Rusted Justice

For this article, from the many definitions of corruption, it is enough to choose one, in some sense reminiscent of the arithmetic mean: we will call corruption the unauthorized actions of officials aimed at obtaining their own benefit and relying on the resources and powers granted to him by his position. Clearly, this definition is incomplete because it treats corruption as a type of individual action. The actions of the other party, if any, the bribe-giver, are not considered. Corruption interactions and relationships, corruption relationships and behavioral strategies, corruption as a property of institutions, communities and societies are not considered. However, when measuring corruption using sociological surveys and, if necessary, finding a common language with respondents on this matter, one has to use the most common definitions, which are obviously limited by common sense and generally accepted interpretation. This is exactly the interpretation used above.

From the perspective of this definition, let us consider corruption in Russian courts. The analysis will be based on data from two studies conducted by the INDEM Foundation. The first, “Diagnostics of Russian corruption: sociological analysis” [1] , was carried out in 2000–2001. It included in-depth interviews with experts, excerpts from which will be used below, and two sociological surveys on a sample of citizens (2,017 respondents) and entrepreneurs (709 respondents). The second - “Regional Corruption Indices” - was carried out jointly with the Center for Anti-Corruption Initiatives TI-Russia in 2002 [2] and covered 40 Russian regions, in each of which two samples of citizens and entrepreneurs were built, sufficient for a statistically correct comparison of regions with each other by the level and structure of corruption; In total, this study covered 5,666 citizens and 1,838 entrepreneurs. In addition, data from the World Bank’s Business Environment and Enterprise Performance Survey (BEEPS) will be used for analysis. [3] .

The choice of topic is determined by the importance of the institution of the judiciary in the implementation of reforms and its vulnerability. The importance of the judiciary in the transitional period is determined by the fact that it is called upon to perform two fundamental functions in a transitional society. The first, traditional, is associated with the position of the judiciary at the top of the legal pyramid. And the second is generated by the legacy of the period of authoritarian rule, based not on law, but on the myth of monopoly justice, personified by a monarch, dictator or “party”. The destruction of the old regime is associated with the destruction of the institutional foundations of justice familiar to citizens. The only institution capable of taking on this function is the court.

But in authoritarian and totalitarian regimes, the court is a subordinate, dependent structure, with which citizens do not associate either the concept of law or the concept of justice. It is no coincidence, for example, that the concept of law in the USSR was identified with the prosecutor's office, and the concept of justice with party organizations. This led to the fact that the practice of judicial protection of their rights was minimal. Therefore, during the transition period, it is difficult for the judicial system to find its place in the legal protection system. But if the court is also corrupt, then citizens are simultaneously deprived of both a nascent system of legal protection and a dying system of justice.

The role of the court in the functioning of a market economy deserves special mention. It is the court that is called upon to perform two fundamental functions on behalf of the state - the protection of private property and the enforcement of contracts. A corrupt court cannot adequately protect private property. As a result, the emerging market economy is deprived of its institutional foundation, without which its development is doomed.

Thus, the court turns out to be that critical zone of reforms, on the functioning of which the basic functions of society depend: the provision of material goods, which must be carried out by the economy, and the provision of legal social order. However, at the same time, the court becomes the target of a corruption attack.

In this article we will look at corruption in courts from three sides. The first is corruption in courts as a type of everyday corruption; the second is corruption in courts as part of business corruption; the third is corruption in the courts as a transit factor.

Corruption in courts as part of everyday corruption

In accordance with the strategies implemented in the two sociological studies mentioned above, we will characterize corruption in courts based on the practices of citizens and their assessments. Moreover, in the case of everyday corruption, we will have the opportunity to assess the dynamics. It is these data on various characteristics of corruption practices that are reflected in Table. 1 (the values ​​of the characteristic and the corresponding rank are given in the form of the proportion of everyday situations in which corruption is higher than in the courts).

