Summary

Transparency International - Moldova carried out this study in partnership with CBS-AXA and with the support of the US State Department.

The objective of the study was to analyze the perceptions and the encounters with corruption of households and business people in the Republic of Moldova, as well as to evaluate the impact of the implementation of the National Anticorruption Strategy in 2012.

The tasks of the study are the following: 

• Evaluating the awareness of the population on the threat of corruption for doing business;
• Identifying the main causes of corruption and their evolution;
• Evaluating the perception and the personal encounters with corruption in 38 domains of public life;
• Estimating the total amount of unofficial payments in various public institutions/services;
• Evaluating the professionalism and credibility of the law enforcement staff members;
• Evaluating public tolerance towards corruption, the acceptability  of unofficial payments and willingness to pay bribes;
• Evaluating public awareness about conflict of interest;
• Identifying the most efficient measures to prevent and combat corruption;
• Identifying the main sources of information about corruption and evaluating the credibility of information from mass-media;
• Calculating corruption risks indicators for the law enforcement institutions.

Two types of respondents were interviewed for this study: businesspeople and household representatives. Separate questionnaires were used for each of the two categories.

The size of the sample: 490 businesspeople and 1106household representatives over the age of 18.

Representation: the sample is representative at the national level with a maximal error of +2.9% for households and +4.4% for business people.

Sample: stratified, random, two-staged.

Stratification criteria:12 geographical regions based on territorial administrative units that were in place before the last territorial-administrative reform, residential environment (urban-rural), size of urban localities (2 types), size of rural localities (2 types of rural localities); The sample is relevant to analyze the following strata of respondents: urban, rural, North, South and Center zones, with respective error margins corresponding to the size of each strata of respondents.

Time of interviewing: July 26–August 7, 2012 to interview household representatives, and July 26–September 10, 2012 to interview business people. The interviews were conducted at the respondents’ homes by the network of operators of CBS-AXA.

The comparison of the results of this study with the results of similar studies conducted by TI-Moldova in the last 10 years allowed us to reveal some clear trends in perception and personal experience with corruption by the general public, as well as in the behavior of representatives of public institutions and the results of applied policies. For example:

• For the household representatives, the gravity of corruption as an impediment for country’s development did not change compared to 2008, and it remained third on the list of problems that they face. For businesses, compared to 2008, a number of other priority problems have emerged in addition to corruption, such as political instability, imperfections in the fiscal legislation, frequent changes in legislation and high taxes. Corruption took the sixth place in their ranking.
• Public awareness about the threat of corruption for the country’s development among households and businesses has increased. If ten year ago the main part of the respondents would consider poverty as the main cause of corruption, at present two thirds of respondents understand that corruption causes poverty and therefore, fighting corruption is the main way to address poverty.  The share of households that are aware of the impact of corruption on poverty increased from 56.8% in 2008 to 66.9% in 2012. Among businesses the number increased from 57.1% in 2008 to 63.5% in 2012.
• About half of the households (49.6%) and business people (41.9%) think that the corruption phenomenon increased in the last 12 month.

The share of respondents that think corruption increased in the last 12 months, %
 

• Just as in the 2008 study, the causes of corruption stated by the respondents were the lack of punishment for those who commit acts of corruption and the lack of firm action taken by the governance. To obtain the support of the public, the governance needs to conduct an extended awareness raising campaign on the implementation of its engagements vis-a-vis corruption prevention in diverse public institutions. 
• An important factor in the spread of corruption is conflict of interest in decision making situations. The Law on conflict of interest and the mechanism of its implementation was modified in 2001.  To evaluate the degree of familiarization of the population with the notion of conflict of interest, the representatives of the households were asked to select the right definition out three options. The results showed that only 55% selected the correct answer. For comparison, in 2010, 76% of public servants from central public authorities gave a correct answer. These statements suggest the need to train the population and public servants to better understand conflict of interest and the consequences for ignoring the law.
• The main sources of information about corruption remained unchanged since 2008. The respondents indicated television as the first source, followed by the printed and electronic press, radio and discussions with friends and relatives. It is important to note that 34% of the household respondents and 44% of businesses believed the information on corruption coming from mass-media; however, their share slightly decreased since 2008. Mass-media needs to consolidate the quality of the information related to corruption, to prove impartiality, ethical treatment and good quality of argumentation of corruption cases.

Share of respondents that trust the information on corruption from mass-media,%

• In the perception of household respondents, corruption in most spread among police employees, health care and education institutions, customs, prosecutors and judges.

