Bangladesh has a troubled relationship with corruption. Since independence, it has been an enduring feature of public life-shaping institutions, distorting economic outcomes, and steadily eroding public trust. While corruption has long been widespread, systematic evidence from both domestic and international sources has confirmed its persistence.
Data from Transparency International's Corruption Perceptions Index (CPI) shows that the early 2000s marked the nadir of corruption. Between 2001 and 2005, Bangladesh ranked as the most corrupt country in the world. Corruption during this period was widely described as endemic and all-pervasive, penetrating virtually every arm of the state.
Some improvements in ranking took place in the mid-2000s and early 2010s. Governance reforms and tighter macroeconomic management coincided with modest gains, particularly in financial oversight. The banking sector's non-performing loan ratio, which stood at around 35 per cent in 2000, declined over time, falling to 6.1 per cent by 2011. These trends suggested partial progress, though deep structural weaknesses remained.
Between roughly 2012 and 2022, corruption appeared broadly stable-but at a high plateau. Bangladesh's CPI score hovered between 25 and 28, reaching its highest-ever level of twenty-eight, yet the country still ranked among the more corrupt globally. That stability proved illusory. From 2017 to 2024, corruption indicators deteriorated sharply. In 2024, Bangladesh scored just 23 out of 100-its lowest score in 13 years-and fell to 151st out of 180 countries, ranking near the bottom in South Asia.
Importantly, these indicators capture mainly public-sector corruption. They do not reflect private- and corporate-sector malfeasance-such as money laundering, tax evasion, and illicit financial flows-areas where recent evidence suggests Bangladesh has become disturbingly prominent. In other words, measured corruption, as reflected in CPI indices, understates the true scale of the problem in the country.
These trends matter because corruption in Bangladesh is no longer just a moral issue or a collection of individual abuses. It has become a structural constraint-one that shapes how the economy grows and, more importantly, who benefits from that growth.
This is happening despite Bangladesh's development gains. Over the past two decades, the economy has gradually climbed the development ladder: poverty has decreased, and a segment of the population has moved into the lower middle class. However, alongside these advancements, inequality has widened, institutional trust has eroded, and frustration-particularly among younger, more educated citizens-has intensified. Corruption lies at the heart of these contradictions.
One of the most damaging channels is investment. In Bangladesh, access to bank credit, public contracts, land, licenses, and regulatory leniency has often depended less on economic or commercial viability than on political or bureaucratic proximity. Resources are diverted from the most productive firms to the most connected ones. Entrepreneurs invest in cultivating influence rather than upgrading technology, improving management, or training workers. Corruption, in effect, acts like an unpredictable tax on business, depressing productive investment and long-run growth.
This distortion helps explain why productivity growth outside a few sectors, most notably the garment sector, has remained sluggish. When competition is blunted and inefficient firms are protected, the incentive to innovate disappears. Over time, this lowers Bangladesh's growth potential and blocks diversification into higher-value activities.
Corruption also weakens the state's ability to raise and use public resources. Bangladesh's tax-to-GDP ratio remains among the lowest in the world for a country at its income level, and recent studies suggest it has stagnated or even declined in real terms. Exemptions, under-assessment, negotiated settlements, and selective enforcement allow powerful actors to opt out of the tax system. The burden then shifts to indirect taxes, which fall disproportionately on ordinary consumers.
The consequences are visible. Persistent underinvestment in health, education, and social protection has steadily degraded the quality and reach of public services. Even when budgets increase, leakage and rent-seeking dilute their impact. For poorer households, this means weaker schools, poorer health care, and higher out-of-pocket costs-direct channels through which corruption deepens inequality.
Perhaps most corrosive is the way corruption acts as a gatekeeper to opportunity. In Bangladesh, access to public-sector jobs, subsidized credit, urban land, or regulatory relief often hinges on who one knows rather than what one can do. Families with political or bureaucratic connections secure advantages denied to others. Over time, income and wealth reflect proximity to power rather than effort or skill, eroding social mobility and fueling resentment.
The banking sector illustrates the macroeconomic risks. Newspapers are full of reports that politically connected borrowers have repeatedly received large loans without adequate oversight, contributing to persistently high non-performing loans, especially in state-owned banks. It crowds out credit to small and medium enterprises, weakens financial discipline, and creates fiscal vulnerabilities. Growth built on distorted finance is inherently fragile.
All of this would be serious in any era. But it is becoming more dangerous because the global environment is less forgiving. Official development assistance fell in real terms in 2024, marking a notable reversal after several years of increases. In addition, Bangladesh is facing harsher aid conditions as it moves up the income ladder. Global trade is also facing rising uncertainty and a more demanding compliance environment, with the World Bank and World Trade Organization (WTO) highlighting the risks from escalating trade tensions, trade barriers, and policy uncertainty. And remittances-now one of the most critical external inflows for many developing economies-face headwinds as host countries tighten labor markets and migration regimes, and the specter of artificial intelligence (AI) looms large in receiving countries. Bangladesh can no longer rely on external cushions to offset domestic inefficiencies. Growth will increasingly depend on domestic productivity, credibility, and trust-precisely what corruption erodes.
This context also exposes the emptiness of the familiar refrain from politicians of different stripes that Bangladesh can "become Singapore" by cherry-picking this policy or that. The most relevant lesson from Singapore is not simply technocratic competence, sector-picking, or infrastructure. It is the country's transformation under a hard institutional bargain: corruption was made difficult, risky, and unrewarding.
In 1965, Singapore began as a small, resource-scarce, vulnerable city-state. Yet within a generation, it became one of the world's richest economies on a per capita basis. That transformation was underpinned by credible corruption control: a specialized agency with a deterrent stance, and a system designed to minimize cover-ups and enforce rules predictably. Investors put money into productivity because proximity to power was not the primary path to profit.
Bangladesh does not need to replicate Singapore's political system or scale. But it must internalize the core lesson: growth and equality improve when corruption is credibly constrained. Without that constraint, industrial policy becomes rent distribution, finance becomes patronage, and regulation becomes bargaining-what political economists such as Acemoglu and Robinson describe as extractive institutions.
For Bangladesh's next government, the message is stark. Controlling corruption is not a slogan, nor a peripheral reform. It will determine decisively whether the government swims or sinks. Anti-corruption efforts must focus on reducing discretion, strengthening enforcement, restoring tax compliance, and protecting institutions that investigate and expose wrongdoing.
The clearest test of seriousness is how the anti-corruption agency is wielded. When it chases the misdeeds of past regimes while ignoring corruption unfolding in real time, it stops being an institution of justice and becomes a tool of political score-settling. Corruption is not a historical artifact; it is an active disease. Public trust will be restored only when enforcement is relentless, even-handed, and present-focused-when today's abuses are pursued as aggressively as yesterday's.
Corruption control may not deliver instant results. But failure to act will impose rising economic, fiscal, and political costs in a world that is far less forgiving than before. For the next government, corruption is the defining test-determining whether Bangladesh moves forward or slips back-and Singapore's experience offers the clearest lesson: without credible control of corruption, growth, fairness, and trust cannot last.
M G Quibria is a development economist whose work examines development policy, trade, and institutional reform. mgquibria.morgan@gmail.com