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Corruption

Political corruption is the use of governmental powers by government officials for illegitimate private gain. Misuse of government power for other purposes, such asrepression of political opponents and general police brutality, is not considered political

corruption. Neither are illegal acts by private persons or corporations not directlyinvolved with the government. An illegal act by an officeholder constitutes politicalcorruption only if the act is directly related to their official duties.

All forms of government are susceptible to political corruption. Forms of corruption vary,but include bribery, extortion, cronyism, nepotism, patronage, graft, and embezzlement.While corruption may facilitate criminal enterprise such as drug trafficking, moneylaundering, and trafficking, it is not restricted to these organized crime activities. In somenations, corruption is so common that it is expected when ordinary businesses or citizensinteract with government officials. The end point of political corruption is a kleptocracy, literally "rule by thieves".

Economic effects

Corruption also undermines economic development by generating considerabledistortions and inefficiency. In the private sector , corruption increases the cost of business through the price of illicit payments themselves, the management cost of negotiating with officials, and the risk of breached agreements or detection. Althoughsome claim corruption reduces costs by cutting red tape, the availability of bribes canalso induce officials to contrive new rules and delays. Openly removing costly andlengthy regulations are better than covertly allowing them to be bypassed by using bribes.Where corruption inflates the cost of business, it also distorts the playing field, shielding

firms with connections from competition and thereby sustaining inefficient firms.

Corruption also generates economic distortions in the public sector  by diverting publicinvestment into capital projects where bribes and kickbacks are more plentiful. Officialsmay increase the technical complexity of public sector projects to conceal or pave wayfor such dealings, thus further distorting investment. Corruption also lowers compliancewith construction, environmental, or other regulations, reduces the quality of governmentservices and infrastructure, and increases budgetary pressures on government.

Economists argue that one of the factors behind the differing economic development inAfrica and Asia is that in the former, corruption has primarily taken the form of rent

extraction with the resulting financial capital moved overseas rather invested at home(hence the stereotypical, but often accurate, image of African dictators having Swiss bank accounts). In Nigeria, for example, more than $400 billion was stolen from the treasuryby Nigeria's leaders between 1960 and 1999.[2] University of Massachusetts researchersestimated that from 1970 to 1996, capital flight from 30 sub-Saharan countries totaled$187bn, exceeding those nations' external debts.[3] In the case of Africa, one of the factorsfor this behavior was political instability, and the fact that new governments oftenconfiscated previous government's corruptly-obtained assets. This encouraged officials to

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stash their wealth abroad, out of reach of any future expropriation. In contrast, corruptadministrations in Asia like Suharto's have often taken a cut on everything (requiringbribes), but otherwise provided more of the conditions for development, throughinfrastructure investment, law and order, etc.

Environmental and social effects (Unknown Kgrup)

Corruption facilitates environmental destruction. Even the corrupt countries may formallyhave legislation to protect the environment, it cannot be enforced if the officials can beeasily bribed. The same applies to social rights such as worker protection, unionizationand prevention of child labor . Violation of these laws and rights enables corrupt countriesto gain an illegitimate economic advantage in the international market.

As the Nobel Prize-winning economist Amartya Sen has observed that "there is no suchthing as an apolitical food problem." While drought and other naturally occurring eventsmay trigger famine conditions, it is government action or inaction that determines its

severity, and often even whether or not a famine will occur. Governments with strongtendencies towards kleptocracy can undermine food security even when harvests aregood. The 20th century is full of many examples of governments undermining the foodsecurity of their own nations – sometimes intentionally.[4]

Bribery (kyle)

Main article: Bribery

Bribery requires two participants: one to give the bribe, and one to take it. In somecountries the culture of corruption extends to every aspect of public life, making itextremely difficult for individuals to stay in business without resorting to bribes. Bribesmay be demanded in order for an official to do something he is already paid to do. Theymay also be demanded in order to bypass laws and regulations. In some developingnations, up to half of the population has paid bribes during the past 12 months.[6]

Graft ( kyle )

While bribery includes an intent to influence or be influenced by another for personalgain, which is often difficult to prove, graft only requires that the official gains something

of value, not part of his official pay, when doing his work. Large "gifts" qualify as graft,and most countries have laws against it. (For example, any gift over $200 value made tothe President of the United States is considered to be a gift to the Office of the Presidencyand not to the President himself. The outgoing President must buy it if he or she wants tokeep it.) Another example of graft is a politician using his knowledge of  zoning topurchase land which he knows is planned for development, before this is publicly known,and then selling it at a significant profit. This is comparable to insider trading in business.

