Anti-Corruption Programmes in Post-Communist Transition Countries and Changes in the Business Environment, 1999-2002

Abstract

This paper analyses the anti-corruption activities of 24 transition countries in the period 1999-2002. These activities are divided into omnibus anti-corruption programmes, legislative reform aimed at tackling corruption, and adherence to international anti-corruption conventions. The paper presents a new measure for determining the extent of anti-corruption activity undertaken in these three categories during 1999-2002. Using the results of a large survey of firms across the region, the paper shows that countries with low levels of administrative corruption were more likely to adopt intensive anti-corruption programmes than countries with high levels of administrative corruption, independent of the level of state capture Across the transition countries, omnibus anti-corruption programmes and membership in international anti-corruption conventions have not led to reductions in the level of either administrative corruption or state capture - at least in this relatively short time period - while new or amended laws aimed at tackling corruption have led to reductions in administrative corruption, but not in levels of state capture. Finally, the paper finds that perceptions of corruption - measured in terms of the degree to which firms consider corruption to be an obstacle to the operation and growth of their business - are positively correlated with the intensity of anti-corruption programmes. This finding suggests that by launching high-profile anti-corruption initiatives, governments may be more likely to heighten managers' perceptions of the problem rather than to reduce the impact of corruption on firms.