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62The scientific heritage No 47 (2020) 11
КОРРУПЦИЯ КАК ДЕСТРУКТИВНЫЙ ФАКТОР ЭКОНОМИЧЕСКОГО РАЗВИТИЯ
Березюк С.В.
к.э.н., доцент кафедры административного менеджмента и альтернативных источников энергии, Винницкий национальный аграрный университет
г. Винница, Украина Яремчук Н.В.
к.э.н., старший преподаватель кафедры административного менеджмента
и альтернативных источников энергии, Винницкий национальный аграрный университет
г. Винница, Украина
CORRUPTION AS A DESTRUCTIVE FACTOR OF ECONOMIC DEVELOPMENT
Bereziuk S.
Candidate of Economic Sciences, Associate Professor of the Administrative Management and Alternative Energy Sources Department, Vinnytsia National Agrarian University Vinnytsia, Ukraine Yaremchuk N.
Candidate of Economic Sciences, Senior lecturer of the Administrative Management and Alternative
Energy Sources Department, Vinnytsia National Agrarian University Vinnytsia, Ukraine
Аннотация
В статье акцентировано внимание на отрицательном воздействии «института коррупции» на функционирования экономического механизма и его разрушительное влияние на социально-политический климат.
Проанализировано дефиницию понятия «коррупция», а также отдельные аспекты ведущие к её возникновению и развитию.
Подчёркнута прямая связь уровня тенизации государственного сектора экономики и «градуса» коррупционного климата в стране. Названы основные причины перехода экономической деятельности субъектов хозяйствования в тень, в частности, несовершенство законодательной базы, коррупционная деятельность в системе органов государственного управления, искаженное восприятие идеологии гражданами страны и снижение уровня ценностно-ориентационных норм.
Определено, что наиболее коррумпированным сектором остается сектор государственной собственности, в которой процесс приватизации госпредприятий целенаправленно притормаживался управленческими структурами в коррупционных целях.
Также раскрывается вопрос об организации процесса государственных закупок на основании нововведенной платформы Prozorro.
На рассмотрение выносятся результаты деятельности Национального антикоррупционного бюро Украины как правоохранительного органа имеющего широкие силовые полномочия предупреждения, выявления, прекращения и разрытия коррупционных преступлений. Поддерживается теория гиппотетиче-ской зависимости роста ВВП от уровня Индекса восприятия коррупции.
Предложено комплекс мер, выполнение которых даст вероятность снизить уровень коррупции в государстве.
Abstract
The article focuses on the negative impact of the "corruption institute" on the functioning of the economic mechanism and its destructive impact on the socio-political climate.
The definition of the concept of "corruption" is analysed as well as separate aspects leading to its appearance and development.
A direct connection between the level of shadowing of the public sector of economy and the «degree» of corruption climate in the country is emphasised. The main reasons for the transition of economic activity of enterprises to the shadow, in particular, imperfection of the legislative base, corruption in the system of state administration, distorted perception of ideology by citizens of the country and reduction of the level of value and orientation norms are mentioned.
It has been determined that the most corrupted sector remains the state property sector, where the process of privatisation of state enterprises was purposefully slowed down by management structures for corrupt purposes.
The issue of organization of the public procurement process on the basis of the new Prozorro platform is also
disclosed.
The results of activities of the National Anti-Corruption Bureau of Ukraine as a law enforcement agency with broad power to prevent, detect, stop and break up corruption crimes are submitted for consideration. The theory of hypothetical dependence of GDP growth on the Corruption Perceptions Index is supported.
A set of measures has been proposed, the implementation of which will make it possible to reduce the level of corruption in the state.
Ключевые слова: коррупция, приватизация, индекс воспрятия коррупции, тенизация економики, государственные закупки.
Keywords: corruption, privatization, anti-corruption index, shadow economy, public procurement.
