The Perception of Corruption Among Retailers in Central Asia and Eastern Europe During and After the 2008 Crisis

Abstract

In this study, we examine how the 2008-2009 Global Crisis has affected the informal payments/gifts paid by retailers in Eastern Europe and Central Asia. We look at the overall incidence of bribes, the incidence of bribes in customs/imports, the incidence of bribes in courts, and the incidence of bribes in tax payments. We compare the crisis period to the post-crisis period and found that these firms believed that the incidence of bribes went down significantly after the crisis ended. When we differentiate the retailers with respect to size, structure, legal form, gender of the owners, gender of the top manager, and whether or not they held an international quality certification, we found that, the results hold for all classifications of retailers. When we go into more detail and examine the incidence of bribes in customs/imports, courts, and taxes/tax collection, we found that the respondents saw a significant drop in the incidence of bribes in all areas after the crisis ended. However, our results show that, for bribes in customs/imports, the results do not hold for some of the classifications (i.e. medium-sized and the largest small firms, the firms that are part of a larger firm, the shareholding firms trading in the market, the partnerships, and the firms with an internationally recognized quality certification). For bribes in courts, the results do not hold for the largest small firms and the partnerships. For bribes in taxes/tax collection, the results do not hold for the partnerships and the firms with a quality certification. Our findings are consistent with the low rankings of these countries in Transparency International’s annual Corruption Perception Index data. Our findings are also consistent with previous studies’ findings that document high-levels of corruption in developing (or less developed) nations.