Former African National Congress parliamentarian Tony Yengeni still drives his cut-price Mercedes-Benz, but it is the SA taxpayer who is being taken for a ride.

Looked at from the point of view of business, corruption is simply a tax, as it adds to the cost of doing business. If corruption increases in a society, logically the amount available to the national fiscus declines.

Of course, this does not mean that the national fiscus will reduce its taxes to take account of what is already paid in corruption tax. Overall, though, the pool of resources available for taxation is generally depleted by the extent of corruption.

This realisation has led some economists to argue that limited corruption might be horrible and immoral but it is not necessarily a bad thing for an economy. Just as tax can be used efficiently or inefficiently, likewise corruption tax can as easily be a force for good as for bad.

From this point of view, corruption "greases the wheels of commerce", with bribes used to encourage officialdom to reach quick decisions and cut red tape. And they could persuade otherwise unwilling officials to do what is in the best interests of their clientele, something they are all too often completely unable to recognise off their own bat.

Alas, if only this were true. The fact is that bribery is more likely to encourage inefficiency than to encourage efficiency. In a sense, the best evidence is exactly the case that eventually ensnared Yengeni, the R52bn arms procurement package.

Yengeni has claimed that he had no decision-making role in the arms package, and charges that suggest a link between the discounted Mercedes and the arms package have been dropped. But since Yengeni was the head of the defence committee at the time the deal was being discussed, suspicions seem likely to endure in the public mind. Interestingly, the other government official able to negotiate a attractive deal on a Mercedes was Vanan Pillay, a former trade and industry official who would be deciding what constitutes a sufficient "offset". Pillay has since been dismissed.

The discount was provided by a now-suspended official of the European Aeronautic Defence & Space Company, Eads. This company went on, in a joint venture with Reutech Radar Systems, to secure a R500m slice of the arms package to supply missiles and radar tracking systems aboard four new SA Navy corvettes.

If backhanders were as factor, what does this say about the "efficiency" of the arms package as a whole? It depends on whether you believe that ultimately the package will create jobs or not. But in general, that fact that bribes are paid suggests to me that people making unfettered decisions would not have come to this decision.

The notion that corruption greases the wheels of commerce is also negated at a macro level as corruption has a measurable effect on all countries' credit ratings. An interesting aspect of the recent decision by Moody's to upgrade the outlook on SA's foreign debt is that despite the generally rosy picture, one marginally negative aspect mentioned by the agency was SA's overall level of taxation.

Moody's estimates SA's general government taxation to be just over 28% of gross domestic product (GDP), and reckons this to be quite high by the standards of countries on the same credit level as SA.

This is somewhat higher than the level mentioned by government in the recent budget review. The review states that general government revenue will remain "between 27% and 28%" of GDP. The difference, thankfully small in SA's case, is that the rating agencies include in their calculations a measure intended to account for corruption. Like countries around the world, this inflated measure goes into the mix, and at worst means the country concerned will pay more than necessary for its foreign debt.

There is also an immeasurable aspect to corruption. At the personal level, corruption requires a mentality of invulnerability and entitlement. These may not be measurable, but they are dangerous because it tends to spread quickly.

One of the most bizarre aspects of the Yengeni saga is the spiffing suits that he chose to wear to court. This is a man who has evidently still not paid for adverts he took out in newspapers defending himself when allegations were originally made, and who was dumped by his lawyer for not paying his legal fees.

There may be all kinds of strange reasons why Yengeni would choose to flaunt affluence and prosperity while facing charges of illicit affluence and prosperity, but it does argue a certain happy disregard for public opinion. Overall, far from greasing the wheels, corruption gives efficiency the slip.

With acknowledgements to Tim Cohen and Business Day.