A new World Bank report released today reveals some encouraging signs that the magnitude and negative impact that corruption exerts on business may be declining in many countries of the region

The report, Anticorruption in Transition 2: Corruption in Enterprise-State Interactions in Europe and Central Asia 1999-2002, analyzes trends in corruption in business-government interactions in 26 transition economies of Europe and Central Asia. The findings are based on a survey of over 6,500 firms as part of a Business Environment and Enterprise Performance Survey (BEEPS) that was run in 1999 and 2002. The World Bank and the European Bank for Reconstruction and Development (EBRD) co-sponsored the BEEPS, the initial results of which were published in a chapter of EBRD’s 2003 Transition Report. “This new report provides an in-depth measure of trends in business-government relations over time and explains what is driving patterns of corruption in the region. By looking at such indicators as the frequency of various types of bribes, the yearly share of revenues paid in bribes, and managers’ views regarding the extent to which corruption impairs business performance, we can begin to discern what is holding back investment that could spur higher growth,” said Shigeo Katsu, World Bank Vice President for the Europe and Central Asia Region. According to the authors, from the first to the second survey, most of the countries in the region enjoyed three years of solid economic growth, political stability, and improved macroeconomic performance. Foreign and domestic investment began to recover in many parts of the region. The accession or association process to the European Union made strong progress not only for the countries of Central Europe and the Baltics, but also for some of the countries of South Eastern Europe. As a result, this latest report, known as ACT 2, analyses corruption and government in a very different overall environment, buoyed by a strong upturn in the business cycle, a return to stability after a rocky decade of transition, and a brighter medium-term outlook.