Role of Government : Comprehensive Strategy Is Needed To Fight Global Corruption
| Pages | 182-183 |
Page 182
Corruption has lately attracted a considerable-if not, unprecedented-amount of attention. In Corruption Around the World: Causes, Consequences, Scope, and Cures, Vito Tanzi, Director of the IMF's Fiscal Affairs Department, finds that this growing interest in corruption reflects not only a greater awareness of an age-old phenomenon but also an increase in its scope, as political and economic developments brought corruption to a peak in the 1990s. Tanzi suggests that the increasing role of government in the economy since 1960 and other economic changes that have taken place in many countries-especially the transition economies-have contributed to the rise and spread of corruption in the past decade. In many cases, he contends, the government has become so integrally involved in the economy that the fight against corruption cannot proceed independently from a reform of the state.
Corruption, according to Tanzi, is generally connected with the activities of the state-in particular, its monopoly and discretionary power-which provide a fertile ground for corruption.
Regulations and Authorizations. In many countries- especially developing countries- licenses, permits, and authorizations are required to engage in such activities as opening a shop, borrowing money, investing, or engaging in foreign trade. These regulations and authorizations give the officials who authorize or inspect these activities a monopoly power and require frequent and protracted contact between citizens and bureaucrats. Surveys from developing and transition countries in particular indicate that managers of enterprises spend an enormous amount of time dealing with bureaucracies. This time can be reduced through the payment of bribes.
Taxation. Clear tax laws that do not require contacts between taxpayers and tax inspectors are less likely to lead to corruption. However, when the state's controls on its agents are weak, corruption is likely to be a major problem in tax and customs administrations. Among the specific situations inviting corruption are:
- frequent contacts required between taxpayers and administrators, such as when the laws are difficult to understand and taxpayers need assistance in complying with them;
- low wages of tax administrators;
- nontransparent or ineffectively monitored administrative procedures; and
- tax...
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