Cause and Effect of Corruption Essay

1660 Words Nov 4th, 2012 7 Pages
There is a growing worldwide concern over corruption at the present time. Several factors are responsible for this. A consensus has now been reached that corruption is universal. It exists in all countries, both developed and developing, in the public and private sectors, as well as in non-profit and charitable organizations. Allegations and charges of corruption now play a more central role in politics than at any other time. Governments have fallen, careers of world renowned public figures ruined, and reputations of well-respected organizations and business firms badly tarnished on account of it. The international mass media feeds on it and scandals and improper conduct, especially of those in high places. The rising trend in the use of …show more content…
Likewise, low prices set on gasoline and energy contributes to deficits in the government budget. Fixing low prices on rice and agricultural products, in the wake of sharp increases in the prices of other domestically produced and imported goods, turns the terms of trade against farmers. This adversely affects their incentive to produce and hinders agricultural output. Low prices set on energy result in huge losses for the government enterprises engaged in this area. Consequently, they do not have the resources to invest in new facilities, to buy spare parts or to properly maintain existing machinery, and equipment that are falling into disrepair. The outcome is frequent breakdowns, unreliable and poor service, and general inability to meet requirements in terms both of generating capacity and in the quality of energy produced. Under-pricing energy has other harmful effects. Cheap energy leads to its uneconomic and wasteful use. When energy prices are kept at a level much below cost for decades, there is little incentive for its users to adopt energy efficient technologies and methods of production. So they are not sufficiently prepared for the large price adjustment that inevitably comes when low prices are no longer sustainable due to an internal or an external shock. The result is disruption in production, more

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