NCPA - National Center for Policy Analysis

Corruption And Officials' Pay

August 16, 1997

Corruption among government officials is a serious problem in many developing countries. International financiers have long debated ways to combat it.

Researchers at the International Monetary Fund suggest that paying public officials more seems to reduce the incidence of corruption somewhat. But raising official pay scales would be costly.

  • Bureaucratic pay scales in the developing world range from 3.5 times manufacturing wages in Singapore, to about one-half such wages in Egypt and Mexico.
  • The researchers suggest that raising average civil-service pay from 100 percent to 200 percent of the manufacturing wage reduces corruption by about one unit on their corruption index.
  • Getting rid of corruption would entail government wages being set at between 2.8 and 7.4 times the rate of manufacturing wages -- a stiff price.
  • Some countries -- El Salvador is an example -- pay their bureaucrats far more than the average factory worker, yet still have corruption problems.
  • It is noted that some governments deliberately keep wages low because they take it for granted that customs inspectors and driving-license clerks will supplement their official pay through bribes.

Source: "Reasons to be Venal," Economist, August 16, 1997.


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