Consequences of Corruption

Consequences of Corruption

On a macroeconomic level, corruption limits economic growth, since private firms see corruption as a sort of "tax" that can be avoided by investing in less corrupt countries. In turn, the lower economic growth results in less government revenue available for investment, including investment in the health sector. Corruption also affects government choices in how to invest revenue, with corrupt governments more likely to invest in infrastructure-intensive sectors such as transport and military, where procurement contracts offer potential to extract larger bribes, rather than social sectors like health and education. Within the health sector, investments may also tend to favor construction of hospitals and purchase of expensive, high tech equipment over primary health care programs such as immunization and family planning, for the same reason.
Corruption in the health sector also has a direct negative effect on access and quality of patient care. As resources are drained from health budgets through embezzlement and procurement fraud, less funding is available to pay salaries and fund operations and maintenance, leading to demotivated staff, lower quality of care, and reduced service availability and use . Studies have shown that corruption has a significant, negative effect on health indicators such as infant and child mortality, even after adjusting for income, female education, health spending, and level of urbanization . There is evidence that reducing corruption can improve health outcomes by increasing the effectiveness of public expenditures .
A review of research in Eastern Europe and Central Asia found evidence that corruption in the form of informal payments for care reduces access to services, especially for the poor, and causes delays in care-seeking behavior . In Azerbaijan, studies have shown that about 35% of births in rural areas take place at home, in part because of high charges for care in facilities where care was supposed to be free . In many countries, families are forced to sell livestock or assets, or borrow money from extended family and community members, in order to make the necessary informal payments to receive care.
Besides informal payments, other types of corruption which clearly affect health outcomes are bribes to avoid government regulation of drugs and medicines, which resulted in the dilution of vaccines in Uganda and has contributed to the rising problem of counterfeit drugs in the world. Dora Akunyili, Director General of the National Agency for Food and Drug Administration and Control in Nigeria, writes eloquently about her struggle to lead Nigeria’s battle against counterfeit drugs .Unregulated medicines which are of sub-therapeutic value can contribute to the development of drug resistant organisms and increase the threat of pandemic disease spread. In addition to fake and sub-therapeutic drugs on the market, corruption can lead to shortages of drugs available in government facilities, due to theft and diversion to private pharmacies. This in turn leads to reduced utilization of public facilities. Procurement corruption can lead to inferior public infrastructure as well as increased prices paid for inputs, resulting in less money available for service provision.
Unethical drug promotion and physician conflict of interest can have negative effects on health outcomes, as well. As documented by Jerome Kassirer, promotional activities and other interactions between pharmaceutical companies and physicians, if not tightly regulated, can influence physicians to engage in unethical practices . Studies have shown that these interactions can lead to non-rational prescribing, and increased costs with little or no additional health benefit. Patients’ health can be endangered as some doctors enroll unqualified patients in trials or prescribe unnecessary or potentially harmful treatments, in order to maximize profit .