Corruption

Corruption undermines nations’ prosperity —Lagarde, IMF boss

Amid growing global concerns over corruption in public and private sectors and its consequences on nations’ growth, Managing Director of International Monetary Fund, IMF, Christine Lagarde, has said that corruption undermined prosperity because of its micro economic implications.

According to Lagarde, “corruption undercuts countries’ efforts to deliver sustainable and inclusive growth. How? “First, by weakening fiscal capacity. When citizens feel that wealthy individuals are able to avoid paying taxes through bribes, it delegitimizes the whole system. And not surprisingly, other people decide not to comply, which undermines the ability of the state to raise revenue “At the same time, government spending becomes skewed toward areas with greater opportunity for graft, such as public procurement for construction projects. One study has found that in eight European countries, public projects were on average 13 percent higher because of corruption.