A/CONF. 187/9 16. In the context of international trade, corrupti conflict of interest, extortion, nepotism, tribalism articular in the form of bribery--serves as a ba to fraud and corruption. It is the most dangerous type of corruption and the one that causes the most serious As aresult, a corrupt environment may present global damage to the country or countries involved. In developing countries, such corruption may undermine their capital. Those investors most likely to make a economic development through a number of related long-term contribution to development may therefore factors: the misuse or waste of international aid be discouraged, while those who seek quick profits unfinished development projects, discovery and through dubious ventures may instead be encouraged replacement of corrupt politicians, leading to political This in turn increases the harmful effects of corruption instability; and living standards remaining below the on the global economy, which have been mounting It country s potentia has been shown that countries suffering from pervasive 21. Industrialized countries, in particular, have been freed corruption invest less and achieve lower economic with systemic corruption at the highest level of growth. A country with widespread corruption is government. An environment in which long-term rule likely to achieve aggregate investment levels of almost by one political party and a system made up of a few 5 per cent less than a country relatively free of social and political groups that share power over corruption and to lose about half a percentage point of decades is conducive to the establishment of networks gross domestic product growth per year. Such personal networks hide behind consensual 18. Corruption in both the public sector and the private agreements, justified by political, social, ethnic and sector. regardless of the level at which it occurs, can eligious arguments, so that it is difficult for the publ eopardize free trade, distort competitiveness and to become aware of them These links are often undermine the stability upon which the free market discovered inadvertently, allowing them only then to be system is based. 2 Companies may resort to bribery prosecuted. Unfortunately, since individuals or small a means of bypassing existing trade barriers or parts of the network are generally identified, the reducing national tariffs and expediting international prosecution is, in most cases, unable to identify or trade. Such action, however, undermines the position eliminate the entire network of the State, reducing government revenue and 22. As public awareness increases of the immediate violating important environmental and safety negative effects of high-level corruption on day-to-day standards, among other things fe, tolerance of the problem will be reduced. Media 19. Widespread corruption jeopardizes the credibility of reports can be very effective in bringing corruption Governments and their institutions. As a result. a scandals to the attention of society. The perception that negative culture arises in which priority is given to a scandal exists and the motivation to have the individual success and short-term achievement participants brought to justice are the first signs of Systemic corruption also weakens the effectiveness of citizens'empowerment and willingness to confront the punishment tools: it is hard to punish one person severely when so many others are likely to be equally is likely to grow and infiltrate hent, organized crime C. Corruption in public administration and the guilty. Within such an environ high levels of public administration. In the worst scenario, public order may criminal justice system break down. as occurred in Albania in March 1997 or there may be civil war 23. Public administration officers, as the authority licences, permissions, permits and other authorizations, are both potential targets for corrupters, B. Top-level corruption as well as instigators of corrupt practices. Within the olice, opportunities are even greater, since that 20. Top-level corruption is often controlled by hidden institution not only enforces the laws but also has the networks and represents the sum of various levels and power to deprive individuals of their freedom, througl types ofirregular behaviour, including abuse of power he use of legitimate force, and to carry out nvestigations into criminal conduct that may lead toA/CONF.187/9 6 16. In the context of international trade, corruption—in particular in the form of bribery—serves as a barrier to trade and investment. 17. As a result, a corrupt environment may present global investors with a poor environment in which to place their capital. Those investors most likely to make a long-term contribution to development may therefore be discouraged, while those who seek quick profits through dubious ventures may instead be encouraged.9 This in turn increases the harmful effects of corruption on the global economy, which have been mounting. It has been shown that countries suffering from pervasive corruption invest less and achieve lower economic growth.10 A country with widespread corruption is likely to achieve aggregate investment levels of almost 5 per cent less than a country relatively free of corruption and to lose about half a percentage point of gross domestic product growth per year.11 18. Corruption in both the public sector and the private sector, regardless of the level at which it occurs, can jeopardize free trade, distort competitiveness and undermine the stability upon which the free market system is based.12 Companies may resort to bribery as a means of bypassing existing trade barriers or reducing national tariffs and expediting international trade. Such action, however, undermines the position of the State, reducing government revenue and violating important environmental and safety standards, among other things. 19. Widespread corruption jeopardizes the credibility of Governments and their institutions. As a result, a negative culture arises in which priority is given to individual success and short-term achievement. Systemic corruption also weakens the effectiveness of punishment tools: it is hard to punish one person severely when so many others are likely to be equally guilty.7 Within such an environment, organized crime is likely to grow and infiltrate high levels of public administration. In the worst scenario, public order may break down, as occurred in Albania in March 1997,13 or there may be civil war. B. Top-level corruption 20. Top-level corruption is often controlled by hidden networks and represents the sum of various levels and types of irregular behaviour, including abuse of power, conflict of interest, extortion, nepotism, tribalism, fraud and corruption. It is the most dangerous type of corruption and the one that causes the most serious damage to the country or countries involved. In developing countries, such corruption may undermine economic development through a number of related factors: the misuse or waste of international aid; unfinished development projects; discovery and replacement of corrupt politicians, leading to political instability; and living standards remaining below the country’s potential. 21. Industrialized countries, in particular, have been freed with systemic corruption at the highest level of government. An environment in which long-term rule by one political party and a system made up of a few social and political groups that share power over decades is conducive to the establishment of networks. Such personal networks hide behind consensual agreements, justified by political, social, ethnic and religious arguments, so that it is difficult for the public to become aware of them. These links are often discovered inadvertently, allowing them only then to be prosecuted. Unfortunately, since individuals or small parts of the network are generally identified, the prosecution is, in most cases, unable to identify or eliminate the entire network. 22. As public awareness increases of the immediate negative effects of high-level corruption on day-to-day life, tolerance of the problem will be reduced. Media reports can be very effective in bringing corruption scandals to the attention of society. The perception that a scandal exists and the motivation to have the participants brought to justice are the first signs of citizens’ empowerment and willingness to confront the phenomenon. C. Corruption in public administration and the criminal justice system 23. Public administration officers, as the authority issuing licences, permissions, permits and other official authorizations, are both potential targets for corrupters, as well as instigators of corrupt practices. Within the police, opportunities are even greater, since that institution not only enforces the laws but also has the power to deprive individuals of their freedom, through the use of legitimate force, and to carry out investigations into criminal conduct that may lead to