Corruption is Big and Small in Europe

In Russia, experts say that President Vladimir Putin and his oligarchs are a corrupt coterie that has bilked the country for billions. But a University of Delaware professor in the Alfred Lerner College of Business and Economics has research that shows that corruption is common practice in Eastern Europe.

Katalin Takacs Haynes, associate professor of management at UD’s Lerner College, and the Bancroft Construction Fellow for her research, conducted a qualitative study with a colleague in New Zealand, Matt Raskovic, of Auckland University of Technology, Business School – International Business, Strategy & Entrepreneurship. It explores the practices of corruption in three European countries: Hungary, Slovenia and North Macedonia. The article, Living with corruption in Central and Eastern Europe: Social identity and the role of moral disengagement, was published in the Journal of Business Ethics, in December. 

 

“Both Matt and I grew up in a former socialist country. Matt is from Slovenia, and I’m from Hungary” Takacs Haynes offered as 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 at an international level.

 

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

 

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

 

Takacs-Haynes and Raskovic rely on concepts from social identity theory, such as in- and out-groups and intergroup relations to explain corruption. According to social identity theory, people to gain cognitive and emotional value from being part of a social group. The authors found that people use cognitive schema, like self-enhancement, to justify shared behaviors of corruption based on history. Another layer of shared experiences, optimal distinctiveness further ties people together or sets them apart while uncertainty reduction, which people or groups use to reduce uncertainty of others helps challenge behaviors, reinforce them or resolve issues. All three of the social identity mechanisms can lead to behaviors that perpetuate corruption and stifle anti-corruption efforts. 

 

Hungarians take pride in owning their traditions. Many still mourn the Treaty of Trianon, which signaled the end of their involvement in WWI when Hungary forfeited two thirds of its territory to surrounding countries. People there still keep old maps of their country in its former glory and often refer to them with nostalgia. Tax evasion is common and considered a victimless crime in Hungary. Hungarian children are taught to be clever and that to outwit the government is a game. Adults are also deemed clever if they outwit the government.

 

Researchers found that in North Macedonia, people believe that being from Eastern Europe results in them being seen as inferior to people from other countries. North Macedonia was historically tied to the Ottoman Empire, and the national feeling is that their station in life is linked to this fact. Bribing to get what they want is common practice and is sown into their history.  According to the experts interviewed for the study, North Macedonians participate in corrupt activities to gain access to better healthcare, education and government. North Macedonians believe and acknowledge 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 believe that they are overall good and stick to the rules. While their history dates back hundreds of years, the country has been independent only for the past three decades. In spite of having been part of another country until 1992, Slovenians have maintained their own culture and language.

Slovenians follow rules and see themselves as being good. They survive by playing along and teaching this to children. 

 

The researchers found Slovenians follow a code of telling on each other for not following the rules, and reporting corruption. There are factions within the larger group of Slovenians who do break rules and practice corruption, however. This is determined by location within the country, Takacs Haynes found. People who live in or near the capital city, Ljubljana, are considered corrupt and elitist by those who live in more rural locations. People in the rural areas feel justified to act corruptly to close the gap between who they perceive as elitist business leaders in the capital and themselves. Consequences and responsibilities of such actions are denied.

 

As part of her research, Takacs Haynes also found that foreign companies who set up shop play a role in curtailing corruption and trying to change the behavior of citizens who work for them, as opposed to local companies. Research showed that citizens in Hungary and North Macedonia took pride in being part of the larger group of people working for a multinational company, and did not participate in corrupt practices while working there. In North Macedonia, citizens believe that foreign companies’ jobs are to force citizens to consider different ways of living that don’t involve corruption, and 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 during those hours, I’m not going to participate in corruption, because I’m working for this other company which 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 dealing with the rise of populism around the world.

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