INTRODUCTION

Corruption, as a widespread phenomenon, has left a trail of distrust and institutional deterioration in many economies globally, manifesting itself through practices such as bribery, nepotism, influence peddling, and money laundering (^{Sánchez, 2018}). These illicit activities distort competition and create an unequal business environment, where those willing to engage in corruption gain undue advantages in terms of government contracts, tenders, and access to natural resources (^{Goicochea, 2020}). This limits opportunities for ethical and transparent businesses, creating unfair competition and slowing innovation and sustainable economic growth (^{Donayre, 2016}).

Globally, corruption also impacts the economy as a whole. The lack of transparency and accountability in economic and political systems facilitates tax evasion, money laundering, and other financial crimes, which can weaken international financial systems and affect global economic stability (^{Melo-Silva et al., 2021}). To address this problem, various international agreements and conventions have been established, such as the United Nations Convention against Corruption and the OECD Convention on Bribery (^{Fernández & Jambrina, 2022}). These instruments seek to promote transparency, accountability, and cooperation between countries to prevent and combat corruption (^{Reina & Albán, 2022}). However, the challenge persists and requires a continued commitment by governments, the private sector, and civil society to strengthen institutions, promote a culture of integrity, and ensure a fair and transparent business environment globally (^{Moreno-López et al., 2022}).

In Latin America, corruption has been an entrenched problem for decades, significantly impacting private investment and economic development in the region (^{Pastrana, 2019}). It manifests in different forms, such as bribery, embezzlement, nepotism, and lack of transparency in government and business processes (^{Cohaila, 2020}). The effects on private investment are evident; investors face an unequal business environment full of uncertainties (^{Salas, 2016}). Corrupt practices distort competition and create an unfair playing field, where those with political connections or a willingness to engage in illicit acts gain undue advantages (^{Chevalier, 2018}). This discourages ethical and transparent companies, limiting their ability to grow and expand (^{Zorrilla & Carhuancho, 2019}).

Furthermore, corruption negatively affects the quality of institutions and governance in the region (^{Benito & Mateos, 2021}). Lack of transparency and accountability undermines citizen and investor confidence in political and economic systems (^{Salas, 2017}). This can lead to political and social instability, making it even more difficult to attract private investment and achieve sustainable economic development (^{Ramos & Álvarez, 2019}). While the fight against corruption in Latin America has gained momentum, much remains to be done. Countries in the region have implemented anti-corruption laws and measures, strengthening institutions responsible for preventing and sanctioning corruption (Ramos & Álvarez, 2019). However, a joint and sustained effort is needed to ensure the effectiveness of these measures and to promote a culture of integrity at all levels of society (^{González-Ramírez & Monsiváis, 2022}).

Peru is no exception to this challenge, and its impact on private investment is vital to its economic development (^{Daly & Navas, 2015}). The presence of corrupt practices has undermined the credibility of institutions, generating uncertainty and discouraging both domestic and foreign private investment (^{Batallas, 2021}). Trust is key for investment, as investors need certainty and legal security to commit their resources to long-term projects (^{Vásquez, 2021}). However, corruption undermines this trust by eroding transparency and fairness in governmental, judicial, and regulatory processes (^{Zorrilla & Carhuancho, 2019}). This deters investors from entering the Peruvian market or expanding their existing operations (^{Olivera, 2020}). As a result, the country faces the loss of investment opportunities that could drive economic growth, generate employment, and improve the quality of life of citizens (^{Cohaila, 2020}).

Over the last decades, Peru has made significant progress in terms of economic growth and macroeconomic stability (^{Horna, 2016}). However, persistent corruption threatens these achievements and poses an obstacle to sustainable development (^{Alfaro-Mendives, 2021}). Corruption undermines investor confidence in the Peruvian economy and in the institutions charged with ensuring a fair and transparent business environment (^{Vivar-Mendoza, 2020}). Investors require a sound regulatory framework, protection of their property rights, and guarantees of equitable treatment to make their investments safely and profitably (^{Olmedo & López, 2022}). The existence of corrupt practices in public administration, bidding processes, and business interactions creates uncertainty and discourages both domestic and foreign private investment (^{Cornejo, 2022}).

Corruption generates unfair competition by favoring those with political connections or who engage in illicit practices (^{Alejandría, 2015}). This negatively affects ethical and transparent businesses that seek to operate legitimately and contribute to the economic development of the country (^{Olivera, 2013}). The lack of an equitable and corruption-free business environment discourages private investment, reduces competition, and limits growth and development opportunities for the business sector in Peru (^{Ruelas et al., 2022}).

