Political Competition, The Rule Of Law And Corruption In Successful Post-Communist Countries

The current orthodoxy in post-communist political economy explains the difference between different levels of corruption and economic performance, by reference to the constraint provided by political competition. However, political competition cannot explain the difference in levels of corruption between successful post-communist countries and the West. We develop a theory of how political competition and the rule of law can interact to actually lock-in post-communist corruption at a substantial level. The rule of law constrains the ability of the executive to punish firms, but not their ability to reward firms. Thus, if parties alternate in power it is rational for firms to marry parties, that is, to develop exclusive corrupt relationships. We test our theory against qualitative insider interviews and a quantitative elite survey. Both sets of evidence are from Poland, which is representative of successful post-communist states, in terms of both levels of corruption and political competition