How Corruption Affects Social Expenditures : Evidence from Russia

This paper clarifies the main theoretical issues of corruption study such as definition, reasons, and consequences. An estimate and branch analysis of corruption in Russia is offered. The research concentrates on effects produced by corruption on social expenditures. The analysis demonstrates how corruption influences poverty situation after social transfers and consequently general efficiency of social payments. On the basis of European Commission method and a corrected method indicators of efficiency of social spending have been calculated for Russia. Also, the existence of correlation between efficiency of social spending measured by European Commission and corruption perception index calculated by Transparency International Agency has been estimated on the dataset of indicators of the European Union countries and Russia. A few policy recommendations aimed at anti-corruption struggle in modern Russia and optimization of public expenditures are offered