Can it ever happen that an anti-corruption drive which leads to government action becomes detrimental to the economy?
Is there any example?
Politics Stack Exchange is a question and answer site for people interested in governments, policies, and political processes. It only takes a minute to sign up.Sign up to join this community
Monica de Bolle, a senior fellow at the Peterson Institute for International Economics, reckoned the fallout from the Carwash case deepened Brazil’s historic recession, shaving as much as 2 percent of gross domestic product in 2015. “The construction sector is stalled, Petrobras is recovering but struggling, and other sectors have taken a hit,” de Bolle told me. “A cleanup is inevitably messy. You have to hope that you clear the slate enough so that the economy can grow again.”
So far, there is not a single country in the world that plunge into heavy corruption willing to change the country policies to reduce or get rid of the cronies oligarchy. In many country with corruption perception index score lower than 50, anti-corruption is used as political tools than a policy tools, which the anti-corruption policies and the associate authority body is ambiguous.
In such country, any "anti-corruption" practice will lead investor take "wait and see stance", to see who will be the new oligarch that they can deal with after the power shuffle, which will cause detrimental to the country economy.
In common sense, no "economic analyst" is required to tell you the outcome hindsight for such country.