Рассадовская_резюме_ENG (Моделирование и оценки взаимосвязей между коррупционными ожиданиями, социальным капиталом и доверием в обществе)

National Research University Higher School of EconomicsRassadovskaia Anastasiia VyacheslavovnaRELATIONSHIP BETWEEN CORRUPTION EXPECTATIONS, SOCIALCAPITAL AND TRUST: MODELLING AND ESTIMATIONSPhD Dissertation Summaryfor the purpose of obtaining academic degreePhilosophy Doctor in Economics HSEAcademic supervisor:Candidate of Physical-Mathematical Sciences,Associate Professor Aistov Andrey ValentinovichJEL: C51, D73Moscow – 20182Problem descriptionThe term ‘corruption’ has a long history. According to several sources, itwas first mentioned by Aristotle, from Latin corruptus, past participle ofcorrumpere, to destroy. There is no doubt that abuse of official position forpersonal gain, actions of other economic agents related to this concept (forexample, bribe givers) and many other things that are included in the modernconcept of corruption, were known even before Aristotle, but these phenomenaremain relevant to study nowadays, minimizing their negative impacts.A lot of attention is paid to anti-corruption policy all over the world becauseof its long history and high influence on everyday life.

Nevertheless, according todifferent estimations of corruption level and its dynamics the problem remainsburning for most of countries. For example, in 2017 Russian Federation was at135st place of 180 in Corruption Perception Index rating, which is computed byTransparency International and grades countries by the level of cleanliness fromcorruption and by efficiency of anti-corruption measures. Anti-corruption policy isset in Russia not only by government, but also by non-governmental organizations.The national anti-corruption plan includes not only formal measures to strengthenmonitoring and control, but also an impact on ethical and moral norms.

Despiteseveral measures taken, a high level of corruption is observed in the country, andthe analysis of corruption relations and the reasons for their occurrence remainsrelevant to society.It is also worth mentioning that in latest years there has been a huge progressin cross-disciplinary investigations, where mathematical and instrumental methodsare applied to economic, psychological, political, institutional studies.In our opinion, the study of the relationship between corruptionexpectations, social capital and trust in society has both theoretical and appliedvalue. The scientific significance lies in expanding the prerequisites about thepossible motivation of economic agents to illegal activities in cases where they donot behave rationally.

From a practical point of view, the identified relationships3can be applied to the architecture of anti-corruption policies, using the opportunityto influence corruption expectations through social capital.Literature reviewThere are several ways of corruption research in the existing literature.Theoretical works usually model corruptive behavior of economic agents,empirical reveal regularities by countries, regions, forms of corruption.

Researchcan be devoted to anti-corruption policy, the causes of corruption and its outcomes.The experience of different countries in anti-corruption policy is presented,for example, in research of Izotova et al. (2017), Ageev, Kuzmenko (2016), Hutler,Shah (2000), Leak (1999), Meagher (2004). As usual, the severity of punishment,the state of economy and politics, cultural aspects are claimed to be the reason forfailure.The works of Okhotsky (2009), Galitsky, Levin (2008), Bystrova, Silvestros(2000), Luo (2006), Johnston (1986), Nye (1967) are devoted to social andpolitical consequences of corruption.

From the economic point of view corruptionoften touches upon welfare grouth, mainly by limiting the competition (Lopukhin(2010); Mauro (1995)), or, on the contrary, by giving opportunities for optimisingeconomic interactions when formal institutions happen to be ineffective (Levin(2008); Ahlin, Pang (2008); Méndez, Sepúlveda (2006); Leff (1964)).Mathematical methods, for example game theory modelling, is often used formeasuring outcomes and in forcasting (Ahlin, Pang (2008); Levin, Ciric (1998);Ugolnitsky, Usov (2014)).

Expert assessments of losses from corruption arepresented, for example, in the report of INDEM (1998).Researchers claim that the reasons for corruption flourishing are thereadiness of formal institutions for the market economy that came after socialism,the openness of the economy (Treisman (2000), Levin, Satarov (2000), Varese(1997)), and cultural and religious factors (Porta et al. (1996)).

The link betweencorruption, trust and economic inequality, the level of social capital in post-sovietcountries are mentioned as well (Rothstein, Uslaner (2005), Rose-Ackerman(2001a)).4In empirical works researchers more and more often turn to individualsurveys of people or firms (Andrienko (2002); Svensson (2003)) becausecorruption happens to be highly latent and official statistics gives lower estimationsand no way to reveal the reasons for the phenomenon.

Macroeconomic phenomenaform because of individual actions, whereas individual opinions result from theidea of general corruption level.Cross-disciplinary approach in this field requires using formal mathematicalmethods and including in the models not only formal cost-benefit motivation, butalso personal or social factors. INDEM research that huge corruption is no more arational action, but mostly a social phenomenon explained for example by anomietheory of Durkheim. But in the existing research social aspects are usually includedin case studies, and these works lack formalization (Dasgupta (2000), Uslaner(2008)).It’s worth mentioning that both theoretical and empirical works lackexploring bribe giver behavior. However, in addition to extortion of a bribe by anofficial, corruption may take the form of bribery initiated by the bribe giver,therefore, it is necessary to pay attention to the analysis of her motivation.

Fromthis point of view, it is of interest to study not facts of corruption, but corruptionperceptions at the individual and public levels. An understanding of themechanisms of formation of corruption expectations and opportunities to influencethem is required.Objectives of the researchCorruption expectations are presented in this work by a formal indicator ofcorruption perceptions built on social surveys.

By corruption perceptions we meanindirect estimations. By corruption expectations we mean indirect estimationsbased on social surveys data.Social capital is presented in this work by formal quantitative indicatorsincluding trust evaluations. By social capital we mean the amount of links betweenmembers of the society and the result of interactions between them. According to5one of the approaches to social capital definition, it includes networks, norms andtrust.The aim of this research is to reveal at individual and group level therelationship between corruption expectations and social capital, including trust. Toapproach this goal the following objectives were achieved:1.

Empirical test of the hypotheses about relationship between corruptionperceptions and social capital on micro and macro data, using new regressionmodel specifications, that consider social capital as an explaining variable.2. Introducing the measure of social capital influence on the rate ofcorruption expectations diffusion, by suggesting the network empirical model thatcan be used in the lack of dynamic data.Methodology and main findingsIn the first chapter, based on the author’s review and analysis of existingresearch, the terminology is introduced, possible relations between the studiedobjects are examined, and hypotheses on the relationship between the perception ofcorruption by economic agents, social capital, and trust in society are suggested.The following statements about the relationship between corruption andsocial capital prevail in the literature: low trust in public systems is accompaniedby high levels of corruption; developed social ties with weak formal institutions,for example, in post-socialist countries, contribute to the growth of corruption;interpersonal and public trust have different relationship with the level ofcorruption expectations.However, there are works that have different results, for example, there areno definitive conclusions about the relationship between horizontal trust andcorruption.

In addition, in existing studies, the relationship between corruption andsocial capital is mainly studied in case studies or macroeconomic research, whilelittle attention is paid to microdata. A relatively small amount of research has beencarried out on Russian data. The lack of attention to microdata also leads to the fact6that the behavior of the briber, particularly her corruption expectations, is weaklystudied.The review of the literature suggests that the issue of the motivation for theparticipation of economic agents in corruption lacks significant research, which, inthe context of an active fight against corruption in Russia, indicates the relevanceof this study.In the present work, based on the studied literature and considering thepoints of view missing in it, the following hypotheses are put forward.1. Social capital indicators have significant relationship with corruptionexpectations.