Corruption in Russia: Editor’s Introduction

[Muzh]

October 8, 2013 by Dmitry Gorenburg

Although Vladimir Putin began his first presidential term with reforms that were geared in part toward reducing illegal activity on the part of both state officials and average citizens, the hopes that tax and judicial reform and higher salaries for government employees would quickly reduce the extent of corruption in Russia proved unfounded. Corruption remains one of the most critical problems facing the Russian state and society.

This issue of Russian Politics and Law returns to the theme of corruption that we first addressed in 2009. The authors of the articles found in this issue describe the extent to which bribery and other forms of corruption occur in Russia as a whole and in specific sectors. They also address potential solutions to the problem and even discuss the extent to which corruption is necessary for the continued functioning of the Russian state.

Vladimir Rimskii’s “Bribery as a Norm for Citizens Settling Problems in Government and Budget-Funded Organizations” describes the results of a study that shows that bribery in Russia draws support from a system of norms and values that is deeply rooted in Russian society. The hypothesis driving the study is that bribery in Russia has become a social norm by which citizens solve their problems with government representatives. Rimskii tests this hypothesis by examining the results of three surveys conducted over a ten-year period. The results show that behavior in corruption-prone situations depends on the nature of the problem, with bribery being most common in relations with medical assistance or during motor vehicle inspections, while it was less common in situations where the respondent was applying for a job or government benefits, dealing with housing issues, or even going to court or the police. The frequency of bribery in Russian society is high, but stable.

One interesting finding that comes out of the surveys is that corruption has become such an entrenched part of the system that most people offering bribes do so without being asked and a sizable plurality know in advance the appropriate amount to give in particular situations. The surveys show that almost 40 percent of the population believes that giving bribes is essentially a necessary part of life in Russia. Most people blame the system or corrupt officials for the endemic nature of Russian bribery, rather than implicating their own behavior. They also see various state-sponsored anticorruption measures as ineffective, registering a high level of hopelessness about the possibility of systemic change.

Additional data about the demographic and geographic characteristics of corrupt behavior is found in “The Geography of Bribery” data put together by the Public Opinion Foundation, based on a survey it conducted in 2011. The data in this short article shows that corrupt behavior by government officials is most common in the southern parts of the country and in the twin capitals of Moscow and St. Petersburg. Corruption is least common in the middle regions of Russia, including Siberia, the Urals, and the Volga region. In terms of demographic characteristics, the groups most prone to find themselves in corruption-prone situations are “those with greater social and material resources: men, middle-aged people, people with a higher education, and people with relatively high incomes.”

Large-scale corruption at the regional level is explored in detail by Leonid Bliakher in “The Regional Barons.” He finds that the post-Soviet Russian state has gone through three phases. In the first phase, extreme state weakness resulted in the state’s enforcement functions being performed by organized criminal gangs. As local state structures began to strengthen while the central state remained weak during the second phase, regional barons came to preside over regional administrative markets. The establishment of a strong central state in the most recent phase has led to the creation of a unified national administrative market.

The next several articles examine specific aspects of corruption. In “Bribery and the Judiciary,” Vladimir Rimskii shows that the judicial reform carried out during Vladimir Putin’s first term as president has made bribery more widespread in the Russian courts, with business people the main target of extortion. The frequency with which bribery is used in the court system to assure favorable rulings has undermined Russians’ trust in the court system and has prevented the courts from becoming a way for citizens to protect their rights. In fact, most Russians see no distinction between the judiciary and the executive branch and do not believe in judicial independence.

Anastasia Dubova and Leonid Kosal_’s examine “Russian Police Involvement in the Shadow Economy.” They find that Russians do not trust the police to be impartial in carrying out their duties. The authors find that “police involvement in the shadow economy has reached the point where it poses a threat to the Russian economic and political system.” The main causes of extensive corruption among the police stem from their de facto privatization and use by governing elites in the division of assets left over from the Soviet system. At the same time, the collapse of the communist system undermined the police professional code, while low salaries encouraged police to use their powers to make money on the side.

