Economic consequences of corruption: impact on investment climate and business development

M.I. Elaev

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Abstract: This article highlights the mechanisms through which corruption affects key economic indicators and the business environment. The author examines how corruption risks transform the investment climate, create additional costs for business and impede the implementation of long-term projects. The study identifies the specifics of the impact of corruption schemes on small and medium-sized enterprises and traces the link between corrupt practices and the emergence of shadow structures in the economy. In addition, the paper analyses the impact of systemic corruption on the allocation of budget funds and the evaluation of strategic state programmes. Based on a comparative analysis of scientific sources, the paper offers specific recommendations for the implementation of anti-corruption measures that increase the transparency of market procedures and stimulate the inflow of investments. The conclusions formed may be in demand by economic specialists, representatives of public administration and experts involved in the study of socio-economic reforms.

Keywords: corruption, investment climate, business development, economic growth, public procurement, anti-corruption measures, shadow market, public finance, competitiveness, innovation potential

For citation. Elaev M.I. Economic consequences of corruption: impact on investment climate and business development. News of the Kabardino-Balkarian Scientific Center of RAS.2025. Vol. 27. No. 2. Pp. 184–198. DOI: 10.35330/1991-6639-2025-27-2-184-198

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Information about the authors

Mansur I. Elaev, 2nd year Master’s student of Human Resources Management, Faculty of Economics, Peoples’ Friendship University of Russia named after Patrice Lumumba;

117198, Russia, Moscow, 6 Miklukho-Maklaya street;

mansur.elaev@yandex.ru, SPIN-code: 5862-5828