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t t- 1 Baltic Journal of Economic Studies Vol. 5, No. 1, 2019---
DOI: https://doi.org/10.30525/2256-0742/2019-5-1-201-206
THEORETICAL ASPECTS OF THE TRANSFORMATION OF THE INSTITUTE OF CORRUPTION IN EASTERN EUROPE
Maryna Skoryk1
Abstract. The purpose of the article is to substantiate the essence and structure of corruption as a separate institution in an institutional environment that has a deviant, anti-social orientation. To describe the influence of informal institutions on corruption in Ukraine. To propose constructive proposals for the use in domestic practice regarding the mechanism of overcoming corruption, which in the future will bring Ukraine to sustainable economic development. Methodology. The study we conducted is based on a systematic method that considers all elements of corruption in unity and development. The research used the following general scientific methods of scientific knowledge, namely: the method of analysis (means of combating corruption); synthesis (generalization of the main causes of corruption in Ukraine); method of induction (the impact of corruption on society); the method of hypotheses (when building a mechanism for overcoming corruption); and empirical method (own observations of the author on the situation in the state). Results. Corruption in Eastern Europe is a consequence of the spiritual, economic, and political crisis of society. Corruption demoralizes citizens and destroys their trust in the state. The mechanism of overcoming corruption is considered from the standpoint of neo-institutionalism. The author stresses that corruption is an informal institution. The system will start to change after the state's economic development, and the main condition is the promotion of culture, which makes it impossible for an institution to be corrupt. To act and start such propaganda should be the education of future generations. Investing in education will raise its level, give a new class of professionals who will go to work in private business and government. Worthy wages will make you think about the desire for easy profit. The author conducts a qualitative analysis of corruption through methodological tools of neo-institutionalism. It is proved that the fight against corruption at all levels exists as a complex hybrid of institutional mechanisms of regulation, the impact of which primarily affects informal institutions, and then formal ones. For example, the purpose of a bribe is to obtain a profitable contract. A bribe is an informal institution that is an agreement between an official and a citizen. But a contract signed with a bribe is a formal document (legal). As a result of such corruption actions, formal institutions are not violated but act as a means of implementing informal arrangements. Practical implications. Taking into account the historical, economic, and mental component of Eastern European countries, analysing the foreign experience of the countries, the formation of a national idea in the subconscious of the society, which will be aimed at building the state, should come to the fore. It is necessary to break down stereotypes, raise confidence in power and law. Such measures are possible only through the reform of education, the upbringing of young people in the personal negative attitudes to corruption. An active civil society that supports various strategies aimed at reducing corruption. Sanctions are important, so punishing corrupt officials is an important part of any effective anti-corruption effort. Therefore, the Criminal Code of the country should clearly indicate the responsibility for any manifestation of corruption. The mass media must conduct a serious information company: report on detention and investigation and display social advertising (not as a part of a political advertisement). Value/originality. The influence of informal institutes on corruption in the eastern part of Europe is substantiated and the mechanism of its overcoming is proposed, the use of which will ensure the gradual economic development of the state.
Key words: corruption, shadow economy, neo-institutionalism, deformation, formal institute, informal rules. JEL Classification: A13, B52, H70, E60, E71, 128
Corresponding author:
1 University of the State Fiscal Service of Ukraine, Ukraine. E-mail: maryna_sk@ukr.net
1. Introduction
The scale of corruption is striking. Corruption in the eastern part of Europe has already reached its peak, along with ordinary goods and services the population already sells everything that, in the sense of Europeans living in the Western part of Europe, cannot be sold at all. That is, in the countries of Eastern Europe, it is easy to buy a post, a diploma of higher education, a reward, honour, a human body, a state secret, etc.
In real life, corruption is manifested through various kinds of bribes such as: "extortion," "gifts," "hospitality," "kickback." And they are guilty of a situation that has developed, such as the one who takes, and the one who gives.
Corruption is truly a global problem, in his essay on the fight against corruption in Estonia, Mart Laar claims that corruption has been so rooted that it has become a way of life. He writes: "We did not even realize that this is not normal" (Mart Laar, 2016). Such a characteristic clearly corresponds to the situation in Ukraine. That is, corruption has already gone beyond understanding it as a part of a "shadow economy" and an economic phenomenon.
