Corruption and inflation, the relation between

This article will be written to search upon the relation between, corruption and inflation.

When a certain country has corruption, does that necessarily leads to an inflation.

The compound of the writing will be as follows:

1. Definition of Corruption

2. Definition of Inflation

3. List of countries that have corruption

4. Is there a relation between?

What is corruption?

corruption as the abuse of entrusted power for private gain (Transparency international).

Corruption does not only lead to personal gain but can involve gains for a collective entity such as a political party, a corporation, or a group of people (Basel institution on governance).

Based on the United Nations report on, what is corruption? (United Nations)

Here are the Forms of corruption

Bribery and embezzlement in the public sector
Bribery and embezzlement in the private sector
Trading in influence
Abuse of functions
Illicit enrichment
Money-laundering
Concealment and
Obstruction of justice.

What is inflation?

The origins of the term “inflation” can be traced back to the early 1900s, when it was first used by economists to describe the phenomenon of rising prices. The term comes from the Latin word “inflare,” which means “to blow up” or “to expand.” (Konstantin Koychev, 2023)

Inflation is the increase in the prices of goods and services over time (Federal reserve; Federal reserve bank of Cleveland)

Inflation measures how much more expensive a set of goods and services has become over a certain period, usually a year (International monetary fund).

Measurement of Inflation:

Consumer Price Index (CPI):

Measures the average change in prices paid by consumers for a fixed basket of goods and services (e.g., food, rent, transport). It reflects the cost of living and is widely used to adjust wages and pensions (Sveriges Riksbank; Reserve bank of Australia; Monetary authority of Singapore)

for example, if prices rise from $100 to $105 over a year, the inflation rate is 5%.

Based on Trading economics website, https://tradingeconomics.com/country-list/corruption-index, and https://www.sanctionscanner.com/blog/top-10-most-corrupt-countries-in-2025-1231 here is the world corruption index.

Left to the reader to check if these countries have inflation or not.

So, lastly, does corruption have a relation with inflation?

The answer is yes, in most case scenarios, countries that have corruption do have an inflation, BUT, shockingly, sometimes corruption can prevent inflation.

Assuming for example, due to a corruption in some nation, the wages and salaries are highly low, furthermore the public will not have the power to purchase expensive goods, therefore the price of goods either will decrease, stay the same or increase by insignificant amount.

But when corruption prevent inflation, surely it will not be in a beneficial way.

References

Transparency international. What is corruption? https://www.transparency.org/en/what-is-corruption

Basel institution on governance. What is corruption? https://baselgovernance.org/what-is-corruption

United Nations. What is corruption? https://www.unodc.org/corruption/en/learn/what-is-corruption.html

Konstantin Koychev. (2023). The Influence of Monetary and Fiscal Policy on Inflation. Pp 15. https://research-api.cbs.dk/ws/portalfiles/portal/98730753/1617815_Master_s_Thesis.pdf

Federal reserve. What is inflation, and how does the Federal Reserve evaluate changes in the rate of inflation? https://www.federalreserve.gov/faqs/economy_14419.htm

Federal reserve bank of Cleveland. What is inflation? https://www.clevelandfed.org/center-for-inflation-research/inflation-101/what-is-inflation-start

International monetary fund. Inflation: Prices on the Rise. https://www.imf.org/en/Publications/fandd/issues/Series/Back-to-Basics/Inflation

Sveriges Riksbank. How is inflation measured? https://www.riksbank.se/en-gb/monetary-policy/the-inflation-target/how-is-inflation-measured/

Reserve bank of Australia. Inflation and its measurements. https://www.rba.gov.au/education/resources/explainers/inflation-and-its-measurement.html

Monetary authority of Singapore. Understanding Inflation & Monetary Policy. https://www.mas.gov.sg/monetary-policy/economics-edu-inflation/inflation/how-do-we-measure-inflation