Typology of Post-Communist Corruption Rasma Karklins

CAPITALISM, CORRUPTION, AND SOMETHING ELSE Typology of Post-Communist Corruption Rasma Karklins TRIKE up a conversation with anyone in the post- Corruption takes many forms, communist region and the topic of governmental and all of them distort the Scorruption will invariably come up. People are convinced that corruption is widespread, and they all workings of the political have stories to tell, either from their own experience or heard from others, including the media. They are frus- system. trated because so little is being done about the situation, and because they feel helpless and see themselves as being played for fools. Many cynically believe that in order to get along they have to “play the game”— that “the System” compels them to do so. But what “system” exactly? What are the proto-typical structures and processes involved in post-communist corruption, and how are others drawn in? Why is corruption so perva- sive and hard to fight?1 One important reason is that post-communist corruption has many sub-types, some of which are institutionalized. Next to petty acts like bribing traffic cops or building inspectors, there is the grand corruption of exercising illicit influence on political decisions at the highest level of government. Post-communist corruption also includes the stripping of public assets by self- serving officials who, at times, transform entire public institutions into private fiefdoms. While the extent and specific mix of corrupt practices differ from one post- communist country to another, their basic features are similar across the region.2 This suggests that corruption is rooted in systemic features of the preceding regimes and the transition from them. The first step in identify- ing these systemic features is to building a typology of corruption in the post-communist region. Corruption occurs in every political system, and many RASMA KARKLINS is professor of political science at the University of Illinois–Chicago. of its expressions are the same throughout the world, Problems of Post-Communism, vol. 49, no. 4, July/August 2002, pp. 22–32. © 2002 M.E. Sharpe, Inc. All rights reserved. 22 Problems of Post-Communism July/August 2002 ISSN 1075–8216 / 2002 $9.50 + 0.00. yet it has a distinctive profile in the post-communist teachers and public servants. But it also has costs for states. Part of this distinctiveness is linked to the nature economic and political development. While the eco- of the former regimes. Robert Klitgaard, a leading nomic costs, such as the undermining of investment and scholar of corruption, argues that corruption is based market competition, are recognized, the political costs , on “monopoly + discretion – accountability.”3 The too, need to be spelled out. The “misuse of office” en- antecedent communist regimes were characterized by tailed in corruption means that it undermines the pur- monopolies of all kinds, political, economic, and so- pose of public institutions. Depending on the specific cial. Thus, one has to look at the post-communist insti- public purpose that an institution serves, the socio-po- tutional context and ask about the extent to which officials retain monopolies over decision-making or the provision of public services, how much discretion they The currency of the corrupt act, be it a have, and how much accountability there is. Related bribe, profiteering, nepotism, or issues are the effectiveness of separation of powers, something else, is less important than oversight, and transparency. how it distorts the workings of In some cases, the misuse of public power has be- the political system. come so widespread that some analysts speak of “steal- ing the state” or “state capture.” Others identify a hidden political regime. As argued by James C. Scott, corrup- litical cost may be tallied in terms of crime, health haz- tion represents a hidden political arena, and when this ards, environmental damage, or something else. hidden politics begins to dominate a regime, any analy- Corruption involves administrative, legislative, and sis that ignores it will be misleading. One needs to “ask judicial malpractice and leads to the squandering of how this situation affects the distribution of power and political capital through the loss of judicial security, authority in the political system, how it distorts the for- public accountability, and international prestige. If of- mal declarations of government policy, how it influ- ficials cannot be trusted, the values of civic-mindedness ences the character and composition of the political elite and civil service, so crucial for good governance, are over time.”4 In line with Scott’s thinking, this article undermined. Survey data from the post-communist re- argues that the currency of the corrupt act, be it a bribe, gion show low levels of public trust, democratic legiti- profiteering, nepotism, or something else, is less im- macy, and rule-of-law credibility. Richard Rose and his portant than how it distorts the workings of the political team report a clear correlation in that “the higher the system. Thus, the