Editorial – ERCAS

Predicting Governance Evolutions.

Why is there so little evolution in governance, and the trend lines across continents and income groups have looked so depressively flat for the past 20 years? Well, because indicators are poor, some would say, as governance indicators are statistical aggregates which normalize individual components that they throw into an index- and therefore what little change exists gets blurred. While this is true, it’s only because change is so incremental that this happens. And while it is also true that governance, not just governance indicators, generally lags- easier to stage a coup d’état than to change power status and the related social allocation patterns in a society- the exceptions, like Georgia, show us that this is possible. When a country takes off, indicators do show it, provided it’s a big bang and not only a promise. But how many countries have such evolutions? The answer is that very few do, and we need to predict also the others.

Additionally, the reform process is understood in many countries not by the brave reforms directly dismantling the rent system and the administrative discretion at its basis, but by adopting standard anticorruption legislation as an alibi for real action. Do please click on the best governed countries in the world in the public accountability repository europam.eu: the Finland, Sweden and Netherlands of this world and you will discover that they have the thinnest, not the thickest regulation when public integrity is concerned: indeed they are under the European average of nearly every count. On the contrary, countries where corruption is prevalent- in the EU, those are Bulgaria, Romania, Greece, are packed with good governance agencies and laws (but this applies to the rest of the world as well). As no willing government and no great demand existed in these countries to attack rents directly by Georgian or Estonian like reforms (massive reduction of resources for corruption), vast repertoires of laws and institutions were instead adopted. Everyone has anticorruption agencies, whistleblower protection acts, financial disclosures and such- but they do not seem to go anywhere with them, simply because de facto good governance progress does not result from such de jure arrangements. In the past fifteen years there was no evidence that countries which adopted treaties of good governance (and all were tested) progressed more than countries that did not. We need other elements than de jure standard anticorruption reforms to guess if a country will evolve or not.

Here is where the Index for Public Integrity comes into picture. This index developed in 2015 by ERCAS is based on a cluster of factors which interact to generate control of corruption. They are closely correlated, and the index is simply the result of this correlation (a principal component). Its theoretical principle is simple: public integrity is a result of a society’s capacity to control corruption opportunities or resources by how strongly it can constrain ruling elites from not using power for economic advantage. The more opportunities you have (natural resources, red tape, administrative discretion) the more constraints you need: enlightened citizens, a free press, a judiciary autonomous from private interest. But these also do not change easily over time. To guess better the evolution of a country, our team went back in time researching these factors and their related proxies. We then looked at fresh political evolutions to capture recent contingencies and the current strength of demand for good governance. The result is the forecast in the map on the homepage of this website. The ten years data is also accessible here, and the detailed analysis at the basis of the methodology is here. We assessed every country for which data was available and we found twenty positive evolutions: countries which we forecast will continue to improve and eleven negative ones. The rest of more than one hundred countries will very likely continue as they are: there is simply not enough dynamic there, or promise of, to shake the equilibrium. Each country has a brief explanatory note of the state of its control of corruption and its trend. Of course, countries on the upward trend are those where donors could support local change coalitions with a maximum of impact. In view of the last twenty years I should better rephrase that to read “with some demonstrable impact”.

As any innovation, this forward-looking governance tool is open to feedback and constructive suggestions. Every country has a feedback form where you can challenge or agree with the forecast. Do not forget to attach your evidence. Foggy as the governance indicators jungle is, we can together identify some paths leading out if we only pool significant evidence.

Budget transparency – more complex than you’d think

When talking anti-corruption, the most common buzzwords flung around by civil society activists, researchers and development professionals alike are transparency and accountability. Transparency is seen as so key to the fight against corruption that its arguably most important advocate took it as part of its name: Transparency International. It should thus not come as a surprise that the EU Horizon 2020 DIGIWHIST project also aims at increasing transparency, specifically in the realm public procurement. But how do we increase transparency, and how does this contribute to more accountable governance?

A significant part of the project involves the collection of publicly available budget data for both national- and local-level governments across the EU countries and beyond. DIGIWHIST relies on countries following through on their commitments to budget transparency in order to find the necessary data, but it’s evident that not all countries are pursuing budget transparency in the same way.

Budget transparency – and how to get it right

The OECD definition of budget transparency is “the full disclosure of all relevant fiscal information in a timely and systematic manner.” Thus, what’s important to consider when we talk about this kind of transparency is both how promptly the information in question is released, as well as how predictable and orderly its release is.

The digital era has transformed the practice of budget transparency significantly. Ideally, citizens who wish to inform themselves about their government’s budget simply need to access an online portal where they can find all of the desired information presented to them in an accessible, understandable format. Regular users of online media should, however, not be surprised that the reality of budget transparency is more complex than this. The extent to which it is realized varies radically today. Still, there are some examples of how to do digital budget transparency “right”.

The German government, for example, has two main portals for people to turn to. One is Bundeshaushalt-info.de, which allows visitors to explore the national budget via colorful infographics and interactive tables. The second is Govdata.de, the government’s official open data portal, where a simple search of “Bundeshaushalt” returns machine-readable versions of the national budget from 2012-2015. Both portals cater to diverse audiences, ensuring that everyone from casually interested citizens to dedicated data analysts (like the kind of people working on DIGIWHIST) can find the desired information in a form that works for them. On a more local level, a great example of this can be found in Spain. The Presupuestos de Aragón website offers visitors a variety of interactive tools and visualizations for understanding the Spanish autonomous community’s budget. Their open data portal, Opendata.aragon.es, also provides machine-readable budget documents for the years 2006 – 2017.

So how can we evaluate who is doing budget transparently well? One of the main organizations focusing on this is the International Budget Partnership, which conducts the Open Budget Survey. The survey tends to focus on more traditional aspects of budget transparency rather than solely on the digital aspect of it. It contains an index measuring countries’ budget transparency (amount, level of detail and timeliness of budget information), budget participation (opportunities for civil society and the general public to participate in the budget-making process), and budget oversight (capacity of institutions to influence how public resources are raised and spent). The most recent survey, published in 2015, saw New Zealand, Sweden, South Africa, Norway, and the United States leading the pack.

Another view on evaluating budget transparency comes from the Open Knowledge Foundation, which publishes a ranked government budget dataset. They have a specific focus on the availability of government data in digital forms, and rankings are based on nine different factors, such as whether budget data is openly licensed, if it is available online, and if it is machine readable. Because this index is more narrowly focused than the Open Budget Survey, it is hard to compare the two data sources, and they often have strikingly diverging rankings (for example, the Open Budget Survey ranks Russia 11^th overall, while the OKFN rankings have Russia tied for 105^th place). Thus when evaluating budget transparency, it’s important to be clear about what aspects of it you are specifically interested in.

Transparency – and then what?

Just having the data in hand does not mean the battle is won. More transparency does not automatically equal more accountability. On the contrary: exerting accountability via budget transparency is no easy feat. The mere existence and general availability of budget data does not mean that it is immediately possible to make observations on and draw meaningful conclusions from the data. First of all, the way the data is published is often problematic. It does no good for a country to boast that all of its budget information is published online if that information is buried in a difficult-to-navigate finance ministry site, or in a chaotically-organized open data portal. Other countries still exclusively publish budgetary information in PDFs or publish only select portions of their budget data in machine readable formats. This is prohibitive to organizations like DIGIWHIST who want to automatically extract and analyze budget data, as extracting information from PDFs is much more difficult and error-prone.

