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Published online: 21 August 2014
© Springer Science+Business Media New York 2014
Abstract This paper examines the effects of different competitions for favors on the prevalence and perceptions of corruption across Russian regions. Results show that while greater general competition (measured by regional population size), increases both perceived and actual corruption, competition among enterprises only increases corruption perceptions, while competition among government employees increases actual, but not perceived, corruption. Privatization activity and unemployment fail to affect either measure of corruption. Finally, the effects of urbanization differ on perceived and actual corruption. Besides Russia, these findings are somewhat unique to the broader literature.
Keywords Corruption perceptions . Corruption incidence . Russia . Government . Competition
JEL Classification K42 . O5 . P37
1 Introduction and motivation
This paper examines the effects of competition for favors on the prevalence and perceptions of corruption across Russian regions. Perceptions of corruption might differ from incidence because they are not necessarily based on personal experience. Corrupt activity is inherently difficult to measure as participants in corrupt transactions do not have incentives to voluntarily divulge their roles (see Sampford et al. (2006)). Furthermore, perceptions about corruption in a region and actual corruption can differ substantially in some cases. For example, a large corruption scandal in a region that gathers substantial media attention would increase perceptions about corruption there, although actual corruption in the region might not be very widespread. Thus, studying differences in determinants of perceived versus actual corruption can be very instructive (see Svensson (2005)), and has received surprisingly little attention in the literature so far (see Olken (2009) for a notable exception).
In this paper, various dimensions of competition for rents, including competition among the general public, businesses, and government officials are examined. Besides providing unique insights into factors determining corruption, this paper contributes to the broader literature on country-specific corruption studies and provides useful policy inputs. While there are numerous studies examining various aspects of cross-national corruption, related investigations analysing the details of corruption in individual countries are only a few, due primarily to a lack of adequate data on the extent of corrupt activity across regions of the same country. In addition, we evaluate determinants of both corruption perception and actual corruption incidence, which is...