electoral process is compromised if level of corruption in a new democracy, the less likely supposedly neutral journalists accept bribes to write individuals are to support the new regime (–.24) and . biased articles. What’s more, corrupt deals are rarely . the less likely individuals are to reject undemocratic self-contained—they typically involve other acts, such alternatives (–.21).”5 In other words, democracy itself as lying, fraud, and the corruption of others. Ultimately is endangered by political corruption. such activities may spread so widely that they become This article makes an initial attempt to rank corrupt institutionalized, creating a culture of corruption where practices in terms of their political costs. The types of more and more honest people succumb to the tempta- corrupt practices are listed in Table 1, and the political tion to misuse public power entrusted to them. Corrup- damage each of them inflicts on the public is assessed tion is more complex than is often thought and carries throughout the article. As survey research shows, citi- major political costs and consequences. zens in post-communist countries are more critical of The discussion that follows uses Transparency the misconduct of politicians than that of street-level International’s definition of corruption as the “misuse officials.6 It is also important to focus on how post-com- of public power for private gain,” but adds to it, “at the munist officials initiate corrupt dealings and act in a expense of the public good.” Although the latter is im- self-serving way. Too much of the work on post-com- plicit in the notion of misuse, saying so explicitly em- munist corruption has focused on how private citizens phasizes that there are costs to corruption. These costs or businesses corrupt public officials, and too little at- need to be spelled out, because criticism of corruption tention has been paid to the reverse. The corruption of is all too often dismissed as sanctimonious moralizing. the public sector by private interests presupposes a Corruption has direct costs for the citizenry, since funds Western-type business world that in fact has been slow are diverted from paying for public goods, such as safety, in emerging. There is a difference between the misuse social services, infrastructure, and decent salaries for of public money for private gain and the misuse of pri- Karklins Typology of Post-Communist Corruption 23 Typology of Post-Communist Corruption tal takes an unofficial “fee” to expedite a surgery. The I. Low-level administrative corruption typology at times draws artificial lines between sub-types • Bribery of public officials to bend rules of practices that may overlap, and it does not single out • Deliberate over-regulation, obfuscation, disorganization interactions that involve several corrupt acts at once. • Using licensing and inspection powers for extortion II. Self-serving asset stripping by officials • Diverting public resources for civil servant spoils • Mismanagement and profiteering from public resources Low-Level Administrative Corruption • Profiteering from privatization Bribery to Bend Rules. Corruption in everyday bureau- • Malpractice in public procurement • Nepotism, clientelism, and “selling” of jobs cratic encounters between officials and citizens typi- III. “State capture” by corrupt networks cally involves bribes to officials to break rules and • De facto takeover of public institutions for private business or regulations. Surveys of households in selected post-com- criminal activity munist countries show that payments to police, particu- • Forming collusive networks to limit political competition • Undermining free elections through slush funds, hidden larly the traffic police, and the health services account advertising, etc. for about half of all bribe expenses. Bribes associated • Misuse of legislative power • Corruption of the judicial process with the educational system, especially its higher lev- • Misuse of auditing, investigatory, and oversight powers els, are also relatively common.7 Bribery is often an • Using kompromat for political blackmail and coercion open secret—and sometimes “price lists” are published. • Corruption of and in the media A newspaper in the Ukrainian city of Donetsk reported a $30–$50 asking price for a good exam grade in local vate money to influence public policy. There is also a colleges and universities, with a “group” option as low difference between corruption of the state by outside as $10 per student, and a premium rate of $80 for stu- forces and corruption by the state itself. While both are dents who had already taken and failed the exam.8 Not politically detrimental, the latter is more damaging, es- all bribes are this systematic. More often individual of- pecially if state institutions become parasitic or extor- ficials or citizens initiate bribes on an ad hoc basis. tionist. Instances where individual citizens initiate the The hidden nature of corrupt politics makes it diffi- bribe—for example, to a traffic cop—are politically less cult to study.

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