Corrupt Intermediaries in Post-Socialist Russia: Mutations of Economic Institutions

Abstract

Using the example of intermediaries in business–state relations, this essay addresses the evolution of corruption in Russia which has been facilitated by the introduction of a neoliberal system of market relations. Based on empirical studies of small and medium-sized enterprises in Russia, the essay demonstrates how intermediaries (which are also present in Western market economies and serve the function of reducing firms' transaction costs) have adapted to the local system in order to serve as providers of both legal and illegal (corrupt) services. Disputing the pervasive claim that neoliberalism and corruption are mutually exclusive phenomena, we argue that in ‘incoherent’ democracies like Russia, where properly functioning democratic institutions and a developed civil society are lacking, neoliberalism has led to the expansion of corruption.