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Russian “corruption market” estimated 3 billion USD/year

Russian thinktank INDEM Fund based on its annual survey estimates that the volume of Russia's “everyday corruption market” (i.e., sum of the bribes to be paid by citizens within one year) is 3 billion USD in year 2005, a slight increase from 2.8 billion USD in year 2004. The methodology of the study takes into two factors that determines the “market of corruption”: (1) corruption risk (authorizer’s corruption pressure onto citizens) (2) corruption demand (citizens’ readiness to bribe)

Several “services” occupy the top positions of “market share”:

(1) Higher education: to enter, transfer, exams, etc (583 million USD);
(2) Free medical service (401 million USD);
(3) Solving problems related to conscription procedure (354 million USD)
(4) Dwelling: to obtain and/or legalize a relevant proprietary interest ( 299 million USD)
(5) To obtain justice in law-court (210 million USD)
(6) to solve problems with road police authorities (obtaining driver’s license, technical examination, road traffic, etc.) (183 million USD) . Obtaining driver's license is quite a "business" in many developing countries; you may also want to read a World Bank report on corruption of obtaining driver’s license in India (hat tip: PSD blog)

The Russian corruption report by INDEM Fund can be found here.

Five billion is certainly surprisingly a small amount, compared to China’s 50-84 billion USD/year, which amouts to 3-5% of China's GDP (according to an global anti-corruption report by OECD, co-authored by among others Janos Bertok). The China and Russia numbers however are not quite comparable, because the Russian number only takes into account everyday bribes, while petty bribe is  actually a relatively smaller problem in China compared to embezzlement of public funds.

In China, according to the same OECD reports, two-third of the corruption fugitives were senior executives of state-owned enterprise. When they fleed(to favorite destination: California, New Jersey, Canada, where extradition treaties are not signed with China), they bring with them huge amount of money.

Posted on July 01, 2006 in Everyday Economics, Written by R-Squared |

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Comments

What matters is administrative efficiency

http://cvc.nic.in/pn0506.pdf

Posted by: ajit | July 02, 2006 at 12:24 PM

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