Corruption in Slovakia Results of Diagnostic Surveys Draft provided for review by the Steering Group Prepared at the request of the Government of the Slovak Republic by the World Bank and the United States Agency for International Development Funding for this report was provided by the United States Agency for International Development (USAID) and the World Bank. However, the views expressed in this report are entirely those of the author and should not be attributed to either institution. This report was prepared by James Anderson (World Bank), based on surveys developed in a collaborative effort with Emilia Sicakova, Eugen Jurzyca, Daniela Zemanovicova (Center for Economic Development and Transparency International Slovakia), Olga Gyarfasova and Ivan Dianiska (Focus Agency), Gustav Mathiek, Maria Mamlouk, and Kathy Stermer (USAID). It benefited from the detailed comments of Carlos Silva-Jauegui and Jack Titsworth (the peer reviewers), and from helpful comments provided by Lubomira Zimanova Beardsley, Jean-Jacques Dethier, Helga Muller, Randi Ryterman, and the participants at discussions of the early results held at the World Bank and with the Anticorruption Steering Committee in Bratislava in February, 2000. The report benefited from the leadership provided by Sanjay Pradhan (World Bank) and Paula Goddard (USAID). This report would not have been possible without the cooperation of 352 Slovak officials, 407 enterprise managers, and 1,131 ordinary people who agreed to be surveyed for this project. Their cooperation is greatly appreciated. 2/13/ 11:49 AM, SlovRep34.doc CONTENTS CONTENTS................................................................................................................................................III FOREWORD................................................................................................................................................V EXECUTIVE SUMMARY ........................................................................................................................ VI 1. OVERVIEW ......................................................................................................................................... 1 2. LEVELS AND TRENDS OF CORRUPTION IN SLOVAKIA ....................................................... 4 HOW BAD IS CORRUPTION IN SLOVAKIA? ................................................................................................... 4 IS CORRUPTION GETTING WORSE?.............................................................................................................. 5 WHICH GOVERNMENTAL BODIES ARE REPORTED TO BE THE MOST CORRUPT?.......................................... 7 Perceptions............................................................................................................................................. 7 Experiences ............................................................................................................................................ 9 WHO ENCOUNTERS CORRUPTION MOST OFTEN?...................................................................................... 19 Regional Variations.............................................................................................................................. 19 Enterprise Characteristics.................................................................................................................... 20 Household Characteristics ................................................................................................................... 21 3. EXPERIENCES WITH CORRUPTION ......................................................................................... 22 SOCIAL SECTORS....................................................................................................................................... 22 Health Sector........................................................................................................................................ 22 Education.............................................................................................................................................. 26 Labor Office ......................................................................................................................................... 33 JUSTICE SYSTEM ....................................................................................................................................... 34 Courts ................................................................................................................................................... 34 Police.................................................................................................................................................... 36 CADASTRE................................................................................................................................................. 39 BUSINESS SERVICES .................................................................................................................................. 40 Banking Services .................................................................................................................................. 40 Auditor Services.................................................................................................................................... 41 Notaries ................................................................................................................................................ 41 UTILITIES .................................................................................................................................................. 42 Telephone ............................................................................................................................................. 42 Water, Gas, and Electricity .................................................................................................................. 43 REGULATIONS, INSPECTIONS, AND LICENSING.......................................................................................... 44 Business Registration ........................................................................................................................... 44 Import, Export and Other Licenses ...................................................................................................... 45 Construction Permits............................................................................................................................ 46 Fire Supervision ................................................................................................................................... 46 Hygiene Supervision............................................................................................................................. 46 Office of Environmental Protection...................................................................................................... 47 Certification Authority.......................................................................................................................... 47 Business Authority................................................................................................................................ 47 State Business Supervision ................................................................................................................... 48 Health and Social Insurance, Labor Office, and Labor Security Authority ......................................... 48 TAX AND CUSTOMS................................................................................................................................... 49 Tax........................................................................................................................................................ 49 Customs ................................................................................................................................................ 49 4. CROSS-SECTORAL ISSUES........................................................................................................... 50 iii UNOFFICIAL FINANCING OF POLITICAL PARTIES ....................................................................................... 50 NATIONAL PROPERTY FUND...................................................................................................................... 51 SUBSIDIES ................................................................................................................................................. 51 SELLING TO THE STATE ............................................................................................................................. 52 PUBLIC SECTOR TENDERS ......................................................................................................................... 53 5. CORRUPTION AND THE PUBLIC SECTOR .............................................................................. 54 CORRUPTION: POOR QUALITY, SLOW SERVICE DELIVERY, AND EXCESSIVE BUREAUCRACY................... 55 PUBLIC SECTOR VALUES, STRUCTURES, AND ADMINISTRATIVE INSTITUTIONS ........................................ 57 How Does Corruption Work and How is it Dealt With? ...................................................................... 57 Organizational Mission and Objectives ............................................................................................... 58 Internal Administration .......................................................................................................................