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Patronage (Junard Hombed)

Patronage refers to favoring supporters, for example with government employment. Thismay be legitimate, as when a newly elected government changes the top officials in theadministration in order to effectively implement its policy. It can be seen as corruption if 

this means that incompetent persons, as a payment for supporting the regime, are selectedbefore more able ones. In nondemocracies many government officials are often selectedfor loyalty rather than ability. They may be almost exclusively selected from a particular group (for example, Sunni Arabs in Saddam Hussein's Iraq, the nomenklatura in theSoviet Union, or the Junkers in Imperial Germany) that support the regime in return for such favors.

Embezzlement (Junard Hombed)

Embezzlement is outright theft of entrusted funds. It is a misappropriation of property.

Another common type of embezzlement is that of entrusted government resources; for example, when a director of a public enterprise employs company workers to build or renovate his own house.

Kickbacks (Lindo Kervin)

A kickback is an official's share of misappropriated funds allocated from his or her organization to an organization involved in corrupt bidding. For example, suppose that apolitician is in charge of choosing how to spend some public funds. He can give acontract to a company that is not the best bidder, or allocate more than they deserve. Inthis case, the company benefits, and in exchange for betraying the public, the official

receives a kickback payment, which is a portion of the sum the company received. Thissum itself may be all or a portion of the difference between the actual (inflated) paymentto the company and the (lower) market-based price that would have been paid had thebidding been competitive. Kickbacks are not limited to government officials; anysituation in which people are entrusted to spend funds that do not belong to them aresusceptible to this kind of corruption. (See: Anti-competitive practices, Bid rigging .)

Nepotism and cronyism (Unknown kgrup)

Favoring relatives (nepotism) or personal friends (cronyism) is a form of illegitimateprivate gain. This may be combined with bribery, for example demanding that a business

should employ a relative of an official controlling regulations affecting the business. Themost extreme example is when the entire state is inherited, as in North Korea or Syria. Amilder form of cronyism is an "old boy network ", in which appointees to officialpositions are selected only from a closed and exclusive social network – such as thealumni of particular universities – instead of appointing the most competent candidate.

Seeking to harm enemies becomes corruption when official powers are illegitimatelyused as means to this end. For example, trumped-up charges are often brought up against

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journalists or writers who bring up politically sensitive issues, such as a politician'sacceptance of bribes.

Example of Corruption cases (Ako)

The Marcos regime, which has been described as a kleptocracy, literally “rule bythieves,” made the Guinness Book of World Records in the late 1980s as the most corruptgovernment of all time.[1] Fortunately, the situation has improved. In 2006,Transparency International, the Berlin-based non-profit, non-partisan organizationfounded in 1993 to curb corruption in international transactions, rated the Philippines lesscorrupt than 51 of 163 nations, but ranking among Asian nations is not good.[2] The onlyAsian nations in 2006 receiving a worse rating than the Philippines from the Political &Economic Risk Consultancy, Ltd. (PERC), a Hong Kong firm specializing in strategicbusiness information and analysis, were Indonesia and Vietnam.[3] In 2007, the

Philippines dropped to last place of the 13 Asian economies studied by PERC.[4]

So, the Philippines has a relatively poor ranking, but quantifying graft gives a better ideaof the impact on the nation. In September 1998, President Estrada said stealing wouldwaste roughly 100 billion pesos (approximately USD2.5 billion), which translates toabout 20% of the national budget proposed for 1999![5] In June 1999, President Estradaconsistently applied this percentage, stating that 24.1 billion pesos (about USD600million), or 20% of all government project funds spent the previous year, were lost tograft and corruption.[6] The following month, Philippine Ombudsman Aniano Desiertoclaimed the government lost 1.4 trillion pesos (perhaps USD100 billion, varyingexchange rate over 11 years) since 1988 when the Office began investigating government

corruption, and continues to lose 100 million pesos daily, or 36.5 billion (roughlyUSD940 million) annually.[7] (The Office of the Ombudsman is a special independentbody to support the principles of honesty, integrity, and public accountability and to serveas the people’s protector and watchdog.) Although there is some variance in the figures,they serve to indicate the scale of graft.

It is difficult to quantify other costs of corruption, such as potential revenue lost tothriving black market industries, and foreign and domestic capital, businesses, and jobsthese businesses would have created, all sources of new tax revenue, lost due to the high-risk investment climate caused by corruption. Additionally, it is likely that the manybillions of pesos (estimated at 13 billion annually [8]) collected by illegal gamblingsyndicates, which could not operate without government acquiescence, come mainlyfrom the poor who most need the government's help and protection.

Billions allocated to infrastructure projects, community development, and improving thelives and health of the Filipino people have gone into individuals’ pockets, or Swiss bank accounts, instead of designated projects. This travesty results in untold misery now, andguarantees more in the future. We can only imagine what the country would look like if these funds had been properly spent, but certainly there would be less poverty and more

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“island paradise.” The officials who squander the country's resources have a strangleholdon the development and prosperity of the entire nation.