Pocket-oriented Democracy

“Having my own company, I no longer work for profit but as a hobby, with no money to me, only paid to everyone else’s pocket who has an official hand.” This was the view–commonly held– of one businesman who finally moved his business out of Russia’s “pocket-oriented democracy” to Germany. Corruption in Russia is endemic, widespread and well-known. Elena Panfilova of Transparency International’s Russia Chapter began by painting a bleak picture for CIPE’s and TI’s guests from NED, State Dept, Dept of Justice, and others at today’s roundtable on Evolving Approaches to Combatting Corruption in Russia.

And yet some progress is being made. President Medvedev has championed new anti-corruption laws, including declaration of assets by public officials and other measures passed in the past 3-4 months. A positive direction, but there are still many steps to enforcement and changed habits, agreed Andrew Wilson, CIPE’s Regional Director for Eurasia. The question, as is often the case, is how to close the reality gap between laws on the books and capacity to implement. CIPE has worked for more than 7 years with local groups across Russia’s regions on just this question. Key issue areas for the private sector are common across regions: taxation, access to premises (which are often owned by local government) and general corruption.

Corruption mushroomed in Russia in the early-mid 2000’s from small facilitation payments and preferred access to a highly extractive existential threat for companies. The business community’s reaction has also evolved, coming together to address the problem, recognizing the need for themselves to exemplify the change they wanted to see, building support both by using those institutional structures with more political will and by reaching out more to the public for action.

Examples of CIPE’s programs include the Saratov Chamber of Commerce, which produced a guide on how to analyze laws for their corruption potential (existence of discretion, etc), found that more than 35% of local and regional acts had great corruption potential, and then recommended more than 40 changes. Now this program has moved to a federal-level effort, and the government has decreed that corruption analysis should take place for all laws.

Elsewhere, a business coalition in Vladivostock used the courts to fight back property seizures, and all over Russia business associations and chambers of commerce are establishing themselves as watchdogs, providing an outlet for greivances to be aired and giving voice to the collective call for cleaner institutions at all levels.

These efforts build citizen involvement, strengthen the quality of democracy and move toward true markets, not pocket-oriented democracy.

Published Date: May 05, 2009