In a nutshell, corruption increases inequality, decreases popular accountability and political responsiveness, and thus produces rising frustration and hardship among citizens, who are then more likely to accept (or even demand) hard-handed and illiberal tactics.
Corruption erodes the trust we have in the public sector to act in our best interests. It also wastes our taxes or rates that have been earmarked for important community projects meaning we have to put up with poor quality services or infrastructure, or we miss out altogether.
What are the Impacts of Corruption on Economy as Per Law
It finds that corruption discourages investment, limits economic growth, and alters the composition of government spending, often to the detriment of future economic growth.