How Can High Levels of Corruption in Central and Eastern Europe Be Explained Essay

Custom Student Mr. Teacher ENG 1001-04 5 January 2017

How Can High Levels of Corruption in Central and Eastern Europe Be Explained

What impact does it have on societies at large? Corruption constitutes a significant part of politics in Eastern Europe to the extent that “talking about corruption is the way post- communist public talks about politics, economy about past and future” (Krastov, p 43). Transparency International defines corruption as “a misuse of public power for the private gain at the expense of the public good”.

There are different types of corruption: bureaucratic, political –administrative, political legislative and judicial corruption. (Ott, p 72). Scholars introduced many potential explanations behind the astronomical levels of corruption in Central and Eastern Europe. In this essay I will examine the communist legacies as well as pre-socialist historical and political background as some of the factors that result in modern day corruption. I will additionally assess the impact of the transitional period on the corruption level.

Furthermore it I will examine corruption’s negative costs, such as economic inefficiency and distortion of civil society, decline of the rule of law and, the rise in organised crime along with arguably positive consequences such as resolving bureaucracy and increase in productivity among the officials. Corrupt legal and political systems that were indicative of communist states have greatly influenced the region today. This is due to the connection between economics and politics in the socialist system, which is even closer than it is in liberal democracies (Krastev, p 180).

People were forced by the system itself to cheat in order to achieve improv their lives. In western democracies, citizens were able to move around freely and had alternative employers, whereas “in socialist society with technically one employer it was hard to achieve wanted promotion”(Karklins, 80). Frustration at the system endorsed corruption as means of taking revenge at the system (Karklins). Because of “the legacy of seeking individualized solutions” became so widespread during socialism it had consequences on the macro level (Karklins).

This became even more important following the break up of the USSR as “the politically linked were the biggest winners in the beginning of transition” (Karklins,p 83). For example, Hungarian communist youth organization purchased the main newspaper for only 1. 5 million forints yet in less than a year the paper was sold for over 100 million (Karklins,p 83). Socialism stimulated inequality during transition, when a “culture of functional friendship served to cover the exchange of favours as something pleasant and kind” (Holmes, p 79).

This communist legacy remains strong in some countries, such as Moldova due to the inability of executive, legislature and judiciary to protect enforce a solid rule of law, which in turn forces people to seek for alternative protection, to the detriment of a strong civil society. Another legacy inherited by the region was the poor economic situation which led to a situation where a “considerable part of this unofficial regime entailed the second economy”(Karklins,p 76).

Scholars such as Miller suggests, that this occurred because trust in the public good and social solidarity was undermined as the real socialist society was split up into “an archipelago of networks whose members were focused on exchanges with fellow network members at the expense of outsiders”(Miller, p). A huge gap emerged as “private and dysfunctional public structure; moral declined visibly too, replacing old values with “materialism and individualism” (Miller,p 193). I don’t understand what this means? As a result people were applying rules of the past regime in a new economy.

Another factor was transition itself. As discussed by Karklins privatisation of the wealth of the communist states provided huge incentives and opportunities that were ill protected by insufficient regulation (Karklins p 80). Due to the vast opportunities that some exploited there was a sudden “internationalization of trade and finance”(Miller, p 52. ) Transition was conducted in an extreme environment. Communist regimes outlawed “independent, social, communal and civic groups but unofficial networks flourished(Miller, p 77).

During the transitional period, in Eastern Europe most corruption took places “during business transactions with public administration and government offices” (Zuzowski, p 137), this in turn discouraged foreign investment. Examples provided by Walezcki state that in 1998 the Czech deputy prime minister and minister of environment resigned as a result of a political scandal concerning secret donations made to the Civic Democratic Alliance by Czech companies. CDA alliance received 1 million into its illegal Credit Suisse account. The party then used the money to pay for its 1996 election campaign (Walezcki, p 244).

Political corruption such as this occurred during the transition period at all levels of society and was poorly regulated, which allowed itto become widespread. Additionally, the uniqueness of the eastern European case following the collapse of the centralised state, allowed favourable circumstances and opportunities that almost sanctioned corruption. According to L&S (who’s L&S? )“old habits die hard, and established structures and procedures remain to influence, both through inertia and as a safety net in confusing times”(p 89(L&S).

However, there is an alternative view that suggests that corruption is not culturally inherited and permanent, but is actually temporary. It can be argued that this is due to “self-conscious awareness of the phenomenon that suggests that the blurring of norms and the tolerance for deviance is regarded by the public only as an exceptional response to exceptional times, public norms and values remain intact”. (Miller, p283). This theory suggests that habits inherited from a communist past don’t influence current norms.

However this is disputable , since according to survey 82 percent of Czechs considered corruption to be the most serious problem in their society in 1996 and almost half of the population believed corruption is permanent part of country’s culture (Zuzowski p 138 ). Another explanation of high corruption clarifies may give an insight as to why the levels vary throughout the region. Looking at the history of countries before the communist take overs and the character of those takeovers may provide an alternative explanation.

