Open Access

Maria Alejandra Salazar Martinez

• Although corrupt practices are ethically unobjectionable and, in many cases, clearly illegal, the economic analysis of corruption tends to adopt a point of view where moral or legal considerations doAlthough corrupt practices are ethically unobjectionable and, in many cases, clearly illegal, the economic analysis of corruption tends to adopt a point of view where moral or legal considerations do not play a leading role. The study of corruption from an economic perspective is to determine how individual and institutional behavior affects economic welfare. The purpose of this study is to identify the causes and consequences of corruption for a country´s economy with special focus on Venezuela, one of the richest Countries in South America and one of the most corrupt countries in the World. Observing historical, economic, political and social components is essential to understand the complex dynamics of how corruption has taken such roots in Venezuela. The relationship between Economic freedom and Corruption will be also discussed. Venezuelas economy is largely controlled by the government and the independence of institutions is lacking. In Venezuela, the government plays a major role in the economy through excessive regulatory restrictions, which has increased opportunities for corruption, which is at very alarming levels. The General conclusion of this work is that corruption distorts competitiveness by establishing forms of unfair competition, undermines the free market mechanisms, leading to uncertainty in the business, discourages new investment and destroys the business ethics. In order to reduce corruption is necessary a commitment of leaders, reduce demand and supply of corruption and increase the severity of penalties.…