Formulation of the problem. In Ukraine, the level of Corruption is quite high and it neutralizes a significant amount of internal resources. This is the resource that is redistributed through corrupt rent and which is actually withdrawn from our national product, which actually makes the Ukrainians one of the poorest nations in Europe. The experience of many countries in the world shows that traditional attempts to suppress corruption only through strict law enforcement measures do not yield positive results. This situation is explained by the fact that corruption measures are implemented under the influence of super active factors motivating human behavior - power and wealth. When analyzing corruption on a societal scale, we conclude that it is economically motivated. The main motive of a corrupt person is the desire to take possession of additional material wealth. And a ban on corrupt actions also has its price.
The negative impact of corruption on the economic sphere is primarily manifested in the increase in the value of commercial contracts and, as a consequence, leads to a similar increase in prices for goods and services. Therefore, the population of a country with a high level of corruption will never achieve a decent level of welfare, even if the economy is sufficiently modernised and developed.
Presenting main material. Corruption is a complex phenomenon of today's social reality. Penetrating into almost all spheres of society, this destructive "institution" entails the destruction of social ideals, economic mechanisms, the legal environment. For a long time, we have witnessed how our government distorts the state system in its own interests. The causes of
corruption are diverse and complex, but the main one is the inability of the authorities to resist this destabilizing phenomenon, which from year to year blurs the boundaries between public and private interests.
According to the results of a nationwide survey of the population of Ukraine, 91% of citizens consider corruption a serious problem, and 61% of respondents are convinced that it is the most serious problem that hinders the development of the country. Only 4% of respondents admit that the problem of corruption exists, but it is not too serious, and 0.5% consider this problem far-fetched. During the year, compared to 2017, awareness of the seriousness of the problem of
corruption has grown significantly: in September 2017, 44% considered corruption to be the most serious problem, now - 61%; not too serious in 2017 -12%, today - 4% (Fig.1).
According to citizens, the main reason for the lack of positive changes in the fight against corruption is that those who have to fight it are themselves corrupt. Other important reasons: corruption usually goes unpunished (38%), the lack of a "strong hand" that would bring order to society (31%), and the imperfection of laws that can be interpreted in any way (28%).
Respondents were divided on whether corruption could be considered a manifestation of the Ukrainian mentality. 38% believe that corruption is part of the mentality, and 46% - that it is not. At the same time, the younger the respondents, the more often they called corruption a manifestation of the mentality of Ukrainians. This question arose in 2001, when corruption was considered a manifestation of the Ukrainian mentality much less - 26% [5].
other ] 0,9
difficult to tell S 3,3
external management S2I 6,1
passivity of citizens 533 6,5
rupture of relations with Russia, orientation to. .Wl 6,9
lack of significant investment in the economy migration, departure of the working population populism of politicians lack of professionals in power oligarchs in economics war in the Donbass corruption
7,3
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0
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Fig. 1. Problems that, in the opinion of the citizens of Ukraine, hinder the development of the state mostly as of
08.01.2018
* It was possible to choose several (not more than 3) answer options at once
Source: [20]
Regarding the definition of "corruption", in practice there are two main approaches to the formation of this scientific concept. The first is doctrinal, based on research by scientists and specialists in a particular field. The second is official, legal, based on regulations, international documents and other sources that have legal force [19].
According to the first approach, the analysis of modern scientific literature demonstrates a significant number of definitions of corruption, summarizing which, we can say that the understanding of corruption depends on the angle from which it is trying to explore experts in various fields of science. Thus, from the point of view of economics, the generalized position of scholars who have studied the concept of corruption within economic theory is defined as follows: corruption is the sale of public property by civil servants for private purposes, which is not just a function of resources spent on surveillance and prosecution. function of relations between the state and the private sector [19].
Also, one of the most successful is the interpretation of the concept of "corruption" by a domestic scientist M.I. Melnyk, who believes that "corruption is a social phenomenon that covers a set of corrupt acts related to the misuse by persons authorized to perform the functions of the state, the power given to them, official powers, appropriate opportunities to satisfy personal interests or the interests of third parties » [17].
