This paper examines the effects of competition for favors on the prevalence and perceptions of corruption across Russian regions. Perceptions of corruption might differ from incidence because they are not necessarily based on personal experience. Furthermore, perceptions about corruption in a region and actual corruption can differ substantially in some cases. For example, a large corruption scandal in a region that gathers substantial media attention would increase perceptions about corruption there, although actual corruption in the region might not be very widespread. Thus, studying differences in determinants of perceived versus actual corruption can be very instructive, and has received surprisingly little attention in the literature so far.
In this paper, Belousova, Goel and Korhonen (2016) study the effects of different competitions for favors on the prevalence and perceptions of corruption across Russian regions. The authors examines various dimensions of competition for rents, including competition among the general public, businesses, and government officials.
Results show that while greater general competition (measured by regional population size), increases both perceived and actual corruption, competition among enterprises only increases corruption perceptions, while competition among government employees increases actual, but not perceived, corruption. Privatization activity and unemployment fail to affect either measure of corruption. Finally, the effects of urbanization differ on perceived and actual corruption.
Besides providing unique insights into factors determining corruption, this paper contributes to the broader literature on country-specific corruption studies and provides useful policy inputs. While there are numerous studies examining various aspects of cross-national corruption, related investigations analysing the details of corruption in individual countries are only a few, due primarily to a lack of adequate data on the extent of corrupt activity across regions of the same country. In addition, this paper evaluates determinants of both corruption perception and actual corruption incidence, which is still relatively rare in the literature.
Belousova, V., Goel, R. K., and Korhonen, I. (2016). “Corruption Perceptions versus Corruption Incidence: Competition for Rents across Russian Regions”. Journal of Economics and Finance, 40(1), 172-187.
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