Administrative and political corruption in Bulgaria: status and dynamics (1998-2006).

• Author: Stoyanov, Alexander
• Position: POLSCI FOCUS - Report

It is always difficult to say how much (or how little) corrupt the administration of a country is unless a proper operational definition of corruption is used. There are two ways of dealing with the more general approach towards corruption. First, the denial-of-everything approach which claims that corruption is too complex, too vague and too difficult to define and eventually measure and/or analyze. Many reports and analyses of corruption adopting this approach usually begin with the notion that corruption is a complex social phenomenon that is practically immeasurable and difficult to define. In addition corruption (as most social phenomena) is system dependent, i.e. its forms and involvement in different societies varies. Respectively, perceptions of corruption in different countries and governments differ substantially. Most often this approach is politically biased and is used to reject findings on corruption at all levels. The rationale is that one cannot measure something that could not be defined.

Secondly, the positivist approach, which includes the attempt to compose and decompose corruption to its different forms and mechanisms and to construct a system of measures which aim to account for the levels of corruption in societies, social sectors, or among different population groups. The logic of this approach is that the function of science is to measure the immeasurable, i.e. to step by step create preconditions (theory) that would make is possible to asymptotically get closer to the true understanding of a given phenomenon.

In Bulgaria, a well-known and systematic approach to analyze and counteract corruption has been adopted by Coalition 2000 (1). One of the instruments used by Coalition 2000 has been its Corruption Monitoring System (CMS) (2). The basic methodological assumptions and concepts on which the CMS is based are:

Administrative corruption. This concept refers to the corruption transactions in which lower and middle level officials receive kickbacks (money, gifts, favors) from citizens either to provide a better service or to violate existing rules and laws. This type of corruption has been found to be characteristic for all post-socialist countries and is manifested in forms and sectors that seem fairly unlikely for developed countries. The main systemic reason for the existence of this type of corruption is the character of transition processes in these countries. More specifically this is the dynamically shifting balance between the public and the private spheres within a short period of time. Administrative corruption seems to be the negative byproduct of systemic adjustment to the new public-private balance in society.

Political corruption. This concept refers to corruption of high level officials in the executive, the legislative and the judiciary. In principle corruption transactions of this type involve manipulation of substantial resources and more complicated corruption schemes (including political party financing).

Perception based measures. Perception based measures of corruption include accounts for the perceived spread of corruption in different social sectors (also institutions, professional groups, etc.). CMS research findings and other international research has shown that perception based measures reflect attitudes of different targets groups towards corruption are not precise estimates of the actual level of corruption. In this respect perception based measures are dependent on situational factors and are strongly politically biased. However they proved a fair account of public tolerance or intolerance of corruption practices in society.

Experience based measures. Experience based measures account for incidences of personal experience with corruption transactions. These measures are based on anonymously provided reports. The same approach is used in crime victimization research and experience accumulated since the 1960-ies has proved that obtained results are fairly accurate. The CMS includes both perception and experience-based indicators. Collecting of information started in mid 1998 and the last monitoring survey was conducted in November 2005. The main target groups addressed in CMS surveys are 1) general population (18+); 2) business sector representatives (managers of small, medium and large companies). CMS monitoring surveys address mainly administrative corruption. While this is the most widespread form of corruption observed in Bulgaria, another important form of corruption--political corruption--remains out of the scope of the CMS. However, many aspects of political corruption have also been analyzed.

Corruption: Issues of Contemporary Social History

The forms and mechanisms of political and administrative corruption in Bulgaria are essentially something new for the country. They emerged in the beginning of the 1990-ies are closely linked to the specific driving forces of political and economic transformations.

In the period 1990-2005 the structure of property in the country changed dramatically. The ratio between state v/s private property of industrial assets changed from 96:4 (1989) to 20:80 (2005). In the context of an evolving legal system, the transformation of property did not always follow the legitimate rules. Political power and influence have been decisive in the first years of the privatization of the state. At later stages mechanisms have become more sophisticated and this has lead to the involvement of various levels of the administration into the process of privatization of the state.

The mechanism that has "facilitated" privatization and the establishment of the new property structure in the country has often been corruption. Now that privatization is practically completed, corruption mechanisms that have been used to control privatization are being utilized to gain comparative advantages in the functioning of the new structure of the economy under the new rules (market economy). Corruption mechanisms are targeted to "benefit" from resources in several principle areas:

1. Violation of rules with imposed payments in favor of the state. Such rules are--taxes, VAT, customs fees, social benefit payments, excise payments, etc. These are contributions to the budget enforced by the state; their violation through corruption brings substantial advantages to social actors.

2. Control over public procurement spending. This type of corruption transactions very often combine administrative and political corruption and substantially modify specific markets.

3. Control over spending of EU funds. This corruption area is relatively new and its importance is most likely going to increase, as the amount of funds will substantially grow after the EU membership of the country.

4. Control of law enforcement mechanisms. This type of control through corruption has proved to be important for the perpetuation of more complicated corruption schemes (involving various actors and operating for a longer period of time). The intensification of government anticorruption policies and practical measures in 2006 has show that a disturbing number of high level law enforcement officials have been involved in corruption schemes ensuring protection for violations of the law.

5. Political party financing. Party funding is the crucial intersection of different corruption schemes, which ensures political lobbying. One of the basic preconditions for that (except economic interest of the political class) is the under-funding of parties by the budget. Financial needs, especially in election years, do normally exceed state subsidies. According to expert estimates the latter account for 10-20% of actual party spending.

6. Protection of "black businesses" (organized crime activities). For many reasons organized crime has been one of the elements of transition. At the very early stages of transition criminal groups have (through corruption) managed to create relationships with institutions important for their sphere of activity.

   These principle fields of corruption transactions generate both administrative and political corruption. Depending on the specific corruption transaction one or more levels the administration and forms of corruption could be involved.

   For example large-scale customs fraud (cigarette smuggling) for a longer period of time necessarily involves officials from the customs administration, tax administration, border police, investigation and prosecution officials, "private law enforcement", and political protection combined with party financing. Lower level customs officials get paid to close their eyes when necessary, their superiors get paid to tolerate the violation of agency rules and higher-level politicians get paid (personally and/or their parties) to tolerate the existence of such a situation. Law enforcement officials get paid not to act, if something goes wrong in smuggling operations and bank or financial institutions get paid to process the revenues (3). Evidence that accounts for the existence of cigarette smuggling is relatively easy to find. It is just necessary to compare consumer spending of imported cigarettes (market research information) with aggregate customs information about official (legitimate) import. For specific periods of time the share of legitimately imported cigarettes on the Bulgarian market has been down to 15-20%.

   The above example and issues elaborated make it possible to deduce several important assumptions about corruption assessment:

1. Administrative and political corruption are closely linked. It is practically not possible to observe high levels of administrative corruption without assuming that the higher political levels are not involved. If administrative corruption levels are high and political corruption level are low, this would mean that the higher levels of the administration do not have any control over their officials.

2. The existence and evolution of corruption over a longer period of time links different...