ercent growth rates, while other firms report a mere 8 percent. However, this is slightly misleading, because overall, states that produce low levels of capture averaged 21 percent growth rates, while those with high levels produced only 11 percent growth rates. These results indicate that despite benefits to particular firms that are received from corrupt actions, there are aggregate macroeconomic repercussions that immensely exceed these smaller scale benefits. The ten year results are staggering, with countries that report high levels of both types of corruption reporting approximately 50 percent declines in output, while countries with medium amounts of corruption barely saw any declines. High levels of corruption have also had extremely negative tax implications and have precipitated unprecedented levels of unofficial economy. In countries featuring high levels of corruption, the unofficial economy represents nearly 50 percent of the entire GDP. The consequences are that large amounts of income go unreported and tax levels are noticeably low, diminishing government spending for public services, and giving firms greater incentives to continue their corrupt practices. In one astounding example, the government of Ukraine recently offered an amnesty for an estimated US$20 billion in gray capital kept offshore (world bank 22).Corruption has also had immense social consequences. While colossal declines in GDP have produced drastic increases in poverty rates, recent trends toward economic recovery have not produced significant improvements in poverty rates. This is largely the result of the large amounts of administrative corruption that have not provided [adequate] social safety nets, and have left the most vulnerable groups unprotected. Surely, poverty can contribute to corruption, yet corruption also exacerbates poverty (world bank 20). By diminishing growth rates, corruption can indirectly contribute to vicious cycles of pov...