Second, the actual analysis of budget data and what changes in allocations from year to year actually mean can be challenging without sufficient contextual background. Huge changes can be explained away by departmental consolidations, and small shifts in numbers may actually be indicative of changes that warrant scrutiny – the point is, a casual observer of this data can’t necessarily look at it and understand what is happening and identify potential causes for concern.

Third, the budget data needs to be sufficiently detailed to be useful from an accountability perspective. For DIGIWHIST’s work with public procurement data, for example, it is not sufficient to know how much money is being allocated or spent by a single ministry. Since the project is interested in matching contracting authorities from procurement tenders with the specific government agencies to which they correlate, a deeper layer of detail is needed; budget experts refer to this as the “economic classification.” But not all countries release budget information at levels this specific, making it that much more difficult for organizations like DIGIWHIST to hold governments accountable for their budget allocations.

Though progress at times feels slow, there is a clear trend toward greater budgetary transparency in governments and better provision of structured, accessible data. Projects like DIGIWHIST help in furthering this push thanks to the pressure they place on governments to be more accountable. Their researchers make transparency and accountability more than just buzzwords and help citizens and civil society activsts in their fight against corruption.

By Tori Dykes

This post was originally published as part of the DIGIWHIST project.

EU Aid to Turkey – Money well spent?

Following the failed coup attempt in Turkey last week, Recep Tayyip Erdogan put increasing pressure on the country’s democratic institutions. The crackdown was not limited to rebelling soliders, but was quickly extended to the judiciary and academia. In total, around 50,000 state employees were rounded up, sacked or suspended.

While this crackdown is unprecented, it is a continuation of many years of Mr Erdogan’s efforts to undermine the democratic order in Turkey and extend his grip on power, as Alina Mungiu-Pippidi pointed out in a recent comment. She questioned whether the EU was right in continuing to send billions of euros in aid to Turkey each year. But how much aid does Turkey really receive from the EU institutions?

Table 1: EU Aid to Turkey 2005 – 2014, in Million US Dollars*

In the ten-year period between 2005 and 2014 alone, EU institutions sent the equivalent of 13.7 billion dollars in aid payments to Turkey. 1.5 billion dollars were directy aimed at improving government and civil society institutions. In the light of the continuing campaign to undermine democratic institutions we have to ask the question if this is money well spent or if it is time for a rethink in EU-Turkey relations.

Figure 1: EU Aid to Turkey 2005 – 2014, in million US Dollars*

*All data taken from the OECD Query Wizard for International Development Statistics

So far, democracy has not won in Turkey

Those European leaders who rushed to welcome the restoration of a constitutional order in Turkey should think better. President Recep Tayyip Erdogan himself started the subversion of this particular order a while ago, to little international indignation.

Ahead of the abortive coup in Turkey, the NATO member (and European Union candidate) country could hardly have been called a democracy. Freedom House ranks it as partly free, lacking in civil liberties and, especially, press freedom. Erdogan had already changed the constitution to be elected directly by the people, after ruling the country in various forms since 1996 and repeatedly bending the Constitution. In the last two years, he undertook a series of measures which no democrat would endorse:

He removed or replaced prosecutors and judicial police personnel to stop corruption investigations against his family and some ministers close to him, with no protest from Brussels. In contrast: any moves by magistrates in Romania or Bulgaria must be sanctioned through the continuing biannual Cooperation and Verification Mechanism as part of post-accession conditionality.
He removed dozens of elected Kurdish mayors and stripped several MPs from Kurdish parties of their parliamentary immunity on grounds that they lacked loyalty to the state.
He arrested dozens of critical journalists, brought hundreds of cases of alleged libel toward him to court and granted large public works concessions to oligarchs in exchange for their acquisition of critical media outlets and their promise of favorable coverage.
He allowed thousands of boats to transport refugees from Syria to Europe from the Turkish coast, yet once Germany (and its European partners) agreed to his conditions, it was clear he could easily put a stop to this.
He intervened in Syria in an intransparent manner and without consulting international partners, allowing thousands of jihadists to pass through the border in the months before the French terror attack last year.

Erdogan has for many years pursued a clear agenda of dismantling the constitutional order of modern secular Turkey, following his own wisdom from when he was mayor of Istanbul and declared that the West could be beaten with its own weapon: democracy. Already earlier he took control of large parts of the army, arresting hundreds of officers under the pretext of an earlier coup that was never proven. He forced their sentencing, resulting in over two hundred acquittals on grounds of falsified evidence. Following last weekend’s events, he had a list of nearly three thousand magistrates to be dismissed or arrested, including Constitutional Court judges, when the dust from the coup had barely settled. The OSCE declared Turkey’s last election problematic, due to intimidation, the use of administrative resources in his support and even limited fraud.

Being endorsed by a majority of voters does not mean much under such circumstances. Russian President Vladimir Putin enjoys a similarly strong electoral mandate. In such environments of intimidation and manipulation of democracy, the word ‘mandate’ loses its meaning. It increasingly appears that the attempted coup was, to a large extent, motivated by the military’s desire to defend itself from imminent plans to take over what was left of the army and judiciary through politicisation. A military coup is indisputably not the solution to the problems of a democracy. But this does not mean that world leaders who rushed to defend Turkey’s constitutional order have a remedy for Erdogan’s long-time constitutional subversion. This subversion is much worse than Hungarian leader Viktor Orban’s actions, against which Western leaders were very vocal. They had little to fear in view of Hungary’s relatively minor military role compared to Turkey. Both the EU and the United States have tried for many years now to ignore the degradation of democracy in Turkey, as they saw no solution to it. Erdogan will now use the opportunity, which he called ‘God’s gift’, to destroy what was left of any executive constraints.

If Erdogan is no better than Putin, and Europe is to deal with two such ruthless leaders on its borders, we need to change the game and put an end to hypocrisy. Turkey is still the largest aid recipient of EU funds: since 2002, even before the migration crisis, they have received over one billion euros a year to strengthen the rule of law. Today here we are, on one side Europeans distracted by chasing funny Pokémons, on the other side neighbouring states playing a Game of Thrones in which they eliminate real people. It’s not just the French who should start calling their reservists to volunteer duty. We need a widespread understanding that we are on the precipice of a new era in which our normative order is openly defied on our borders, including the terrible spillover that we already see. Security free-riding is over. If we want real democracy and human rights, we have to be prepared to pay the price for it.

This article was originally published on the blog of the Hertie School of Governance.

Can we really speak about corrupt countries?

Prime Minister Cameron shocked everyone by referring to Afghanistan and Nigeria as possibly some of the most corrupt countries of the world just a few days before this week’s anti-corruption summit in London. Many saw his statement as yet another instance of Western hypocrisy. Given London is famously a playground for the corrupt and Mr. Cameron’s family itself profited from stashing money overseas, it does seem odd that he is the one to point the finger. But is it justified to be politically correct about corruption? The evidence tells us otherwise.