Table 1

Characteristics of the practice of everyday corruption in Russian courts

in 2001* and 2002**

Characteristic	2001 Meaning	2001 Rank	2002 Meaning	2002 Rank
Demand for services (share of citizens, who applied to this type public services throughout the year)	14,5	0,875	13,8	0,933
Corruption risk (the likelihood that, once to the public services market, respondent will end up in a corrupt situation)	0,262	0,500	0,472	0,200
Structure (share of all corrupt transactions in this market public services)	3,1	0,563	3,8	0,533
Demand for corruption (the probability that, finding yourself in a corrupt situation in this market of public services, the respondent will agree to a corrupt deal)	0,594	0,813	0,628	0,867
Intensity (average number of tricks, given by respondents at this public services market)	0,683	0,938	0,93	1,000
Bribe price (average bribe value in this market of government service, in rubles)	13964	0,000	11923	0,000
Market size (minimum estimate total amount of bribes paid in this market of public services, in millions of dollars)	274,5	0,250	512,0	0,400

*According to the study “Diagnostics of Russian Corruption”.

**According to the study “Regional Corruption Indices”.

We see that everyday corruption in the courts is consistently characterized by a very high level of bribes (about ten times more than in the traffic police) and the lowest intensity, which is not surprising given such large bribes. Only wealthy citizens can afford the luxury of resorting to Russian justice. As for the dynamics of this type of corruption, it is clearly visible that it is realized due to an increase in the risk of corruption and the increasing intensity associated with this, as well as due to an increased willingness to give bribes. In addition, the proportion of citizens involved in corruption in general has increased slightly. As a result, we see that over the year, corruption in the courts, expressed in the annual volume of the corruption market, increased by 87 percent.

The situation in Russian courts identified in the characteristics of corruption practices is reflected in respondents’ assessments of this situation. In table Table 2 shows the frequency of responses of citizen respondents to the question in the research questionnaire “Diagnostics of Russian corruption”.

Table 2

Question: “There are different opinions about our judicial system,

our judges. How would you evaluate the following statements in this regard?

No	Judgment	Agree	I don't agree	I'm at a loss answer
1	Our judges are poorly protected; they receive small salary, so some they start taking bribes	46,0	36,3	17,1
2	He often wins in our courts It's up to whoever pays the most.	75,0	12,4	12,2
3	Finally we have independents courts and a normal judicial system.	10,1	63,3	26,2
4	Very often some boss may prompt the judge to accept the right solution.	64,8	13,8	21,0
5	Now a citizen can come to court and protect your rights, find justice.	17,1	61,2	21,4
6	Our judges have such an inviolable confidence that they can do anything and with complete impunity	39,2	32,8	27,6
7	Many people don't want to go to court because they don't expect to find there is justice.	78,6	10,6	10,4
8	Many people don't want to go to court because unofficial ones are too expensive expenses.	72,2	11,2	16,3
9	The judges are too unqualified to solve problems competently	23,2	38,0	38,5

The data obtained is a verdict on Russian justice: almost 80 percent of respondents do not expect to find justice there. Additional analysis (using contingency tables [4] ) shows that this belief is based mainly on ideas expressed by two versions of the same question: “In our courts, the one who pays the most often wins the case” (contingency coefficient j is equal to 0.860) and “Many people do not want to go to court because unofficial costs are too expensive” (contingency coefficient j is 0.902); that is, the hopelessness of seeking justice in court is determined almost entirely by the corruption of the courts in the perceptions of citizens. During the year, about 15 percent of respondents go to court. And more than 27 percent say they felt the need to go to court in the past two years but did not do so. That is, we can say that of those who are faced with the need to go to court, only half proceed to practical action. Despite the substantial amount of bribes, it turns out that it is not the respondents’ income that influences their refusal to seek justice. A more significant contribution to such a decision is made by negative attitudes towards the judicial system. It is no coincidence that according to the results of a comparative assessment by respondents of the corruption of various everyday situations, the courts occupy an honorable second place, second only to the traffic police. Thus, the corruption of justice in Russia infringes on the constitutional right of citizens to judicial protection of their rights.

