Joseph Coomson
8 August 2007
IN SOME countries, doing business may require making unofficial payments to clear red tape, or gifts to government inspectors or to officials involved in issuing government contracts.
A corruption survey conducted by Enterprise Analysis unit of the World Bank called Enterprise Surveys in 68 countries has identified most up-to-date corrupt regions of the world in terms of unofficial payments for typical firm to get things done, firms expected to give gifts in meeting with tax inspectors and value of gift expected to secure government contracts.
With the unofficial payments for typical firm to get things done, North Africa and Middle East topped with 2.72% of sales followed by Sub-Saharan Africa with 2.14% of sales. South Asia recorded 2.02%, East Asia & Pacific, 1.81%, Latin America & Caribbean, 1.40% and Organisation for Economic Co-operation and Development (OECD) countries 0.13%.
However, Sub-Saharan Africa topped in the area of percentage value of gift expected to secure government contracts. Sub-Saharan Africa topped with 4.09% whiles OECD countries recorded the lowest with 0.55%.
Percentage of firms expected to give gifts in meeting with tax inspectors in Sub-Sahara Africa is 20.78 placing fifth the rankings.
Corruption, which is the theft of public resources for private gain, imposes large costs on businesses and society. The first type of costs is redistributive. Redistribution costs are incurred whenever business or individuals with more financial or political power abuse their privileged position to gain contracts or services (including regulatory services) at the expense of their competitors. The second type is a welfare cost to the overall economy as a result of corruption, making everyone worse off. Research has only recently started to quantify the various ways in which corruption retards private sector development.
The Enterprise Analysis unit provides EnterpriseSurveydata on the investment climate in98 countries, based on surveys of over 66,000 firms. Enterprise surveys measure business perceptions of the investment climate, and can be used to analyze the link to job creation and productivity growth.
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