IMF: Global corruption costs trillions in bribes, lost growth
WASHINGTON, May 11 (Reuters) – Public sector corruption siphons $1.5 trillion to $2 trillion annually from the global economy in bribes and costs far more in stunted economic growth, lost tax revenues and sustained poverty, the International Monetary Fund said on Wednesday.
In a new research paper, the IMF said that tackling corruption is critical for the achievement of macroeconomic stability, one of the institution’s core mandates.
The Fund argues that strategies to fight corruption require transparency, a clear legal framework, a credible threat of prosecution and a strong drive to deregulate economies.
“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 wrote in an essay accompanying the paper.
“Corruption also has a broader corrosive impact on society. It undermines trust in government and erodes the ethical standards of private citizens,” Lagarde added.
The paper, titled “Corruption: Costs and Mitigating Strategies,” follows Lagarde’s warning to Ukraine in February that the IMF would halt its $17.5-billion bailout for the strife-torn eastern European country unless it takes stronger action to fight corruption, including new governance reforms.