This research aims to deepen the understanding of the relationship between corruption and private investment in Peru, highlighting the relevance and need to address this issue to promote a more transparent and attractive business environment for investment.

METHODOLOGY

For this study, a systematic review was carried out under the PRISMA scheme by means of an exhaustive search in the Scopus, Web of Science, Scielo and Dialnet databases, using the descriptors “corruption” and “private investment”. Initially, 209 documents were obtained, distributed as follows: 88 in Scopus, 114 in Web of Science, 6 in Dialnet and 1 in Scielo. After eliminating duplicates, 180 unique articles remained. In the initial selection, the titles and abstracts were reviewed and 120 articles were discarded because they did not meet the inclusion criteria. Then, 60 articles were evaluated in detail, excluding 38 for not meeting the detailed criteria, resulting in the final inclusion of 22 articles classified in three categories: economic impact of corruption, legal framework and anti-corruption measures, and good practices and success stories.

Considering the research objective, a criteria-based sampling was developed, focusing on empirical or review articles related to the topic, published between 2010 and 2020, open access and written in English or Spanish. The study used the narrative method for the construction of knowledge, pre-establishing the research categories according to the reality of the study, which implied an aprioristic categorization. Finally, the findings were presented through the triangulation of sources to ensure the validity and depth of the analysis.

Source: Adapted from Crisol-Moya et al. (2020)

Figure 1.  PRISMA flow diagram 

RESULTS

In principle, with respect to the economic impact of corruption in Peru, it encompasses diminished investor confidence, distortion of competition and inefficient allocation of resources. Corruption undermines trust, complicates investment decisions, and provides undue advantages to the politically connected. This creates an unequal business environment, discourages ethical business and limits economic growth. In addition, corruption diverts public funds from critical sectors such as infrastructure, education and healthcare, negatively affecting sustainable development and the most vulnerable populations. The following table summarizes the contributions of several authors who have examined these economic impacts in Peru.

Table 1.  Analysis of articles on economic impact of corruption 

In terms of the legal framework and anti-corruption measures in relation to Peru, a strong regulatory framework has been developed and various institutions have been created to combat corruption and promote transparency. These measures include the creation of specialized offices to investigate corruption, monitor public resources and enforce ethical business practices. Their effective implementation requires collaboration between the public and private sectors, as well as a commitment to fostering a culture of ethics and transparency. The contribution of the authors found is shown in the following table.

Table 2.  Analysis of articles on legal framework and anti-corruption measures 

Source: Own elaboration (2024)

Finally, with respect to “Good practices and success stories,” the importance of identifying and promoting effective strategies to combat corruption and encourage private investment in Peru is highlighted. Key initiatives include adopting ethical codes of conduct, establishing internal whistleblower mechanisms, forming strategic alliances, and using digital platforms to improve transparency and accountability.

Table 3.  Analysis of articles on good practices and success cases 

Source: Own elaboration (2024)

DISCUSSIONS

The economic impact of corruption in Peru goes beyond simple investor distrust. The lack of trust undermined by corruption hinders investment decision-making and decreases the willingness of investors to commit their resources to projects in the country (^{Bermúdez-Tapia, 2021}). The perception that the rules of the game are not level creates an unfavorable environment for private investment, where companies with political connections or willing to engage in illicit acts gain undue advantages (^{Shack et al, 2020}). This lack of equal market opportunities harms both domestic and foreign investors, who may choose to invest in other countries where integrity and transparency are stronger (Ramón-Ruffner de Vega, 2014).

In addition, corruption distorts competition and creates an inequitable business environment in Peru. Corrupt practices such as bribery and nepotism favor those with political and economic connections, generating an imbalance in access to contracts, tenders and resources (^{Olaguivel Flores et al., 2023}). This discourages private investment by limiting growth opportunities for companies that operate in an ethical and transparent manner (^{Andújar, 2021}). Businessmen and entrepreneurs face additional barriers and unfair competition from those willing to engage in illegal acts (Ramón-Ruffner de Vega, 2014). This situation not only affects the current business environment, but also discourages the creation and emergence of new businesses, which has a negative impact on innovation, entrepreneurship and employment generation (^{Choque et al., 2019}).

