Some businessmen spend a month on applications only to be told that they used wrong-colored ink. Jacob Yampel, a native of Brooklyn, N.Y., describes a health inspector's call on his pasta factory in Ukraine. But of what and for how much I'll decide in a few minutes. Quantifying the cost of graft is difficult. But economists have concluded that bribes act like a tax on an investment or a transaction.
Many executives never know when they have given the last bribe needed to get a job done.
U.S. officials responsible for development aid and trade also see mounting evidence of corruption's toll. Procurement fraud rakes off funds that should develop national infrastructure, as witnessed in the half-built schools and roads dotting the developing world. Precious national assets are sold to cronies at below-market prices. Tax revenues dry up. The poor of the developing world are hit worst, for they are the least able to pay extra for medicine, schooling, and telephones.