The Panama Papers show that elites in most countries will display a quite shameless (and selfish) appetite for privilege if a loophole presents itself. But while people from countries with a reasonable control of corruption, such as the United Kingdom, have to go to some exotic island with their money, people in countries where corruption is systemic (the majority of places) need not go that far. In those countries public budgets and banks are controlled by ruling elites, who openly flaunt lavish houses, cars and incomes worth far more than their declared earnings.

Countries like these have their very own Virgin Islands within their own borders, and their populations know it. This is how the Global Corruption Barometer assesses whether their officials and indeed their countries as a whole are corrupt. In countries with tighter control over corruption, survey respondents tend to claim their national rulers merely put their private interests first. Both groups are right in identifying corruption, but there is a big difference between the two cases. The summit concentrated on closing offshore havens, but did not touch havens operating within national borders. While this may help clean up less corrupt countries a little more, but it will do nothing for the others.

Another key facet in the politically correct approach to corruption is that money from developed countries is feeding corruption in the developing world. Granted, there is evidence to suggest assistance funds and even EU structural and cohesion funds can turn into a resource for corruption in countries where corruption is systemic. One Afghan leader at the summit aptly pointed out that the flow of Western money into his country was only making things worse. However, what came first was not the flow of foreign money – completely benign when invested or donated in a country with low corruption – but the ruthlessness and unchecked power of governments in recipient countries. They designed the rules to extract as many rents as possible from all public and private resources, be they local taxes or foreign investment.

Unchecked local power is the number one cause of corruption. Without tackling this, pressure on international donors makes little sense. At most, it can lead to investors avoiding countries with corruption and donors organizing aid through non-governmental channels, for example by funding international and local charities or communities. Similarly, repatriating assets makes little sense if future governments continue to act corruptly. This is exactly what happens in over eighty democracies and forty autocracies, where public resources are openly raided by whoever comes to power.

Finally, is it right to say we can only speak of corrupt individuals and not of corrupt countries? The idea was suggested by the Prime Minister of Malta, a country with a reasonable control of corruption. Once again, this is untrue, as survey respondents all over the world have repeatedly shown. Although corruption is universal and human nature tends to give in to temptation all too easily, history shows us countries have constructed constraints on corruption within national borders over time. In a minority of countries the constraints are strong enough to keep an eye on the resources available for corruption.

Once constraints have reached this level – with, for instance, critical and engaged citizens able to sanction rent seekers, as in Iceland, where the Panama tainted PM had to leave immediately – resources for corruption, such as oil, no longer pose a danger. This is still far from the case in “fantastically corrupt” Nigeria, as Cameron called it. We can therefore speak of corrupt countries where the rules of the game normalise government extraction of public resources and where most people in power do just that. Here, payments provide virtually the sole access to public services and careers are forged on the basis of connections and not merit. Inhabitants of such countries know and connect together all these symptoms. Many of the most talented people leave, preventing the creation of a critical mass for reform and strengthening the fate of subdued populations and predatory elites.

When statistically analysing resources and constraints for corruption, we create a ranking system that clearly shows what reforms are needed. Researchers from ANTICORRP have done this in the Index of Public Integrity. It shows Norway leads the world, while Venezuela and Chad are on the bottom rung. By addressing these areas for reform, Nigeria has the potential to progress from ‘corruption as a rule’ to ‘corruption as an exception’. None of this was discussed at the summit. There is a huge knowledge gap between making the world a cleaner place and addressing the issues of individual countries. Future summits can bring further well meant and hopefully still politically incorrect contributions.

Alina Mungiu-Pippidi is Professor at the Hertie School of Governance in Berlin and policy chair of the EU FP7 Projects ANTICORRP, the EU’s largest policy research program on corruption. She is the author of the Quest for Good Governance: How Societies Develop Control of Corruption and recently wrote a report on integrity and trust in the EU for the Dutch EU Presidency, as well as many academic and non-academic contributions.

Corruption Perception: how can we improve corruption measurements?

By Ramin Dadašov and Niklas Kossow

When releasing the Corruption Perception Index (CPI), every year, Transparency International (TI) can be sure to attract the attention of the wider public including policy makers, academics and the media. According to its latest results, the problem remains severe across the globe. More than two thirds of countries covered by the CPI suffer from serious corruption. Still, the current report also says that there is significant improvement in many countries: this seems to be good news for the growing anti-corruption community. Yet, some of the CPI results do raise some eyebrows. The steady raise of Qatar’s scores, for instance, cannot be squared with the governance realities on the Arabian Peninsula.

The role of the CPI and its companion – the World Bank’s Control of Corruption indicator (CCI) – in raising public awareness of the magnitude and the spread of corruption worldwide cannot be underestimated. Moreover, thanks to these indicators and the resulting huge body of empirical research in the last years we have learnt a lot (although by far not everything) about the factors which explain cross-country variation in corruption levels. The key feature of both indicators is that they are based on the aggregation of perceptions of experts and the general population. The aggregation of a variety of sources aims to reduce the measurement errors associated with individual surveys and to reflect the broad concept of corruption which underlines the measurements. Although the CPI and CCI differ with respect to sources employed and aggregation methods, they are highly correlated (for a global sample of 173 countries in 2013 data, e.g., the correlation between both indicators is r=0.98).

As aggregate perception indicators both indicators have received several criticisms since their first publication in the mid-90s. Leaving aside the discussion on methodological and conceptual issues, one of the major concerns is their “lagging nature”: Changes in the assessments of corruption often reflect corrections of errors done in the past. One illustrative example is Brazil. Hit by the Petrobras scandal that broke in 2014, it has been suffering from a severe economic and political crisis; the country’s current CPI scores deteriorated compared to the previous year after being stable between 2012 and 2014. The positive development of uncovering a previously hidden corruption scandal was not reflected in the score. Other notable example in this context is the worsening of CCI scores in Greece, Spain, Italy, and Portugal in the aftermath of the recent financial and fiscal crisis.

These examples make clear that interpreting changes in CPI or CCI should be done very cautiously. Using them for guiding policymakers can be misleading or even harmful as they might be silent about the potential outcome of anti-corruption reforms. Ukraine’s CPI score showed almost no change between 2012 and 2015, despite witnessing major anti-corruption reforms since the Maidan revolution in early 2014. Until very recently the methodology of CPI did not even allow for comparison across years which, despite explicit warnings by TI, did not hinder many users from doing so.

A corruption indicator that addresses the needs of the policy community thus needs to be a diagnostic tool that assesses the institutional capacity of a society to control corruption. It should be based on objective data, solidly grounded in evidence thereby transparently reflecting preventive policies for curbing corruption. Building on our work in ANTICORRP, the ERCAS team has been working on building such a tool.

Specifically, we propose an indirect way of capturing the national level of control of corruption through an Index of Public Integrity (IPI). Relying on objective and actionable data, it combines six different indicators reflecting aspects of red tape, transparency, judicial constraints, and social accountability. A global version of the IPI covering around 100 countries will be available soon. A more limited version that covers only 28 European Member States was presented this month in a report commissioned by the Dutch EU presidency. Its approach enables researchers to track progress over time and to consider the impact of reform efforts. Similarly, as part of the DIGIWHIST project, our researchers are working on ways to use red flags in the context of public procurement as indicators for high-level corruption. As a governance field particularly prone to corruption, procurement practices can be used as proxies to estimate societal corruption levels, if used with care.

