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Not often that you see Russia in some color other than bloody red on a world map of corruption or institutional quality. But according to the Open Budget Index (2012 results), the Russian budget is actually pretty transparent as far as these things go.
Of the major countries, only the UK (88), France (83), and the US (79) are ahead. The other major developed countries in the survey like Germany (71), Spain (63), and Italy (60) are all behind Russia (74), as are its fellow – and supposedly far cleaner – BRICs fellows Brazil (73), India (68), and China (11). Of perhaps greater import, only the Czech Republic (75) edges above Russia in the CEE group, whereas all the others – Slovakia (67), Bulgaria (65), Poland (59), Georgia (55), Ukraine (54), Romania (47), etc. – lag behind it. Also noteworthy is that Russia’s typical neighbors on Transparency International’s CPI, such as Zimbabwe (20), Nigeria (16), and Equatorial Guinea (0), reveal almost nothing in their national budgets.
Now of course the Open Budget Index is not the same thing as corruption. You can have an open budget but still steal from it (and this does happen in Russia frequently), and you can also have a closed budget from which few people steal, at least directly (as was the case in the USSR… or to take a more modern example, while Russia’s OBI is now higher than Germany’s, it is inconceivable that state corruption is even in the same league in these two countries).
Nonetheless, there is surely a very significant degree of correlation between the two. Having an open budget means that it is can be subjected to scrutiny; were Russia’s budget closed like China’s or Saudi Arabia’s, Navalny’s work to expose corrupt state tenders would be simply impossible (as it is, the latest ploy corrupt bureaucrats have been forced to resort to is to sprinkle Latin characters into the Cyrillic texts of state tenders so as to confound search engines).
Second, a high OBI score demonstrates the state’s commitment to fighting corruption. If Putin and Co. really didn’t care and were truly the kleptocrats they are repeatedly labeled as by the Western media, they would instead do everything in their power to hide the budget so as to remove the possibility of scrutinizing it. But they don’t. To the contrary, Russia’s OBI has increased from year to year.
As we can see above, Russia’s budget transparency in 2006 was… about middling; consistently below developed world standards, but higher than plenty of Third World countries and even quite a few CEE countries. But by 2012 it was 10th out of 100 countries. If Russia’s government were truly only committed to stealing as much as it possibly could why would it bother with the legislative and institutional improvements that enabled such a change in rankings?
It is now the most transparent of the BRIC’s, having overtaken both (consistently transparent) Brazil and (also rapidly improving) India in 2012.
Of most pertinence, Russia has massively improved its relative position to other CEE countries; only the Czech Republic and Georgia under Saakashvili have registered such appreciable improvements. To the contrary, both Poland and Romania actually registered declines in their overall levels of budget transparency.
Russia no longer even trails the developed world in this regard.
I would also note that this chimes with the findings of the Revenue Watch Index, which found Russia to be one of the world’s best countries at reporting information about revenue from the extractive sector. This in particular goes against the widespread trope of shady siloviki appropriating all the proceeds from Russian oil and gas and murdering the investigative journalists who go after them.
Conclusions
Once again I would like to emphasize that the OBI does not measure corruption. For instance, China is nowhere near as corrupt as the numbers indicate here; FWIW, my own impressions from perusing various indices and reading comments boards from both countries is that “everyday” corruption is somewhat higher in Russia and elite-level corruption is comparable. Nonetheless, the OBI is an objective measure, drawn from concrete metrics, and that alone makes it superior to Transparency International’s CPI, which is a measure of corruption perceptions.
To remove any possible insinuation that I only castigate the CPI because it ranks Russia abysmally low, I would ask the following question: Is it really plausible that Italy is more corrupt than Saudi Arabia, as implied by the CPI, when there is such a vast gulf in their levels of budget openness and other objective assessments of institutional quality?When we actually pretty much know that a substantial chunk of Saudi Arabia’s budget goes into feeding the country’s 15,000 odd princes… that the very country is named after the family that rules it? I find that very improbable. I would suggest it is somewhat more likely that the “experts” and businessmen asked to assign CPI ratings simply bumped up the Gulf states for their (admittedly) very generous and sumptuous hospitality and their pro-Western policies; all factors that would work in the reverse direction in the cases of countries like Russia, or Venezuela.
Still, all that is speculation. Much like the CPI itself. Back in the world of concrete statistics and facts, I think this further confirms my basic thesis on Russian corruption, which goes something like this:
- It was extremely high during the 1990’s.
- It declined at a steady if not breakneck rate (media narrative – it keeps getting worse every single year under Putin).
- The state itself is moderately but not extremely interested in curbing corruption (media narrative – Russia is a “mafia state”).
