Corruption declines in Eastern Europe

Former socialist countries are making progress in reducing corruption, a new World Bank report shows. Although still more prevalent in Eastern Europe than in Western Europe, corruption is declining, particularly in large firms.

by World Bank
Last Updated: 23 Jul 2013

Anticorruption in Transition 3 – Who is succeeding and why? is the third report tracking levels of corruption in enterprise-state interactions since 1999. One of the survey's main findings is that corruption decreased most in areas which underwent strong economic and institutional reforms, lending support to such initiatives.

Tax and custom administration has seen the most visible progress. In a bid to promote transparency and cut red tape likely to lead to corrupt shortcuts, transition countries such as Estonia have pioneered the use of simplified low or flat income tax rates with fewer exemptions. In the Slovak Republic for instance, such moves improved considerably the image of the tax system in the corporate world and reduced tax evasion.

The implementation of EU standards in custom legislation also helped bring bribery down. New IT systems and risk-based assessment also reduced the degree of discretion used in the selection of items for physical inspection. Another initiative, the Trade and Transport Facilitation in Southeast Europe programme, which promotes cooperation between custom services, has also improved transparency and cross-border clearance times.

In contrast, judicial reform was often neglected in the early years of transition and corruption in courts is still rife. Several countries are now starting to address the problem. Russia is raising judges' salaries, Croatia is investing in IT management systems to improve transparency, and the Slovak Republic is prosecuting judicial corruption.

These results are encouraging, and often the work of determined individuals. "Strong leadership is a key weapon in the fight against corruption," says Cheryl Gray, co-author of the study. "Every country that has made measurable progress in reducing corruption has had a strong champion who made transparency and accountability top priorities."

Source: World Bank

Review by Emilie Filou

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