Corruption in the courts

as part of business corruption

Table 3

Question: “There are different opinions about our judicial system,

our judges. How would you evaluate the following statements in this regard?

№ n/p	Judgment	Citizens	Entrepreneurs
1	Our judges are poorly protected; they receive small salary, so some They start taking bribes from them.	46,0	51,9
2	In our courts, the one who often wins the case is the one who will pay the most?	75,0	71,2
3	We finally have independent courts. and a normal judicial system.	10,1	8,6
4	Very often some boss can induce the judge to make the necessary decision.	64,8	65,4
5	Now a citizen can come to court and protect your rights, find justice.	17,1	17,5
6	Our judges have this immunity, what they can do anything and with complete impunity.	39,2	29,1
7	Many people do not want to go to court because do not expect to find justice there.	78,6	80,5
8	Many people do not want to go to court because unofficial costs are too expensive.	72,2	26,1
9	The judges are too unqualified to solve cases competently.	23,2	26,1

Let's begin our analysis by comparing the assessments of the judicial system by citizens and entrepreneurs who also answered the question presented in table. 2 . The results of this comparison are given in table. 3 (frequency of responses from citizen respondents and entrepreneurial respondents to the survey question “Diagnostics of Russian Corruption”; percentages of “Agree” responses are shown).

A comparison of the responses of citizens and entrepreneurs reveals both striking similarities and differences. Let's focus on the latter. The most significant difference in opinions is found in answer 8 about the amount of a bribe in court as a reason for refusing to go to court. It is not surprising that entrepreneurs do not find the size of the bribe an obstacle, since they face the court as representatives of their companies, and therefore bribes for them are simply a type of transaction cost, which is then included in the price of goods or services. Thus, the burden of the corruption tax is transferred to consumers, mostly ordinary citizens. Another significant difference is the low assessment by entrepreneurs of the immunity of judges as a source of dysfunction in the judicial system. If we take into account that citizens do not consider this circumstance significant and that it is quite acceptable to regard our entrepreneurs as experts on the evils of the judicial system, then the fuss of the Russian authorities around limiting the independence of judges appears in a new light. If we talk about significant similarities, then the most important thing is in the unanimous assessment by citizens and entrepreneurs of the hopelessness of attempts to find justice in the courts.

In the surveys of the studies “Diagnostics of Russian Corruption: Sociological Analysis” and “Regional Corruption Indices”, entrepreneurs were asked the same question about the problems created by the authorities and hindering the development of their business. Using comparable methods, indices of the burdensomeness of these problems were constructed. In the table below . Figure 4 shows the ranks of these indices, which makes it possible to compare them with each other and over time. The lower the rank, the more burdensome the corresponding problem is for business development.

Table 4

Ranks of indices of problems created by government for business, determined

based on surveys conducted in 2001 and 2002

№ n/p	Problems	2001	2002
1	Excessive control	2	1
2	Overlicensing	5	3
3	Creation of tax and similar benefits for individual companies	15	8
4	Participation of officials in the struggle for property on the side of “their” companies	4	4
5	Participation of officials in the management of companies with shares of regional or municipal property	10	10
6	Participation in artificial bankruptcies	13	16
7	Creation of artificial monopolies for “our” firms	3	7
8	Poor protection of private property rights	1	2
9	Poor performance of arbitration courts	9	11
10	Poor performance of courts of general jurisdiction	11	12
11	Requests for non-statutory contributions into various funds created by the authorities	17	5
12	Officials forcing their people to work in company management	16	15
13	Protectionism for “our own” or controlled companies	6	9
14	The struggle of the authorities for blocking or controlling stakes	14	17
15	Private business in the region is run by officials or their relatives	7	6
16	Subordination of the authorities to large private businesses in the region	8	13
17	Pressure to choose the “right” suppliers or product customers	12	14

The most striking thing that this table reveals in relation to the problem we are studying is contained in lines numbered 8, 9 and 10. On the one hand, we see that “Poor protection of private property rights” is consistently considered by entrepreneurs to be one of the most painful problems. On the other hand, “Poor performance of the courts” burdens Russian businessmen to a much lesser extent. Meanwhile, it is the courts in a normally functioning state that must ensure effective protection of private property. This paradox may have several explanations. Here are some of them.

