The Colombian Confederation Of Chambers Of Commerce

2337 WordsDec 5, 201410 Pages
Case study: Colombia The Colombian Confederation of Chambers of Commerce (Confecámaras) recognized that Colombia had a set of norms and instruments for detecting, controlling, and punishing corrupt practices in Colombia. However, these mechanisms were not often applied, partly because of corrupt politicians. Confecámaras worked with local businesses to have clear rules and codes of conduct in procurement processes and to demonstrate the benefits of compliance. With input from local business leaders, Confecámaras developed local ethical codes of conduct, to which over 1,000 businessmen voluntarily signed in the first year alone (Luna 2006, 11). ANALYSIS Corruption affects human development and wealth distribution Corruption does not only affect economic growth in terms of economic efficiency, it also has a distributional impact. While there is strong evidence of a negative correlation between corruption and the level of GDP per capita, some authors argue that such studies should also take into consideration indicators of social welfare and distribution of wealth. In 1998, the International Monetary Fund (IMF), based on cross-country regression analysis, established the substantial impact of corruption on income inequality, with a one standard deviation point increase in corruption resulting in an income reduction for the poor of 7.8 percentage points a year (Aidt 2010, 4). Corruption increases income inequality through lower economic growth, biased tax systems favouring the
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