For example, according to the Corruption Perceptions Index in 2017, Ukraine has improved its situation in the provinces by 2012 in four positions and has 30 points out of 100 (Ofitsiinyi sait Transparency International, 2018). That is, Ukraine is on the right track. However, corruption in Ukraine is already a universally accepted norm of the behaviour of a society that has its institutional structure, which is why it does not cause social protest.
D. North is a classic who first isolated informal institutes in the general system of institutions. His non-institutional theory demonstrates the overcoming of the limitations of the classical institutional approach, and the study of informal, "shadow" illegal institutions that significantly affect the stability of the entire institutional system (Kushnarov, 2017) is included in the institutional analysis. V. O. Mandibura explores the institutional essence and mechanism for overcoming corruption, E. V. Nevmerizhitsky regards corruption as a socio-political phenomenon. Instead, other scholars will discuss this topic in the context of general research on manifestations and the fight against corruption.
Thus, from the point of view of neo-institutionalism, scholars have conducted a non-complete study of corruption as an informal institution. This fact confirms the relevance of our research.
2. Methodological approaches to the study of corruption
as an institution of anti-social conjecture
For a clear mechanism of corruption overcoming, it should be clearly defined, taking into account a wide range of factors of influence on its occurrence.
The studies we conducted confirmed the fact that today scientists have not yet formed the general definition of "corruption." In the process of research, scholars focus on the scale of corruption, on improving law enforcement, on improving penalties for committing corruption. However, they do not pay attention to the motivating motives, to the very desire for profit with the use of their official powers.
According to V. Mandybura, "corruption is a complex systemic institute with an exclusively anti-social orientation" (Mandybura, 2017). The generally recognized definition of corruption belongs to Professor C. Friedrich: "Corruption is a behaviour associated with a certain motivation, in particular, with the personal gain on a public account" (Revak, 2011). "Corruption is not only certain acts but also a system of negative attitudes, beliefs, guides, a way of thinking" (Nevmerzhitsky,
1999), that is, corruption is also a psychological and moral phenomenon. It cannot exist without people. Corruption has an impact on the economy, politics, the ideology of the nation, and so on.
In confirmation of the use of the methodology of neo-institutionalism for the analysis of corruption as an institution, it is necessary to give a description of the very notion of "institution," from the informal point of view.
According to D. North, "the institution is the rules of the game, consisting of official written rules, as well as, usually, unwritten codes of conduct that go beyond the formal rules and complement them" (North,
2000). That is, corruption acts as an institution in the institutional environment and is influenced by formal (written "rules of the game": laws, Constitution) and informal rules ("unwritten rules of the game": customs, traditions).
D. North's neo-institutional theory changes the classical institutional approach and adds to the institutional analysis the study of informal institutions that, in one way or another, have a significant influence on the functioning of the institutional environment.
G. Helmke and S. Levitsky point out that "informal institutions are social rules commonly written, created and executed outside officially authorized channels" (Helmke, Levitsky, 2007). That is, corruption can be considered one ofthe varieties ofthe informal institution. Changes in informal institutions are relatively slow.
O. Stoiko stressed that "informal institutions should not be considered as a threat to democratization," the scientist substantiates his position that "informal institutions change, weaken, and ruin the rules underlying formal institutions" (Stoiko, 2016).
We distinguish the main approaches to the concept of "corruption as an informal institution": scientific-theoretical, practical-applied, ethical, neo-institutional, and integrated.
We believe that from the point of view of the scientific and theoretical approach, corruption as an
informal institution should be considered as a social phenomenon that reflects the real situation in the state. That is, to conduct research on the influence of informal rules of conduct on the formal. With regard to the practical application, the developed mechanism to overcome corruption should be respected. Scientists should work to improve and eliminate contradictions in legislation. Transparency International's organization in the corruption investigation also uses the "ethical approach" with which one cannot but agree. In society, ethical rules of conduct must act.
From the point of view of the neo-institutional approach, corruption can be considered a kind of informal institute as acting contrary to the public interest in order to secure its own.
An integrated approach means that this problem has an interdisciplinary character.
The author's position is that the main attention of researchers should be focused on what prompts a person to commit such actions.
The Institute of Corruption as a specific institution with an absolute anti-social orientation has already gone far beyond the boundaries of the interaction of common market institutions. It is constantly parasitizing in the system of providing public services, and also present at the redistribution of public goods.
