Corruption and Entrepreneurship : Impact of Trust and Civic Society. A Cross-Cultural Comparison of 21 Countries

Up to now, the major part of corruption research in the field of Economics has been done from the viewpoint of a bribe-taker (a national officer). However, for the appropriate analysis of the roots of this phenomenon, one also needs to scrutinize it from the horizon of the bribe-payer at the micro level. Only an investigation of both sides involved in corrupt transactions as well as their motives and laws of behavior will contribute to a better understanding of this phenomenon and thus enable us to combat it efficiently (Bardhan 2003). Considering this, I attempt in this paper to give insights into determinants of perception of corruption of entrepreneurs as potential bribe payers. An analysis of (the perception of) corruption from the perspective of market actors is also crucial for understanding the causes and consequences of corruption in economic life. Numerous empirical studies show that survival, success and growth of enterprises in the post-Soviet block depend on how well they adapt to the corrupt institutional environment (Kaufman et al. 1999). Investments in corrupt, illegal rent-seeking activities and social networks are therefore a crucial component of a successful business strategy in the CIS-countries. At the same time, it is argued that a high level of administrative corruption and excessive bureaucratic burdens hinder start-ups (De Soto 1987)