When the Crowed Fights Corruption

Harvard Business Review

When the Crowed Fights Corruption

Michelle Aliprantis

Gwynedd Mercy University, MBA 600

Professor Hall

2/21/2016

Corruption is the greatest impediment to conducting business in Russia, according to leaders recently surveyed by the World Economic Forum. Sadly, Russia today is one of the most corrupt nations in the world, and given its geopolitical power and international importance, this fact is rather alarming.  Corruption has seeped throughout Russian politics, economics, and criminal underworld since it became a capitalist state. However, there’s one person willing to stand up for all the corruption and exposing it through social media, Alexei Navalny.   While it may be easy to blame the rise of capitalism for the reason corruption is so prevalent in Russia, one must always look to Russia's history to find the real genesis of something that's pervasive throughout a country. On the one hand, there are obvious public-relations and political risks; on the contrary, corruption can erode a firm's competitiveness, the trust of customers and employees, and even the very legitimacy of capitalism.  While capitalism plays an enormous role in corruption in Russia, communism is the root of the widespread corruption throughout Russia.  

This county has been serving on corruption at an economic level, financial level or, embezzlement, which has been professionally organized for some time.  This contributes to the growing number of poverty, due to chronic non-payment of wages and unemployment produces a ‘reserve army of criminals’ (Frisby, 1998: 27-49). Criminal activity has become one of the most important methods of regulating their environment.

Currently, there are a couple of main sources of corruption in Russia.  The first, and probably most dangerous, is political corruption.  Russian politics are notorious for corrupt practices like major voter fraud and using political power for personal gain.  This form of corruption is a long standing tradition throughout Russia, and can easily be traced by to the communist regime of the USSR (Kneen, P., 2000).  The second source of political corruption is in the private sector.  The successful capitalists, particularly how the government acts like a kleptocracy, controlling vast industries which make them billions of dollars every year. They use to corrupt politicians and public services for their gain.  Then the criminal underworld, which has its fingers throughout the political and economic world of Russia, and uses this to their advantage every chance they can.  

One example, of the most usual ways that Russian government officials can profit off citizens, is through the levying of taxes.  In some areas, sales taxes are as high as 40%, so many people consider it better to pay the Russian Mafia for ‘protection' than to be imposed by government officials who can shut down a business by asking for high taxes (Boylan 1995).  However, not all businesses fall victim to organized crime or tax collectors because many companies can get away without paying any taxes at all, especially large Western companies that have many political connections (Lyman and Potter, 1997). Regardless, all of these forms of corruption allow the others to survive and flourish.  With these bastions of corruption, the average Russian business stands a small chance of success.  

As of December 2011, there was an internet based public awareness site called, RosPil (Healy, Ramanna and Shaffer 2012). They claimed to have prevented the granting of suspicious contracts worth US$1.3 billion. The organization holds dishonest politicians' and bureaucrats' feet to the fire largely through Internet-based crowdsourcing, whereby often-anonymous people find requests for government-issued that are designed to generate kickbacks. They are informing Russia's citizens more about the corruption in their country.

To illustrate, according to this articles, it showed that Navalny has opened a website to expose the corruption in Russia. His purpose is to let others people in Russia know about bad things happening with their government. From this point, I totally agree with what he’s doing. Opening up the public's eyes about the corruption, helps citizens and the public be aware. I feel the Russia people need to continue to use the media, to keep everyone informed. I would say, Navalny has had success in Russia, because of the support through social media is growing and the majority of Russian people are unsatisfied with the existing regime. Although there are still opposition activities, I don’t believe they will be able to influence the “KGB” and corruption in Russia.