Corruption is big and small in Europe

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In Russia, experts say President Vladimir Putin and his oligarchs are a corrupt coterie who have cheated the country out of billions. But a professor at the University of Delaware in the Alfred Lerner College of Commerce and Economics has research that shows bribery is a common practice in Eastern Europe.

Katalin Takacs Haynes, an associate professor of management at UD’s Lerner College and a Bancroft Construction Fellow for her research, conducted a qualitative study with fellow New Zealander Matt Raskovic of Auckland University of Technology, Business School — International Business , Strategy and Entrepreneurship. The study explores corrupt practices in three European countries: Hungary, Slovenia and North Macedonia. The article was published in the Business Ethics Review, in September 2021.

“Matt and I grew up in a former socialist country. Matt is from Slovenia and I am from Hungary,” Takacs Haynes said, referring to their motivation for the study. She recently presented her paper at a Lerner faculty showcase. She said she wanted to highlight countries that are rarely talked about internationally.

“When we were growing up, we noticed that corruption and involvement in illegal and unethical practices is a way of life in these countries,” she said. Takacs Haynes said many Hungarians like her saw the fall of the Iron Curtain as a welcome sign as they believed it would bring more resources, democratic elections and a free market economy.

Takacs Haynes conducted expert interviews with a total of nine people; three from each country. They included investigative journalists who had spent at least a decade reporting on corruption, academics and officials from the global anti-corruption non-profit organization International Transparency.

Takacs-Haynes and Raskovic draw on concepts from social identity theory, such as in- and out-groups and inter-group relations to explain corruption. According to social identity theory, people gain cognitive and emotional value by being part of a social group. The authors found that people use cognitive schemas, such as self-improvement, to justify shared story-based corrupt behaviors. Another layer of shared experiences, Optimal Distinctiveness further binds people together or sets them apart, while Uncertainty Reduction, which individuals or groups use to reduce the uncertainty of others, helps to re-establish question behaviors, reinforce them or solve problems. All three social identity mechanisms can lead to behaviors that perpetuate corruption and stifle anti-corruption efforts.

Hungarians are proud to own their traditions. Many still mourn the Treaty of Trianon, which marked the end of their involvement in World War I when Hungary lost two-thirds of its territory to neighboring countries. Locals still hold onto old maps of their country in its former glory and often refer to them nostalgically. Tax evasion is common and considered a victimless crime in Hungary. Hungarian children are taught to be smart and that outsmarting the government is a game. Adults are also considered smart if they outsmart the government.

The researchers found that in North Macedonia, people say they believe that being from Eastern Europe makes them seen as inferior to people from other countries. North Macedonia was historically linked to the Ottoman Empire, and the national feeling is that their position in life is linked to this. Bribing to get what they want is common practice and is ingrained in their history. According to experts interviewed for the study, North Macedonians engage in corrupt activities to gain access to better health, education and government services. North Macedonians say they believe and recognize that while every country has corruption and crime, in North Macedonia the Mafia owns the country.

Slovenia is the youngest of the three countries, and citizens there say they think they are good overall and play by the rules. While their history dates back hundreds of years, the country has only been independent for three decades. Although they were part of another country until 1992, Slovenes have retained their own culture and language.

Slovenians follow the rules and consider themselves to be good. They survive by playing the game and teaching it to children.

Researchers have found that Slovenians follow a code for telling each other if they are breaking the rules and reporting corruption. There are, however, factions within the wider group of Slovenes that break the rules and practice corruption. This is determined by location in the country, Takacs Haynes found. People who live in or near the capital, Ljubljana, are seen as corrupt and elitist by those who live in more rural areas. People in rural areas feel justified in acting corruptly to bridge the gap between themselves and those they perceive as elite business leaders in the capital. The consequences and responsibilities of such actions are denied.

As part of his research, Takacs Haynes also found that foreign companies that set up shop play a role in reducing corruption and trying to change the behavior of citizens who work for them, as opposed to local companies. Research has shown that citizens of Hungary and North Macedonia take pride in being part of the larger group of people working for a multinational company and do not engage in corrupt practices while working there. In North Macedonia, citizens believe that the job of foreign companies is to force citizens to consider alternative ways of life that do not involve corruption and to seek to change local ways and customs.

“So it’s like, if I can think ‘Okay, when I go to work from nine to five, at least during those hours, I’m not going to participate in corruption, because I work for this other company that brings in other value systems and so on,” Takacs Haynes said.

Takacs Haynes studies corporate governance, greed and corruption. She and Raskovic are collaborating on another research project that also examines social identity theory in the face of rising populism around the world.

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