3. The reasons for the increase in corruption in the eastern part of Europe
According to the author, the main reasons for the high level of corruption in the eastern part of Europe:
The lack of trust in public institutions in the people. On the one hand, we are paternalistic enough (we expect the state to solve our problems), but when it comes to the state, we do not trust it.
Mentality "displays the historical process in the public consciousness, preserves the genetic code of the people, gives a sense of identity that determines a certain political and everyday behaviour. A significant part of the researchers almost unanimously gives some basic interrelated features of the traditional political mentality of in the eastern part of Europe society, namely: existential individualism, self-centeredness, introversiveness (the orientation of the psyche to the inner world), conservatism, social egalitarianism (aspiration for social equality), escapism (striving for illusory dreams), community-centeredness, provinciality, anarchy, general apoliticality. For example, Ukrainians are individualists, egoists. What does folklore say: "I have my hut at the end of the village, I do not know anything." Historically, Ukrainians belong to introverts, which are oppositional to any government. (Mykhnenko, 2013).
the absence of a national idea, ideology. We live in difficult times, in times of violent reform and military action. The population does not feel confident in
the future. Citizens should find something common, common principles of life, economic attitudes, social, political and spiritual principles of cooperation of each with all for the sake of overall progress. A key element of the ideological system is the national idea; indifference to society. This problem can be solved by patriotism (an integral part of the consciousness of each citizen). Before you blame the state for all your sins, you should think about what you have done in order to have a better life in our country? But on patriotism only you will not live, you need a material incentive to action; business-political relations (lobbying of own interests in legislative documents);
ineffectiveness of the principles of the rule of law (impunity of illegal actions of officials), delaying the reform of the judicial system, analysts called the system of justice in Ukraine "rotten to the core" and complained about the political pressure on the judges (The Bleyzer Foundation 2016), ignorance and misunderstanding of the laws by the population; excessive tax and customs pressure on enterprises; partial transparency of operations and management decisions occurring within institutions and departments; confusion and incomprehensibility of the legislation in the Slavic countries of Eastern Europe; low wages and a correspondingly low standard of living of persons authorized to vest the functions of the state; high prices for goods and services.
According to the mentioned problems, three levels of corruption have already been clearly defined in Eastern Europe: political (distorting state decisions, leading to bad laws and distrusting people to the state), corruption is widespread in the interaction between business and government (market mechanisms do not function properly, no fair competition and lack of consumer protection); Daily bribes are a common occurrence (they often facilitate daily operations, for example, when a bribe helps to get certain goods or services cheaper or faster. In other cases, they take the form of extortion, for example, by the local business administrations (The Bleyzer Foundation, 2016).
According to the above reasons of corruption, it becomes clear that in the countries of Eastern Europe, and especially in the Slavic part of it, the action of informal institutions has a significant influence over formal. And with the aim of building an economically developed state, this should be taken into account in the first place.
4. The mechanism of overcoming corruption on the example of one of the countries of Eastern Europe
Ukraine is now on the path of reform, so we consider it expedient to study the mechanism of combating corruption on its example. In turn, the country's leadership rapidly implemented complex organization -
Figure 1. The system of the internal institutional environment of the mechanism of overcoming corruption
legal measures (adopted in 2014 the Law of Ukraine "On Prevention of Corruption" in 2018 the Cabinet of Ministers of Ukraine introduced to the Verkhovna Rada of Ukraine the Law of Ukraine "On Anti-Corruption Strategy for 2018-2020").
To date, the following institutions have been operating in Ukraine to fight corruption: the National Agency for the Prevention of Corruption (monitoring life of civil servants on the basis of their declarations); National Anti-Corruption Bureau of Ukraine (prepares cases for investigation of corruption crimes but does not deal with administrative offenses); National Agency of Ukraine for Detection, Investigation and Asset Management of Corruption and Other Crimes, Specialized AntiCorruption Prosecutor's Office. At the legislative level, issues of coordination of activities and interaction of the entire system of state anti-corruption bodies are still not coordinated.
According to the author, in the fight against corruption, various mechanisms can be used. However, administrative and non-punitive actions should play a leading role. The focus should be on economic, legal, financial, organizational measures that will allow the state to prevent and eradicate corruption.
Aspects of influence (social: poverty, migration, economic: shadow economy, power: the influence of the rich population on the formation of government, political: legal reprisal against political opponents, international: negative impact on the international image of the country and loss of investment) have directly proportional effect on the institutional maintenance of the mechanism ofthe internal institutional environment,
directly affect the components of the subsystem, whose activities are carried out both in accordance with formal rules and informal. The study of the actions of informal rules is the cornerstone of the fight against corruption. The institutional environment of corruption is the place where corruption is taking place.