As demonstrated by Holmes, Eastern Europe was under influence of various empires with different cultures before USSR’s capture, for example Romania was under Ottoman Empire, while Hungary was under Austrian influence. Empirical evidence seconds this opinion: firms stating bribery as frequent in Romania is 15%, while Hungary 8 % (BEEPS, 2008). Another factor that explains difference in corruption tolerance is the “urbanization and economic development”(Holmes, p 160), which also refers to difference in mentalities.

For instance, in the Baltics states, tolerance to corruption was lower and in Georgia because Baltics were more developed “resulting in different attitudes towards personalized power” (Holmes, p 160). The way in which the communists came to power is equally critical as “an indicator of subsequent popularity some countries came to support communism like Russia, while in others such as Poland the regime was virtually imposed upon a reluctant citizenry by a Soviet army”(Holms).

It is thus their way of rebelling against the system “with no tradition of popular endorsement”,(Holems, p 160). Nevertheless, this explanation has also been challenged by anti-corruption science, which states that corruption is not dependent on culture but is “characteristic of institutional environments and characteristic of certain policies”, (K, p 31). This is not always the case however as the question of morality and people’s acceptance of corruption as a norm in Eastern Europe compared to West should be considered.

Cultural heritage seems to influence perception on corruption; the difference among the region shows it. EU-8 countries have improved their corruption rates due to EU membership, however their levels of corruption increased again: Slovenia’s and Slovakia’s corruption levels rose by 2% between 2005-2008. The question one must ask is why this happened even though EU regulations and policies towards corruption haven’t changed. High levels of corruption have multiple consequences on the whole society; some of them are negative, some of them are paradoxically positive.

According to Bayley negative effects include undermining of formal rules and the rule of law (Bayley, p)The meaning of corruption during communist times was uncertain due to the “overriding importance of power and institutional interests”(Karklins,P 76). Karklins emphasises that negative consequences of these practices affected the whole of society, as they distorted the “popular attitudes towards law, equal opportunity, merit, fairness”. Corruption also diminishes the role of the political system by being an informal alternative to institutions (Karklins P 80).

Consequently corruption undermines democracy and furthermore the rule of law. For example, in Bulgaria the head of Communist Party from 1954- 1989, Zhivkov, appointed his daughter to high positions, which resulted in her being th4 second most important person in Bulgaria (Holmes, p). Corruption promotes social inequality, because the wealthy can always be protected due to the influence of money on the law. It also creates financial inequality, as it provides opportunities for financially secured people, whilst leaving poor in the bigger disadvantage.

Likewise, the continuing role of exclusive personal networks is problematic because they “limit how eager people are to join other groups, thus undermining civil society”(Bayley). It is argued that the persistence of communist-era exclusive networks worsens development of a civil society (p 89. L&S). Similarly, proposed by Ott, corruption is potentially a very destabilizing force because of the abuse on the part of those inside the system that may encourage citizens to become distant with he activities of the state and weaken their own willingness to support the state, for instance by refusing to pay the taxes (Ott, p 67). There are some extreme consequences introduced by Bayley. For instance, corruption can weaken the state as, “The failure of state to enforce rules creates vacuum to be filled by the organized crime. If government and the judicial system are so corrupt that they cannot help the contract to be enforced the only available enforcer is the mafia”(Bayley, p). This may result in organized crime being “both a source and product of rising corruption”, (krastev, p 9).

It may even lead to political instability and revolution. High levels of corruption can become highly problematic since “systemic corruption it is impossible to control”. (Zuzowski) Conversely, there is also “useful corruption” as according to W. Clark it cuts red tape and reduces bureaucratic rigidity (Karklin, p 78). Corruption can increase the “responsiveness of bureaucrats to individual and group needs (Holmes, p 730). For instance, the power holders accepted the use of blat as “an informal practice to smooth socioeconomic transactions”(Karklins,p 79).

Especially in socialism corruption assisted to overcome some economic problems like shortages. Moreover, corruption may result in “increased allocations of resources away from consumption and into investment. The key element for the corrupted and the corruptor to consume and invest” Scholars argue that corruption may not always represent “net drain from investment” (Bayley, p) but it may be the case that government servants with unique access to information about prospects for economic development have greater propensity to invest in productive enterprises.

Corruption has serious consequences for the whole society, typically they are negative, since “benefits are primarily in the realm of politics” (Bayley, p 730). However, “the analysis has shown that net effects of corrupt practices upon economic development are not always of baneful nature”, (Bayley, p 730). It is thus important to consider some benefits of corruption for post-communist countries and not only focus on the negative. To conclude, “corruption is the most powerful policy narrative in the time of transition”(Krastev, p 93).

Even though there are many factors that provoke rise of corruption, the communist legacy is “singled out as the critical domestic pre-condition for the rise of corruption” (Krastev, p 53). Other factors such as the crisis of legitimacy and the low trust in the public institutions are also part of explanation (Karklins, p 53). Concerning the consequences, it is obvious that corruption can undermining the development of a strong society, as well as having detrimental impact on politics and economics.

It is hard however to assess the whole impact due to lack of data, so the picture will always be distorted. “ It is a crime that nobody is interested to report, and the cases of corruption ending in a court are insignificant in comparison with the number of corruption transactions taking place” (G, p 25). Additionally, the rise in corruption can be a result of either increase of corruption or “increase of corruption visibility”, especially due to the attention that the subject receives from media (Krastev. p 10).

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