One of the way an institution can reduce the expected payoff of investment and production is through corruption.
What is corruption?
- Corruption is a type of dishonesty or a criminal offense committed by a person or organization in a position of authority in order to obtain illegal benefits or abuse power for personal gain.
- Corruption can encompass a variety of actions such as bribery, influence peddling, and embezzlement, as well as acts that are legal in many nations.
- Political corruption happens when an elected official or other government employee uses their official position for personal gain.
- Corruption is one way for an institution to diminish the expected return on investment and productivity.
- Kleptocracies, oligarchies, narco-states, and mafia states are the most corrupt.
Therefore, one of the way an institution can reduce the expected payoff of investment and production is through corruption.
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