- Today, Russia is not an outlier or an anomaly on corruption when compared against Central-Eastern or Southern Europe. To the contrary, it is comparable to the worst-performing European countries (e.g. Hungary, Romania, Greece), and about middling in the overall global corruption ratings. (media narrative – “Nigeria with snow”).
- It continues to improve at a slow but steady pace.
For more information see my Corruption Realities Index, which I developed in 2010 and takes into account the OBI when computing corruption levels.
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“It was extremely high during the 1990′s.”
No…back then they called it “rough and tumble capitalism”. It only became corrupt when Putin and his gang of KGB pirates took over.
“media narrative – Russia is a “mafia state”
Russia would only be better off if it were true. The US has evolved into the worlds largest extortion racket…land of the Arnold Rothstein people with an East Detroit style gang leader as the front man. Minus Putin plus Yukos…Russia might well have become a super-sized version of Detroit.
Dear Anatoly,
I found this a most interesting article. It reinforces a view I am starting to develop, which is that the central Russian government is most successful in combatting corruption in those areas of Russian life that are most directly under its control. Thus as your article shows Russia publishes a pretty transparent budget, it has cleaned up tax collection to a very great degree and it has it has created an effective computerised court structure to enforce contracts. I don’t want to suggest that all is well – the latest scandals racking the Defence Ministry show otherwise – but even those scandals in a sense show that the government takes corruption seriously when it discovers it within its own ranks. By contrast in other areas of Russian life where the central Russian government exercises less control the situation seems to be much worse. I noticed for example from the World Bank ease of business survey the continuing difficulties businesses have in Russia in getting themselves registered, obtaining planning permission and building permits, getting connected to the power supply, getting building contractors to do their work and getting goods they produce transported. Whilst one mustn’t make the assumption that all these problems are due to corruption (some may simply be due to poor infrastructure) I can’t help but think that they point to a culture of bribe taking at local level where payment of a bribe is often needed to get things done. Having said this, if the central government is indeed intent on cleaning up its own act and in fighting corruption generally (and everything that I have seen strongly suggests that it is) then it is only a matter of time before this starts to have an effect even at local level.
I would just make two further points:
1. As we both remember the batte against corruption was a central theme of Medvedev’s Presidency. It has become a cliche that this battle was lost and that no progress in fighting corruption was made. The improvements in tax collection, contract enforcement and budget transparency and the setting up of the Investigative Committee may suggest that this assessment is too harsh.
2. I cannot agree with Donnyess that corruption got worse under Putin than it was in the 1990s. Any study of Berezovsky’s career or any reading of Paul Khlebnikov’s book or of Korzhakov’s memoirs on the contrary shows that corruption was the organising principle of political and administrative life during that period. The facts that came out in the recent case Berezovsky brought against Abramovitch in the Commercial Court in London also bear this out. Khodorkovsky’s cardinal mistake in my opinion was in not realising after Putin came to power that this disastrous period had come to an end. I have always felt that the single step Khodorkovsky took which turned the entire government apparatus and Putin himself decisively against him was his successful defeat in I think 2002 through his mass bribery of Duma deputies of a tax proposal that would have effected the energy sector including of course himself and his businesses.
What I think is true is that in the period up to 2008 the government did not prioritise eliminating the culture of corruption that had become embedded during the 1990s. In saying this however one should not overlook how much the government in the period from 2000 to 2008 had to do. It had to restore its authority over the oligarchs and regain from them control of the economy. It had to rebuild a state administrative system that had all but collapsed over much of the country and restore the tax system which had all but ceased to function. It had to rein in various local barons who had effectively seized control of many regions and who were running them like local fiefdoms. It had to restore financial stability and the normal functioning of the economy and the government’s own finances after a disastrous period of hyperinflation, economic slump and debt default. It had to fight organised crime, which in parts of the country (including as I personally remember St. Petersburg) was at that time running amock. Last but not least and a fact that always gets forgotten, it had to fight a bitter counterinsurgency war against jihadi insurgents and Chechen separatists in the northern Caucasus. The government managed to do all of these things and did so moreover without resorting to overtly authoritarian or dictatorial methods. Even after 2008, during Medvedev’s term, it had to prioritise dealing with the world economic slump. It is not surprising if in the process the government did not give the fight against corruption its full attention. All the signs are that now it is.
A short thought: You say that objective measures are inherently better when it comes to measuring corruption, or even only suggestion which countries might have some corruption. But objective measure can only rely on data that is openly available, and corruption generally thrives when it’s hidden.
I’m not championing the CPI, but it is an useful way (among others) to roughly measure the trust in a government – domestic or international.