How Corruption Destroys Armies – Theft, Graft, and Russian failure in Ukraine

On paper, Russian military modernisation should have produced a force that could overmatch the Ukrainian army. For more than a decade, funds for modernisation were allocated to State Defence Orders for everything from next generation aircraft and tanks, to new communications and battlefield control systems.

Russian R&D did its part (mostly), turning out systems that won attention and praise at trade shows, while commentators steadily built the Russian army up as an example of a dangerous foe that proved you could achieve more with less in the military procurement space.

Then they invaded Ukraine, and the image was shattered. I’ve previously explained this by looking at the Russian Defence budget and their priorities in the lead up to the invasion, but in doing that I refrained from focusing on one key issue.

Corruption in Russia is endemic, corruption in the Russian defence sector (like many around the world) is a catastrophe. From the highest levels of procurement fraud, down to the level of the enlisted personal hawking diesel, copper, and even explosives for petty cash, corruption has been a constant thorn in the side of all efforts to modernise the Russian army and mould it into an effective fighting force.

In this video In this video, I try to take a somewhat light hearted look at how corruption in a military context can (and sometimes does) work, citing examples of actual cases and using hypotheticals to demonstrate the kinds of actions that can rot an institution from head to tail. For those of you in countries that face this problem, it should all seem a little familiar.

Examples are taken from the sources listed below and I make no independent representations on the veracity of any claims. I don’t know exactly how much is stolen from the Russian defence budget, I doubt anyone does. But what I can do, is help us understand how a nation capable of producing some of the most advanced defence equipment in the world would be running out of fuel on day 3, and be rolling out museum piece tanks less than three months into a major conflict.

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A majority of proceeds will be directed to the Australian Red Cross Ukraine appeal, which supports Ukrainians displaced by the war.

Key sources: Corruption in the Russian Defence Sector (Beliakova and Perlo-Freeman)…

Russian statements (albeit old) on defence budget theft…

Russian corruption ranking…


  • Corruption is possible because a person is capable of selling/stealing something without paying the cose of doing so.
  • They are not acknowledging the externalities of their actions
  • Because of this — price is not “efficient”