EU Funds Curse? New evidence on the reciprocal impact between EU funds and corruption in CEE

Using a new quantitative indicator, this European paper finds EU Structural and Cohesion Funds impact grand corruption in Central and Eastern Europe in two ways. One, by increasing the amount of money available for rent-extraction and two, by failing to provide monitoring mechanisms to reduce corruption. As much as 1/3 of EU funds given to public projects in the Czech Republic, Hungary and Slovakia are disbursed in irregular, obscure ways, tending to favour certain companies. The authors give several policy recommendations to help the EU protect its investments and ensure procurement processes are transparent and competitive. Read More