ABSTRACT
The bureaucratic corruption of many underdeveloped countries has been widely condemned both by domestic and foreign observers. Apart from the criticism based on moral grounds and the technocratic impatience with inefficiency, corruption is usually assumed to have important prejudicial effects on the economic growth of these societies. The critique of bureaucratic corruption often seems to have in mind a picture in which the government and civil service of underdeveloped countries are working intelligently and actively to promote economic development, only to be thwarted by the efforts of grafters. Corruption can also help economic development by making possible a higher rate of investment than would otherwise be the case. Bureaucratic corruption also brings an element of competition, with its attendant pressure for efficiency, to an underdeveloped economy. Corruption also performs the valuable function of a "hedge" and a safeguard against the full losses of bad economic policy.