In terms of resource allocation, corruption has detrimental consequences for the equitable and efficient distribution of public funds in Peru (^{Zavaleta & Chávez, 2020}). Resources that should be allocated to investments in infrastructure, education, health and other key sectors are diverted to acts of corruption (^{Mejía, 2016}). This limits the potential for economic growth and affects the quality of life of the population. In addition, corruption leads to inefficient allocation of available resources, as projects are not selected based on their merit or social benefit, but because of the bribes or political influence involved (^{Shack et al., 2020}). As a result, resources are diverted to projects of lesser economic and social impact, which compromises the sustainable development of the country and negatively affects the most vulnerable population.

In this category, it has been possible to demonstrate the economic impact of corruption in Peru, ranging from reduced investor confidence to distortion of competition, limitation of growth opportunities and inefficient allocation of resources. These adverse effects affect private investment, economic growth and the welfare of society as a whole. It is essential to implement effective measures to combat corruption and promote a transparent and equitable business environment that encourages private investment and sustainable development in Peru.

Regarding the category legal framework and anti-corruption measures, the country has established a solid legal framework and a series of regulations to prevent, detect and sanction acts of corruption. These laws establish ethical standards and principles that are to govern economic and political activities, promoting transparency, accountability and integrity at all levels (^{Choque et al., 2019}).

One of the key measures implemented in Peru is the creation of specialized institutions in charge of investigating and prosecuting corruption offenses. For example, the Prosecutor's Office for Money Laundering and Loss of Ownership (Fiscalía de Lavado de Activos y Pérdida de Dominio in spanish) is responsible for investigating and combating crimes related to money laundering and corruption. This institution plays a crucial role in identifying and prosecuting acts of corruption, promoting accountability and compliance with the law (Pozsgai-Álvarez, 2019).

In addition, the Office of the Comptroller General of the Republic was established to supervise and oversee the proper use of public resources (^{Chanjan et al., 2020}). This institution plays a key role in preventing and detecting acts of corruption, evaluating and supervising the management of public funds and providing recommendations to improve processes and strengthen integrity in the public sector (^{Chocano, 2019}).

At the corporate level, a number of specific measures have been implemented to prevent and combat corruption. Codes of conduct and ethical business practices have been established that promote transparency and integrity in business operations (^{Vera, 2009}). Companies are increasingly adopting internal control mechanisms and audits to detect and prevent acts of corruption within their organizations.

However, it is important to note that effective implementation of these measures requires collaboration and commitment from both the public and private sectors (^{Zavaleta & Chávez, 2020}). Cooperation between government, business and civil society is essential to strengthen the legal framework and ensure its effective enforcement (^{Shack et al, 2020}). For this reason, it is necessary to promote a culture of ethics and transparency at all levels, encouraging corporate responsibility and accountability (Ramón-Ruffner de Vega, 2014).

In summary, this category has led to the understanding that the legal framework and anti-corruption measures play a crucial role in the fight against corruption and in promoting an enabling environment for private investment in Peru. The existence of clear laws and regulations, as well as the effective implementation of preventive and control measures, are key elements in promoting transparency, integrity and trust in the business environment. However, it is important to note that the fight against corruption is an ongoing challenge that requires the constant commitment of all parties involved. Collaboration and the strengthening of institutions and control mechanisms are fundamental to achieving significant progress.

The "Good practices and success cases" category highlights the importance of identifying and promoting successful initiatives in the fight against corruption and in the promotion of private investment in Peru. These good practices represent concrete examples of strategies and actions that have had a positive impact on reducing corruption and creating a favorable environment for investment.

First, it is essential to highlight the transparency and accountability initiatives that some companies have proactively adopted (^{Cornejo, 2022}). These practices include the implementation of ethical codes of conduct that establish clear standards of behavior, anti-corruption policies that prohibit bribery and fraud, and compliance programs that provide guidance and training to employees on the importance of acting ethically in all business activities (^{Choque et al., 2019}). These companies recognize that integrity is a key factor in attracting investors and strengthening the trust of customers and business partners (^{Olaguivel Flores et al., 2023})

In addition, the importance of having internal whistleblowing mechanisms that allow employees to report possible acts of corruption in a secure and confidential manner is emphasized (^{Pillaca, 2019}). These whistleblowing channels promote a culture of transparency and empower employees to be active agents in detecting and preventing corrupt practices (^{Ford, 2003}); moreover, companies that implement these effective whistleblowing mechanisms demonstrate their commitment to integrity and send a clear message that they will not tolerate corruption in any form (^{Juárez & Carhuancho, 2019}).

