CORRUPTION IMPACT ON THE STATE ECONOMY

Abstract

Individuals and legal entities can claim the patronage of officials in terms of increasing some profits and reducing a few state costs, in which case they will be forced to pay for such transaction. This payment will be considered as corrupting if it illegally entails additional profits or helps to avoid mandatory payments, including tax costs. Corrupt behaviour encroaches on the foundations of state power, destroys the normal management of government and municipal institutions, and hinders their effective work. Corruption is an evidentiary sign that the process of public administration is violated and malfunctioned, and officials, who must regulate the relationships between citizens and the state, use their official position to obtain personal benefits and corrupt bonuses. The market mechanisms, which usually increase economic efficiency and economic growth, in the case of bribery, disrupt the legitimacy and effectiveness of government.