D8.1 due to Dalila: 24 March due to EC: 31 March
WP8Corruption, assistance and development
This work package, led by the Hertie School of Governance, investigates the nexus between corruption, development and assistance. It has three objectives: a) to provide an assessment of corruption’s impact on development by focusing on two key areas – infrastructure and fiscal deficits; b) to engage in the policy evaluation and analysis of European funds meant to promote development (within and outside the EU) and their impact on the governance inside recipient countries; and c) to systematically assess the impact of European conditionality on corruption in new member, accession countries and European Neighbourhood Policy (ENP) countries through governance indicators and case studies.
The data needed to reach these objectives is collected by surveying corruption in the infrastructure sector. Anecdotal evidence and country investigations allege that the costs of public infrastructure projects are systematically higher in countries with high degrees of corruption, such as Italy, Greece or new EU member states. The fact that infrastructure is a public service with great social importance, significant externalities, and “public good” characteristics, lies at the heart of governance problems in this sector. This work package assesses the extent of corruption problems in the public infrastructure sector, analyses the likely causes of those problems, including the incentive structures and political economy that sustains them and develops a strategy to increase probity in the sector.
The second part of this work package studies the connection between corruption and fiscal deficit through systematic policy narratives and analysis in Greece, Hungary, Romania and Latvia. All these four cases had high deficits which are difficult to explain by economic reasons alone. However, the policy mechanism allowing to the build-up of such deficits with little opposition and public debate has never been systematically studied. ANTICORPP examines policy-making mechanisms in these four countries and formulates recommendations to countries and to the EU on how to avoid the same problems in the future.
The third part of this work package concentrates on the grants the EU provides to developing, neighbouring and accession countries. Research on the effectiveness of development assistance over the years revealed that aid can be “highly effective, totally ineffective, and everything in between depending on the quality of policy-making and institutions. In countries with poor public management, the amounts of aid have not affected the levels of economic growth. There are several channels through which the effectiveness of aid is undermined. Ineffective public budgets, low state capacity and diversion of public resources are some of the key problems of development aid in African countries. Conditioning aid on improvement in governance seems an ideal solution, but as it is a recent one we still have very little research on the underlying mechanism. This work package fills the gap, focusing on countries where the EU has a special interest.
Cases are divided in three categories: European funds in the context of strong anti-corruption conditionality, before and after accession (Bosnia-Herzegovina, Kosovo, Bulgaria and Hungary), European funds in a context of moderate to low conditionality (ENP countries; e.g. Ukraine, Morocco), and European assistance funds unconditioned by good governance (Zambia, Ghana). All country cases selected receive significant EU funds.
Alina Mungiu-PippidiHertie School of Governance, Germany (HERTIE)
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Other Project Participants
- University College London, UK (UCL)
- GIGA German Institute of Global and Area Studies, Germany (GIGA)
- Center for the Study of Democracy, Bulgaria (CSD)
- Corvinus University of Budapest, Hungary (BCE)
- Partnership for Social Development, Croatia (PSD)
- Romanian Academic Society, Romania (SAR)
- Hacettepe University, Turkey (HAT)
- Kosovar Stability Initiative, Kosovo (IKS)
- Hellenic Foundation for European and Foreign Policy, Greece (ELIAMEP)