Corruption and Economic Growth

1378 words 6 pages
Corruption and Economic Growth
This brief overview analyzes corruption and its relationship to economic growth. The brief continues to consider the idea of economist Amartya Sen that development means more than economic growth. Additionally, provided, a quick risk analysis of two countries where corruption is common everyday practice.
Corruption and Economic Growth
What is the relationship between corruption in a country and economic growth? Answer this question. Research indicates corruption weakens an economy. Ho (2001) contends there is a direct relationship between corruption and economic growth (pg. 67). Ho further states “a 1% increase in the corruption level reduces the growth rate by about 0.72% or,
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Fey and Shekshnia (2008) contend, “Businessmen who claim to have never dealt with corruption working in Russia are either lying or completely misunderstand the environment” (pg. 22).
Czech Republic. Conducting the same search and using the same search engines, replaced Russia with Czech Republic, returned virtually the same results. Cunningham states, “An anti-corruption strategy by the government does not exist” (para. 3).
It is apparent corruption is a large risk in both countries. A risk mitigation plan unique to corruption will greatly increase a successful launch of a business in countries where corruption is high. The investment in either country could be profitable.
Which investment would you favor and why? Answer and explain.
Favor. Conducting a quick risk analysis of Russia and the Czech Republic, the Czech Republic is the better investment opportunity.
Why. The Czech Republic was favored for returning the best results of a risk analysis – four sources provided the information to form the basis of selecting the Czech Republic. analysis was used: 1) U.S. Department of State: Investment Climate Statements (DoS), 2) Forbes, 3) Doing Business, and 4) Transparency International. Each source provided unique information or a comparison of each country. A brief summary from each source follows.
U.S. Department of State: Investment Climate Statements The DoS (Doing business in Russia: Market overview) contends ,


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