The Code of Conduct for Officials, adopted by the UN General Assembly on December 17, 1979, defines corruption as "... the commission of certain acts in the performance of duties, or in connection with these duties as a result of gifts, promises or incentives, or their illegal receipt whenever there is such an act or omission. " This definition reflects not only the receipt of
material values by an official, but also his official behavior [///] In the Ukrainian legal dictionary-reference, corruption is interpreted as one of the forms of abuse of power, which is associated with bribery of officials [Corruption. Legal dictionary-reference book [4].
The Law of Ukraine "On Prevention of Corruption" [Law] defines the term corruption as the use by a person of official powers or related opportunities for the purpose of obtaining an illegal benefit or accepting a promise / offer of such benefit for himself or others, respectively promise / offer or providing an improper benefit to a person, or at the request of another person in order to persuade that person to misuse the official powers granted to him or her [6].
The world community perceives Ukraine not just as a country with a high level of "corruption climate", but as a country where the "institution of corruption" is an integral part of economic and socio-political life.
Transparency International provides the results of its own research, which demonstrates the following situation. 30 points out of 100 possible - the result of the Corruption Perceptions Index in 2019 for Ukraine. The country returned to the level of 2017 and now ranks 126th out of 180 countries. Next in the ranking - Kyr-gyzstan, Azerbaijan and Djibouti. Among its neighbors, Ukraine is ahead of Russia, which has maintained its position (28 points, 137th place). Poland (58 points, 41st place) and Slovakia (50 points, 59th place) are expected to lead the neighbors. Belarus added one point and now has 45 points and 66th place. Also, this year we see a decrease in the index of neighbors: Romania -minus 3 points, Hungary - by 2, Moldova by 1 [11].
The need to determine the preconditions of corruption is due to the fact that corruption as a social phenomenon is a product of socio-historical processes and social relations with established patterns and trends.
That is why identifying the causes of corruption is so important in the process of combating it (Fig.2)._
- it is the daily abuse by middle- and lower-level government officials of the government entrusted to them in dealing with ordinary citizens seeking access to basic services provided by the state in health care, education, police stations, and other government agencies.
- these are actions committed at the central level of public administration that distort the policy or mode of functioning of central public authorities, which allows senior officials to receive remuneration for the public good.
- it is the manipulation of policies, institutions and regulations (rules, procedures) by officials who make political decisions on the allocation of resources and funding, who use their positions in order to maintain their powers, status and financial status
Source: [3]
Fig.2. Types of corruption and their interpretation
Historically, the source of corruption has been excessive state interference in the economy, through abuse of power, the creation of excessive bureaucracies, which were not needed at the appropriate stage of reforming the economic system, "hints" to entrepreneurs to solve business issues outside the legal sphere
(Table 1). Excessive change of government during the years of independence has led to the formation in the minds of public officials of an understanding of the short term of office and the desire to use their official position for material gain.
Table 1
Causes of corruption
Political (use of powers to satisfy private interests) - low level of legal culture of society
- excessive and active state intervention in the economy and private life of citizens
- non-transparency of the public administration system, development and decision-making processes at the national, regional and local levels
Economic (use of civil servants' own powers in the field of economic management) - instability of the country's economy
- underdevelopment of the monetary and financial system
- lack of transparent mechanisms for privatization and tendering for public procurement
- unfavorable investment climate.
Legal (inefficient system of anti-corruption tools and imperfect anticorruption legislation) - uneffective mechanism for counteracting the abuse of bureaucracy
- ignorance or misunderstanding of laws by the population
- Insufficient settlement of liability for various acts of corruption
- gaps, ambiguity and vagueness of legislation
- imperfection of the system of declaring incomes of civil servants
Organizational and managerial - the ability of officials to make decisions at their discretion
- total occupation of public posts with the help of personal relationships
Socio-psychological (low civic consciousness; a mentality that is distorted by the awareness of the possibility of solving any issue without undue effort and loss of time) - weakness of civil society
- low wages
- lack of career prospects in the presence of professional achievements
- low level of management culture
- unclear organization of control and imperfection of decision-making procedures and reporting on the work performed
Corruption is often associated not only with the misapplication of legislation, it can distort the legislative process itself, when the preparation and adoption of regulations is reduced to meet their own business interests, rather than public needs.
