Corruption, development, and the state in Putin's Russia

The paper investigates the determinants of corruption in Russia based on an original survey of 1,376 businesspeople in 39 regions. Regression analysis reveals economically and statistically significant correlations between bribes, development, and state intervention in the economy. Using the instrumental variable of geographical location, this paper provides supportive evidence for a causal (negative) relationship between prosperity and bribes. It finds a positive correlation between regional corruption and state ownership and a negative one between corruption and the size of the bureaucracy. These results hold for both perceived and experiential corruption. This paper contributes to the investigation of corruption in Russia and post-communist countries. It illustrates the importance of economic development, effective bureaucracy, and the reduction of state property for mitigating corruption.