CORRUPTION IN PUBLIC ADMINISTRATION AS AN OBSTACLE TO THE TRANSITION OF SOCIETY TO INDUSTRY 4.0
DOI:
https://doi.org/10.34132/pard2022.16.16Keywords:
corruption, public administration, society, economic relations, Industry 4.0Abstract
The transition to smart factories and the replacement of unskilled labor leads to significant socio-economic changes. Structural changes are taking place in the world economy, the competitive advantage of some countries in wages is being eliminated. The return of factories to developed countries will accelerate. Changes are taking place in the structure of national economies, not only with regard to individual sectors, but also with regard to the ratio of the official and shadow economy. The institutional environment, an important part of which is the propensity for corruption in public administration, can significantly determine the ability to accept the challenges of the transition to Industry 4.0. It has been proven that corruption has different effects on two key factors of production, the ratio of which depends on progress in the transition to Industry 4.0. Corruption in public administration has a far more destructive and long-term effect on capital accumulation than on the size of the labor force. The corrupt environment, which is becoming systemic and immanent and approaching the so-called state capture, significantly increases capital armaments in the shadow economy and slows down the transition to Industry 4.0. Thus, corruption can be one of the possible obstacles to the industrial revolution, and if it becomes so systemic that it is very persistent, its influence will have devastating consequences. Corruption in public administration has a far more destructive and long-term effect on capital accumulation than on the size of the labor force. The corrupt environment, which is becoming systemic and immanent and approaching the so-called state capture, significantly increases capital armaments in the shadow economy and slows down the transition to Industry 4.0.
Thus, during the transition to Industry 4.0, the task of public policy is not only to support digitization, robotization and the further development of technologies with the help of various types of subsidy and incentive tools, but especially to ensure a transparent and non-corrupt public administration environment that will reduce the size of the shadow economy and increase armed forces in the official economy.
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