In the perception of business people, the most affected by corruption are police employees, customs, law courts, fiscal inspectorates, and prosecutors. Compared to 2008, there is an increased perception that corruption in law courts, fiscal inspectorates and prosecutor offices has raised.

• Having been asked which branch of the state power is most corrupt, both categories of respondents indicated the judicial branch.

• Both, representatives of households and businesses consider money (cash) as the main modality to solve unofficially their problems with public servants. This suggests that an efficient prevention of corruption is impossible without a sound system of declaration and control of incomes and assets by public servants.
• When compared to 2008, the share of those who think that it is easier to solve problems through unofficial channels is simpler remained within the margin of error.

Share of respondents that think it is easier to solve problems by unofficial channels,%

• Among the institutions contacted by members of households the most are health care (55.2% of total) and educational institutions (28%), as well as local public administration offices (23.6%). In 2012, business people contacted most frequently fiscal inspectorates (66.9% of total), health care institutions (51%), vehicle technical inspectorates (47.1%), customs (44.3%) and sanitary inspectorates (39.4%).

Households most frequently bribed police officers (41.2% of those who had contact with police), educational institutions (40.4%), health care institutions (39.1%) and technical revision of vehicles (33.1%). Businesses most frequently paid bribes to education (52.7%) and health care institutions (52.4%), the police (45%), customs (42.9%), the office of construction authorizations (37%) and the prosecutor’s office (33.3%). It is clear that to relieve the tension created in the society by the spread of corruption, it would be most efficient to concentrate on fighting corruption in health care, police and education institutions. If the governance aims to support businesses and increase its budget revenue – they should concentrate on fiscal inspectorates and customs. Nevertheless, if the governance wants to have a systemic approach in curbing corruption, it should start with such law enforcement institutions as the prosecutor’s office and law courts.

• The average bribe paid by households varies by domain. The highest bribes have been given to attorneys (on average 5,274 lei) who, in fact, direct the bribe to judges and prosecutors (4,378 lei). The highest average bribes paid by business people are directed to judges (4,550 lei), customs officers (3,145 lei), cadastral bureaus (2,740 lei) and services issuing construction authorizations (2,463 lei).
• In the last 12 months, the total estimated bribe paid by households constituted about 732 million lei, which is a 15% increase in absolute value compared to 2008. Taking into consideration a 30% increase in consumer prices for goods and services during 2008-2012[1], in real terms this amount diminished by about 15%. In the same period of time, households paid most to health care (238 million lei), education institutions (185 million lei), and police (45.4 million lei). While police achieved considerable progress in reducing the amount of accepted bribes from 97 million lei in 2008 to 45.4 million lei in 2012, the situation in health care and education was different. Thus, in health care the total bribe increased by one quarter compared to 2008, or a little less than the consumer prices. As for the education system, the total amount of paid bribes increased 2.9 times compared to 2008, which cannot be explained by the inflation phenomenon.

The total amount of bribes paid by businesses in the last 12 months reached about 390 million lei, increasing in absolute value by 49% compared to 2008. The largest amount of bribes was paid to the customs officers (75 million lei), health care institutions (41.6 million lei), police (41 million lei), fiscal inspectors (32.4 million lei) and fire inspectors (31.8 million lei). The fact that, compared to 2008 this amount increased in absolute value almost 1.5 times cannot be explained simplyby inflation, and it demonstrates a worsening business environment in the country.

• While in other domains the majority of unofficial payments were made to speed up the provision of services, bribes to law enforcement bodies were given to avoid punishment for breaking the law. Compared to 2008, the share of those who paid to speed up the process increased in the police, while in other domains this share diminished. The biggest modification was noticed in the fiscal inspectorates, where the share of payments made to speed up the process decreased from 75.3% in 2008 to 35.4% in 2012.
• The respondents stated that while the bribes made to health care providers were mostly voluntary, those made to judges, customs officers and fiscal inspectors were made under pressure. Compared to 2008, the share of those who paid bribes voluntarily to all of the above mentioned groups decreased. The most significant decline has been noticed in courts of law, where this indicator diminished from 67.8% in 2008 to 25.8% in 2012.
• Although the total amount of bribes paid by businesses increased in 2012, their attitude towards the country governance and its efforts to improve the business environment did not deteriorate. The share of respondents who believe that the state impedes entrepreneurial activity diminished from 46.7% in 2008 to 33.2% in 2012, and two-fold since 2000.

Share of businesses that consider the state impedes the entrepreneurial activity, %
 

• On a positive note, the amount of time spent on solving problems with state institutions continually reduced. From 2008, when respondents spent 17.3% of their working time on this process, the number dropped to 11.1% in 2012.

