Corruption, The Main Cause Of Poverty And Inequality In Asia

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INTRODUCTION Corruption is the main cause of poverty and inequality in Asia. Government officials may use their authority for private gain in designing and implementing public policies (Gupta S, Davoodi H and Terme RA, 1998). This is defined as corruption. Corruption will lead to both poverty and inequality. Poverty is defined as needs of essential assets and opportunities that every human is entitled (Webster N, 2007). There are two types of poverty, absolute poverty and relative poverty. Poverty can also mean lack of nutrition and poor access to basic housing and education and primary health services. Inequality is defined as a wide gap between the high and low incomes. There is domestic and international inequality. ANALYSIS Corruption does not only affect the growth rate of income but also affect inequality and poverty. Corruption affects poverty by first impacting on economic growth factors. Corruptions will lead to lower economic activities, creates inefficient by increasing the business thus hinders income inequality then leads to poverty in economic. In the economic model, corruption discourages foreign and domestic investment (Chetwynd E, Chetwynd F and Spector B 2003). For example, the increasing costs will create uncertainties which reduce the incentives for the foreign investor to invest in the country then leads to poverty. Besides, biased tax systems such as tax avoidance and evasion will occur thus expanding the gap of income inequality. Corruption will

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