Forensics & fraud blog

An interesting article in TheLocal.de on a study by Prof. Friedrich Schneider of Johannes Kepler University in Linz, Austria.
The study estimates the loss to the German economy due to corruption to be € 250 billion in 2012, up from a previous estimate of € 220 billion in 2005, when corruption in Germany was at a historic low-point.
That is a whopping €250 billion that could have been invested in genuine economic activity and grown the German economy, but was wasted by corruption and bribery. Given the importance of the German economy for the Euro-zone, this figure should be a concern of all European countries.

Also considering that Germany is ranked 14th on the TI list of least corrupt countries, so the relative problem of corruption loss as percentage of GDP may be even worse in other countries.

Something to think about when considering the stagnant or even declining economic growth in Europe.

Or maybe not, considering the impact the current crisis has on Greek society.

In his post, Luke Balleny explains the impact corruption has had on Greek society and now on the crisis facing Greece.

The 2012 Greek chapter of the Transparency International report on National Integrity System Assessment suggests that the Greek government “acceptance” of corrupt practices has contributed to the current crisis in Greece.

TI’s Assessment of National System Integrity on Greece can be found here: TI – NIS

Considering the impact on the lives of many if not most Greeks, and the contribution to the current crisis of the corruption in Greece, we must conclude that corruption is in fact not a victim-less crime.  The consequences may not be immediate or clear to most, but as this case teaches us, there almost always are consequences to be paid.

Fighting corruption, both by preventative measures and controls and by investigating and exposing corruption post-fact, is crucial to the smooth operation of the economy as a whole. And if you need more convincing of the real-world impact, just look at Greece today and the draconian budget measures that they have to implement.

With the 2012 World Economic Forum in Davos just behind us, Transparency International reflect on some of the evolutions in the global corporate community in terms of transparency, corruption, bribery and perception of people around the world.

TI sees the need for companies to consider new approaches and new business models in light of the persistent global economic woes and ever growing public dis-trust in corporations around the world.

Well worth the read: TI – Corporate Transparency: Old Problems and New Ideas