Corruption, bad institutions and lack of openness dog Russian competitiveness

BOFIT Viikkokatsaus / BOFIT Weekly Review 2016/32

The World Economic Forum (WEF) global competitiveness index last year ranked Russia 45th among 140 countries surveyed. Russia had little success in institution-building, financial market development and commodity market efficiency. Corruption was the biggest obstacle to doing business. Russia’s ranking actually improved slightly over the past decade: the WEF’s 2005 survey ranked Russia 53rd of 117 countries surveyed.  

Transparency International’s Corruption Perception Index (CPI) measures perceived corruption of public sector agencies. The 2015 CPI ranked Russia at 119th of 168 surveyed, putting it on par with Azerbaijan, Guyana and Sierra Leone. TI noted that conditions that promote civil society development and press freedom have weakened in Russia. Such factors are considered important in fighting corruption. Russia ranked 126th of 153 countries in the 2005 survey.

The Heritage Foundation’s 2016 Index of Economic Freedom ranks Russia 153rd out of 178 surveyed. Russia got low marks for rule of law (e.g. property rights and fighting corruption) and market openness (investment). The 2008 IEF ranked Russia 134th of 157 countries surveyed.

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