Time spent on solving problems with public institutions, (% of total time)

• More than two thirds of the business people stated that the fiscal inspectors correctly followed the procedure during their controls. The share of business people who had a positive experience during the visit of fiscal inspectors increased from 41.1% in 2005 to 72.5% in 2012.

Share of business people who consider that the fiscal inspector followedthe correctprocedures during the fiscal controls, %
 

• The number of visits by state representatives made to businesses decreased from 21 times a year in 2008 to 6.5 times in 2012. Currently, they are most frequently visited by police officers.

• Willingness to pay bribes to solve their problems with the state remains high among the respondents. More than two thirds of them confirmed this fact.  The share of those who say a firm „NO” to bribes is slowly increasing.

Share of those who DO NOT want to pay bribes in difficult situations, %

• Compared to 2005, the share of those who do not consider corruption acceptable increased 1.5 times, from 43% in 2008 to 67.1% in 2012 among households, and from 49% in 2008 to 78.5% among businesses. This shows a clear trend of diminishing tolerance towards corruption.

• Along with a diminished tolerance towards corruption, respondents changed their overall sentiment towards offering bribes. Three quarters of both categories of respondents stated that they had negative emotions when solving their problem by giving a bribe. Their share rapidly increased from 49.3% in 2008 to 73.1% in 2012 among households and from 41.2% in 2008 to 76.6% in 2012.

Share of respondents that state they have negative sentiments when giving a bribe, %
 

• Even though tolerance towards corruption decreases, the will to oppose corruption by collaborating with law enforcement institutions remains low. About 37.3% of households faced corruption in the last 12 month, 1.9% tried to solve their case in a legal manner and only 0.9% succeeded to solve their problem entirely or partially. Also, 40% of businesses faced corruption, 1.8% tried to solve their problem officially and only 0.7% had some success. It is remarkable that the share of respondents that do not know whom to address with their case of corruption continually diminishes.

Share of respondents that do not know where to address a case of corruption, %
 

Public authorities need to appeal to the population more rigorously and work together on combating corruption. It is necessary to improve the quality of public anti-corruption hot-lines and petition systems. An important role in this context play public awareness campaigns on achievements made in this domain, and the consolidation of whistleblower and witness protection mechanisms.

• If a ranking of law enforcement institutions and control bodies was made, respondents would evaluate the officers of the Internal Service and Security as most professional, followed by fiscal inspectors, the collaborators of the Center for Combating Economic Crime and Corruption and prosecutors. The list would be closed by judges, customs officers and police officers.

In a ranking of this type, the most credible from the point of view of the poll participants would be fiscal inspectors, followed by Center for Combating Economic Crime and Corruption officers. The list would be closed by customs officers, judges and police officers.

• In spite of the high level of corruption in the Republic of Moldova, the majority of households (75.5%) and businesses (84.4%) are optimistic about Moldova’s chances to curb corruption. The state must rely on this optimism and engage the population in the process of combating corruption.
• It is certain that if the supremacy of the law is not ensured and corrupt persons are not properly sanctioned, increasing the salary of public servants would only contribute to inflation and the public servant would adjust the size of the bribe to the his/her new salary. The estimation made in this study on the total bribe paid in Moldova confirms this premise. Still, when asked what should be the monthly salary of a public servant that would make him/her resistant to bribes, the respondents proved a good understanding and came up with realistic and well-motivated figures.

• Among the most efficient ways to curb corruption, both categories listed increasing sanctions to those who take and offer bribes, meritocratic promotion and increasing the salaries of public servants.

Corruption risks

The financial benefits and other personal gains that result from a corrupt act are the main factors in the spread of corruption. However, the notion of corruption is very broad and cannot be limited simply to bribery.

Several indicators pertaining to the risks posed by corruption can be calculated based on the estimated total bribe and total number of bribes paid in separate domains, as well as the official number of public servants in these domains, their average wage, and number of corruption cases opened against them.

Corruption risks indicators

Calculations show that when persons involved in corruption are not properly punished, even a relatively high salary is not an impediment for taking bribes. For example, for customs employees, whose salary covers the minimal consumer basket 2.5 times, the average bribe is still high in absolute terms and compared to their salary.

Furthermore, unpunished corrupt persons easily adjust to new conditions and quickly compensate their losses. Once the size of the bribe diminishes, their frequency increases to balance the loss.

Finally, calculations show that the probability to be caught red-handed was higher among customs officials. Nonetheless, this likelihood remains extremely low (lower than 1%) in all of the domains, which further facilitates the spread of the corruption phenomenon.