“In human society to much wealth or too much poverty is a great impediment to the higher development of the soul. It is from the middle classes that the great ones of the world come. Here the forces very equality adjusted and balanced.”
Popular belief suggests that corruption and poverty are closely related in a developing country. Corruption has been a constant obstacle for countries trying to bring out the political, economic and social changes desired for their development. Across different country contexts, corruption has been a cause and consequence of poverty.
Corruption on the part of governments, the private sector and citizens affects development initiatives at their very root by skewing decision-making, budgeting and implementation processes. When these actors abuse their entrusted power for private gain, corruption denies the participation of citizens and diverts public resources into private hands. The poor find themselves at the losing end of this corruption chain without state support and the services they demand.
At the same time, corruption is a by-product of poverty. Already marginalised, the poor tend to suffer a double level of exclusion in countries where corruption characterises the rules of the game. In a corrupt environment, wealth is captured, income inequality is increased and a state’s governing capacity is reduced, particularly when it comes to attend the needs of the poor. For citizens, these outcomes create a scenario that leaves the poor trapped and development stated, often forcing the poor to rely on bribes and other illegal payments in order to access basic services. For a country, the results produce multiple and destructive forces: increased corruption, reduced sustainable growth and slower rates of poverty reduction. As the World Bank has aptly said, corruption is ‘the greatest obstacle to reducing poverty’.
Corruption and poverty are linked through many indirect channels. On a macro level, corruption has implications for a country’s ability to attract investment, for the effectiveness of its institutions, for income generation through taxation and hence in the end for economic growth and poverty alleviation. Consequently, since corruption negatively affects economic growth, higher growth in corruption is associated with lower income growth of the poor.
Corruption also affects the way money is allocated within the state budget, diverting expenditures away from less lucrative sectors such as health and education to high kickback areas such as construction. Spending on operations and maintenance may also be squeezed out in favour of new projects, leaving existing roads, hospitals and other public infrastructure to decay. Lack of precision in public expenditure planning can create opportunities for corruption and diversion of funds. At the same time, clearly allocated expenditures may never reach the intended recipients – a major source of deprivation to poor people. While this corruption hurts society in general it hurts the poor most since they are more vulnerable and dependent on the quality of governance and state support.
Corruption also feeds inequality. Inversely, empirical analysis suggests that good governance reduces poverty while improving (or, at a minimum, not worsening) inequality.
While this sort of corruption affects society as a whole it is the poor who suffer from it most. Corruption eats into an already tight budget and extra expenditures mean cuts in other basic needs areas. Empirical analysis has shown that the poor pay a higher share of their income on bribes than the rich. The burden corruption places on the poor gets aggravated by the fact that they are more dependent upon public services than the rich. The poor simply cannot afford using private hospitals or private schools and therefore are more vulnerable to the demands for “grease money”.
The effects of the various faces of corruption are not merely financial. They may also be profoundly economic, moral, and social. If rice in a government aid project disappears it erodes poor people’s relationship with their community leaders and government officials. If a policeman or teacher takes advantage of his position to extract bribes it harms their reputation and relationship of trust, destroying social capital and decreasing moral standards. It also becomes a way of “getting things done”, eventually eroding the rule of law.
“Bribing becomes a habit and is imitated by other people in the community. Over time, people become lazy in following correct procedures, too many things are solved by bribing.”
Poor people’s lack of power also stems from a lack of legal recourse and representation. Property rights are often not well established and access to courts depends on the power of the purse.
I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.
If you are interested in participating in the same, do let me know.
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