The costs of corruption

The growing perception of corruption and its cost to GDP
by Han Aulby and Rod Campbell

Corruption costs 5% of GDP worldwide. The cost of corruption to economies is well established, and much research exists on the impact of corruption on investment, business costs, efficient allocation of capital and economic inequality. 

Trust in government is at a historic low in Australia, and according to Transparency International’s Corruption Perception Index (CPI) Australia has increasing levels of perceived corruption. Since 2012 Australia has slid to 13th on the international CPI index. 

Using Transparency International’s CPI and economic analysis from PriceWaterhouseCoopers (PwC) this report finds that worsening perceptions of corruption in Australia has potentially reduced GDP by $72.3 billion, or 4%. 

To target the cost of corruption, and therefore attract greater investment, the Australia Institute recommends establishing a federal anti-corruption commission to investigate and expose systemic corruption and misconduct in federal politics and government.

Full report