correspondent based in London after postings in southern Africa and Sri Lanka. His neck was broken in a vehicle smash on assignment in Sri Lanka in 2006, leaving him largely paralysed from the shoulders down. (http://blogs.reuters.com/peter-apps/)
Analysis: Is Britain more corrupt than it thinks?
“Far from the innocent, upright democracy of its self-image, Britain is showing a seamy side that anti-corruption campaigners say is getting worse and may be politically explosive as society becomes more unequal due to the financial and economic crises. Behind a facade of probity, London offers a haven for oligarchs and despots, a place where foreign media magnates have bought access to and influence over the government…
But it points to a bigger problem in British society -- overly cozy relationships among elites that are ethically dangerous, even when they do not involve outright criminality…
It is ... often a more sophisticated form of high-level political corruption. It may not be strictly illegal -- or it may be more subtle -- but that does not mean it is not very costly for society or the economy…
As with media barons such as Murdoch, the influence of the financial services industry is so strong… that politicians have long avoided questioning it…
That acquiescence contributed to the global financial crisis. It has also made Britain one of the key banking centers for the world's most corrupt oligarchs and despots.”…
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Steve Szeghi PhD (ECON), Professor of Economics, Wilmington College, Wilmington, Ohio, USA
A couple of weeks ago my colleagues Kamran Mofid, Jamshid Damooei, and I wrote on this Blog of the necessity of debt forgiveness in a general context: My Guest Bloggers Steve Szeghi, Jamshid Damooei and I- Promised Land Revisited: Forgive our debts as we forgive our debtors
Student Loan forgiveness was one specific that we mentioned. In the United States students have been forced through a combination of economic circumstances and reduced public financing of universities and colleges to fund an increasing percentage of their college costs through student loans. Student loans are not dischargeable, except under rare circumstances, in bankruptcy court. The current generation of college students in the United States is being saddled with increasing debt even as salaries for college graduates have stagnated, or declined, while job opportunities have decreased.
This is a dangerous situation for the economy and the financial system in addition to being an injustice rendered to a generation.
Student loan debt in the United States, which is securitized in the same way as home mortgages, may well be the next bubble to burst. Before that happens, which could imperil the US as well as the global financial system, we should consider substantial and significant student loan forgiveness. Higher Education should be ideally provided to all who are capable and whom aspire to it, at little or no cost to the individual, funded by society through progressive taxation. It is such a small step in the direction of social justice and building a more cohesive society to provide significant relief to student loan borrowers. It is also necessary for the stability of the financial system. Not only in the United States but in all nations of the world, societies should more substantially publicly fund education, including higher education at increasing levels and consider significant forgiveness for student loan borrowers, for social justice and for social cohesion, but also for the sake of financial system stability. Please consider signing the following petition: Support the Student Loan Forgiveness Act of 2012
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- Britain engulfed in corruption Part III: …And now GlaxoSmithKline fined $3bn for healthcare fraud
- Disgusted with rampant corruption, injustice, crony capitalism, and…? Then, it is Time to Get Crazy
- Moral and ethical tax avoidance: Is it possible?
- America: Welcome Back to European Values and Vision
- Britain engulfed in corruption Part II: David Cameron invites tax avoiders to London!