By destroying state foundations from within, corruption reproduces on a larger scale the real threats to the civilizational prospects of Ukrainian statehood. The aggressiveness of corruption is manifested in its insti-
tutional expansion. Having the power of internal stability, latent and creeping nature, corruption distorts the mechanisms of social influence, distorts the content of law and morality, replaces the main goals of public administration, distorts the paths of economic development. As a result, corruption from private criminal practice becomes a systemic problem, characterized by the formation of stable corrupt segments of the economy, in which the political will of the state is actually subordinated to the interests of oligarchic groups [23].
The current situation stabilizes the public opinion that the state, as a socio-economic institution, has become a hostage of a vicious circle of events, when increased corruption activity strengthens the segment of "poverty", and the latter, in turn, becomes successful. bridgehead "further development of corruption.
Corruption is a macro-critical phenomenon, one of the main problems of our time, because the annual losses of the world economy from bribes, according to the International Monetary Fund, are about $ 1.5-2.0 trillion, or 2% of world GDP [12].
others
Corruption contributes to the shadowing of the public sector of the economy, which in turn is manifested in the uncontrolled production, exchange and consumption of goods and services, as a result, the state budget is short of tax revenues.
Ukraine has traditionally been characterized by a high level of shadow economy. The main reasons for the transition of the economy to the "shadow" are:
- imperfection of legislation, especially tax. These include excessive tax pressure (inflated tax rates and / or excessive taxes), confusing (non-transparent) tax administration mechanisms, unfair provision of tax benefits to businessmen close to the government, etc .;
- corruption in the public administration system. Corruption is an anti-social phenomenon, the essence of which is the commercialization of public officials by their functional responsibilities;
- purely human weekness (greed, legal ignorance,
etc.).
building 53,4
services retailing wholesaling processing industry all sectors
^ 2018 □ 2017
Source: [18]
0 10 20 30 40 50 60
Fig.3. The level of the shadow economy in Ukraine (% of GDP), by sector
According to the calculations of the Ministry of Economic Development, the level of the shadow economy in 2018 amounted to 30% of official GDP, which is 2 percentage points less than in 2017 and is the lowest level since 2009 (Fig. 3). Given that the de-shadowing of the economy is considered by experts as one of
the measures of the effectiveness of the implemented reforms and their perception by society, this result deserves attention. In 2014, the level of the shadow economy was 43% of official GDP (Figure 4).
50 40 30 20 10
<xx>the level of the shadow economy of Ukraine (in% of the volume of official GDP) —■—growth rates / decrease of the level of real GDP , in % to the previous year
Fig.4. Integral indicator of the level of the shadow economy of Ukraine (in% of the volume of official GDP) and
Source: [12]
growth rates / decrease of the level of real GDP (in % to the previous year)
0
One of the main threats posed by the shadow economy to the economic system is the distortion of the mechanisms of laws and market instruments, which leads to the ineffectiveness of mechanisms to stimulate the economy, hindering the economic development of the country. Therefore, the government's efforts should focus, first of all, on the implementation of measures aimed at minimizing the impact of systemic factors of shadowing of the economy, which remain relevant, namely:
- low efficiency of the state in providing the institutional basis for the development of a competitive economy; according to the Global Competitiveness Index (GIC) Report 2018,_the efficiency of state and public institutions ("Institutions") remains one of the biggest competitive "failures" of Ukraine's economy (110th among 140 countries). The low position in the ranking according to this sub-index indicates that the administrative and legal conditions in which businesses operate remain unfavorable due to the persistently high level of corruption, lack of an effective judicial system and proper protection of property rights;
- high level of corruption;
- low efficiency of the judicial system. The level of independence of the judiciary and the level of efficiency of the legal system in arbitration are assessed by international experts as low (117th and 103rd places in the 2018 HIC ranking, respectively).
- insufficient protection of rights to movable and immovable property, including rights to financial
assets. According to the GIC 2018 rating, Ukraine ranks 129th in terms of protection of property rights and 114th in terms of protection of intellectual property rights.
