Markets in Everything.

A possible addition to Marginal Revolutions’s series of Markets in Everything. A Russian entrepreneur now offers a Bribes ’R Us service. Correctly, he has identified the biggest problem in that particular society, not that it is in fact corrupt, but that who is corrupt is unknown. He therefore acts as the cut out. His business has grown out of an earlier one:

According to the newspaper Komsomolskaya Pravda,
Sergei’s method is to organise the passing of a bribe at the official’s
home or in the street to avoid undue embarrassment in the workplace.
He
told the newspaper that he previously handled pay-offs to gangsters
from businessmen who wanted to avoid the risk of being killed during
the transaction.

I have to admit that back in the early days of building our business in Russia we would have found such service useful. As was carefully explained to us the most important issue was not which business we wanted to be in, not how we were going to conduct that business, but who was to be our krysha. Krysha translates directly as "roof" but it really means protector. Who, in return for a cut of the action, will provide you with the contacts, security, if necessary, highly physical security, routes for bribery and the rest that are necessary. Most importantly, who will protect you from others seeking clients for krisha style services. The whole development of one’s business (not to mention one’s physical safety) would depend on the circle of contacts brought along with one’s protectors.
We ended up rather side-stepping the whole process by working with the military/scientific sector which is why, 15 years later, our business is still concentrated in metals that were used in that sector, most noticeably the aluminium scandium alloys that were used for fighter planes, ICBMs and the like, and now in the west are for bicycles and baseball bats.
There is one thing though that I think Sergei could add to his business. After the problem of who to bribe came the one of making sure that the required action was actually taken. Unlike some other areas of the world (no, no names or pack drill here) bribes were paid before the licence/permit/whatever was issued and there was no way of ensuring that one got one’s money’s worth. Perhaps that’s why he insists on drawing up a contract for the services to be performed ….no doubt his previous business with gangsters will help in contract enforcement.

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