The Good, the Bad and the Ugly: Controlling Corruption in the European Union

Since the beginning of the ANTICORRP project in 2012, one of the main objectives has been to replace corruption data based on public opinion with more objective measurements of corruption and this is exactly the goal of this report: it uses more reliable evidence than surveys can produce to document control of corruption across EU Member States and estimate its consequences. This report was first presented in an earlier draft to the European Parliament in April 2013[1]. The current paper, however, is more than just an update, it also covers some important advances in the measurement of corruption:

Section I reviews the evidence gathered from corruption surveys such as the Eurobarometer and other expert measurements to paint a picture of the state of corruption in the EU28. More importantly, it shows examples of how ANTICORRP researchers have taken advantage of public procurement data to create more objective corruption indicators based on a number of practices associated to favouritism. One of the indicators introduced here diagnose particularistic practices in the EU28 is the percentage of contracts awarded through procurement processes involving a single bidder.

Section II outlines seven consequences of corruption across the EU28. It presents evidence linking corruption to:

  1. Lower levels of trust in government;
  2. Deviation of public spending from sectors less prone to corruption (health and maintenance) to sectors more prone to it (construction);
  3. Lower levels of tax collection;
  4. Exclusion of women and minorities;
  5. Less talent retention or increased levels of “Brain drain”;
  6. Diminished capacity to innovate; and
  7. Lower ability to absorb EU cohesion funds.

Section III presents evidence of what works and what does not in the fight against corruption. It shows that two of the most advertised anticorruption policies of the last two decades, i.e. establishing an Anti-Corruption Agency (ACA) and restricting political finance, have not helped curb corruption in the EU28. The section also offers an overview of what does work and identifies six determinants of corruption/control of corruption: administrative burden, trade barriers, transparency, auditing standards, judicial independence and civic engagement. These factors have been theoretically and   statistically proven to capture different dimensions of the resources and constraints that determine the governance equilibrium in a country.

Section IV presents the new measures of public integrity based on the six factors listed above. The Index of Public Integrity (IPI) is based on the six indicators identified in the previous section, which on one hand correlate sufficiently to be aggregated into one index, and on another are strongly associated with existing corruption indicators. The IPI offers the advantage of being actionable and more reliable in the detection of trends and changes in the levels of corruption caused by policy interventions. This part also offers a full ranking of public integrity in the EU28 based solely on the IPI and an analysis of the underlying causes of corruption in different sets of countries in the EU.

Finally, Section V contains a set of policy recommendations that highlight the importance of creating contextual anticorruption reform paths based on a country’s strengths and weaknesses.

[1] See Mungiu-Pippidi, A. (2013) “The good, the bad and the ugly: controlling corruption in the European Union.” Advanced Policy Paper for Discussion in the European Parliament 9.

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