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Working paper

Corruption Markets: An Analytical Framework For Assessing Anti-Corruption Campaigns

Vasileva V. M., Vorobyev A.
Assuming that there is a “missing factor” in the modern corruption studies, authors develop  a  new  conceptual  approach  to  the  study  of  corruption  and  effectiveness  of  anti-corruption  regulations  in  the  public service. This  “missing factor” is  a  “corruption  market”, particularly, its  size, type and nature. Conflict of interest regulations aim at controlling key channels of corruption  behavior, and corruption market in its turn determines prevailing channels of existing corruption  behavior. Misidentification of corruption market’s type is the main reason for the failure of anti- corruption policies, no matter how new and effective models are imported.   Corruption market’s size is defined as the number and average price of corruption deal. The  nature of corruption market depends on the side, capable of setting the final price of corruption deal.  Resulting from institutional characteristics of public administration, corruption markets are either  seller’s or buyer’s markets. Seller’s corruption markets are sensible to ethic regulations of public  service,  and  the  only  effective  way  of  tackling  buyer’s  corruption  markets  are  “cut-red-tape”  reforms and introduction of compliance-based regulation of conflict of interest. Type of corruption  market  encompasses  3  dimensions:  quality  of  institutions,  scope  of  regulations  and  degree  of  regulations.  Basing  on  the  introduced  model,  authors  identify  and  analyze  8  types  of  existing  corruption  markets.  Each  type  of  corruption  market  has  its  own  transformational  dynamics  and,  consequently, own opportunities for anti-corruption policies.   A  new  conceptual  model  of  corruption  market  evolution  is  introduced  in  the  article.  Transformations  of  corruption  markets  depend  on  several  factors.  The  key  factors  are  personalization  of  political  regime,  “new  public  management”  reforms  of  public  administration,  populist policies and creation of rentier states, and set up of the Welfare State.