Research undertaken by the world Bank and others shows that far from lubricating business activity, bribery actually fuels the growth of excessive and discretionary regulations.
Although I know the meaning of the words at bold part, I am failing to realized what it is actully.
Could anyone please help me here?
My take is:
Bribery causes a problem because it leads to too many/strict regulations and rules, many of which are introduced at the judgement of the broker or manager in charge.
I don’t know enough about this aspect of finance and business to be certain about how bribery leads to such rules, but I’d take a guess that it’s twofold:
- Because those in authority know bribery takes place, they introduce tighter regulations and controls in an effort to stamp it out.
- The people who are bribed have to find ways of carrying out whatever they’ve been bribed to do. One of those ways would be through introcuducing regulations which are somehow made discretionary, so that they only apply where the bribe taker wants them to apply.