Editing Political corruption (section)

===Consequences on economy===
In the [[private sector]], corruption increases the cost of business through the price of illicit payments themselves, the management cost of negotiating with officials and the risk of breached agreements or detection. Although some claim corruption reduces costs by cutting [[bureaucracy]], the availability of bribes can also induce officials to contrive new rules and delays. Openly removing costly and lengthy regulations are better than covertly allowing them to be bypassed by using bribes. Where corruption inflates the cost of business, it also distorts the field of inquiry and action, shielding firms with connections from competition and thereby sustaining inefficient firms.<ref>Luis Flores Ballesteros, [http://54pesos.org/2008/11/15/corruption-and-development-does-the-%E2%80%9Crule-of-law%E2%80%9D-factor-weigh-more-than-we-think "Corruption and development. Does the "rule of law" factor weigh more than we think?"] {{webarchive|url=https://web.archive.org/web/20160102095104/http://54pesos.org/2008/11/15/corruption-and-development-does-the-%E2%80%9Crule-of-law%E2%80%9D-factor-weigh-more-than-we-think |date=2016-01-02 }} 54 Pesos (November 15, 2008). Retrieved April 12, 2011</ref>

Corruption may have a direct impact on the firm's effective marginal tax rate. Bribing tax officials can reduce tax payments of the firm if the marginal bribe rate is below the official marginal tax rate.<ref name=":0" /> However, in Uganda, bribes have a higher negative impact on firms' activity than taxation. Indeed, a one percentage point increase in bribes reduces firm's annual growth by three percentage points, while an increase in 1 percentage point on taxes reduces firm's growth by one percentage point.<ref>{{Cite journal|last1=Fisman|first1=Raymond|last2=Svensson|first2=Jakob|date=2007|title=Are corruption and taxation really harmful to growth? Firm level evidence|journal=Journal of Development Economics|volume=83|issue=1|pages=63–75|doi=10.1016/j.jdeveco.2005.09.009|citeseerx=10.1.1.18.32|s2cid=16952584}}</ref>

Corruption also generates economic distortion in the [[public sector]] by diverting public investment into capital projects where bribes and [[Kickback (bribery)|kickbacks]] are more plentiful. Officials may increase the technical complexity of public sector projects to conceal or pave the way for such dealings, thus further distorting investment.<ref>{{cite web |url=http://www.uneca.org/aec/documents/Mina%20Baliamoune-Lutz_%20Leonce%20Ndikumana.pdf |archive-url=https://web.archive.org/web/20120309123826/http://www.uneca.org/aec/documents/Mina%20Baliamoune-Lutz_%20Leonce%20Ndikumana.pdf |url-status=dead |archive-date=2012-03-09 |title=Corruption and growth in African countries: Exploring the investment channel, lead author Mina Baliamoune-Lutz, Department of Economics |publisher=University of North Florida |page=1,2 |access-date=2012-06-07 }}</ref> Corruption also lowers compliance with construction, environmental, or other regulations, reduces the quality of government services and infrastructure, and increases budgetary pressures on government. Economists argue that one of the factors behind the differing [[economic development]] in [[Africa]] and [[Asia]] is that in Africa, corruption has primarily taken the form of [[rent seeking|rent extraction]] with the resulting [[financial capital]] moved overseas rather than invested at home (hence the stereotypical, but often accurate, image of African dictators having [[Swiss bank|Swiss bank accounts]]). In [[Nigeria]], for example, more than $400 billion was stolen from the treasury by Nigeria's leaders between 1960 and 1999.<ref>{{cite web|url=http://www.unodc.org/unodc/en/frontpage/nigerias-corruption-busters.html |title=Nigeria's corruption busters |publisher=Unodc.org |access-date=2009-12-05}}</ref>

[[University of Massachusetts Amherst]] researchers estimated that from 1970 to 1996, [[capital flight]] from 30 [[Sub-Saharan]] countries totaled $187bn, exceeding those nations' external debts.<ref>{{cite magazine|url=http://www.newstatesman.com/Economy/200503140015 |title=When the money goes west |magazine=New Statesman |date=2005-03-14 |access-date=2009-11-05 |url-status=dead |archive-url=https://web.archive.org/web/20080706191351/http://www.newstatesman.com/Economy/200503140015 |archive-date=July 6, 2008 }}</ref> (The results, expressed in retarded or suppressed development, have been modeled in theory by economist [[Mancur Olson]].) In the case of Africa, one of the factors for this behavior was political instability and the fact that new governments often confiscated previous government's corruptly obtained assets. This encouraged officials to stash their wealth abroad, out of reach of any future [[Nationalization|expropriation]]. In contrast, Asian administrations such as [[Suharto]]'s [[Orde Baru|New Order]] often took a cut on business transactions or provided conditions for development, through infrastructure investment, law and order, etc.