Russia is commonly represented as one of the most corrupt countries in the world in the Western media, ruled over by Kremlin clans who sugarcoat their kleptocracy with bombastic nationalism. The most oft-cited evidence comes from Transparency International. This is an organization which aggregates surveys of foreign businesspeople and regional analysts to compile a Corruption Perceptions Index (CPI). Its verdict on Russia is decidedly unflattering; apparently, as of 2008 it was the 147th most corrupt nation on Earth. This morass of bribery and corruption will inevitably stymie its leadership’s economic development and Great Power ambitions.
I’ve criticized such views for being far too simplistic here, here and here. The crux of my argument is that the CPI measures the subjective perceptions of a narrow class of people; it does not accurately portray the extent of corruption in the wider society. For instance, according to Transparency International itself, ordinary Russians do not pay more bribes in a typical year than the Czechs, despite that the latter have a much higher CPI. Businesses and citizens do not pay more exorbitant amounts to “get things done” than is typical for the former socialist world, or middle-income nations in general. And there is compelling evidence that the extent of corruption declined under Putin from the 1990’s, though not by much. Finally, as I pointed out in Education as the Elixir of Growth, though corruption slows growth it is not a crucial factor; a well-educated workforce is far more important for long-term convergence to developed status.
Now I present a summary of an article by Dietwald Claus, Missing the Forest for the Trees, a counter-intuitive analysis of the causes of corruption, its consequences, and how to reduce it. He works from his experiences in Russia to reach global conclusions, which can be summed up by: “Corruption is the consequence of regulation and poverty: regulation creates the incentives for corruption, while poverty determines its price”. Applied to Russia, its metastasized bureaucracy and reams of red tape provide ample scope for corrupt, rent-seeking activities, especially at the higher echelons where foreign observers are concentrated. (Their impressions are reflected in the CPI and the Western media). It also explains INDEM’s findings, which I covered here, that since the late 1990’s, the incidence of corruption fell, even as the average bribe size soared.
