This document discusses the relationship between corruption and economic growth and development. It defines corruption and provides examples of corrupt practices. It then examines how corruption hampers economic growth by discouraging investment, distorting policies, and reducing productivity. Corruption increases inequality, undermines governance and human rights, and hurts the environment. It can also fuel conflict by favouring certain social groups. However, reducing corruption through strengthened accountability can promote development. In the end, corruption severely undermines efforts to achieve the UN's Sustainable Development Goals.

1. ByBy
Dr. Md. Shamsul ArefinDr. Md. Shamsul Arefin
SecretarySecretary
Anti-Corruption CommissionAnti-Corruption Commission
Corruption, Inequality and Impact
on Economic Growth

2. What is Corruption?
According to
World Bank, Corruption is
“ the misuse of public office for private gain”.
Transparency International (TI) defines as:
“Corruption is the abuse of entrusted power for private
gain”
Anti-Corruption Commission of Bangladesh defines
Corruption’ as the offences set out in the schedule to this law
Scheduled offices are sections 161-169, 217, 218, 408, 409 and
477A of the Penal Code 1860 means bribery, forgery etc. by
public officials.

3. Corruption
Possession of Property in Excess of Known Sources of Income
If a person in his/her own name has obtained ownership of moveable or
immoveable property through dishonest means and the property is not
consistent with the known sources of his/her income then that person shall
be sentenced to a prison terms of ten years and these properties shall be
confiscated.
Anti-Money Laundering Offences: Any person who commits the offence
of money laundering, shall be punished with imprisonment for a term of
at least 4 years but not exceeding 12 years. The court may pass an order
to forfeit the property of the convicted person as well.
Anti-Corruption Commission of
Bangladesh

4. Corruption Equation
CORRUPTION = MONOPOLY DISCRETION
ACCOUNTABILIT
Y+ -
C = M + D - A
Bryan R Evans : The cost of corruption

5. Income inequality
The Gini Coefficient
If there was no inequality the Lorenz curve
would be a straight line (Line of perfect
equality).
The Gini coefficient is the area between the
“Line of perfect equality” and the Lorenz
curve divided by the total area under the
“Line of perfect equality.
The Gini coefficient can theoretically range
from 0 (complete equality) to 1 (complete
inequality); it is sometimes expressed as a
percentage ranging between 0 and 100.
The higher the coefficient the higher the
degree of inequality.
The Gini index is the Gini coefficient expressed as a
percentage, and is equal to the Gini coefficient
multiplied by 100.
Example: The Gini coefficient of Bangladesh is
0.324 which is 32.4 in percentage and ranking is
124 (in 2010)

6. Top and Bottom Five Countries
of the Gini Index ( Income Inequality ) in 2017

7. Corruption Perceptions Index 2017
(Ranking from the top & bottom five countries including Bangladesh)
2017
Rank
Country
2017
CPI
Score
Gini Index
(Year of
estimation)
1
New
Zealand
89 36.2 (1997)
2 Denmark 88 28.8 (2015)
3 Finland 85 26.8 (2014)
4 Norway 85 26.8 (2010)
5
Switzerlan
d
85 29.5 (2014)
2017
Rank
Country
2017
CPI
Score
Gini Index
(Year of
estimation)
180 Somalia 9 N/A
179
South
Sudan
12 46.0 (2010)
178 Syria 14 35.6 (2004)
177 Afghanistan 15 27.8 (2007)
175 Yemen 16 37.9 (2009)
Top Bottom
2017 Rank Country
2017 CPI
Score
Gini Index (Year of estimation)
143 Bangladesh 28 32.1 (2010)

8. Corruption hinders Economic Growth
c. Potential entrepreneurs
with bright ideas will be
scared by the financial costs
of starting new business
ventures and will either opt
for taking their ideas to
some other less corrupt
country.