First. Problems with private property are associated not with protection, but with an attack on this property by criminal competitors or officials encroaching on extra-legal control over a successful business. The last strategy of the bureaucracy forms an independent type of corruption, called “business capture” [5] . This trend, which began during the Yeltsin era, has intensified in recent years. It was colorfully described by our experts whom we interviewed in the study “Diagnostics of Russian Corruption: Sociological Analysis.” Here is just one of the fragments:

Now you can do anything you want with your business, because there is a court decision. There are even a dozen court decisions that say that the Gamma group was wrong in buying up this plant. There are a dozen decisions of other courts that say that the Gamma group is wrong, because, unfortunately, court decisions are inexpensive. In addition to the regional arbitration court, which, with rare exceptions, is subject to the decisions of the governor, there is always a district arbitration court, subordinate to the one who pays the most. Above the District Arbitration Court is the Supreme Arbitration Court. And in the Supreme Arbitration Court there are an awful lot of deputies from whom, even before the decision of the Supreme Arbitration Court, you can buy this or that decision with money, for example, suspending the decision of another court. Moreover, it must be emphasized that when you buy with money, you are not necessarily buying an unjust decision, you can buy a decree that stops the action of the unjust decision.

Moreover, in addition to arbitration courts, unfortunately, the practice of civil courts has spread. Some Verkh-Isetsky court or the court of Nizhny Volochok receives a lawsuit from a shareholder Pupkin, or Tyutkin, or Vaskin, who says: “You know, guys, an additional issue of the Nizhnemakhalsky Metallurgical Plant or an additional issue carried out by the FOCUS group of companies, carried out by Figanskneftegaz.” , violated my rights as a shareholder." And the court prohibits this additional issue or prohibits this or that decision of the board of directors based on the claim of shareholder Tyutkin, who owns one share. This technique opens up the widest scope for abuse, completely incomparable with the previous one.

Second. The court is not considered by entrepreneurs as an authority capable of significantly influencing the situation in the country, including somehow contributing to the protection of private property. This explanation is indirectly confirmed by the fact that, according to our calculations, the lion's share of bribes paid in the country falls on the executive branch. The courts receive less than one hundredth of what the executive branch receives in bribes. But bribes are paid to those on whom the fate of the business depends. This means that almost everything depends on the executive branch, and almost nothing on the judicial branch. This explanation seems very plausible. Consequently, a corrupt judiciary reduces not only its effectiveness but also its influence.

Courts as a target of state capture

At the beginning of the article it was stated that the courts are vulnerable to corruption attacks from business. The scientific literature discusses such a type of corruption as “state capture”. This term denotes corporate and individual business behavior strategies aimed at establishing shadow control over government decision-making, meaning both different branches of government and different levels of government (central, regional, etc.) [6] . Therefore, we can say that the courts are becoming targets of state capture by business. In the World Bank BEEPS study mentioned above, indices of state capture of various authorities were constructed based on the responses of business respondents, and from these indices a generalized state capture index was constructed for various transit countries.

In the study of the INDEM Foundation “Diversity of countries and diversity of corruption” [7], the variable “Transit Index” was constructed based on data from the following studies: “Index of Economic Freedom”, Heritage Foundation [8] ; “Aggregate Governance Indicators”, World Bank [9] ; "Nations in Transit", Freedom House [10] . As a result, an aggregated variable was obtained that took into account the level of formation of democratic political institutions and a market economy in 22 transit countries. Below is a diagram showing the relationship between the degree of transit and state capture.

