1. CORRUPTION - THE CONSEQUENCES ON THE ECONOMY SOCIETY SECURITY Slides for a seminar session and discussion © Denis Osborne, 2007

2. Ethics and Good Governance 2 DAMAGE TO THE ECONOMY OFTEN UNDERESTIMATED: corruption causes  greater costs (to government, companies)  Because competition made ineffective (Milan, bribes 2 – 3%, ‘clean hands’ ‘op’ brought costs down 15 – 60%. Where had money gone?)  lost revenues (in some countries 50%)  those who pay gain more than those who receive, a ‘thought experiment’…  policies distorted; investment diverted EVERYBODY SUFFERS

3. Ethics and Good Governance 3 DAMAGE TO SOCIETY CORRUPTION  causes most hurt to minorities, women,  and the poor, increasing poverty  cannot afford bribes, even ‘relief’ gets diverted  causes people to lose trust in each other  in the workplace, in families  and in government, politics, democracy  leads to anger, frustration, conflict SOCIETY DISINTEGRATES

4. Ethics and Good Governance 4 DAMAGE TO SECURITY  Less protection: regulations ignored, risks to  food, health, environment, roads, workplaces …  Nobody is safe  if a bribe gets me a driving licence when I cannot drive well, your children are at risk!  More crime: drugs, rape, murder, terrorism, etc  criminals are safe if police take bribes  People live in fear CORRUPTION KILLS

5. Ethics and Good Governance 5 CITIZENS’ CONCERNS  Not convinced about hurt to economy!  Damage understated, but importance over-rated?  ‘Corrupt’ countries (and companies) do well.  More concerned about loss of trust, conflict risks  in family, workplace, government  Most concerned about crime, lost safety  Perhaps emphasis on economic losses because funds to fight corruption come from Ministries of Finance, World Bank  and anti-corruption bodies want the cash

6. Ethics and Good Governance 6 A GLOBAL THREAT Safety put at risk from money-laundering, drug-running, gun-smuggling, people trafficking, environmental damage, incompetent managers, terrorist acts, GM and other experiments CORRUPTION ANYWHERE THREATENS EVERYBODY EVERYWHERE