Module 1 Critical thinking 2 Word Beverly McMilliana Insert

Module 1 Critical thinking 2 Word Beverly McMilliana Insert AaBbCcDc AaB 3. What is the relationship between corruption in a country (i.e., government officials taking bribes) and economic growth? Is a corruption always bad?

Solution

In a broader view, corruption seems to hinder the economic growth of a country. But it is not always true if seen the effects of corruption on economic growth in a deeper level. Some economists explain corruption helps in overcoming big and rigid restrictions of the system brought by the government, inefficiency in the supply and distribution of public services and laws of the government institutions of the country that work poorly but make rigid and impractical laws. While there is another approach to seeing the relation between corruption and economic growth that it diminishes economic performance of a country. It causes a rise and uncertainty in the cost of transactions, investments in an inefficient manner and the factors of production are diversified to the unproductive areas. Some economic studies show that the effect of corruption on the economic growth depends on the country\'s bureaucratic systems and financial development, considering which the corruption can be bad and good to some extent for the economic growth of the country.