Such corruption can scare away foreign investment and reduce economic growth. A corrupt country’s economic growth rate can be .5 to 1 percentage points lower than that of a similar country with low corruption, according to the World Bank.
Exact figures on losses from corruption can be elusive, but from time to time some numbers have been put forward. For example, China’s central bank recently estimated that more than $120 billion had been stolen by employees of government enterprises since the mid-1990s.
Now for the good news: Governments and civic activists are recognizing the need to combat bribery – and vigorously.
Governments have only to look to the streets of the Arab world where outrage over government corruption has inspired angry protests and even toppled rulers.
In the world’s two most populous countries, China and India, hundreds of millions of people expect to be lifted out of their poverty through economic growth. Officials in both countries are recognizing that corruption will hold them back.
“We must create the conditions in which the people can supervise and criticize the government ... so as to prevent corruption from developing,” Chinese Premier Wen Jiabao said in June. “Corruption will cost the party the support and trust of the people,” chimed in China’s President Hu Jintao July 1, adding “We must not turn our power into an instrument for making personal gain for a handful of individuals. It is more urgent than ever for the party to impose discipline on its members.”
While crackdowns in China on corruption at the local level have been tolerated – and even encouraged – in the past, what remains to be seen is whether a housecleaning can take place at the higher levels of Chinese government.