This is a scatterplot of the transit index (horizontal axis; the higher the index value, the further the country has traveled along the transit path) and the state capture index (vertical axis; the higher the index value, the greater the corruption). Country points are marked with standard three-letter codes.

The diagram clearly demonstrates the non-linear statistical relationship between the degree of transit and the level of state capture. The explanation is quite transparent if you think about the dynamics of the growth of state capture and its components. The main necessary condition for the emergence of “state capture” as one of the business behavior strategies is the existence of this business, and an independent business, separated from the state. This means that state capture cannot occur in regimes with a centralized economy and state ownership of the means of production due to the absence of a subject of state capture. It follows that in the transit countries we studied, the level of state capture before the start of transit was zero. In the first stages of transit, the imperfections of legal and democratic institutions that must be built during the transit create incentives for businesses to seek solutions to their problems outside the legal framework. Thus, during the transit campaign, state capture may increase in the first stages. State capture depends on the policies of the state itself. Weakness of the state and slow and weak institutional reforms create the conditions for increasing state capture as business becomes stronger. State capture can decrease as the power and efficiency of government increases and institutional reforms are carried out, and also if the state begins to control big business, limiting it or simply preventing it from being created (more on this below).

Consequently, state capture is small in two situations: at the start of transit, when there is no one to capture the state, and at the late stage of transit, if business has no incentive for such a strategy, and the state helps it legally solve problems and does not create such problems in vain. We see this in the diagram in the part marked with curve 1. The second part of the diagram, marked with curve 2, indicates the action of another strategy belonging to the corrupt bureaucracy - “business capture”, which was already mentioned above.

In the scatter diagram, Russia is in the center of the configuration, in the zone of uncertainty, from which four trajectories are possible - to the lower left corner of the diagram, which corresponds to left revenge; to the upper left corner of the diagram, which corresponds to a complete victory of either state capture or business capture; or to the lower right corner of the diagram, which will mean successful completion of the transit. The measurement shown in the chart is for the period 1999–2000. Observation of the dynamics of the development of the situation shows that recent years have been accompanied by an intensification of business capture (as discussed above) and a change in the forms of state capture.

Let us now consider how state capture in the courts contributes to the overall state capture index. To do this, let us calculate the linear correlation coefficients between the specific characteristics of state capture and the general ones. The higher the correlation coefficient, the greater the contribution of a particular type of state capture to the general phenomenon. The results of such calculations are given in table. 5 .

Table 5

Linear correlation coefficients between the index

“state capture” and individual institutional components

this characteristic according to the study

Instruments of State Capture	Correlation
Legislatures	0,900
Presidential decrees or similar instruments	0,887
central bank	0,762
Courts of general jurisdiction	0,919
Funding of political parties	0,894
Commercial courts (arbitration)	0,940

It follows from the table that the largest contribution to “state capture” is made by the courts, with commercial courts leading by a wide margin. Interestingly, if instead of the “state capture” index we use the “TI Corruption Perceptions” index, then again the maximum correlation is achieved in the case of commercial courts. This confirms the thesis formulated above about the increased vulnerability of ships. The above analysis shows that as business grows in the transit process, the level of “state capture” increases, and within it the courts play a specific role and are the main target. It can be assumed that the importance of the courts and their increased vulnerability in the transit process are interconnected: if the courts do not fulfill the critical role assigned to them in the construction of a market economy, then businessmen begin to privately buy justice, which the state is obliged to provide to them.

Let's look at another set of characteristics that were measured in the BEEPS study. These are indices that, based on the responses of respondents, were built in order to identify various obstacles to business development caused by the dysfunctions of government institutions. The chart compares an index characterizing court dysfunction as an obstacle to business development and the level of state capture in commercial courts.

This is a scatterplot of the index of court dysfunction as business development (horizontal axis) and the index of state capture in commercial courts (vertical axis); The higher the index value, the greater the obstacle or corruption. Country points are marked with standard three-letter codes.

