The IMF estimated $2 trillion of annual loss from the global economy in bribes

Almaty. May 12. Silkroadnews – Public sector corruption siphons $1.5-2 trillion annually from the global economy in bribes, which is about 2% of global GDP, data by the International Monetary Fund (IMF) show.

According to IMF study, every year the world economy loses $1.5 trillion to $2 trillion (about 2% of world GDP) in bribes. The paper, titled “Corruption: Costs and Mitigating Strategies”, say the strategy to fight corruption requires transparency, a clear legal framework, a credible threat of prosecution and a strong drive to deregulate economies, RBC reports.

The IMF noted that corruption slows economic growth annually much more than lost tax revenues and sustained poverty.

“While the direct economic costs of corruption are well known, the indirect costs may be even more substantial and debilitating,” IMF managing director Christine Lagarde said.

According to her, corruption has “a broader corrosive impact on society”.

“It undermines trust in government and erodes the ethical standards of private citizens,” Christine Lagarde said.
Without naming any particular countries, the IMF, in its report, says the dependence on non-renewable natural resources, as well as conflicts over control of them, can often encourage corruption.

On the one hand the document emphasizes the need for tougher anti-corruption laws, yet on the other hand it says regulations reduction can limit the opportunities for bribery and give companies more opportunities for growth.

“Wherever discretion is granted to an official regarding the approval of an economic activity, there is a risk that this discretion will be abused,” Lagarde said.