Corruption and Economic Freedom in Transition Economies

The article analyses the relationship between corruption and economic freedom in transition economies, on the basis of the corruption perceptions indices published by Transparency International, and the economic freedom indices drawn up under auspices of the Heritage Foundation. We seek answers to the question to what extent the hypothesis, that the increase in economic freedom reduces corruption finds confirmation in the countries undergoing deep institutional changes involved with the transition from a centrally-planned to a market economy. In the first part of the article, basic corruption and economic freedom indices are characterised, while the second part contains an analysis of correlations between Corruption Perceptions Indices (CPI) and Economic Freedom Indices (EFI). On that basis, and as a result of an analysis of suggestions from the New Institutional Economics a conclusion has been formulated that the nature of relationships between the degree of corruption and the scope for economic freedom in transition economies is more complex and less unequivocal than in mature market economy democracies. In transition economies, due to cultural and political factors, economic liberalisation is accompanied by strengthening tendencies towards using political power and official functions for fostering private interests