Consequences Of Corruption In The Latin American Economy

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Consequences of corruption in the Latin American economy


Corruption is an action that some people perform, this action is practically the abuse of power, in any position of those who exercise it, whether public or private, whose purpose is to obtain a benefit at the expense of collective or individual well -being. Nowadays there are many forms of corruption, it would be thought that it only happens in the governmental field because that is where it is generally seen, however this activity is also practiced in the private initiative, the question is how does it occur in both?, The answer is different ways.


When multinational companies transfer their profits generated outside the country or to “fiscal paradises” in orderhigher than transnationals since they do not have access to this type of movements;This is a form of corruption and is known as erosion of the taxable base and the transfer of benefits.

Another form of corruption is when there is an unequal exchange of resources or favors to benefit or favor certain people, this form of corruption is called clientelism. Boundary is also considered a form of corruption, which can take the form of gifts, rate, loans or others, to give advantage to an illegal action. The conflict of interest is also another form of corruption, which consists in choosing under a merely personal, work, family, etc., Instead of complying with what is due.

Just as these examples, there are many other forms of corruption such as extortion, embezzlement, collusion, fraud, nepotism, illicit financial flows, money laundering, abuse of power by public officials, among others (Transparency International, Anti-corruption glossary). Corruption is an action that takes great importance at the social level, since it is something that daily affects people to their economy and the country’s economy. 

That is why having instruments that allow measuring corruption levels helps improve the accountability of both public and private institutions, as well as improve the economic and social development of a nation. There are different indices and indicators that help measure corruption, in the case of indicators these are not as such instruments of universal measurement, because they depend on several important aspects such as precision and accuracy to be comparative.

However, they exist and are classified according to the objective you want to measure, example: indicators based on perceptions and indicators based on experiences. Meanwhile, among the indices that help measure corruption is the perception index of the corruption of international transparency (CPI), which determines the degree to which public and political servants accept different types of illicit payments or other types of other types ofRelated crimes. 


This indicator classifies on a scale from 1 to 10 countries, where 1 indicates that the country’s perception is totally corrupt and 10 indicates that the country is completely honest. The International Country Risk Guide, which classifies 140 countries on a scale of 1 to 100, where the numbers closest to the latter indicate a lower political risk and the numbers closest to 1 indicate a higher risk. The 2001 Pricewaterhouse Cooper Opacity Index, this classifies 35 countries on a scale of 0 to 150, where 0 indicates greater transparency and 150 greater opacity. 

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