Corrupting Development: Unveiling the Impact of Corruption on Sustainable Development in Latin America (2010-2021)

Corruption is not strictly a "problem" and is even less something that can be solved. It is a complex phenomenon that affects not only the economy but the entire social fabric, resulting from the interaction of social agents over a specific time and space. In our research, we identify the impacts of corruption on economic growth, human development, poverty, and inequality in a comparative framework. One of the most significant results of the research is gaining clearer insights into its complexities, providing elements to design better strategies for identifying and combating corruption. Our work is theoretically justified as a reflection of political economy on the interrelations of corruption, evaluated from different perspectives that interact with the development process. By modeling the influence of corruption on Human Development, we aim to estimate these effects, allowing us to visualize the complexity of its consequences from a different perspective. Directly measuring corruption is a complex task, so our work seeks to infer its effects on specific aspects of the development process. This paper presents the results of research on the pervasive effects of corruption on sustainable development in Latin America from 2010 to 2021. Employing a mixed-methods approach, we utilize a panel dataset comparing development-related indicators across 19 Latin American countries within the global context. The research explores corruption's nuanced impact, specifically addressing inequality, poverty, and state capture. Corruption emerges as a catalyst for inequality, hindering equitable resource distribution and opportunities, exacerbating poverty through misallocation of resources, weakening institutions, and eroding trust in government. Moreover, corruption is identified as a key driver of state capture, enabling powerful interest groups to undermine good governance and impede sustainable development. By examining the Human Development Index (and its version adjusted for inequality), our findings reveal a compelling negative association between corruption levels and overall human development, particularly pronounced in lower-income countries. The theoretical framework integrates complexity theory and critical theory, providing a comprehensive understanding of corruption's interconnected factors, and emphasizing the role of power and inequality. The study contributes to a more holistic understanding of corruption's impact on sustainable human development. By employing a complex systemic analysis, we aim to provide a new perspective that transcends simple cause-and-effect relationships, acknowledging the inherent difficulties in fully measuring corruption. Our work consolidates descriptive, econometric, and historical analyses aiming to give us a glimpse of the roots of corruption resilience, ultimately concluding that a shift in targeting within anti-corruption policies is essential for effective intervention. The study also contributes to critical theory discussions by framing corruption within a capitalist economy, highlighting its role in the competition between capital (and its multiple interest groups) and as a tool for increasing both the expanded reproduction of capital and the accumulation by dispossession through the financialization process. The paper advocates for a systemic, plural, and transdisciplinary approach, utilizing complexity theory to capture the multifaceted nuances of corruption.