Working Paper, NUPI

Corruption in China and Russia compared : Different legacies of central planning

Published: 1 Jul 2016

During the first decade after markets became the major mechanisms of economic coordination in China and the area of the former Soviet Union (FSUA), corruption was perceived to increase in both. At the same time China experienced rapid growth while most countries in FSUA experienced steep declines. In the paper I argue that this difference is difficult to explain within an n-country, cross-section econometric framework. Instead a case-oriented approach with more institutional specification is chosen. In particular, the role of the former normative and institutional framework of central planning is explored. The paper describes some of the explanations of corruption as it occurred under central planning, including its limitations and how they may be linked to (negative or positive) growth mechanisms. In addition the posttransition data on corruption and growth are linked to major political characteristics at the point of transition.