Our research shows that there is still a long way to go in order to reach truly objective measurements of corruption. Yet, there are steps in the right direction. Thanks to the efforts of the growing anti-corruption community we will soon be able to find indicators which will help us to inform the policy community on how to effectively fight corruption.

If FIFA were a country…

by: Alina Mungiu-Pippidi

Speaking on Thursday, 3 December on the corruption indictments of additional FIFA officials (bringing the total number of individuals charged to date to 41) American Attorney General Loretta E. Lynch said: “The Department of Justice is committed to ending the rampant corruption we have alleged amidst the leadership of international soccer – not only because of the scale of the schemes, or the brazenness and breadth of the operation required to sustain such corruption, but also because of the affront to international principles that this behaviour represents”. In other words- it has almost become impossible to defy common definitions of public integrity as openly and as outrageously as FIFA has done for many years. On international Anticorruption Day (9 December) it is worth pondering on what this means.

Based on what we know, FIFA officials systematically distributed broadcast rights or picked tournament locations on the basis of favouritism (in exchange of kickbacks or other favours). This means that in the way FIFA operated, corruption was the rule and not the exception. American officials claim that for decades, FIFA officials “used their power as the leaders of soccer federations throughout the world to create a web of corruption and greed that compromises the integrity of the beautiful game”[1]. Everybody knew. Opponents were systematically silenced, eliminated or remained a tiny minority.

Should this come as a surprise? Looking at rankings of public integrity, the average of the 209 countries whose soccer associations are the FIFA constituents is just 5, on a scale where New Zealand stands at 10 and Equatorial Guinea at 1. Somalia, standing at 1.3, nominated Sepp Blatter for the FIFA presidency in 2011. The number of countries where integrity clearly prevails (say, above the grade of seven) is only 44, with 94 countries scoring above 5. If FIFA were a country, it would clearly not be in upper half. Rather we would most likely see it somewhere near Brazil and stand around rank 121, with a score of 4.2.

These are scores on the control of corruption taken from the Worldwide Governance Indicators. This is only a perception ranking, even if arguably the most objective one to date as it aggregates different ratings for a country. After all, however, Brazil has been known for some years to struggle with corruption, which seems not to have been the case with FIFA. What if we built a corruption indicator looking only at procurement practices? This was already done for the EU-28. It shows that in this context EU institutions might rank just behind Portugal at place 16. It might be better not to ask where the UN would stand if ranked as a country – an organization where, after a major clean-up, there are still high-level officials which could be arrested on corruption charges.

It seems that to arrive at a situation where corruption is deviation from the norm, rather than the norm itself there is still some way to go. What anticorruption fighters around the world battle with is a vicious social order in which you have to know who somebody is in order to predict what share of public resources he or she will get. This is what I argue in my latest book, The Quest for Good Governance. We must wage a war to establish the norm of public integrity before punishing the defectors from it. It is a matter of understanding what the majority practice is.

The resemblance between FIFA and one of the countries below average in global corruption ratings does not stop here. Corruption is all about unchecked power and lack of public oversight which allows officials to convert their influence into material assets. Where this exists, power monopolies take hold even if the institution of formal competitive elections exists. For many years Mr. Blatter enjoyed the combination unlimited terms and being the only candidate on the ballot, a familiar practice in sub-Saharan Africa or Central Asia, which are seen as the most corrupt regions in the world. In a situation in which discretionary power is preventing any opposition (no football federation in the world had the courage to endorse the mock candidature of an American sports journalist to the FIFA presidency due to fear of reprisals from FIFA leadership), internal control agencies or committees are also subdued. They were regularly petitioned to intervene, but ended their investigations due to “lack of evidence”.

In my book, I argue that this is the reason that countries which have adopted anti-corruption agencies or adopted more anti-corruption legislation did not progress more than countries which did not. Actually, it seems to be the reverse: presently the most corrupt countries have the most laws and agencies. Occasionally, these are used against opponents of those corrupt leaders who control these agencies. The best anti-corruption policy would be, however, to replace the leaders of those countries all together. Cliques and elites that were in power all these years when corruption flourished would be removed. Officials would finally be able to introduce term limits, liberalize access to being elected and conduct all other common sense reforms that many soccer fans around the globe expect from FIFA since many years.

This is difficult, however, because the whole political economy of a corrupt country is built in a corrupt way and is not easy to disentangle. For instance, in Brazil, a country in which the fight between integrity and corruption is at least ongoing, the poorest regions of the country are used by corrupt politicians to get re-elected in exchange for the allocation of fund. In a very similar way, for FIFA it was stadiums or other favours for poorer countries, which turned national associations into clients of the ruling clique (if they were not directly bought by cash handouts on Election Day). Richer and more politically active regions demand integrity from FIFA, even in the run-up to or during a World Cup. In the end of the day the result is unspectacular. Corruption does not depend on nationality – Mr Blatter is, after all, a Swiss national, whose country has a staggering control of corruption score of 9.8 and is ranks at number 4 globally. Corruption depends on your constituents. If the majority of them can be bought, intimidated or pushed around, then a country, no more than an international organization, won’t be able to establish control of corruption.

In the end of day, FIFA is, however slightly better off than a country. As it seems, some jurisdictions external to its own home-grown impunity system seem to apply. At least the Swiss and American legal systems are shining a light on FIFA corruption, as the defendants luckily used American banks for their transactions. In doing so they are likely to have violated American laws. They thus created the conditions for what is for once a very welcome American intervention.

[1] FBI Director James B. Comey, also speaking on 3 December.

What Does the Volkswagen Story Really Tell Us?

The current scandal around Volkswagen (VW) and possibly other German carmakers rigging emission measurements of their cars should have come as less of a shock to the press and the public. Surveys of German businesses have been already showing appalling levels of business integrity and VW is by far not the only German company involved in fraud and dodgy deals. Only a couple of years ago a special Eurobarometer (Survey on Business Attitudes’ towards Corruption) revealed that over half of businesses in the sample believed that procurement deals in Germany were either inside deals or pre-arranged as a rule. A similar percentage declared that favouritism towards friends and family was widespread in the German business community. These results are far worse compared to the other EU countries often praised as clean (Denmark, Sweden, the UK or France) and closer to the numbers registered in Romania or Italy.

How can such findings be reconciled with the image of a Germany which self-styles its business culture as high on both competitiveness and integrity?

Despite being perceived as one of the world’s cleanest countries according to corruption measurements from the World Bank and Transparency International, Germany has an objective problem with transparency, says Roberto Martínez B. Kukutschka, a researcher from the European Research Centre for Anti-Corruption and State-Building (ERCAS) in Berlin. He authored a report on the situation of public procurement in Germany, comparing it with new member states and Turkey as part of the European funded research project ANTICORRP. He found that the outdated data collection practices, the complex legal framework and the underuse of electronic platforms make the situation very in-transparent. The lack of data obstructs bidders, media and civil society organizations to monitor procurement decisions. This places an extra burden on the federal and local courts of auditors, some of which have issued reports that seem to back the perceptions of the business community, criticizing the practice of contracting authorities which fail to publish data on assigned contracts, or use restricted procedures even when the law calls for open tenders.