The diagram has a distinct triangular shape, indicating the presence of a statistical relationship of the type "General - Particular" or "Cause - Effect": poor functioning of the courts may or may not be accompanied by state capture in the courts. If state capture in commercial courts is high, then this is obviously a high obstacle to business development. In other words, the greater the state capture in the courts, the greater the obstacle to business development the courts are. As a result, a cycle is started that has the character of a generator with positive feedback. The development of business in the context of an inefficiently functioning state with a corrupt bureaucracy stimulates the growth of state capture, a significant part of which is concentrated in the courts. Increased state capture in the courts increases the level of power dysfunction, which in turn leads to increased state capture. The described cycle illustrates a well-known fact: corruption, left to its own devices, can only increase. The same applies to any of its particular varieties.

The growth of private types of corruption can be limited either by state policy aimed at limiting corruption in general, or by competition between different types of corruption. Currently, it is the court in Russia that is the battleground between two corruption strategies: state capture and business capture. Careful observation of the battle allows us to conclude: so far the advantage is on the side of the bureaucracy, which, after V. Putin came to the Kremlin, is trying to take revenge on all fronts. And first of all, its efforts are concentrated on obtaining the main prize - control over corrupt markets. A complete victory for the bureaucracy on this front will turn Russia into an ordinary kleptocracy.

Conclusion

As sociological studies show, corruption in courts is one of the most powerful corruption markets in Russia, which also has energetic negative dynamics. Corruption in the courts is embedded in various corruption networks operating at different levels of government. We can distinguish, for example, networks for the collapse of criminal cases and networks for intercepting someone else’s business (“hostile takeover”). Corruption in the courts is a consequence of the general increase in corruption generated by the transition period, and at the same time a factor contributing to the growth of corruption in the country.

Corruption in courts has a number of negative consequences. Of these, two main ones should be highlighted. Firstly, the growth of public distrust in government, the alienation of citizens from power, and the loss of faith in democratic principles. And, secondly, the lack of protection of private property and contract law, which should be provided by the judicial system, destroys the mechanisms of normal market competition and has an extremely negative impact on the Russian economy. The reduction in investment in the economy in conditions of political stability is a direct consequence of the corruption of the bureaucracy and especially the judicial system. There is no doubt that limiting corruption in the courts is one of the most important components of the state’s anti-corruption policy, should one ever appear, and an indispensable condition for the country’s exit from the corruption impasse that leads to vulgar kleptocracy and into which Russia is steadily being drawn at the moment.

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[1] Diagnosis of Russian corruption: sociological analysis // Corruption in Russia: to understand is to win. M.: Vagrius, 2003 ( in press ).

[3] Seize the State, Seize the Day: State Capture, Corruption, and Influence in Transition Economies (World Bank Policy Research Working Paper 2444) September 2000 • J. Hellman, G. Jones, and D. Kaufmann.

[4] Kendall MJ, Stewart A . Statistical inferences and connections. M.: Nauka, 1973.

[5] Satarov G. A., Parkhomenko S. A. Diversity of countries and diversity of corruption // Corruption in Russia: to understand is to win. Vagrius, 2003 ( in print M .: ).

[6] Seize the State, Seize the Day: State Capture, Corruption, and Influence in Transition Economies (World Bank Policy Research Working Paper 2444) September 2000. – J. Hellman, G. Jones, and D. Kaufmann

[7] Satarov G. A., Parkhomenko S. A. Decree. op.

[8] Materials from the Heritage Foundation on the official website www.heritage.org . Methodology: Factors of the Index of Economic Freedom by William W. Beach and Gerald P. O'Driscoll, Jr.

[9] Aggregating Governance Indicators (World Bank Policy Research Working Paper 2195) October 1999 • D. Kaufmann, A. Kraay, and P. Zoido-LobatЧn.

[10] Freedom House materials on the official website www.freedomhouse.org . “Explanatory Notes” Charles Graybow