And it damages the respect for law and public and financial institutions, undermines the credibility and effectiveness of both elected and appointed government officials, and creates an environment conducive to crime in the private sector, including organized crime. The economic dimension of corruption has been demonstrated over the last year and a half, as the world has experienced a financial crisis. In some countries, corruption increased vulnerability to crisis. In others, corruption was a significant impediment to implementing the necessary response and a major obstacle to restoring the confidence that is so critical to countries' recovery and stability. In some countries, corruption is so pervasive it can be a threshold economic issue that undermines a country's ability to succeed in the global economy.
Corruption exists everywhere.
But corruption is especially troubling in developing countries. By diverting the scarce resources that are needed so badly for critical priorities such as health, education and housing, and more generally, the impact on a less developed economy can be so much greater. Against that backdrop, it seems to me there are at least five elements critical to effectively combating corruption. First, nations must have good, clear laws and regulations that can be easily and reliably enforced. This, in turn, requires courts that are adequately funded and independent of political pressure, as well as honest, well-trained and adequately compensated regulators, judges, prosecutors and law enforcement officers.