VW is naturally not the only high-profile German company that has been prominently linked to fraud and corruption. ERCAS has just published a working paper by Jennifer Kartner and Carolyn Warner, two American scholars, arguing that the penetration strategies of Siemens AG to foreign markets are adapted to local corruption syndromes and this is not unique among multinationals.

The paper argues that multinationals which engage in transactions in countries with the reputation of being corrupt adjust their market entry tactics according to the host country and play entirely by the local rules of the game. As Siemens alone has been investigated by authorities in approximately 25 different countries, the authors chose Siemens AG as a case and assessed its behavior over four countries belonging to different types of corruption control environments – the US, Italy, Russia and China. They do not claim to assess whether and if Siemens’ tactics have changed since it had been prosecuted and fined by the US and some other countries. However, the authors argue that if a country’s overall corruption has not changed, such multinationals are likely to search for even more camouflaged means of participating in corrupt “markets.” Stopping to do business in those countries, as an alternative strategy, hardly seems to happen. Persistent investors in notoriously corrupt countries thus become subsidizers of a vicious circle of poor governance.

“It’s easier for corrupt behavior to spill over borders than for integrity”, says Alina Mungiu-Pippidi, Director of ERCAS and a Professor at the Hertie School of Governance. “Control of corruption is a nationally built equilibrium, a system built over a long time to constrain powerful people from cheating on competition and stealing public resources. This was not well translated in the era of globalization because such barriers are mainly national, so a whole land of opportunity opened up”. Corruption is frequently justified by the need to “open markets” to companies when dealing with more corrupt countries which control access. But this has led to fraudulent practices becoming increasingly accepted in the context of ever more competitive markets.

Mungiu-Pippidi, who edits a yearly anticorruption report funded by the European Commission, says that the Germans need to shake off complacency. “This is a country where young mothers shout at foreigners if they cross the street on the red light, even when no car is in sight, because they give a bad example to their kids,” she remarks, “but it’s not just integrity on the street which needs permanent monitoring, or good practices melt away. Corrupt practices of top German businesses have been going on for years due to lack of transparency and insufficient public scrutiny. Young Germans need to act fast, or they might discover that German business integrity is a myth from the time of their grandparents.”

Anti-corruption as last chapter of democratic revolutions

by: Alina Mungiu-Pippidi

Tarek al-Tayeb Mohamed Bouazizi was a 27 years old Tunisian street vendor who set himself on fire on 17 December 2010, in protest at the confiscation of his wares following an accusation by officials that he was trading illegally. That started the fires of the Tunisian Revolution and then the wider Arab Spring, and he was instantly cast as a hero – after all, then-President Zine El Abidine Ben was a typical predatory leader with a wife who had built herself an unauthorized villa at the UNESCO heritage site of Carthage. But the hero of the Tunisian revolution was in fact avoiding paying tax, like most petty traders in poor countries all around the world. He saw himself as acting legitimately in doing so because the state had done so little for him and his family in his life, while President Ben Ali and his wife prospered. The state could have argued in return that since people like Mr Bouazizi had never paid taxes there were insufficient public resources to offer them much. It might turn out that the money spent on Mrs Ben Ali’s villa and other spoils was insufficient to provide for all those in need of education and health care but who were not paying taxes. In other words, beyond the paradigm of predator and victim, what seems to be the problem in the Tunisian situation is the absence of an agreed social contract between them to avoid both corruption and evasion. Only such a contract would give development a chance.

1280px-French_support_Bouazizi — Photo credit: Antoine Walter (Flickr)

Crowds in the streets of New Delhi, Sofia and Rio have only recently raised corruption as one of the main banners of their protests. It is not difficult to see why. Most of the 114,000 respondents in 107 countries interviewed for the 2013 Global Corruption Barometer believe that corruption has increased, not decreased in the previous year, two out of three consider that favouritism is the rule rather than the exception in their public services (only a quarter having resorted to bribes in the year previous to survey), over 50% believe their government is captured by vested interests and for every nine people who consider national anti-corruption strategies ineffective we find one who believes they are working.

The reasons why people complain of corruption become obvious when we survey the countries where such perceptions are dominant. New research from the EU FP7 ANTICORRP project shows that corruption comes with a score of malign phenomena which hinder development and well-being. High perception of corruption is significantly associated with low public expenditure on health (the queues outside Brazilian hospitals), but high expenditure on various government projects – from Brazil’s expensive World Cup to Mr. Ben Ali’s grandiose empty mega-mosque – along with reduced absorption of assistance funds, low tax collection, poor returns from public investment and brain drain. In 2013 only citizens in Northern European countries agreed that for the most part advancement in the public or private sector is based on hard work and competence, while for the rest of Europeans favouritism through connections, the most insidious and widespread form of corruption, seems to be the ticket to success in their societies.

Why are elections not taking care of that and in new democracies we continue to have the same problem, which we can document with evidence ranging from the poor rate of tax collection to the fact that the number one source of wealth continues to be power and authority? Why does control of corruption work in most old democracies (though not in all) and in so few new ones (over eighty countries which hold regular free elections are systematically corrupt)? Because for a society to prevent those with power to allocate public resources to their benefit elections seem not to be sufficient- they alone cannot guarantee that whoever gets elected rules by the law and the state treats everyone equally and fairly. In many new democracies political parties are structured as “spoiling machines” of public resources, a historically more evolved organizing vehicle for group benefit after family, clan or tribe, who have learned to coexist fairly well with apparently modern organizations by informally draining them of their impersonal and objective character. The most widespread example is the politicization of the public service in corrupt countries (including hospitals and schools, where jobs are seen as party spoils).

Over 160 countries in the world ratified the United Nations Convention against Corruption pledging to evolve to modernity. But seeing that corruption at a systemic scale is simply an abuse of power, anti-corruption is necessarily a political act. The few countries which succeeded to build control of corruption over the last forty years – countries like Uruguay or Estonia – did not do it through anti-corruption agencies or other silver bullets promoted by the international community, but because a critical mass managed to balance power and elect people who ended the old vicious circle and initiated new rules of the game. For our generation the elimination of privilege and favouritism is the only way to accomplish in full the democratic revolutions started in 1989. Integrity is a public good, and this is why its construction is fraught with collective action problems and translates in this new wave of global discontent – it’s only discontent with the outcome of imperfect democracies and not with democracy itself.

The results of the ANTICORRP project cited here are published in Alina Mungiu-Pippidi (editor) Anticorruption Report 1 (Controlling Corruption in Europe) and Anticorruption Report 2 (The Anticorruption Frontline) which came out from Barbara Budrich publishers in 2013 and 2014.

Alina Mungiu-Pippidi chairs the European Centre for Anticorruption and State Building (ERCAS) at the Hertie School of Governance in Berlin.

