If high level of corruption in a country deters foreign investment in worthy projects, this is known as

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Adverse selection occurs when one party in a transaction has more or better information than the other party, typically leading to a poor outcome for the less-informed party. In the context of corruption deterring foreign investment, investors may avoid investing due to the high risk of engaging in transactions where the level of corruption (a critical piece of information) affects the potential success of the investment, leading to a situation where only riskier or less worthy projects might seek or receive investment.

If High Level of Corruption in a Country Deters Foreign