Anticorruption in transition 3 who is succeeding and why
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Anticorruption in Transition 3 – Who is Succeeding … And Why?. World Bank, November 2006. www.worldbank.org/eca/act3. The Big Questions. Is corruption in Eastern Europe and the former Soviet Union – including Moldova – getting better or worse? What explains the changes?.

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Anticorruption in Transition 3 – Who is Succeeding … And Why?

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Anticorruption in transition 3 who is succeeding and why

Anticorruption in Transition 3 – Who is Succeeding … And Why?

World Bank, November 2006

www.worldbank.org/eca/act3


The big questions

The Big Questions

Is corruption in Eastern Europe and the former Soviet Union

– including Moldova –

getting better or worse?

What explains the changes?


Anticorruption in transition 3 who is succeeding and why

A Tool for Monitoring Corruption

“Business Environment and

Enterprise Performance Survey” (BEEPS)

  • Joint initiative with EBRD

  • 20,000 firms in 3 rounds (1999, 2002, 2005)

  • 26 transition countries

  • 6 European comparators in ‘05: Ireland, Germany, Greece, Portugal, Spain, Turkey (+ Korea and Vietnam)

  • Focus on corruption in enterprise-state interactions


Corruption indicators used in beeps

Corruption Indicators used in BEEPS

  • Frequency of bribery

    • Tax

    • Customs

    • Business Licensing

    • Procurement

    • Judiciary

  • Bribe “tax”

  • State capture

  • Corruption as a problem for business


Is corruption getting better or worse

Is corruption getting better or worse?

…and how do transition countries compare with European comparators?


Corruption is falling for the region as a whole though not yet to w europe levels

Corruption is falling for the region as a whole(though not yet to W. Europe levels)…

Source: Anticorruption in Transition 3 – Who is Succeeding … and Why?


But not in all countries

… but not in all countries …

Bribe Frequency by country, 2002-2005

Source: Anticorruption in Transition 3 – Who is Succeeding … and Why?


And not in all sectors

… and not in all sectors.

Bribe Frequency by sector, 2002-2005

Source: Anticorruption in Transition 3 – Who is Succeeding … and Why?


Many moldovan firms see corruption as a problem for business but fewer than in 2005

Many Moldovan firms see corruption as a problem for business…but fewer than in 2005.

Source: Anticorruption in Transition 3 – Who is Succeeding … and Why?


Moldovan firms report the highest levels of corruption in the following areas

Moldovan firms report the highest levels of corruption in the following areas:

  • Customs(improving but still high)

  • Business licensing(no change over 3 years)

  • Tax(major improvement but still significant)

  • Government procurement(rising)

    …and state capture is still relatively high in Moldova and other SEE countries.


New private firms continue to pay the most bribes

New private firms continue to pay the most bribes.

Source: Anticorruption in Transition 3 – Who is Succeeding … and Why?


Why the improvement in eca

Why the improvement in ECA?


A tool for monitoring policies and institutions

“Doing Business”

Survey of accountants and lawyers on time and cost of:

Starting a business

Dealing with licenses

Hiring and firing

Registering property

Getting credit

Protecting investors

Paying taxes

Trading across borders

Enforcing contracts

Closing a business

A Tool for Monitoring Policies and Institutions


Transition countries lead the world in business friendly policy reforms

Transition countries lead the world in business-friendly policy reforms…

Source: Doing Business in 2007


3 of the top 10 reformers in 2005 were in eca

3 of the top 10 reformers in 2005 were in ECA…

1. Georgia

2. Romania

3. Mexico

4. China

5. Peru

6. France

7. Croatia

8.Guatemala

9. Ghana

10. Tanzania

Source: Doing Business, 2007


And reforms are in many areas

… and reforms are in many areas.

  • Tax

    • Low rate, broad based taxes (e.g. Baltics and Slovakia)

  • Customs

    • IT, risk-weighted inspections (SE Europe)

  • Regulatoryenvironment

    • deregulation; less frequent inspections (Georgia)

  • Courts

    • independence, efficiency, transparency (Romania)

  • Procurement

    • transparency and capacity-building (Poland)


However the ease of doing business still varies widely among countries

However, the ease of doing business still varies widely among countries.

Lithuania 16

Source: Doing Business in 2007


Moldova ranks well in a few policy areas but not most note lower score is better

Moldova ranks well in a fewpolicy areas but not most…[note: lower score is better]

Source: Doing Business in 2007


And some progress has been made in addressing accountability and transparency

… and some progress has been made in addressing accountability and transparency.

Source: World Bank project on Actionable Indicators; update of Dorhoi (2005)


What motivates change

What motivates change?


The carrot of eu accession has been a strong motivator of reform

The “carrot” of EU Accession has been a strong motivator of reform.

Source: Anticorruption in Transition 3 – Who is Succeeding … and Why?; based on the Anticorruption Assessment Index in Dorhoi (2005).


Anticorruption in transition 3 who is succeeding and why

Most importantly, every country that has made significant progress has hadstrong and committed leadership.


To summarize

To summarize

  • Corruption in enterprise-state relations is falling in many transition countries...including Moldova.

    • but wide variation among sectors

  • Policy and institutional reforms matter.

    • Customs, business licensing, taxation, and public procurement are some key areas for Moldova

  • Strong leadership is essential, and countries need to continue their efforts.

    • Still a distance from EU norms

    • Complacency is not an option in today’s globalized world


Anticorruption in transition 3 who is succeeding and why1

Anticorruption in Transition 3:Who is Succeeding … And Why?

www.worldbank.org/eca/act3

For more information on

economic policy and governance:

www.worldbank.org/eca/econ


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