Business, Legal & Accounting Glossary
A corrupt and dishonest government characterised by greed.
Kleptocracy is a government with corrupt leaders that use their power to exploit the people and natural resources of their own territory in order to extend their personal wealth and political powers. Typically, this system involves embezzlement of funds at the expense of the wider population.
Kleptocracy is when a government increases the wealth and political power of bureaucrats and the ruling class at the common people’s cost. Kleptocracy can also be named as cleptocracy or kleptarchy.
Kleptocracy arises in such cases where a government is inefficient and not working properly for the welfare of the people. Kleptocracy can be also referred to as a kind of despotism or some other form of domineering and favouritism that prevails in any government rule.
Kleptocracy in full form is hard to find though it exists in some other forms. It is believed that Kievan Rus can be treated like an old case of Kleptocracy government. It is said that alliance between Varangians and Slavic elites were responsible for setting up this type of government and they managed to escape all attacks that were thrust when Tatars conquered Kiev in 1240. A case of Kleptocracy also happened in the US until in 2006, when the Bush government of United States articulates a policy in particular to internationalize an attempt to resist kleptocracies in the state.
Effect of Kleptocracy can be bad to worse for any economy. Kleptocracy affects the economy of any state, political associations, and civil rights very adversely. Acute scarcity of foreign direct investment(FDI) is a major effect of Kleptocracy. Import and export affairs are also affected very badly. Kleptocracy often misuses government funds collected through taxes or investment schemes. This leads to lower standard of living of people. In the case of Kleptocracy, funds are stolen that are granted for the construction of schools, colleges, hospitals, roads, parks.
Kleptocracy brings a huge disparity among the population, rich and ruling classes gains a lot and other people have to suffer. The entire economic cycle is distorted and this often leads to the phenomenon of a vicious circle of poverty in which economy lands back to the same point from which it had started developing. Thus any government should not entertain Kleptocracy of any kind. It can be regarded as a social and economical offence that can crash any economy.
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This glossary post was last updated: 29th March, 2020 | 0 Views.