Aaron in Azerbaijan

Just another blog about Azerbaijan.

Corruption Features Both Supply and Demand

with 5 comments

It’s no secret that Azerbaijan is considered one of the more egregious countries when it comes to bribery and corruption. Just ask Transparency International. But it is also important to note that most of our discussions about bribery and corruption focus on those demanding bribes. This ignores a pretty significant half of the equation, in which there is a host of bribe suppliers. Even Transparency International’s reports mostly focus on the demand side, though they do have one report that looks at companies who are willing bribe payers.

So, with that in mind, it’s refreshing to see that there are some people applying some criticism for graft on not only the government organs and businesses extracting some informal payments, but also on the people who willingly collude in the exercise. There are two things to highlight here. The first is this lecture given by Turkhan Sadigov a few months ago in Baku. He zeroed in on students and their willingness to pay bribes in the university system:

To what extent corruption is caused by ordinary citizens’ ‘offer’ rather than public officers’ ‘demand’? The presented study, unlike the majority of other researches, explores citizen corruption. Based on the survey of Azerbaijani university students, it demonstrates that the market for bribes is driven more by the supply side than the demand of them. The cause of bribe offers, according to the survey, lies in a specific social climate of Azerbaijan, termed by the preponderant role of social ‘status’ rather than merit. Therefore, it is argued that the fight with corruption cannot be confined to the misbehavior of officials.

I don’t know Turkhan Sadigov, but I probably would have enjoyed attending that lecture. I also would like to find that study somewhere to read more on it. It’s an important idea that we need to see the whole equation in the corruption process. It doesn’t forgive the bribe demanders, but it does include bribe suppliers. At the same time, however, there is a strong current of thought by some of the more open-minded Azeris here that corruption comes from the top, and that ending corruption at the top shuts down the rest the system. They point at Georgia and Saakashvili’s campaign that effectively ended corruption in the police force in Georgia, a top-down process. It probably has something to do with creating an atmosphere where people on all sides of any exchange expect that things will be carried out above-board, by the book, according to whatever rules and laws are in place.

The second highlight is a 2008 report from Transparency International that focuses on the willingness of businesses to pay bribes. The full press release detailing the report is here. It’s rather limited in scope, only providing details on 22 countries (of which Azerbaijan is not one). The goal was to see which corporations, from which economic giants, are the most likely to engage in bribery when doing business abroad. Since Azerbaijan doesn’t really have the skilled labor or capital to export, they are more likely to be on the receiving end of things here. In this report, as in previous reports, Russia is a leader of the dark side. I’ve already given my thoughts on Russia and its effects over in this part of the world. There could be a pretty strong influence from Russian businesses and Azeri Russian-based business here in Azerbaijan. If we can go by just what I hear, the construction scene is also dominated by a homegrown industry, and then Turkish, American, and UK firms. The Turks didn’t make TI’s survey, though. I’m curious what the American firms need to do in order to secure their contracts here.

Last, I think it’s interesting to note that that particular report finds that corruption is most prominent in construction, real estate, and oil and gas sectors, all sectors which are booming here in Azerbaijan. So how much are those foreign companies encouraging the atmosphere of bribes in Azerbaijan with their plentiful supply?


Written by Aaron

July 9, 2011 at 12:28 pm

Posted in Uncategorized

5 Responses

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  1. Go ahead and add wastewater and large-scale water purification to those industries that demand ‘perks’. From several discussions I’ve had, a briefcase of case upon arrival of the set-up crew goes a long way to keep the project running smoothly. Of those discussions, the primary locations were in south america.
    As for bribery being a two-way street, that does ring true. There are those who definitely enable bribery.


    July 9, 2011 at 12:49 pm

    • that would be ‘briefcase of cash’, not case


      July 9, 2011 at 12:50 pm

      • Wastewater and Large-scale water purification! Who knew what the industry was up to? Sounds like you’ve got a prime set-up there. When Azerbaijan decides that wastewater and large-scale water purification are important things to have in the country, we’ll have to keep an eye out for those briefcases…


        July 10, 2011 at 3:38 am

  2. From conversations I have had with foreign businessmen here, it seems that no-one has ever paid a bribe in Azerbaijan but they will admit to parting with “facilitation fees” on a regular basis.


    July 17, 2011 at 6:46 am

    • What could sound more innocuous, and yet more scandalous at the same time, as “Facilitation Fees”? Yikes.


      July 18, 2011 at 4:22 pm

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