Corruption is a problem in countries across the world, with developing countries often believed to be more prone to it, although there is no evidence to suggest this is the case.

However, in the transition from a state-planned economy to a market economy, private enterprises inevitably have an element of corruption, which manifests itself in the subordination of business to any level of government administration, as well as the patronage of the government over business structures.

There are two functions that corruption possesses. The first is its negative function impeding economic development. The second, less commonly acknowledged one, is corruption plays a role of lubricant to stabilize ties between business and political authorities. At the initial stage of the transition to a market economy, the second function plays the major role, as it makes up for imperfections in the legal regime.