The mechanism of overcoming corruption will be effective in combining the challenges of society and the intentions of the state authorities to satisfy the desire of society. The author shares the opinion of V. Mandybura that: "The state must abandon a purely forceful approach and unjustified cruelty of punishment since historical experience has shown that unlawful strengthening of punishment for bribery can only increase the 'quality' of corruption conspiracy and scale up bribes" (Mandybura, 2017). According to the author, we will not be able to eradicate corruption quickly. The state is people. It is necessary to change the views of society towards the problem, and mental differences and morality add to their peculiarity.
Given our historical roots, mentality, we should begin with the formation of a new elite, that is, to introduce harsh measures in education. Educational reform will give us young, intelligent, creative people who will not allow corruption to develop. The next step should be to maximize the simplification of the current legislation, filling the existing gaps in it. It is also necessary to eliminate unnecessary supervisory authorities and licensing procedures (to make everything as transparent as possible).
Salaries for civil servants should be raised to such an extent that workers are afraid of losing their j obs (one of the
most important factors preventing the spread of corruption in Finland is the high material and social security of officials (official web Corrupt.ua, 2018)). In addition to raising wages, ensure a high level of responsibility.
To overcome political corruption - the abolition of parliamentary immunity is required.
The government must adhere to the anti-corruption strategy ofthe state, and state anti-corruption authorities must clearly delineate their functions and powers, remove duplication. An independent anticorruption court must act in Ukraine.
As an example of the fight against corruption in Georgia, one should conduct anticorruption propaganda (creative advertising in the media, showing arrests), this move will add a positive image to law enforcement.
5. Conclusions
Summing up the above, we can conclude that in the economic conditions in which a part of Eastern Europe finds itself today, the interaction of institutional mechanisms to combat corruption in the transition towards intensification of informal rules. Informal institutes compete with the formal, displacing the latter. In our opinion, precisely neo-institutionalism is the best methodology for analysing corruption in the state. The current analysis of corruption should start from the middle of the institute because corruption occurs precisely in the institutional environment.
Corruption in the country can be overcome but a prerequisite for this is the political will and support. First of all, it is necessary to intensify all efforts to form a national idea and popularize it among society, stereotypes must be broken. Society must have faith in a safe future.
According to the author, priority steps in the fight against corruption are:
reform of education, i.e. education of a new elite (formation of a general negative attitude and personal rejection of corruption, an increase of wages both for employees of secondary and higher schools); civil service reform (high and clearly regulated wages, without the use of manipulations with bonuses); clear regulation according to the Criminal Code of Responsibility for Every Kind of Corrupt acts and
judicial penalties (dismissal, fines, deprivation of liberty, deprivation of payment of a state pension); annual control of property, assets and debts, the disclosure of declarations of subjects of power authorities, civil servants, etc.;
the ban on financing election campaigns, political parties and other political organizations of oligarchs (strict order of financial statements); holding information companies on a permanent basis to eliminate tolerant attitude towards corruption, namely: firstly, popularization of the fight against corruptors (involving specialists in the spheres of jurisprudence, pedagogy, psychology, PR-technologies), and secondly, social advertising (public awareness of detection of corruption and discussion of consequences -punishment for corruption actions). These actions will contribute to the formation of corruption awareness about the dangerous impact of corruption on the development of society. Thirdly, the mandatory investigation of each media report on corruption cases and the corresponding invoice notification of the investigation authorities about the results of the investigation.
the development of a network of centres for free legal anticorruption assistance, the creation of anticorruption receptions and direct telephones of trust, wide involvement of Internet resources where everyone will be able to offer their own vision of anti-corruption measures in state institutions (on the example of the Public Organization of the All-Ukrainian Centre for Combating Corruption and Assistance to Law Enforcement Agencies);
complete informatisation of public life, namely: firstly, in the free access information, for registered citizens on the site, about tax revenues, the receipt of funds from international organizations, and where these funds have been distributed, etc., and secondly, electronic queues and applications for state certificates, licenses, visits to family doctors, etc. (transparency principle).
For running the reforms, they need more reformers to change all spheres of public life (in the first place, education). Perhaps, to achieve this goal, one should abandon the democratic principles of the exercise of power and use the authority of the leader.
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