(De)centralization of Corruption: Consequences for Private Sector

Student: Kochnev Roman

Supervisor: Leonid Polishchuk

Educational Programme: Joint HSE-NES Undergraduate Program in Economics (Bachelor)

Year of Graduation: 2016

This paper studies the negative effect of decentralized corruption on the total burden of bribes paid by firms to bureaucrats and quality of common goods and infrastructure provided by these bureaucrats to the firms in exchange for bribes. A theoretical model, which shows these effects, is developed in the paper. Also, an empirical analysis of 37 Russian regions based on the BEEPS data for 4,220 firms confirms the first hypothesis, while the effect on infrastructure is statistically significant for European regions only.

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