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Negative Effects of Globalization - Corruption


Negative Effects of Globalization - Corruption

As developing nations increase their tade relationships and become more involved in the world economy, the strength of their financial and governmental institutions is put to the test. The quailty of these institutions will more or less decide whether a country benefits from globalization or not, how much it benefits, and how the gains are distributed throughout society. If these institutions are strong, the economic gains from globalization is usually great, while if they are weak, the bulk of the gains are lost to the negative effects of globalization - corruption.

The definition of economic or political corruption is the abuse of public office for personal gain. Corruption is particularly and African problem, according to the German think tank Transparency international, which publishes a yearly corruption perception index. In 2007, thirty-six of the fifty-two African countries that was included in the corruption index had a score of two or below(out of ten), indicating that corruption in those countries were rampant. Fourteen of the Afircan countries scored between three and five, indicating that corruption was a serious challenge in those countries. Only two countries, South Africa and Botswana, scored more than five.

In many ways, corruption undermines the potential benefits of globalization. For instance, it increases the risk and cost of doing business in a given country, hence chasing away foreign capital. It also influences foreign aid, which can be cut or even halted by the donor country if too much of it is skimmed by corrupt politicians and bureaucrats. In Uganda for example a study revealed that only twenty-seven cents of every dollar donated for education purposes made its way to the countries schools. The rest was lost to local patronage politics.

A rationalization that is often used is that corruption in developing countries improves income distribution. Traffic policemen, for instance, earn small salaries from their government. These salaries are so small that they could never survive on them alone. Therefore they take small bribes when issuing tickets, which are beneficial for income distribution, it is argued, because it helps the officers survive. The flaws of this argument are clearly evident. The officers' small offense contributes to a much larger culture of corruption that supports crimes like rigged multibillion-dollar privatization auctions, which makes the rich richer and the poor poorer. Countries who integrate globally without first strenghthening domestic institutions run the risk of uplifting the powerful and hurting the rest of the country.

Negative Effects of Globalization: Governmental and financial institutions that are weak provide a breeding ground in which corruption can grow, thereby cancelling out the potential benefits of globalization.

Corruption Perception Index - Tranparency International


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Source: The Bedside Baccalaureate

Leave Me A Comment About Negative Effects of Globalization - Corruption

Rodney on March 26, 2014:

the biggest problem with MNCs in Zambia is the failing to pay tax.... they ind loop holes in our taxation system in use them to evade tax.... for africa to develop local investment should be encouraged rather than foreign investment the gay just want to ake profits at all costs.....

clavar on October 04, 2013:


melkamu kebede on June 17, 2013:

we do not eliminate corruption totally. any way stand together to decrease it

SPOTMAN on April 22, 2013:

globalization causes unlimited access to info all over the world

enock mlowe on April 07, 2013:

we can eliminate curruption through introducing ''ethics'' in our countries curriculum.

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robert on March 03, 2013:

In uganda its too much

gg on October 18, 2012:



honest boi on June 12, 2012:

Corruption is a global problem that prevails all over the world. I don't think it just in Africa. It is more widespread through out the many levels of governance in Africa. This is prevalent because of the lack of structure and consequences that is faced for committing an act of corruption.

ric ric on June 11, 2012:

shut up

Sunday gobum on May 19, 2012:

Is there no corruption in the west?

tt boy on May 13, 2012:

ur'll blaming everyting on africa when is ur'll country dat causing dat bull****

JUMA JOHN on May 07, 2012:


shailendra kumar on April 29, 2012:

i think africa country have curruption

kayjay evah on April 13, 2012:


kayjay evah on April 13, 2012:

all i can sei is dat ave apreciated since ave got da in4mation i wanted.

Henny on March 22, 2012:

everything is the cause of corruption in Africa

jjjj on February 06, 2012:


Eric on October 28, 2011:

Inflow of foreign culture especially in africa. Africans do nt subscribe to more controversial cultures such as homosexuality.

pabeti from Nairobi, Kenya on October 11, 2011:

I agree that the lack of structures in Africa is the leading cause of corruption

bunny on October 10, 2011:


Gugu Stephen on November 01, 2010:

I don't think that corruption is an African problem as indicated by the author of the article. I think in Africa the basic form of corruption which is petty bribery is more prevalent but this is not the only form of corruption. A look at MNC's like Siemens, Alcatel, British Aerospace among others reveal corruption.

Corruption is a problem of the lack of structures, African countries lack structures thus the high levels of corruption.

White Horse on October 24, 2010:

America needs to halt foreign aid (tax payer money) to the "bad score" countries and at the same time raise their own score. Did I say there was corruption in America?

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