It's an unholy alliance between government and business elites, both nationally and at the regional and local levels. The result is corruption, an unfair playing field, and a lack of open competition. Corporate governance abuses have been widespread. Onerous taxes, regulations and inspections cause companies to hide their assets and force many into the shadow economy. Savings mobilization is another challenge, because most Russians rightly trust their mattresses more than the banks.
Foreign investment is low, and capital flight is high.
No wonder, then, that Russian businesses tells us that high taxes and lack of access to credit are their top problems. CIPE does not work directly with government bodies, nor do we work with individual companies. Instead, we work with business associations, think tanks, and shareholder rights organizations that are building pressure from below for reform. Let me tell you about some of our projects in corporate governance, beginning with a global overview and then focusing on Russia. We have published this book In Search of Good Directors, and translated into a number of languages.