The article is devoted to the prospects of the use of economic and legal mechanisms for combating corruption. For example, St. Petersburg examines the experience of the use of such mechanisms on state procurement.
Importance Many economic agents hide the facts of bribery they were involved into, so it is important to study the nature of corruption perceptions to estimate the latent phenomenon. The difference between estimations on official data and perceptions prove that need. Moreover, anticorruption legislation may not work in case of strong pro-corruptive institutions.
Objectives Revealing relationship of corruption perceptions to different factors, especially for transitional economies.
Methods Nonparametric and regression empirical estimations. The relationship between corruption perceptions (CPI) and GDP per capita, wellbeing, shadow economy size and institutional characteristics, such as government quality.
Results We have found empirical evidence for the hypothesis that shadow economy and corruption can be both substitutes and complements, the last is true for high income and low shadow economy countries. If shadow economy is huge, the relationship vanishes. Income is relevant in macro-analysis, but on individual data the relationship does not seem to be strong. Institutional quality has negative relationship with corruption perceptions, both for formal and informal institutions. We also touch upon the question of the difference between informal institutions, such as trust, in developed European and post-socialist countries.
Conclusions and Relevance Results can be used in long-term anticorruption policy, as institutional changes can lead to lower corruption.