The Ambivalent Future of Ukraine

This article was originally published online in the Hot Spots Forum of the journal Cultural Anthropology. It is republished here with permission of the author.

by Alena Ledeneva

This article is part of the series Ukraine and Russia: The Agency of War

Inline_ledeneva_1 — “Illustration of Ambivalence by Robert Neubecker for Ian Leslie’s ‘Ambivalence is Awesome’ on *Slate*, June 13, 2013.”

The situation in Ukraine can be grasped best by a specialist on geopolitics, a scholar of the (il)legitimacy of power, an ethnographer of insurgencies, an analyst of media propaganda wars, a trauma therapist, or by a psychologist of phobias and love-hate relationships. I have none of those specialisms, but I share their intellectual challenge—the theme of ambivalence. While “East” and “West” embark on another cycle of ideological confrontation and political standoff, there is little room left for marginal positions and ambivalent attitudes. As the outside world lashes out at Putin over the Crimea and East Ukraine, Russians turn wartime patriotic. Yet paradoxically, exactly because it is impossible to achieve a consensus, and because the black-and-white forefront positions over the Crimea and east Ukraine split families, friendships, and international clubs, it is the understanding of grey areas and backgrounds that might help define the way forward for Ukraine.

The Bi-Polar Background

One legacy shared by most survivors of oppressive political regimes is what George Orwell called “doublethink” and what Yury Levada and Alexander Zinoviev branded as being the key feature of Homo sovieticus. Under late socialism, as the present-day elites in Russia and Ukraine were growing up, it was irrelevant whether people believed official ideological messages or not. Instead, the relation to officialdom became based on intricate strategies of simulated support and on “nonofficial” practices (Yurchak 1997, 162). Individual doublethink developed into collective double standards that implied the ability to hold contradictory views in private and in public and the capacity of switching between them smoothly, when applied to “us” and “them,” to “ordinary citizens” and to the Party leaders, and to one’s personal circle and to society as a whole.

In its sociological sense, ambivalence, in the definition of Robert Merton, refers to incompatible normative expectations of attitudes, beliefs, and behaviour. The incompatibility is assigned to a status and the social structures that generate the circumstances in which ambivalence is embedded (Merton 1976, 6–7). The core type of sociological ambivalence puts contradictory demands upon the occupants of a status in a particular social relation. Since these norms cannot be simultaneously expressed in behaviour, they come to be expressed in an oscillation of behaviors (Merton 1976, 8).

In the context of modernity, ambivalence is associated with fragmentation and failure of manageability. Zygmunt Bauman defined ambivalence as the possibility of assigning an object or an event to more than one category and views it as a language-specific disorder, with its main symptom being the acute discomfort we feel when we are unable to read the situation properly and to choose between alternative actions (Bauman 1991, 1, 12). Those who have detailed knowledge of geographical maps and the economic history of Ukraine or have done exhaustive research of the conflicting accounts on the current situation end up developing symptoms of ambivalence. Bauman lists ambivalence among “the tropes of the ‘other’ of Order: ambiguity, uncertainty, unpredictability, illogicality, irrationality, ambivalence, brought about by modernity with its desire to organise and to design” (Bauman 1991, 7). Ambivalence thus implies a form of disorder and negativity. In my view, ambivalence can be singled out from Bauman’s list for its bi-polarity, oscillating duality and the relative clarity of polar positions.

I note the clear visions represented by the White House and the Kremlin, even if they leave me feeling schizophrenic. Russia has gone anti-American yet again, but with a passion as if it is the first time. The United State’s approach toward Russia, as Andrew Wilson points out, reflects traditional concerns, even phobias, that are not based on an adequate understanding of the country, in part because Russia has ceased to be a focus of U.S. foreign policy. The U.S. approach to Ukraine is probably even less informed, if one follows that logic.

These irreconcilable visions constitute thesis and antithesis that co-exist without a possibility of synthesis, yet without an uncertainty as to what they are. The catch is that the clarity of polarized positions does not help in dealing with the complexities at hand. An adequate understanding of the situation in Ukraine, in my view, is unachievable without complicating matters, viewing modern Ukraine in the context of its geographical, historical, economic, and political bi-polarity and without understanding the clash between the completely different modus operandi of Ukraine and Russia vis-a-vis Europe.

The “Open Secrets” of the Ukrainian Sistema

In psychoanalysis, ambivalence is often associated with ambiguity, but the differences are significant. First, ambivalence is a bi-polar concept, not multi-polar as is the case with ambiguity. Its poles (thesis and anti-thesis) are defined and there is little uncertainty as to what these poles, or co-existing views, attitudes, and beliefs are. The uncertainty is created by the unpredictability of their actualization. While ambiguity is best illustrated by shifting centers of power and political influences (as represented by the EU multi-polar model and positions of its individual members on sanctions), ambivalence is an outcome of conflicting constraints.

The ambivalence of the Ukrainian elite can be defined as substantive ambivalence (they are Russian speaking, Russian educated, and Russian thinking individuals, while fighting their own background), functional ambivalence (they criticize and attack the system that they themselves had been an integral part of), and normative ambivalence (they commit to pro-democratic values that oppose their political behaviour, for example, their position on the EU membership goes contrary to their business interests).

The ambivalence of the Ukrainian elite is distinct from duplicity, from the deliberate deceptiveness in behaviour or speech, or from double-dealing. When molded by clashing constraints, ambivalence can result in the ability for doublethink (the illogical logic), dual functionality (functionality of the dysfunctional), and double standards (for us and for them). Ambivalence is best understood through the paradoxes of modernity, such as the role of hackers in advancing cybersecurity, for example, or the elites that propagate democracy and rule of law but are ready to use any amount of force to maintain themselves in power, as Vladimir Pastukhov argues.

Living with Ambivalence

My take on Ukraine evolves from my understanding of sistema, a network-based system of governance in Russia, which operates behind the facades of formal institutions. One “open secret” of the Ukrainian sistema is that it has been unable to serve its own reproduction: in short, elites simply have grabbed too much. I agree with Wilson’s framing of Maidan as “anti-sistema” forces and his argument that people want to reboot the system but don’t have methods for doing so.

The other “open secret,” however, is that ex-Maidans and Maidans-to-be are unable to make a fundamental change: sistema has gone but long live sistema! This points to a certain grip, if not effectiveness, of sistema forces, even where weakened by violence and its own protagonists.

The bad apples vs. bad barrel dilemma of the Ukrainian governance system, sometimes referred to as kleptocracy, cannot be resolved in a non-ambivalent way. It is not the question of changing all the apples (people of the former sistema), or of changing the barrel (the regime). Living with ambivalence will remain the name of the game until Ukraine becomes capable of sustaining itself as an independent economic unity. In the last twenty-five years, there has been very little progress in this direction. The tragedies of the 2014 military confrontations in east Ukraine have made the future of Ukraine even more difficult.

Alena Ledeneva is Professor of Politics and Society, School of Slavonic and East European Studies, University College London. She is also chairs the pillar on the Impact of Corruption for the EU FP7 ANTICORRP project.

References

Bauman, Zygmunt. 1991. Modernity and Ambivalence. Ithaca, N.Y.: Cornell University Press.

Merton, Robert K. 1976. Sociological Ambivalence and Other Essays. New York: Free Press.

