Corruption in the Energy Sector: The Dangers of BCEF (Bribery, Crime, Exploitation, Fraud)

Text Sample:Chapter 2.2, Measurement of Corruption:The determination of corruption levels will be expressed and explained in the chapter of The geographical Analysis via the Corruption Perception Index (CPI).The organization of transparency explored and researched the corruption of public sectors worldwide since 1996 while at the same time providing not only the results of their data but the process of collecting data, the weighing methods and the interpretation of this data as well.As the characteristic of corruption is to deceive and hide its true nature this logically results in difficulties to measure it.As an example the inflation of potatoes in Central Europe originated in Germany from the three biggest competitors . In collusion they achieved a price increase of over 40%.Interestingly, this was the second highest price increase and has been proven to be corrupted while the number one good (onions) seems not to have been discovered or researched. In this case, measuring corruption would be either an estimation based on statistics (similar to a statistic correlated to drug use of professional athletes) or an investigation where in- and outputs have to be recalculated which is a difficult and, depending on the scale and frequency, very costly method.Summarized, it can be said that statistical data indicates possible corruption and with sufficient data, may even define a more refined area of corruption.2.3, Area of Impact:The effects of corruption are wide spread in the energy sector due to various factors. Not only is this sector (disputable) the most important economic base factor but also paradoxically a technology based technology enabler .Therefore irregularities produce technology setbacks (decrease of research speed), a reduction of businesses growth (California case closure), carbon footprint (comparable to future costs that are shared globally) and also global turbulences of financial markets.As there are numerous scientific specializations of economics (for instance lean management, sustainability, cost-benefit analysis etc.) corruption itself is not in-between.Because it is mostly hidden and not/or difficult to measure, depict and express even if there is a hub of research for corruption (transparency.org) a specialization has not been established in the studies of economics resulting in a lack of research compared to other topics.Inevitably, the area of effect is indirectly noticeable in every technologically driven village, city or society as there are no substitutes for energy (compared to food). As a matter of fact, the area of impact is global.3., Role of Regulation and its Methods:The most prominent factor of the theory of regulation is the choice and adaptation of a suitable method. While each of these methods have their strengths and weaknesses their correct and persistent implementation is the key to success in creating the most beneficial outcome for the social welfare.This however will be just a short review of some of the methods as the more problematic part of corruption is the environment, the circumstances, the risks and the opportunities of regulation methods. Often the strict observance of efficient methods is already the first obstacle and/or collapse of the system.When a firm naturally aims for profit maximization a control board has to be set against an unfavorable position of the consumers/ society. The task of setting an optimal regulation which leaves the financial capabilities and flexibility intact, while at the same time ensuring quality and a fair price, is comparable to Sisyphos, due its nature of the persistent struggle of enforcing a continuous work.3.1, Rate of Return Regulation ROR:This type of regulation focuses on maintaining the characteristics and especially the advantages of a competitive market in a monopolistic one. The goal is that firms are allowed to make profits, but only up to a certain rate.They can manage their input into the co... Mehr