Socio-economic factors of business corruption perception in russian regions

Abstract

lnternational studies define Russia as one of the highly corrupted countries. The paper is devoted to the identification of factors of business corruption perception in Russian regions and is based on the original survey of 1051 businessmen in 39 regions. To measure perceived corruption the new index (RCPI) is created. lt demonstrates externa! validity correlating with other independent measures of malpractices. The survey data is analyzed at three levels: regions, cities and firms. The study revealed for the first time for Russia a positive correlation between state participation in the economy and malpractices. An increase by one standard deviation for the share of employees of state-owned firms is accompanied with increase by 0.32 standard deviation in the RCPI. Also, the paper demonstrates the negative correlation between the government size and perceived corruption, which was not detected by previous studies. An increase of the share of state officials in labor force by one standard deviation is accompanied with the decrease of RCPI by 0.42 of its standard deviation. Finally, the negative relationship between the prosperity and bribes is confirmed convincingly. An increase of the average salary by one standard deviation is correlated with the decrease of RCPI by 0.30 of its standard deviation. These findings contribute to investigation of corruption perception factors in post-communist countries. Particularly important is identification of such factors as wealth and state's interference in the economy. They are especially relevant for the current situation in Russia, where the role of the state is growing, and the well-being of the population is declining.