One of the most corrupt areas remains state ownership. Today, the public sector has 3,733 state-owned enterprises. The fact that the country is not able to control the efficiency, expediency, and in general the economic activity of the latter seems absolutely expected. That is why the process of privatization on time is a necessary precondition for the state to emerge from economic stagnation. Obtaining funds from privatization is not a priority, because in fact, a single infusion of financial resources into the state budget is not a panacea and does not solve the dilemma of economic growth. The main objectives of the privatization process should be to attract investment capital and, as a consequence, the possibility of modernization of production facilities, job creation and competitive products.
The stock market of Ukraine in 2018 jumped by more than 80% and became the best in the world ranking in terms of key index, which since 1997 is calculated by one of the two largest domestic exchanges FFTS (First Stock Trading System). Index data clearly reflects and responds instantly to any market fluctuations, both positive and negative. The FFTS index as an indicator of economic security of securities traders most fully reflects the essence and trends of the Ukrainian stock market (Fig.5).
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,—* ,—* ,—* ,—* •-i ,—* •-i •-j •-i ,—* ,—* ,—* ,—* ,—* ,—* ,—* ,—* ,—* ,—*
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Source: [12]
Fig.5. FFTS index value (Ukraine)
The current "plus" of tens of percent means that the demand for securities on the market was extremely high, and they rose sharply in price after a period of deep decline in 2015-2016. Although in general, the volume of the Ukrainian stock market worldwide remains tiny and explanation Such a significant increase lies in the low base of comparison, but despite this, the dynamics of the index eloquently gives a positive signal to investors as potential owners of privatized objects [21].
However, despite the urgency of the issue, the privatization process was deliberately delayed due to a number of factors:
- unreliability and imperfection of the domestic institutional environment, which creates the
4500 4000 3500 3000 2500 2000 1500 1000 500 0
unattractiveness of privatization objects for foreign investors;
- imperfection of the regulatory framework for regulating the privatization process;
- inconsistent policies and lack of long-term plans;
- deliberate delay in the privatization of state-owned objects in order to maintain control over them and, as a result, maximize the debts of enterprises, which entails the loss of their potential economic attractiveness.
Annual allocation of billions of hryvnias from privatization to the State Budget is a risky issue and does not correspond to the qualitative assessment of budget revenues, as the privatization plan is being implemented only by 2-4% (Fig. 6) [24].
^plan -'fact
Source: SPF
Fig. 6. Dynamics of privatization in Ukraine, million USD
A positive step was the repeal by Parliament of a list of laws banning the privatization of more than a thousand enterprises. 9% of all state-owned enterprises (over 400 objects) have already been transferred to the State Property Fund of Ukraine. In general, the Program of Activities of the Cabinet of Ministers announces a reduction of the share of state ownership in the economy to 5%. The development of ownership policy with a clear definition of the purpose of state ownership and key performance indicators for all state-owned enterprises is announced. [Draft Resolution on the Program of Activities of the Cabinet of Ministers of Ukraine] [13].
Of course, corruption can also exist in private enterprises, but then it will cease to be a problem of citizens who are the "holders" of the State budget.
On August 1, 2016, the Prozorro system came into force, which became mandatory for all purchases in the country. The system was designed to provide open access to information, open up the public procurement market to suppliers and launch transparent online auctions to reduce prices, which will save public money [14].
Speaking about the effectiveness of this system, attention is focused on its effectiveness in improving the efficiency of public procurement and reducing corruption schemes in this sector. But still, there is a question about possible cases of corrupt practices.
Cooperation with the customer is necessary for most illegal procurements. By implementing the conspiracy plan, the customer may formulate a tender in such a way as to minimize competition for the bidder, providing a unique size, color, brand or composition of products, which, respectively, will know only a predetermined contractor. In addition, the customer may announce the bidding on such a date that the bidder could not physically collect the necessary certificates, quality certificates, etc. before the start of the bidding. Accordingly, the desired winner of the tender will be notified in advance of the need to collect certificates. Another effective workaround for the customer is to hide the tender in the electronic tender system so that potential bidders cannot find it and submit their bids. At the same time, "trusted" suppliers, of course, learn about everything in time.