Yurchak, Alexei. 1997. “The Cynical Reason of Late Socialism: Power, Pretense, and the Anekdot.” Public Culture 9, no. 2: 161–88.

Why Eastern Europeans did not vote

greva cetateneasca_1 — “I vote, you vote, he/ she votes, we vote, you vote, they vote? , #they rob us!” (Photo from: Uniti Salvam)

By Alina Mungiu-Pippidi

The night before the European elections I dragged myself – despite not being in top form – to plead for one hour by myself in a TV talk show that my Romanian countrymen should vote the next day. A boycott had been called by a group of Facebook activists under the catchy slogan: “Always voting for the lesser evil amounts in the end to choosing an evil.” As turnout in the previous elections for European parliament in Romania (when I declined being a candidate for the President’s party unless his daughter, a model, stepped down) had been 27%, I was worried that the boycott call would be answered massively in all urban areas. In poor rural areas subsistence farmers are ferried to vote by political entrepreneurs. Leaving Romania, a country of 18 million voters, to be represented by its poorest and most disempowered voters seemed to me an extraordinary forfeit of our efforts prior to 2007 to make the country join EU.

Voters have good reasons to be upset with politicians. They always do. Romania’s successive governments were unable to spend more than 25% of its EU development funds. Had the EU not introduced a rule allowing engaged money to be spent even after the end of the budgetary cycle (but not indefinitely), the opportunity costs would have been at about 18 billion Euro presently and they will probably stabilize at half of this. Romanian MEP Mr. Severin, filmed on tape taking money to pass legislation, was the only MEP who did not resign after the scandal. And at the current rate of growth, the trade with the rest of the Community might get some balance after 2019- until then Romania is a net importer. An op-ed of mine called “Futility of Joining the EU” got 50,000 likes on Facebook in a few hours last November. People do not blame the EU, but they blame their leaders, and for good reason, for wasting a historic opportunity.

But why boycott the vote? How would this help? I was still arguing, my eyes on the clock as the Champions League Final was approaching when I knew everyone would switch the channel, that this will be the strongest Parliament still on record. That issues everybody is concerned with, from Ukraine to fracking (hydraulic fracturing) are far more likely to be decided in Brussels than Bucharest. That the elections for European parliament might not always be, if people like Nigel Farage or Marine Le Pen win (they did). At the gas station on the way back home people then asked me how would they even know who in Brussels favors fracking and who is against. They had no idea. In one month of domestic political bickering otherwise known as an ‘electoral campaign’ nobody had told them anything and since they work all day long, they don’t have time to search on the Internet.

All over ‘new’ Europe voters, even in capitals, do not know what these elections were about. This is why only 17% of Slovaks came out to vote (Romanians actually outdid themselves with over 30% turning out this time). People have absolutely no idea:

What is decided in their capitals and what in Brussels;
What is the position of the European parties on major issues;
How their national parties position themselves on issues compared to their EU party family.

In my experience as a pollster, I frequently used a question called “subjective competence” where I asked people: Do you know enough on voters and candidates to make an informed choice? This question is the best predictor of turnout. People do not come out to vote in EU elections in the East because they don’t know the issues and the candidates and they are aware of their ignorance. Their leaders and media failed in informing them during their national disputes and scattered efforts such as mine were too disparate to matter.

According to the Eurobarometer, Eastern Europeans, unlike their Western counterparts, continue to trust EU institutions more than they trust their national politicians. But as national politicians are the ones claiming votes on behalf of the EU, confusion and skepticism reign supreme. And this is how the continent’s perhaps last untapped reserve of Euro-enthusiasts fall out of Europe’s politics.

Through Thick and Thin: Making EU aid to Egypt more effective in a turbulent political climate

By: Isabel Bucknall and Alex Odlum

As demonstrated by the Muslim Brotherhood’s widespread boycott of this month’s constitutional referendum and the ensuing post-poll violence, it is clear that deep-seated political tensions are unlikely to recede swiftly in Egypt. The road to democracy will continue to be long and hard, and donor assistance efforts will have to endure through thick and thin if they are to have any impact. To date, the EU’s assistance strategy has been unable to handle Egypt’s tumultuous political realities. If the EU is to offer effective assistance to support Egypt’s democratic progress, it must significantly change its strategy.

EU aid to Egypt channeled through the European Neighbourhood Partnership (ENP) is manifestly ineffective in its current format. Tying EU assistance to Egyptian progress on governance standards has proven too rigid. Setting such conditions is incompatible with a turbulent political atmosphere. Substantial reform is urgently required to scrap conditionality as the overarching rationale of the ENP, replacing it with a more selective, trade-based approach that supports Egyptian development amidst and despite political chaos.

In 2007, the EU launched a €1 billion European Neighbourhood Partnership programme to support Egypt’s political and economic development. It has proven futile. A European Court of Auditors report published last year found that funds intended to back Egyptian government reform in democracy, human rights, good governance and justice were either ineffectively spent, or not disbursed at all. Of €17 million allocated to the Promotion and Protection of Human Rights and Civil Society between 2007-2010, for example, only 1.8 million was spent. As conditions remained unmet, funds failed to leave EU coffers and projects were perpetually grounded. The result? Negligible, if any, EU impact on Egyptian democratic progress.

Conditionality, even when based on partnership and negotiated standards, inevitably results in impassable deadlocks in unstable political environments. Devolving ownership by setting conditions that tie in with a country’s own development agenda are the key to making conditionality work. But when that development agenda, and indeed the government itself, are changing at a rapid rate – Egypt has had four different heads of state and 2 constitutional referenda since January 2011– previously set conditions are unlikely to be fulfilled by rival politicians.

Of course, such chaos may have been difficult to foresee before 2011. Yet, rather than brace for a long and divisive struggle for power, EU policy hastened to deepen its commitment to conditions that had been agreed with a government just toppled by sheer popular force. Thus far, EU calls of “more for more” have been drowned out by the retreat of democratic progress and descent into political instability.

Scrapping conditionality and reframing the ENP around selectivity must be the first step of reform. This approach would allow Egyptians to regain ownership, with the Government designing and implementing their own targets for good governance prior to receiving full aid funding. Seed-funding and technical assistance would be essential to kick-start the process and provide the Egyptian government with initial momentum. This model would allow Egypt to signal its own strong commitments to reform, stimulating more donor and private investment, in turn producing a further incentive for the government to push forward on social, political and economic reform.

A move from conditionality to selectivity drastically cuts EU funding outlays for governance support to Egypt. As little as €10 million over 2 years would be required, according to baseline figures of the Millennium Challenge Corporation (MCC), an independent US government aid agency who works using the selectivity model. It would be false, however, to equate a renewed emphasis on efficiency and effectiveness in development aid disbursements, with abandoning Egypt altogether. Selectivity can only succeed if it is matched by a parallel commitment to economic support through deeper cooperation on free trade.

Current bilateral trade arrangements between the EU and Egypt stem from 2004 ENP agreements limiting manufacturing and agricultural tariffs. To foster tangible impact through trade, the EU must substantially deepen its commitments to Egypt and the surrounding region. Talks that began in 2012 on a Deep and Comprehensive Free Trade Area encompassing Tunisia, Jordan, and Morocco need to be urgently revived.

