Corruption

CORRUPTION IN RUSSIA by James Roaf, European II Department, IMF* Conference on Post-Election Strategy Moscow, April 5-7, 2000 A. Introduction Corruption is often cited as a key factor behind Russia’s economic problems. However, while it is generally agreed that Russia does suffer from a particularly high incidence of corruption, economists are far from clear as to the actual economic implications of the problem. This note discusses Russia’s experience of corruption from the perspective of the substantial literature that has developed on the links between corruption and economic development, and suggests some strategies for tackling corruption in Russia. Finally the note briefly discusses the issue of transparency, which may be seen as a key means of combating corruption, and promoting good governance in general. 1 B. Scale of corruption Russia consistently ranks poorly in international comparisons of corruption. For example, probably the most widely quoted source, the Transparency International (TI) survey, placed Russia 82nd out of 99 countries in 1999, with a score of 2.4 on a scale of 0 (highly corrupt) to 10 (highly clean). An aggregate indicator of graft compiled from numerous sources by Kaufmann et al. (1999a) places Russia 113th out of 155 countries. In a 1997 survey conducted by the Economist Intelligence Unit, the CIS emerged as markedly more corrupt than any other region of the world, with Russia (along with the other four CIS countries included in the survey) receiving the maximum rating for corruption among public officials. These surveys suffer from a number of serious technical problems – in particular, they tend to rely heavily on the subjective impressions of businessmen, especially foreign investors – and therefore should not be regarded as hard evidence of the extent of corruption within a country. Nevertheless, the general impression that corruption is very widespread in Russia is widely accepted both inside and outside the country. The survey

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