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Business Risk from Governmental Corruption in East Central Europe, the Baltic Countries, and Russia
Abstract
This chapter places in a comparative, cross-country framework analysis of selected secondary information about business risk from governmental corruption in the region comprised of East Central Europe (including the Balkans), the Baltic Countries, and Russia. The region is an important setting for understanding corruption and anticorruption reform. What defines this geographic region is that all the countries are transitioning from monopoly-party rule and typically Soviet economic and political domination. Globalization is drawing the region into world economic integration through increasing Foreign Direct Investment (FDI). Key information from several sources provides an analytically consistent picture. Corruption increases business risk for multinational and domestic enterprises. Corruption deters inward FDI, undermines corporate integrity, and reduces country and regional competitiveness. The chapter provides information and examples about corruption in 21 political entities. These entities range from reasonably clean to endemic corruption, with varying patterns of corruption and anticorruption reform effectiveness. The chapter discusses possible solutions and recommendations and proposes future research directions.
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