Bureaucratic corruption and economic development in sub-Saharan Africa and Bangladesh

¶ … Bureaucratic System as it Is Related to Economics

The objective of this work is to summarize the advantages and disadvantages of the bureaucratic system as it is related to economics.

The consequences of bureaucratic corruption in the economics of a country are seen in unalleviated poverty and in growth of the country's economy being greatly deterred. This is a problem throughout the world as this work will show. This work reviews the situation in sub-Saharan Africa, Bangladesh, and through a report of empirical studies related to this problem. In the work entitled: "Bureaucracy: A Glossary of Political Economy Terms" it is stated that the advantages of the bureaucracy in the organizational techniques used for "creating the powerful centralized nation-stated that predominates the industrialized world of the 20th century."(Johnson, 2006) Johnson goes on to state that: "Hired and promoted largely on the basis of educational credentials and seniority within the organization and protected by civil service personnel practices designed to provide a high degree of job security, bureaucratic officials tend to be very well insulated from responsibility for the external consequences of their decisions and actions as long as they stay formally within prescribed procedures." (Ibid)

SUB-SAHARAN AFRICA BUREAUCRATIC CORRUPTION

In the Nigerian Village Square article entitled: "The Effects of Bureaucratic Corruption on Economic Development: The Case of Sub-Saharan Africa" examined are "the incidence and causes of bureaucratic corruption in Sub-Saharan Africa" and the results or consequences on "economic development" in that area of Africa. Stated to be results of that corruption are "underdeveloped human and natural resources, extremely low levels of productivity, inability to attract and sustain direct foreign investment, continuous mismatch of capital and needs, and deplorable infrastructures. (Klitgaard, 1990; as cited by Ifediora, 2005)

This article states that bureaucratic corruption is "the misuse of the power of public office for personal gain in breach of laws that govern public servants and moral principles." According to Ifediora (2005) bureaucratic corruption occurs when "a government official demands and accepts bribes or kickbacks in performance of normal duties called for by the office. Bribery which can be direct cash payments, gifts or the promise of reciprocity in future transactions, is usually paid either: (1) to gain access to scarce government service, or (2) to avoid the cost of government service." (Ibid)

II. BLACKBURN & FORGUES-PUCCIO

In the work entitled: "Public Expenditures, Bureaucratic Corruption and Economic Development" the authors Blackburn and Forgues-Puccio state that:

1) Corruption is always bad for economic development but its effect is worse if the economy is open than if it is closed;

2) the incidence of corruption may, itself be affected by both the development and the openness of the economy;

3) Financial liberalization is good for development when governance is good, but may be bad for development when governance is bad; and 4) Corruption and poverty may co-exist as permanent, rather than just transitory, fixtures of an economy." (2005)

IV. EMPIRICAL STUDIES

Mauro (1995) made an examination of the results of corruption through use of the Business International (1984) index and growth rates of per capital GDP spanning the years from 1960 to 1985. (Summer and Heston, 1988) Stated is that through use of these variables it was shown by Mauro (1995:702-3) that "a one-standard deviation decrease in the corruption index significantly increases the annual growth rate of GDP per capita by 0.8%." (Akai, Horiuchi and Sakata, 2005)

SUMMARY and CONCLUSION

It is clear that corruption in the bureaucracy of a country greatly impedes and deters economic growth resulting in little to no reduction in poverty rates in a country as indicated by the situation in sub-Saharan Africa and Bangladesh. This work has shown the results of bureaucratic corruption to be evidenced by both misappropriation of funds and public resources as government officials and employees while adhering to procedural rules operate in unsavory practices such as participating in bribes, receiving kickbacks or misuse of power of their position. It is just as clear that just a little bureaucratic corruption goes a long way as reported by Mauro that only "one standard deviation decrease in the corruption index actually increases the GDP per capita in a country significantly. The bureaucratic system that is not corrupt has much to offer a country while a corrupt bureaucracy drains the country of growth potential and hope.