Explain two ways in which corruption impact on the country’s economy
Answer:
1) Corruption can deter foreign and domestic investments: Companies hesitate to invest in countries with high levels of corruption because it can add costs and risks. It can also result in unfair competition, leading to economic inefficiency.
2) It can lead to misallocation of resources: In a corrupt system, public resources can be diverted for personal gain, leading to inefficient distribution of resources. This can impact the country’s economic development and increase inequality.