Post communist transition - Paper 3

Résumé du document

After the collapse of the Soviet system, corruption in post-communist countries surged. Some of the post-communist nations were more successful in dealing with corruption than others. Do you believe that corruption was and still is a big obstacle to the development of these nations? Please explain why. How has a high level of corruption and certain forms of it damaged the transition? In the beginning of the 1990s, new countries emerged in Eastern Europe with the collapse of the Communist Bloc, and they broke from the socialist ideology. They began a difficult economic transition from a planned communist economy to a market ruled economy. It was not a short and easy process because there were a lot of economic, social and cultural resistances to it, and among them was the problem of corruption. At this time, corruption was a widespread practice in almost all the former Soviet countries. It could have taken different forms: bribery, trading in influence, graft, patronage, embezzlement, kickbacks etc. Corruption is still present in some of the former Soviet countries today. It can be seen as a bad cultural habit inherited from the past especially from the system of the Nomenklatura. However I think that corruption can only be partially explained by cultural factors and that each society needs to have fixed rules for it to develop.

Extraits

[...] Indeed corruption affected the relative prices in the economy because it was an extra expenditure for doing business and producing. It completely distorted the idea of the value of various goods and services. As the Hungarian socialist, Elémer Hankiss explained : “everybody will pay more for the same goods or services than they originally paid” (Hankiss, p.249). Corruption was an obstacle to transition because it diverted money from investment which is the key factor of economic development. Corruption was also disastrous in the public sector. In general it increased the costs of services and materials. [...]

[...] Indeed corruption is a real obstacle to the economic development because it leads to distortion in the rule of the market and in the fixation of the prices and it also diverts the national money from essential undertakings. The role of the state is difficult to define in a corrupt economy. For example in Bulgaria there is a conflict between the necessity of reducing state intervention in the economy due to the strong incidence of corruption and the will of the state, inherited from the communist past, to control the resources . It is one of the most difficult problems confronting the program for battling corruption in Bulgaria. [...]

[...] Moreover, corrupted people could be satisfied with a lower level of services which would give them a higher personal profit. It was really disastrous because it led to the production of low quality products. Some projects can even be conceived in accordance to corruption only and some other concerning public health or education, which are essential to economic development, can be ignored. Some governments could even chose to lead projects totally useless for the population just in order to obtain bribes. [...]

[...] It means that no radical political trend could come up, no opposition which is the basis for the elaboration of a democracy. According to a survey the members of parliament were even the most distrust people in society and they were distrusted by 4/5 of the population. So corruption in Eastern Europe Country was a real obstacle to the transition, it made everything more difficult. The most convincing demonstration is the fact that the countries which were the most corrupt have clearly felt behind the others. [...]

[...] I think it is a significant obstacle to the economic development because it can lead to a lack of economic inefficiency and to economic distortions: it can lead to inertia because the payees would oppose any kind of change and it often lead to distortions because funding are allocated not according to the needs of the economy but according to personal reward. During the transition period it was a determining factor for the economic development. Today the result is that many countries who didn't succeed in making corruption vanish felt behind the other countries: it is mainly the case with Central Asian countries. [...]