All the se reasons suggest that the problem of corruption may indeed be greater now than before The momentum of democratization and economic liberalization processes fosters attitudes strongly opposed to discrimination and market distort ions caused by corruption. Higher awareness and lower tolerance of the problem, combined with expected increases in the incidence of corruption, account for the intensity of debates and the large number of initiatives against this scourge Large numbers of people have come to realize the real extent of its negative consequences. all the more so in developing countries, where it has hampered national, social, economic and political progress. Where corruption involves the transfer of funds outside the country, it seriously undermines economic development. This in turn leads to political instability as well as poor ds schools, medical services, lower education standards and the non-completion of projects. The way funds are allocated is distorted and inefficient; competent and honest citizens feels frustrated, and the general populations level of distrust rises. As a consequence, much foreign aid disappears, productive capacity is weakened, administrative efficiency is reduced and the legitimacy of political order is undermined. The same effects, if somewhat less acute can be found in industrialized countries. Individuals who wish to conduct their affairs fairly and honestly are demoralized and lose faith in the rule of law. Corruption breeds distrust of public institutions, undermines ethi cal principles by rewarding those willing and able to pay bribes, and perpetuates inequality. Economic competition is distorted and public funds are squandered. As institutional and market reforms may lose credibility in the eyes of the public, processes of democratization(which should eventually reduce inequalities and improve transparency and accountability) risk losing momentum. Because of the substantial amounts involved in corrupt practices every year, the international financial system is also affected. The risk include what has been termed competitive deregulation, whereby jurisdictions seeking to attract these proceeds relax their regulations and enhance secret provisions. Money-laundering becomes an even more lucrative business with a potential corruptive effect, in turn leading to increased dependency of financial systems on such funds. Internationa conflicts and tensions are another risk, as States attempt to repatriate some of the funds, institute extraterritorial investigations that may be injure national pride or raise issues related to sovereignty, whileAll these reasons suggest that the problem of corruption may indeed be greater now than before. The momentum of democratization and economic liberalization processes fosters attitudes strongly opposed to discrimination and market distortions caused by corruption. Higher awareness and lower tolerance of the problem, combined with expected increases in the incidence of corruption, account for the intensity of debates and the large number of initiatives against this scourge. Large numbers of people have come to realize the real extent of its negative consequences. All the more so in developing countries, where it has hampered national, social, economic and political progress. Where corruption involves the transfer of funds outside the country, it seriously undermines economic development. This in turn leads to political instability as well as poor roads, schools, medical services, lower education standards and the non-completion of projects. The way funds are allocated is distorted and inefficient; competent and honest citizens feels frustrated, and the general population's level of distrust rises. As a consequence, much foreign aid disappears, productive capacity is weakened, administrative efficiency is reduced and the legitimacy of political order is undermined. The same effects, if somewhat less acute, can be found in industrialized countries. Individuals who wish to conduct their affairs fairly and honestly are demoralized and lose faith in the rule of law. Corruption breeds distrust of public institutions, undermines ethical principles by rewarding those willing and able to pay bribes, and perpetuates inequality. Economic competition is distorted and public funds are squandered. As institutional and market reforms may lose credibility in the eyes of the public, processes of democratization (which should eventually reduce inequalities and improve transparency and accountability) risk losing momentum. Because of the substantial amounts involved in corrupt practices every year, the international financial system is also affected. The risk include what has been termed competitive deregulation, whereby jurisdictions seeking to attract these proceeds relax their regulations and enhance secret provisions. Money-laundering becomes an even more lucrative business with a potential corruptive effect, in turn leading to increased dependency of financial systems on such funds. International conflicts and tensions are another risk, as States attempt to repatriate some of the funds, institute extraterritorial investigations that may be injure national pride or raise issues related to sovereignty, while