f corruption throughout the transition economies. State capture has been particularly difficult to measure and often understated in BEEPS data, because it only measures state capture that includes involvement from private firms. Nevertheless, data from this category has proven to be excessively high, especially in CIS countries, where state capture indexes are as high as 41 (as in Azerbijan), indicating an average percentage of firms involved in six different forms of state capture such as the sale of criminal court decisions and the sale of parliamentary votes. Administrative Corruption rates are also astoundingly high, with payments constituting 3.7 percent of annual revenues in CIS countries, 2.2 percent of revenues in Central Eastern Europe, and an alarming 17 percent of profits in the entire region. Results from BEEPS and the EBRD have also shown a direct negative correlation between levels of corruption and various economic and social indicators such as investment and growth, tax payments, poverty, inequality, and the credibility of the state. Together, this empirical evidence indicates the massive, negative impact that results from both types of corruption and identifies corruption as one of the leading causes of transition failure.Administrative corruption and state capture have significantly hindered investments and growth throughout transition economies by creating high levels of uncertainty. Countries with high levels of both categories of corruption have averaged 20 percent less gross domestic investment than those with medium amounts of each category. Firms reporting moderate amounts of administrative corruption report 17 percent average annual sales growth rates over the last three years, while those with high levels of administrative corruption report just 10 percent growth rates in the same period. An opposite trend occurred in state capture figures, with firms engaging in state capture producing 30 p...