Likewise, successful cases of companies that have established partnerships with civil society organizations, academic institutions, and government agencies to promote transparency and integrity in the business sector can be highlighted; these strategic collaborations foster the exchange of best practices, training, and awareness of the importance of business ethics (^{Horna, 2016}). For example, some companies have partnered with non-governmental organizations to implement ethics and anti-corruption training programs for their employees and suppliers (^{Quintero, 2018}). These alliances demonstrate the joint commitment of different actors to promote a culture of integrity in the business sector and in society in general (^{Duque, 2020}).

Another relevant aspect is the implementation of technologies and digital platforms that promote transparency and facilitate access to information (Rodríguez-Anara, 2017). For example, the use of electronic procurement systems and the online publication of government bidding and contracting processes contribute to reducing the spaces of discretionality and ensuring greater competition and transparency in the use of public resources (^{Copello, 2011}). These technologies allow for more efficient monitoring and greater visibility of processes, which reduces the risk of acts of corruption and promotes fairness and equal opportunities for companies interested in participating in government projects (^{Carrizo, 2017}).

In summary, the "Good practices and success cases" category highlights concrete examples of strategies and actions implemented by companies and institutions that have managed to generate a positive impact on reducing corruption and promoting private investment in Peru. These practices include the implementation of compliance policies and programs, the promotion of internal reporting mechanisms, the establishment of strategic alliances with other key actors, and the use of technologies and digital platforms to promote transparency. Through the dissemination of these success stories, the aim is to inspire other companies and institutions to adopt similar measures and contribute to the construction of a business environment with more integrity and conducive to investment in Peru.

Analysis of the economic impact of corruption in Peru reveals its detrimental effect on multiple key aspects of private investment. The lack of trust generated by corruption hinders investment decision-making and decreases the willingness of investors to commit their resources to projects in the country. In addition, the distortion of competition and the inequitable business environment caused by corruption limit growth opportunities and hinder innovation and entrepreneurship. The misallocation of public resources also negatively affects the quality of life of the population and the potential for economic growth. Therefore, it is critical to address corruption as a priority to promote an enabling environment for investment and sustainable development in Peru.

The existence of a sound and effective legal framework is crucial to combat corruption and encourage private investment in Peru. The implementation of anti-corruption laws and regulations, as well as oversight and control mechanisms, is fundamental to prevent and sanction acts of corruption. However, the mere existence of laws is not enough; it is necessary to strengthen law enforcement institutions and ensure their independence and capacity to carry out investigations and prosecutions. It is also essential to promote citizen participation and transparency in government processes to ensure accountability and strengthen trust in public institutions. These efforts should be supported by effective cooperation between the public and private sectors, as well as by international collaboration to exchange good practices and strengthen institutional capacity in the fight against corruption.

The identification and promotion of good practices and success cases are fundamental to inspire other companies and institutions to follow suit and contribute to the fight against corruption and the promotion of private investment in Peru. Companies that implement transparency and accountability policies, establish strategic alliances with other key players and use digital technologies to promote business integrity are examples to follow. These practices demonstrate that it is possible to achieve economic success without resorting to corrupt practices and promote a business environment based on ethics and transparency. In addition, collaboration between the public, private and civil society sectors is essential to promote transparency, training and awareness of the importance of business ethics.

Even with the progress made, significant challenges remain in the fight against corruption and the promotion of private investment in Peru. Corruption remains a deep-rooted problem in some sectors and the lack of a culture of integrity in society hinders efforts to eradicate it completely. In addition, effective implementation of anti-corruption measures requires adequate resources and institutional capacities, as well as sustained political will. It is necessary to strengthen oversight and control mechanisms, as well as improve coordination among institutions in charge of combating corruption. Knowledge gaps must also be addressed and education in ethics and transparency must be promoted from an early age to foster a culture of integrity and rejection of corruption.

Despite the challenges, there are significant opportunities to advance in the fight against corruption and promote private investment in Peru. The effective implementation of anti-corruption measures, the promotion of transparency and accountability, and the strengthening of collaboration between the public and private sectors are key to achieving positive results. In addition, integrating technology and digitization into government and business processes can help improve transparency and reduce spaces for discretion. Promoting a culture of integrity and encouraging citizen participation are also essential to building an ethical business environment and promoting sustainable investment in Peru. With a comprehensive approach and a joint will, it is possible to drive significant change towards a future with less corruption and a greater boost to private investment in the country.