Uphando Forensics

The Impact That Corruption In The Public Sector Has On A Economy


Corruption in the public sector has and always will continue to be a thorn in the side of any government throughout the world. Irrespective of what control measures are put in place, corruption remains a problem.

Economies that are afflicted by a high level of corruption which involves the misuse of power in the form of money or authority to achieve certain goals in illegal, dishonest, or unfair ways are not capable of prospering as fully as those with a low level of corruption.

Corrupted economies are not able to function properly because corruption prevents the natural laws of the economy from functioning freely. As a result, corruption in a nation\’s political and economic operations causes its entire society to suffer.

The quality of education and healthcare also deteriorates under a corrupt economy, leading to an overall lower standard of living for the country\’s citizens.

Corruption can often lead to an uneven distribution of wealth as small businesses face unfair competition from large companies that have established illegal connections with government officials.

In a corrupt economy, resources are inefficiently allocated and companies that otherwise would not be qualified to win government contracts are often awarded projects as a result of bribery or kickbacks.

In South Africa, bribery is one of the main forms of corruption in which ordinary people are likely to come into contact with in their interactions with government officials.

Corruption in South Africa is not limited to certain sectors of society, it occurs in all sectors but it is especially in the public sector that its effects can be most destructive. The reasons for this are:

  • The public service is a direct receptacle of societal trust, the abuse of which erodes local and foreign investment in the widest sense. This means that, different to disgruntled stakeholders in corrupt private sector concerns targeting organisations specifically in their complaints, corruption in the public sector tends to instil a negative reputation in a country as a whole;   • The public service, in opposition to private sectors institutions competing on the open market, mostly holds monopolies on basic and essential services like state housing, welfare grants and primary health care. This often places the recipients of these services in positions of high vulnerability, the exploitation of which results in human rights abuses.
  •  While private sector institutions are increasingly scrutinised internationally according to emerging world governance standards due to economic globalisation, the public sector is still largely enveloped and shielded by national sovereignty. Coupled with the presence of poverty and the absence of proper oversight and management skill to prevent, detect and sanction abuses, it leaves citizens largely defenceless against exploitation.