The absence of honesty or the presence of corruption, or both, harms the effectiveness of an economy. It is the deterred economic activity that makes corruption expensive. The transactions between criminals are not of concern. What decreases effectiveness are the enterprises not started, investments not made, employment that does not occur, and the people who remain unskilled, uneducated, and without entrepreneurial instinct.
The inefficient and dishonest administration of laws has the power to dissuade business or incentivise bribes. A lack of trust in a country’s judicial system will deter business due to the risk of upfront expenditure and wasted time.