9. How Corruption Harms Economic
Growth

10. Corruption hampers Economic Growth

11. Corruption hampers Economic Growth (Contd.)

12. Corruption Increases Inequality

13. Corruption Increases Inequality (contd.)

14. Impact of Corruption on Economic Growth

15. Corruption, GDP and Productivity
A country's gross domestic product can be
calculated using the following formula: GDP =
C + G + I + NX. (C is equal to consumption, G is
the sum of government spending, I is the sum of
investment, NX net surplus from import and export).
An increase in corruption by one point on a
scale from 10 (highly clean) to 0 (highly
corrupt) lowers productivity by 4 per cent of
GDP and decreases net annual capital inflows
by 0.5 percent of GDP (WB).
Corruption affects productivity through its
impact on
Innovation of new technologies
An enabling market environment
Resource allocation

16. Scope of Corruption
Public procurement
Public procurement is the high prone area for corruption.
Public Employment
Public employment is the one of the gray area of the corruption.

17. “Corruption is killing us,
not earthquakes”
--- Hurriyet Headline
Corruption and Earthquake Disaster
 17/08/1999: Izmir, Turkey
 –7.4 Richter, 15,000 casualties, 2,13,000 destroyed
buildings
 –65% (Istanbul), 50% (Izmir), 25% (Ankara) violate building
regulations by engaging corrupt practices.

18. Data on Money Laundering and Bribery

19. Black Money

20. WB’s Survey (2011) Reveals

21. Impact of Corruption on Human Trafficking
Human Trafficking: Global Perspective
Human trafficking along with sex and arms business is the
second largest criminal industry in the world.
Statistics shows that globally, for labor and sex, US $ 150
billion annual market is earned by selling men, women and
children.
Human Trafficking: Bangladesh Perspective
Bangladesh is a source country for trafficking. Bangladeshi
migrant laborers are victims of recruitment fraud.
Corruption is present at every stage of the trafficking process,
beginning with a victim’s recruitment.

22. Impact of Corruption on Drug Dealing
Bangladesh is a transit country for drugs produced in the Golden Triangle
and Golden Crescent.
Drug trafficking is a global illicit trade
The profits from the drugs trade generally laundered to make them
appear legal before they use it further. UNODC study yielded an estimated
global value of drugs trade equivalent to EUR 61 billion, (USD 85 billion) in
2009.

23. Corruption and development:
Empirical evidence - some examples
Linkages The evidence shows
Corruption & Bribery In 2012, half of Afghan citizens paid a bribe while requesting a
public service -total cost of bribes paid to public officials
amounted to US$ 3.9 billion (20% of GDP, according to the UNODC
survey)
Corruption &
Governance
People’s distrust about the government (72% of citizens in Latin
America)
Corruption & Gender Corruption harms women’s access to justice. In the Asia-Pacific
various levels of discrimination in the handling of cases of human
trafficking or rape, the victims are mostly female (Asian Human
Rights Commission)
Corruption &
Environment
In Cambodia, payments to government officials in the form of
bribes are estimated at $200 million in 2016 alone. (World
Resources Institute)

24. Corruption and impact on tax

25. Economic
Growth
Poverty/
Inequality
Governance Human
Rights
Gender Environment Conflict
Corruption Impacts Through:
• Discouraging
investment
• Adding
unpredictabil
ity in
business
environment
• Distorting
economic
policies
• Underminin
g efforts to
achieve
SDGs
• Increasing
the cost of
public
services and
lowering
their quality
• Worsening
income and
inequalities
Distorting rule
of law and
weakening
moral values
Weakening
institutional
effectiveness
• Perpetuating
discrimination
• Denying
rights to
social services
• Undermining
delivery of
justice
• Increasing
sexual
extortions
• Affecting
women
disproporti
onately in
terms of
access to
assets
Worsening
environmental
governance and
reducing
enforcement of
environmental
regulations
Certain
social
groups are
favoured in
the
allocation of
resources,
thus fuelling
grievances
among
marginalized
groups.
Summarizing Relationship between
Corruption and Under-development

26. Statement of UN Secretary-Generals:
development & corruption
Ban Ki-Moon, United
Nations Former
Secretary General
Kofi Annan, United
Nations Former
Secretary General
“Corruption undermines democracy and rule of law. It leads to
violations of human rights. It erodes public trust in government. It
can even kill – for example, when corrupt officials allow
medicines to be tampered with or when they accept bribes that
enable terrorist acts to take place.”
17 September 2017.
“Corruption hurts the poor disproportionately by diverting funds
intended for development, undermining a government’s ability to
provide basic services feeding inequality and injustice and
discouraging foreign investment and aid.”
31 October 2003.

27. Prevention of Corruption