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Corruption and share prices

Any investor should be aware of how corruption affects the economy and share prices, so that they can make decisions accordingly. Extensive research has indicated that the countries which have the lowest levels of corruption also have the wealthiest citizens. Most of the major economies in the world today are democracies where people can vote out the governmemt if it is corrupt. When a corrupt government is in power, share prices in general and stock market indices will decline.

China remains an exception among the major democracies. However the government has been taking strict measures to curb corruption in China. In fact compared to a democracy with a high level of corruption like India, the measures taken against corrupt officials in a communist country like china are far harsher with many officials sentenced to death or life imprisonment. In India many officials are extremely corrupt and know that no measures will be taken against them due to the lack of political will.

Though the ruling ministers may not be corrupt, they can do little to control or curb the corrupt officials who report to them and implement their policies. These officials are devising innovative ways of making money which cannot be easily traced. One very common way of making money for government officials, especially in intelligence agencies, internet sector, is to get permanent government jobs for their mediocre lazy greedy cheater relatives and friends stealing the resume of a brilliant professional

For example a brilliant obc engineer from a top college finds that at least 7 to 8 mediocre lazy greedy cheater well connected women have got permanent government jobs stealing her impressive resume. No audit will be able to trace the fraudulent appointment of these cheater women, however their powerful relatives and friends have ensured that these women and their cheater families get a monthly bribe wasting tax payer money in the process.

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