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Financial Analytics: Science and Experience
 

The phenomenon of modern corruption and factors for corruption in the public sector

Vol. 8, Iss. 21, JUNE 2015

PDF  Article PDF Version

Available online: 14 June 2015

Subject Heading: MONITORING OF ECONOMIC PROCESSES

JEL Classification: 

Pages: 2-15

Tatuev A.A. Moscow State University of Food Production, Moscow, Russian Federation
arsen.tatuev@mail.ru

Borodin A.I. National Research University Higher School of Economics, Moscow, Russian Federation
aib-2004@yandex.ru

Shash N.N. National Research University Higher School of Economics, Moscow, Russian Federation
nat_vshu@mail.ru

Importance Currently, corruption penetrates various sectors of national economies, thus becoming one of the main factors impeding economic development. Corruption affects economic growth, accumulation and effectiveness of aid granted for development, allocation of income and tackling the poverty, and therefore hampers opportunities to modernize the entire economy. This lets us consider corruption as a considerable threat that requires examining various relations and aspects, especially in the public sector, in order to trace corruption practices there.
     Objectives The research explores the reasons and consequences of corruption in developing countries. Analyzing social relations, we describe the main models of corruptive behavior.
     Methods Using the comparative and functional approaches, we determine the main areas where corruption emerges. The statistical method helps us evaluate the existing approaches to fighting corruption within the framework of neoclassical and institutional concepts.
     Results We find key indications of corrupt practices and their adverse consequences, including deterioration of infrastructure and public services, growth in economic uncertainty due to illegal transactions, destroying and degrading competitive market mechanisms, emergence of budgetary difficulties and challenges. We prove that corruption in Russia reflects inner controversies in the socio-economic order, and identify close relationships between corruption and shadow economy. We determine the principal areas of corrupt practices and analyze the structure of social ties.
     Conclusions and Relevance We conclude that corrupt practices continue to exist and even earn certain demand since such models become more common for economic agents in a number of countries, especially emerging economies. It is necessary to actively formulate anti-corruption models that the society should adopt, and employ the existing mechanisms for countering corrupt practices.

Keywords: corruption, public sector, anti-corruption behavior model, evaluation, method, corruption level, shadow economy

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