In “The Border Zone,” Sergei Golunov shows how the Russian border zone offers many opportunities for illegal self-enrichment. He identifies six types of commonly occurring corrupt practices carried out by border zone officials: (1) illegally allowing people or goods to cross the border, (2) extorting money or goods from entrepreneurs and other travelers crossing the border, (3) giving vehicles the right to move to the front of the line at border crossings and customs offices, (4) granting privileges to businesses with connections to the officials, (5) using the restricted status of border territories to exploit their resources, and (6) lobbying government officials in support of legal standards that are conducive to border zone corruption. Golunov argues that smuggling and other types of border zone corruption can be reduced through increased public oversight, systematic rotation of personnel, and the formation of informal associations to pressure officials to reduce abuses.

The last two articles address some of the fundamental causes of corruption in Russia and touch on possible solutions to the problem. In “Hostages of Distrust,” Aleksandr Auzan and Tat_’iana Malkina discuss how efforts to eliminate corruption can have unexpected consequences in societies based on personalized ties. Auzan argues that while corruption can have quite pernicious effects in societies that function based on depersonalized norms, in societies that are based on personalized ties efforts to eliminate corruption may lead to societal paralysis as public services cease to function. He places Russia firmly in the latter group and argues that transition to the group of states founded on depersonalized norms is difficult and does not follow any general laws. Auzan believes that for Russia to make this transition, the creative class will have to put pressure on governing elites to create institutions that can help them function without having to leave the country.

In “The Strategy of the New Principal,” Nikolai Rozov provides a potential path toward eliminating the endemic nature of corruption in Russia. He defines corruption in Russia as a social institution that is based on a principal–agent relationship that allows for frequent violation of formal or informal rules. If such violations become constant, they may be considered rents being paid by clients to the agent, with the active or passive agreement of the principal. While in some societies, the collective citizenry may play the role of the principal, in Russia the role of the principal is given to the supreme state authority—the president. The president has the power to allow his agents to engage in corrupt activities or to punish them for such activities. By frequently changing the rules of the game, the president encourages the formation of an “institutional trap.”

Rozov argues that this trap is created by the existence of a system in which the main actors are more interested in “winning more rights to break rules or greater powers to set both the rules themselves and the rules for breaking rules.” Attempts to replace the existing set of rules with rules that might benefit society as a whole are viewed as hopeless and may lead to the elimination of the actor pressing for such changes.

Based on this analysis, Rozov formulates a potential pathway for breaking out of this vicious cycle of corruption. “The first step is to prevent illegal state coercion directed against persons and property.” This can be done only if a sufficiently large segment of society becomes willing to challenge the rulers in what is essentially an attempt to take away their position as principal in favor of giving that role to the people. This has to be done gradually, first through the formation of local initiative groups that are focused on reducing corruption and reforming the citizen–state relationship in particular localities and on specific issues. Gradually, such groups can coalesce into a political movement that seeks to reform the relationship in Russia as a whole.

In the introduction to the July-August 2009 issue of this journal, I wrote that the most likely scenario is “more of the same, with Russian leaders issuing occasional declaratory statements aimed at making people think that the government is concerned about the problem of official corruption and taking a few exemplary steps against some individuals who have in reality fallen out of favor, while few actual measures are undertaken against systemic corruption.” Events in the last year have shown that this prediction remains very much on the mark, with several corruption-related show trials against regime opponents and highly visible firings of top officials such as former Defense Minister Anatoly Serdiukov for corruption-related offenses. At the same time, there is no longer even any pretense of attempts to eliminate systemic corruption. The governing elites are no longer capable of changing the system they have created; this will inevitably lead to pressure to change the system from below.
Russian Military Reform

[Shadow]

The best way to solve corruption is to legalize it like the EU and US have done successfully.