Final answer:
Corruption in governments can lead to bribery for permits, reducing fair competition, disrupting economic growth, and posing additional investment challenges; yet, nations strive towards market economies amidst these hurdles.
Step-by-step explanation:
When corruption is evident in governments, it disrupts the economic development and creates a challenging business environment. Factories may face difficulties in construction because entrepreneurs often need to engage in bribery to obtain necessary permits. This acts as a barrier to entry and hinders competition, leading to increased costs for establishing factories beyond just labor expenses. Government capital, like infrastructure and an efficient bureaucracy, also plays a crucial role in attracting businesses despite lower wages in some countries. Furthermore, corruption can also manifest in the form of high tariffs and complex permit systems, giving certain firms unfair advantages and reducing market competition. Despite these challenges posed by corruption and other hardships, nations continue to persevere in their transition towards market economies, driven by the increasing interconnectedness of global economic systems.