Corruption In Economical Institutions. A Corruption Survey Of Mexico

TABLE OF CONTENTS

– Introduction.

2. - Description of the types of corruption, the conditions for its existence, and co The
nsequences.

3. - Four Analytical Approaches to Corruption
3.1. – Efficient Corruption
3.1.1 – Wal-Mart’s Corruption Efficiency Case
3.2 – Corruption with a Benevolent Principal
3.2.1 – Salary Rates
3.2.1.1 – Efficient Salaries
3.2.1.2 – CapitulationSalaries
3.2.2 – Monitoring Sytem
3.2.3 – Legal Resources
3.3 Corruption with a Non-benevolent Principal
3.3.1 – Public Education system in Mexico
3.4 – Self-reinforcing Corruption

4. - Conclusion

5. – Bibliography












Introduction

Corruption in economy refers, according to one of the many definitions, to “the payment of services under the law, which therecipient has not lawfully earned¨. Corruption is a very serious issue which is already in the agenda of organizations ike the World Bank and the International Monetary Fund, and that should also be a matter of every institution to solve. It is a multi-faceted problem which is not only has to do with the mere act of bribery, but also with all the “steps” that lead to it.

This phenomenon traces backto the first civilizations in history. In fact, according to the Edward Gibbon’s “The decline and Fall of the Roman Empire”, political corruption was among the main reasons for the fall of the Roman Empire. The Roman Empire, unlike the Greek democracy at the time, in which the government was already chosen by votes, had no effective system for electing a new emperor. The decision was left to adebate between the old emperor, the senate, the Pretorian guard and the army. The Pretorian guard would however gradually take over control and with complete authority choose the new ruler. The new ruler then rewarded the most influential leader of the guard. So, during the last 100 years of the empire, the throne was in most cases sold to the highest bidder.

In our days there are also severalmodern states, which suffer from corruption, and it happens at all levels of economic development. This occurs from the modern Roman empires like the USA or Germany to developing countries like Mexico or India. This problem, which leads the Roman Empire to its end in 476 AD, has proved also strong enough to keep stagnating the growth of countries even in these days. Acknowledging the enormous impactthat this problem has on the growth of a country through its institutions, the following essay will concentrate on explaining theoretically the four analytical approaches to corruption. I will pursue to do this through the specific example of a country which suffers from the corruption cancer that is killing it from the inside out, a country that according to “Transparency International” has arating of 8.8 in a scale which goes from 1-10. A problem that, in this country extends without distinction to all areas, industries and societies affecting yearly 70% of the institutions in Mexico.

2. Description of the types of corruption, the conditions for its existence, and consequences.

According to Professor Juan Castaings Tellery from the Autonomous University of Mexico, theclassification of corruption in this country is divided in “Official Corruption” and “Social Corruption”. From what Prof. Castaings calls official corruption can be defined as the illegalities that arise from the payment of bribes to government agents. These bribes derive in illegalities such as Peculation, and the distribution to the payer of licenses, sharing of classified or illegal information, illegalfunding for political campaigns and privileges to criminals (Narco). On the other hand, “Social Corruption” deals with the corruption that happens at the level of society in general. In the latter we find that the parts involved are bureaucrats, docents at academic institutions, researchers, and the society in general.

The conditions for the existence of corruption are:
Discretionary Power....