Of course, the above agreed actions of the bidder and the customer harm competition and violate the rights of bona fide bidders. In addition, they lead to a waste of budget funds in huge amounts [2].
Therefore, the ProZorro system gave hope for open work in public procurement and clearly minimized the risks, but corruption in public procurement wasn't fully overcome. The issue of impunity for violating the law remains problematic, because as soon as the subject of the appeal applies to the authorized body with the recorded violations of the public procurement process, the customer cancels the tender offer and announces it again.
In the Strategy of Sustainable Development "Ukraine-2020" the main goal of anti-corruption reform contains two components of corruption in Ukraine, reducing losses of the state budget and business due to corruption, as well as increasing
Ukraine's position in international rankings assessing the level of corruption [15].
The constant pursuit of corruption is pushing for radical steps to eradicate this negative phenomenon by creating new bodies to combat it. The National AntiCorruption Bureau of Ukraine (NABU) was established on the basis of the Law of Ukraine "On the National Anti-Corruption Bureau of Ukraine" of October 14, 2014 [7].
According to the NABU Law, it is a state law enforcement body that is responsible for preventing, detecting, terminating, investigating and disclosing corruption offenses within its jurisdiction, as well as preventing the commission of new ones. The purpose of this body is to combat criminal corruption offenses committed by senior officials authorized to perform the functions of state or local self-government, and pose a threat to national security.
According to the Law of Ukraine "On Amendments to Certain Legislative Acts of Ukraine on Ensuring the Activities of the National Anti-Corruption Bureau of Ukraine and the National Agency for Prevention of Corruption" amendments to the Law of Ukraine "On the Prosecutor's Office". Pursuant to the above-mentioned Law, the Specialized AntiCorruption Prosecutor's Office (CAP) is established in the Prosecutor General's Office of Ukraine (as a structural subdivision), in which the prosecutor, as a specially authorized anti-corruption entity, is empowered to make inquiries. and the conditions that contributed to the commission of corruption-related offenses [8] in September 2019, the Supreme AntiCorruption Court has started its work, to which all NABU cases will be transferred. The creation of a court to hear the country's top corrupt officials was a requirement of Western partners and the IMF.
Avoiding "elite corruption" (corruption of highranking officials), purposeful work to expose corruption offenses was often replaced by drawing up a significant number of protocols on ordinary officials - civil servants of 6-7 categories, who committed minor misdemeanors that only formally fell under the signs of corruption. socially dangerous [6].
The National Bureau has proved that positions do not save from responsibility. This confirms the fact that during the reporting period, under the procedural guidance of SAP prosecutors, detectives reported the suspicion to 17 top-level government officials. Among them: an employee of the Office of the President of Ukraine, a minister, several deputy ministers (at the time of notification of suspicion), a number of former deputies of Ukraine, former First Deputy Secretary of the National Security and Defense Council, NAPC ex-head, former First Deputy Head of the State Migration Service of Ukraine, incumbent . These persons are mostly accused of abuse of office, harm to state interests, declaration of unreliable information. Perhaps the largest society was outraged by the actions of three people's deputies (now - ex), who illegally received compensation from the budget for rent. Also among the "leaders" brought to justice - middle-ranking public officers, law enforcement officers, heads of state enterprises. In total, in the second half of 2019, the status of suspects in the NABU
and SAP cases was granted to 84 people, including many directors of state-owned enterprises [10].
