The Relationship Between Corruption And Poor Development

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Kleptocracy is defined as a state controlled to benefit an individual or small group who use their power to gain “a large fraction of society’s resources” to use for themselves. Kleptocracy “obstruct[s] development” of countries because the money taxpayers entrust to further develop their country through projects such as schools or infrastructure, becomes diverted to certain people for their own personal gain. Daron Acemoglu, Thierry Verdier, and James A. Robinson, writers for the Journal of the European Economic Association, established that kleptocracy runs rampant in “many developing countries.” As a result of this corruption, countries suffer “highly inefficient economic policies” and “expropriated the wealth of their citizens.”…show more content…
According to the FBI, 1Malaysia Development Berhad raised roughly 8 billion dollars for the Malaysian people’s use; however, high-ranking Malaysian government officials received much of that money for their own personal use. Robert B. Heuchling, a Special Agent with the Federal Bureau of Investigation, verifies that real estate accounts for 9 out of the 17 assets the United States seeks civil forfeiture for. Jho Low, a Malaysian financier, is a central figure regarding Malaysia’s misappropriated funds. Heuchling confirmed that Low can be traced back to the purchase of real estate properties using misappropriated funds, and despite never holding a formal position at 1Malaysia Development Berhad, Low informally advised 1MDB’s executive committee. Jho Low’s misuse of government funds raises the question: To what extent does kleptocracy in Malaysia affect United States’ real estate?
Louise Story and Stephanie Sauls, writers for The New York Times, conducted an investigation and revealed Low involved himself in the purchase of five high-end properties with the accumulative cost of over 140 million dollars. Story and Sauls disclose that anonymous funding purchased the Time Warner Center in Manhattan, a Los Angeles Hills mansion, and a Beverly Hills Mansion, but Story and Sauls could trace each property back to Jho Low. Robert B. Heuchling confirms their findings in the Verified Complaint for Forfeiture from the United States government along

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