The Costs of Corruption

The damage and inefficiency caused by corruption, in either financial or social terms, should not be underestimated. The World Bank has estimated that more that US$ 1 Trillion is paid in bribes annually. See World Bank, “The Costs of Corruption” (8 April 2004). An Ernst & Young survey of executives indicated that almost half of those involved in the mining industry said that bribery was prevalent, with 30% saying that it was prevalent in the banking and energy industries, especially in countries outside Europe. [One in Four Asked to Pay Bribes]

In the Law Commissions 2007 work [Reforming Bribery (2007) Law Commission Consultation Paper No 185 (.pdf)], they referred to the World Bank’s discussion of the inefficiencies involved for management in having to negotiate and pay bribes, however small. On the broader social side, a culture of corruption may create an environment in which officials get in a system of being perpetual bribe takers according to Alexandra Wrage of Trace International, quoted in Ethical Corporation.