by: James H. Anderson, Cheryl W. Gray
This is the third in a series of World Bank studies that examines
patterns and trends in corruption in business-government interactions
in the transition countries of Europe and Central Asia. The message of
this series is positive: Corruption has fallen since 2000 in many
transition countries in the region. Firms are paying bribes less
frequently and in smaller amounts (as a share of reveneues) than in the
past, and they see corruption as less of a problem for business.
Reforms have accelerated in the past decade. Many countries are
cutting red tape, simplifying taxes, and strengthening audits. These
reforms are translating into lower levels of corruption in areas such
as tax and customs administration, business licensing, and inspections.
While the impetus for reforms and their design and implementation vary
across countries, the link between reform and results is
There is no room for complacency, however. Corruption is not falling
in all countries or all sectors, and even the most successful reformers
still tend to have higher levels of firm-level corruption than in
Western Europe. The burden weighs most heavily on the new private firms
that are the engine of growth and employment in the region. And even in
countries that are showing success, the gains are not irreversible.
Leaders need to continue to open their economic and political systems
to greater competition, foster transparency and accountability in the
public sector, and reduce administrative and regulatory burdens for
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