GAVIN KEETON: Country’s wheels grind to a halt in sands of corruption
South Africans are punch-drunk from almost daily disclosures of corruption, so new announcements of multimillion-rand scams pass almost unnoticed. To make things worse, the economy is on its knees. There has been no meaningful growth for a decade. As a result, unemployment is rising and tax collections are lagging the government’s insatiable need for funds. At a time when consumer spending is already under pressure, further tax hikes are likely. A link between the rampant corruption and our economic woes seems obvious. Yet some economic theorists have argued that corruption is not necessarily bad for economic performance. In situations in which bureaucratic restrictions stifle activity and economic transactions, corruption may actually increase efficiency by "oiling the wheels" of the domestic economy. Such positives are, however, very unusual. Much more often, corruption is "sand in the wheels" of economic activity, reducing efficiency and wasting limited resources.
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