**21. Corruption: financial consequences**

Most countries have mechanisms for price subsidies on basic commodities and price controls. However, in low-income countries where the majority are rural subsistence farmers, the subsidies do not benefit them much as they are on things that do not form part of their weekly shopping basket. I mentioned under economic consequences of corruption that the underground market concentrates market control in hands of corrupt individuals. In the worst cases, more foreign currency will be in the hands of the corrupt that dominate the underground economy than in the Central Bank. This concentration of money in the hands of the corrupt can decimate the value of a local currency. Prices of things can sky rocket, leaving everyone without valuable money. Financing projects and purchases can become very expensive and most times unattainable. The flourishing of a black market will result in government losing revenue, making the government struggle to increase subsidies making it more bankrupt and more and more unable to provide services in quality and in quantity. Corruption and the underground markets, price controls and subsidies have a multiplier effect on corruption thus worsening the social and economic plight of the general population. Currencies are exchanged on the black market creating a very difficult situation for those who cannot reach urban centres where this normally happens. When the currencies are exchanged in the rural and quasi-rural areas, the rates are cut throat further making the poor suffer more.

## **22. Corruption: developmental consequences**

Not only does corruption affect economic development in terms of economic efficiency and growth, but it also affects equitable distribution of resources across the population, increasing income inequalities, undermining the effectiveness of social welfare programmes and ultimately resulting in lower levels of human development [28]. Poor and underdone human resources development will undermine the nation's long-term economic growth, sustainable development and equality [29]. Corruption is always a stumbling block to national modernisation, economic development and integration in a world that is becoming increasingly globalised and integrated. Corruption shatters the potential and growth of future generations [30].

*Corruption: Drivers, Modes and Consequences DOI: http://dx.doi.org/10.5772/intechopen.106826*