Corruption in state-owned enterprises has been the focus of NABU detectives since the very beginning of the institution's activities. In 2018, the work started in December 2015 brings results: the investigation of corruption schemes at a number of state-owned enterprises has been completed, organizers and participants have been identified. In total, in the second half of last year, 61 people became accused in the NABU and SAP investigations. Due to their illegal activities, the state interests were damaged in the amount of more than 2.7 billion hryvnias. In the reporting period, the investigation of corruption at unique enterprises of the transport industry (SE "Seaports Administration of Ukraine", PJSC "Sea Trident", PJSC "Ukrzaliznytsia"), chemical industry
(PJSC "United Mining and Chemical Company"), energy (JSC "Kharkivoblenergo"), etc. Sufficient evidence has been gathered to draw up and send indictments to court. As a result, the National Bureau, as a pre-trial investigation body, has fulfilled its mission. Then - the word of the court, which must determine the degree of guilt of persons and sentence them to crimes. The NABU court ruling is an important precondition for compensating the state for corruption. After all, under these conditions, the confiscation of property seized during the pre-trial investigation becomes a reality. There are hundreds of plots of land and real estate, vehicles and more. The total value of these assets reaches over UAH 9 billion, of which about UAH 0.5 billion is in criminal proceedings in which an indictment has been drawn up [10]. (Fig. 7).
1000
153,3
213,2
100
10
first half of Second half of first half of 2018 Second half of first half of 2019 Second half of
2017 __2017 2018 2019
0,45 0,17 0,27
0,01
0,01
Source: [10]
losses —«—reimbursement
Fig. 7. Performance results NABU
1
The economy is a dynamic system that is constantly changing under the influence of certain factors. That is why for positive and qualitative dynamics it is necessary to minimize the impact of destabilizing factors.
Economic growth is the response of the economic system to positive influences and the transition to a higher stage of evolution. One of the main indicators of economic growth is the growth of absolute and relative indicators of real GDP. That is, a growing economy produces more and more goods and more services. This process is accompanied by the strengthening of the competitive advantages of the national economy on the
world stage.
In a study by the Office of Financial and Economic Analysis in the Verkhovna Rada of Ukraine (OFEA) to obtain an empirical assessment of the impact of corruption on economic growth, an empirical analysis of a sample of 145 countries analyzed data on two indicators: corruption perception index and GDP per capita (Fig.8).
In the world during the relevant period there was a direct relationship between CPI and GDP per capita -the higher the level of corruption, the lower the GDP.
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100
Fig.8. Correlation between GDP per person and the value of the CPI in the EU, 2019 Source: [22]
0
0
The study of the impact of corruption on GDP per person clearly shows the regional differences between countries. A similar situation is observed when assessing the interdependence between the level of corruption and two indicators such as life expectancy and literacy.
It is quite difficult to overthrow the corrupt elite and oligarchs from the top of the pyramid. However, it is possible to put an end to the destructive relationship between government, wealth and corruption by outlining the requirements of high standards of government accountability and an independent judiciary.
Corruption contributes to the following phenomena, which have a destructive burden on economic growth and, consequently, on economic development:
- loss of trust of economic entities and citizens in government structures;
- growth of the shadow economy sector, which contributes to the shortfall of the state budget in tax revenues;
- irrational use of budget funds in the current state budget deficit;
- loss of potential investors due to the inverse proportionality of the level of corruption to the level of attractiveness of the investment climate;
- non-fulfillment by the state, as an institution of the political system of society, of the functions assigned to it in full;
- distortion of property relations and fair distribution and redistribution of resources in society, which creates social inequality;
- negative impact on strategically important sectors of the economy such as medicine and education.
Conclusions and suggestions. Not to fight corruption means to support it, but given the devastating consequences of such inaction in all spheres of society, the problem of counteracting this "enemy" is in any
state. First of all, it is necessary to understand that anticorruption reforms are not just a process of concluding corrupt officials, because the latter will not change the system at all. This is a view into the "root" of the problem, which defines corruption as an acceptable norm, but as the basis for the formation of social, political and economic order.
Given the above, a number of measures are proposed to overcome corruption:
- limiting the opportunities for hidden government actions by demonopolizing the country's politics and economy;
- the active support of civil society by programmes for local authorities aimed at reducing the risks of corruption that arise during the decentralization reform;
- enhancing the virtue, independence and professionalism of the judicial system;
- speeding up the process of privatization, reforms of state-owned enterprises and developing a procedure for the verification of relevant draft laws to attract anti-monopoly assessment to prevent damage to competition for discriminatory norms.
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