This paper describes the institutions and social norms that have accommodated corruption in the Russian Federation in the post-transition years. We show how corruption is sustained by ill-defined boundaries between political and private business activity, and how the role of the state facilitates rather than hinders corruption. The paper draws upon a longer document prepared by the authors, the IDEM Report on Corruption on Russia IDEM Foundation, 1998. Russia versus Corruption: Who Will Win?, Council of Foreign and Defense Policy, Moscow. in Russian .2000 Published by Elsevier Science B.V. All rights reserved.
JEL classification: H1; D73; P26
Keywords: Corruption; Russia; Rule of law; Bureaucracy; Political self-interest
2. Corruption in transitional Russia
3. Corruption as a phenomenon of the transition
4. The state
5. Measures taken against corruption
6. A basis for change
The economy of Russia has not performed well in the years of transition. The failures were predictable given the underlying institutions and rules of behavior of the Russia political and economic system. The idea of a market in Russia is combined with the persistence of old institutions and methods of doing business that use the weakness of the state for private profit. The competition that exists is principally that of competition for rents. Corruption is an integral part of economic activity, with ill-defined boundaries between politics and private business. In this paper which draws on our broader exposition on corruption in Russia published in Russian as the IDEM Report, IDEM Foundation, 1998, we describe how institutions and norms of political behavior have provided the accommodating framework for a society where corruption is a principal means of acquiring weal that all levels.