WHAT IS THE DIFFERENCE BETWEEN GRAFT AND CORRUPTION?

The Philippine's national

anticorruption framework and strategy defines corruption as the use of public office and the
betrayal of public trust for private gain, and graft as the acquisition of gain in dishonest or
questionable manner Essentially, corruption refert to corruption practices in government while
graft refers to corruption in general, including in the private sector. However, the term corruption
is commonly used to refer to all forms of corrupt and corruptible acts and practices, both inside
and outside of government. Graft is the illegal gaining of funds, corruption is the improper use of
funds.
WHAT IS THE DIFFERENCE BETWEEN GRAFT AND CORRUPTION? The Philippine's national
anticorruption framework and strategy defines corruption as the use of public office and the
betrayal of public trust for private gain, and graft as the acquisition of gain in dishonest or
questionable manner Essentially, corruption refert to corruption practices in government while
graft refers to corruption in general, including in the private sector. However, the term corruption
is commonly used to refer to all forms of corrupt and corruptible acts and practices, both inside
and outside of government. Graft is the illegal gaining of funds, corruption is the improper use of
funds.

Coercive power is the ability to influence someone's decision making by taking something away
as punishment or threatening punishment if the person does not follow instructions. It can be a
severe way to get staff members to follow along with a company plan, but it can be necessary in
some cases.

Privatization is the process of transferring an enterprise or industry from the public sector to the
private sector.
The public sector is the part of the economic system that is run by government agencies.
Privatization may involve either sale of government-held assets or removal of restrictions
preventing private individuals and businesses from participating in a given industry.

Privatization is an ongoing trend in many parts of the developed and developing world.
Proponents of privatization maintain that the competition in the private sector fosters more
efficient practices, which eventually yield better service and products, lower prices and less
corruption. On the other hand, critics of privatization argue that some services -- such as health
care, utilities, education and law enforcement -- should be in the public sector to enable greater
control and ensure more equitable access.

policy is a plan of action adopted or purused by an individual, government, party, business, etc.
Some Classic Policy Issues
There are some types of policy issues where economists believe strongly in a policy that may or
may not appeal to the general public. For example, economists believe that we benefit from free
trade, even though the public sometimes resents foreign imports. Here are some classic policy
issues where economists tend to have a consensus opinion.
Ticket Scalping
Economists are in favor of ticket scalping. When the price of a ticket is fixed, the price may be
too low, and there are more people who want to attend the event than the number of seats
available at that price. In that case, the equilibrium price would be higher. Scalpers help to raise
the price to the right level. If the market-clearing price is $50, then someone who only wants to
pay $40 should miss the event. Scalpers help take tickets from people who do not want to pay
the market-clearing price and put tickets in the hands of people who most want to attend the
event.
Rent Control

Cities sometimes adopt rent controls, where they place a ceiling on rents for apartments.
Economists believe that a price ceiling will create a shortage. In fact, cities that have rent control
find that apartments are in short supply. This leads to a "black market" in which one renter might
pay another in order to live in a scarce rent-controlled apartment.

Rent controls provide a short-term benefit to some lucky renters. However, other would-be
renters are unable to get housing entirely. Moreover, apartment owners let their buildings
deteriorate, because with rent control they are unable to raise rents to recover the costs of
maintenance and improvement. Thus, if rent controls are kept in place for a long time, they can
lower the quality of life for everyone.

Minimum Wage Laws

Montgomery County passed a "living wage" law, requiring that workers who provide government
services must be paid at least a minimum amount per hour. Minimum wage laws tend to be
harmful, even for the poor people that they are intended to help.

If the minimum wage is higher than the marginal productivity of an an individual, then the result
of the minimum wage law is to make it uneconomical to hire that person. Instead of earning a
sub-minimum market wage, the person is unemployed. Instead of hiring unskilled workers at the
minimum wage and losing money, employers subsitute capital and highly-skilled workers for low-
skilled workers.

Montgomery County's "living wage" law applies to workers who provide government services. It
will raise the cost of those services, which will reduce the capacity of the government to provide
them. Since many government services go to aid the poor, the "living wage" law will have the
same effect on the poor as a broad-based budget cut.

Fuel Economy Regulation

When people decide to buy cars, they have to decide between fuel economy and other features.
It is argued that there is a "public good" issue because high fuel consumption causes pollution
and also adversely impacts our ability to conduct foreign policy free from the influence of oil-
producing countries.
A policy response has been Corporate Average Fuel Economy, or CAFE standards. These require
auto manfacturers to achieve certain average standards for fuel economy. Economists think that
this approach is ineffective, for a number of reasons.
Improved fuel economy lowers the cost of driving. People who use more fuel-efficient cars to
drive more miles are not reducing their fuel consumption and pollution. They may even increase
it.
The standards create incentives for companies to work around them. Most notoriously, SUV's
are exempt from CAFE standards.

The standards raise the cost of new cars relative to old cars. This keeps old, gas-guzzling,
high-pollution cars on the road longer.

Instead of fuel economy standards, economists would prefer to raise the tax on gasoline. A
higher gasoline tax would directly discourage gasoline consumption. It would allow consumers to
choose the most efficient means to economize on fuel, which might be obtaining newer cars,
driving fewer miles, or switching to cars with better fuel economy.