Mantzaris E, Corruption, Consequences for Socio-economic s.pdf (292.08 kB)
Corruption: consequences for socio-economic well-being in South Africa
journal contributionposted on 2022-01-26, 10:44 authored by Evangelos Mantzaris, Pregala Pillay
his paper begins with the hypothesis that high levels of corruption can self?perpetuate on occasions, as the phenomenon of corruption is perpetrated through all societal levels and sectors. The loss of ethical standards, lack of honest and cohesive leadership, organisational gaps and weaknesses and individual or group greed, coupled with political, or organisational opportunities, and immunity of offenders, are some of the fundamental roots leading to corruption. High levels of corruption have serious negative repercussions for the present and future of any country especially when it occurs in the public sector. Corruption deters investment in the country, as private investment can be discouraged. The consequences are particularly dire in the case of Foreign Direct Investments (FDI), where corruption can amount to an additional cost. It reduces GDP growth as it harms international trade; negatively affects the inflation and exchange rates; affects prices of either imports or exports, thus influencing trade volumes and trade patterns; influences and distorts consumption patterns; increases the wealth distribution disparity and affects the country’s consumption patterns; leads to resource misallocations; harms a county’s international reputation; reduces efficiency, innovation and competition throughout the economy; causes waste of capacity and money, and biases the allocations capital and talent. Finally, it increases inequality as it is instrumental in lowering employment, deters fixed investment as well as becoming a serious hurdle in the establishment of new businesses. The focus of this contribution is on public sector corruption.