The Impact of Corruption on The Economy of The Country

Corruption itself according to the viewpoint of economics known as the misuse of public office for private gain. Meanwhile, the burden of economic actors as a result of corruption called the high cost economy. From the first term above, it appears that the potential of growing corruption in the countries yag government strictly controls apply in practice the economy, aka a big power monopoly. Because the abused here are devices and public or government who benefit are the interests of a personal nature. This shows the fallacy most developing countries are talkative imitate the capitalist countries in terms of opening the tap of foreign investment are loosely, but in practice it is too much governed by the government rather than through the coaching community in advance so that they can push themselves to develop cooperation with foreign parties.Whereas the ability of government and their own moral credibility is not good enough. Eventually, high cost economy. For example is the bureaucracy, where this aspect is the biggest source of most flat and spreading throughout the country against corrupt practices. 

Everywhere seems to block the scourge of bureaucracy, both in terms of population administration or matters relating to business administration. In fact, a source in the internet bubble mention that the cost of unnecessary bureaucracy it suck up about 20% of the budgets of small businesses-businesses, according to statistics. Of course, on the other hand, significantly hindering the development of SMEs, but SMEs we know is one of the main pillars of macroeconomic stability in Indonesia since its ability to absorb massive workforce.

Corruption is also difficult for economic development by creating distortions and inefficiencies are high. In the private sector, corruption increases the cost of trading due to losses from illegal payments, management fees in negotiating with corrupt officials, and the risk of cancellation of the agreement or because the investigation. Although some have claimed that corruption reduces costs (commercial) to simplify the bureaucracy, the emerging consensus concluded that the availability of bribes led officials to create new rules and new obstacles. Where corruption is causing inflation fare trade, corruption also disrupt the "field of commerce." Companies that have a connection is protected from competition and as a result retain companies that are inefficient.

Corruption leads to distortions (chaos) in the public sector by diverting public investment into projects where bribes and people who pay more available. Officials may increase the complexity of community projects to hide corrupt practices, which ultimately result in more chaos. Corruption also reduces the fulfillment of the terms of building security, environmental, or other rules. Corruption also reduces the quality of government services and infrastructure; and added pressures on government budgets.

Economic experts gave the opinion that one of the factors of economic underdevelopment in Africa and Asia, especially in Africa, is the corruption in the form of rent collection leading to the displacement of investment (capital investment) abroad rather than invested in the country (hence the ridicule that often true that some African dictators having Swiss bank accounts). In stark contrast with Asian dictators like Suharto, who often take a cut of everything (ask for a bribe), but rather provides the conditions for development, through infrastructure investment, law and order, and others.

 Experts from the University of Massachusetts estimates that from 1970 to 1996, capital flight from 30 sub-Saharan countries totaled U.S. $ 187 trillion, exceeding the amount of foreign debt of their own. [1] (The results, in terms of development (or lack of development) has been created for a single model in economic theory by Mancur Olson). In the case of Africa, one factor is political instability, and also the fact that the new government is often sealed off the old government assets are often derived from corruption. This gave impetus for officials to accumulate their wealth abroad, out of reach of expropriation in the future.