A DCFTA trade package should comprehensively eliminate agricultural and manufacturing tariffs and all other barriers to trade. Technical assistance should also be lent to Egypt to align regulations with EU standards to the furthest extent possible without jeopardizing Egypt’s trade compatibility with other global partners. Finally, the DCFTA should relax rules of origin restrictions on goods assembled in Egypt and other Southern Mediterranean countries, allowing benefits to accrue in advance of final product transformations. Smooth flows of component trade between producers in Egypt and high-end assembly plants in Europe boast great potential for mutual benefit and should be encouraged, rather than inhibited by arbitrary origin rules.

Agreement on a DCFTA will profit both Egypt and the EU, not only economically, but also politically. Given that dire socio-economic malaise contributed to protestors demand for Mubarak’s overthrow in 2011, political tensions are likely to soften if economic growth can be boosted through trade and translated into visible improvement to livelihoods.

2014 holds a host of democratic opportunities and challenges for Egypt. Momentum for reform should rightly be driven from within. The EU must also strike the balance of being a responsible neighbor, and treating Egypt as an equal partner, listening to and accepting the realities of the Egyptians’ self-determined struggle for freedom and prosperity. Implementing an assistance approach that combines selectivity and free-trade is a legitimate response to the socio-economic and political demands of Egypt: “Bread, Freedom and Social Justice”.

Isabel Bucknall and Alex Odlum are Master’s of Public Policy candidates at the Hertie School of Governance in Berlin.

Who Lost Ukraine?

By Ivan Krastev

VIENNA – Karl Marx famously remarked that major historical events occur twice – the “first time as tragedy, then as farce.” In Ukraine, sadly, tragedy and farce are inseparable.

That is why it would be a mistake to read the current wave of mass political protest, triggered by the government’s refusal to sign an association agreement with the European Union, as a second Orange Revolution. In 2004, inspired by the hope of joining the EU as soon as possible, Ukrainians poured into the streets to take back a stolen presidential election. Back then, the Union looked like a fantastic machine capable of making authoritarian states democratic and poor societies rich.

What has brought Ukrainians into the streets this time is something different – the fear that their country’s European prospects could be foreclosed forever. They know that their country will not join the EU in the next decade, and they know that the EU itself is in crisis. But they are determined to insist on their right to a European future. Fear of losing that hope, it seems, is at the heart of the EU’s soft power when the prospect of enlargement is fading away.

The real legacy of the Orange Revolution, reflected in the current wave of protest, is that people learned then that political leaders cannot be trusted, but that tens of thousands, gathered on Kyiv’s Independence Square, can exercise effective veto power. The major difference between 2004 and today is that, virtually overnight, Ukraine has lost its privileged status of geopolitical ambiguity.

In the two post-Cold War decades, the country has been like an oversize suitcase without handles – you can neither take it with you nor leave it at the station. It was assumed that Ukraine was divided between a pro-Russian East and a mostly anti-Russian West, and that any radical move could lead to the country’s break-up.

Ukraine’s economy is dependent on both Russia and the EU; its labor migrants go both east and west, and its no-nonsense oligarchs keep their eggs in at least two baskets. Politically, Ukraine is also a world of its own – corrupt, messy, and inefficient, but also much more pluralistic and open than Russia or Belarus. So, while it was always difficult to know what Ukrainian leaders wanted, it was easy to predict how far they could go. Unsurprisingly, Ukrainian elites have spent the last two decades making promises and avoiding commitments.

But all of this has changed, almost overnight. Ukraine is not a “kingdom in the middle” anymore. Neither Russia, determined to reintegrate the post-Soviet countries in the Eurasian Economic Community (EurAsEC), nor the EU, humiliated by President Viktor Yanukovych’s refusal to sign the association agreement, can live with the status quo. The current crisis demonstrates that the EU underestimated the transformative power of its European Neighborhood Policy – a reminder of both the strength of the EU’s political appeal and the weakness of its diplomacy.

Ultimately, everybody got Ukraine wrong. European politicians made the Kremlin believe that Ukraine was not important enough for the EU; as a result, Russia wanted not only to block Ukraine’s turn to the EU, but to bring the country into its own integration project. European leaders also overlooked the cultural contempt that the Russian leadership has started to feel for “the same-sex marriage empire” that the EU has become in their eyes.

Russia got Ukraine wrong, too. The scale of the protests in Kyiv has taken the Kremlin by surprise, because Russia’s elite has never considered civil society an independent player in national politics and failed to notice the emergence of a European consensus in Ukrainian society. But Putin correctly calculated that now, unlike nine years ago, Yanukovych is ready to use force if this is the price he must pay to maintain his hold on power.

Outsiders need to understand how high the stakes have recently become in the post-Soviet space, where two opposing integration projects are doomed to clash. There are only three options left for Ukraine: sign the agreement with the EU, as the majority of Ukrainians want; join Putin’s EurAsEC, as the endangered political elite prefers; or go bankrupt.

This article first appeared in Project Syndicate and is reproduced here by permission of the author. Article on Project Syndicate: http://www.project-syndicate.org/commentary/ivan-krastev-looks-at-what-is-at-stake-for-europe-and-russia-in-kyiv-s-mass-protests

Ivan Krastev is Chairman of the Center for Liberal Strategies, Sofia, and Permanent Fellow at the Institute for Human Sciences (IWM) in Vienna. His latest book is In Mistrust We Trust: Can Democracy Survive When We Don’t Trust Our Leaders? He is also an ERCAS Senior Fellow.

Cover photo credit: Nastya Stanko

New Data Calls for New Agenda, Not Old

It has been fifteen years of awareness raising, a joint effort by World Bank and Transparency International (TI), plus a score of other NGOs and journalists. And it worked. A 2011 Eurobarometer survey shows that even Finns in nearly corruption-free Finland have now come to think that corruption is a problem. By 2012, no less than 161 state parties have ratified the United Nations Convention against Corruption (UNCAC), which came into force on 14 December 2005. In articles 7 (public sector) and 9 (procurement), the treaty spells out the modern principles of efficiency, transparency, merit, equity and objectivity as the only accepted governance norms. It also goes far beyond the criminalisation of bribery or influence trading, stating in article 1.c that it will ‘promote integrity, accountability and proper management of public affairs and public property’. In other words, UNCAC sets universal benchmarks of good governance thus ending cultural relativism.

But the implementation gap remains huge. It may very well be that we have only succeeded for the next interval in time to enlarge the difference between the formal institution (UNCAC), and what is really going on in the world. We find that countries which have ratified the treaty have not progressed significantly more than those which have not. Moreover, those who adopted its main tool, an anti-corruption agency, are not doing better than those who fought corruption through normal judiciary channels. In fact, neither of them have progressed. Even when both external funds and conditionality are at a maximum, evolution is scarce, if any. Look at EU member states, for instance: countries such as Greece, Romania and Bulgaria illustrate that. In the case of Greece, its problems are for the first time acknowledged in full.

The recently released 2012 Corruption Perceptions Index (CPI), by Transparency International, shows that two thirds of the 176 countries assessed score below 50 on a scale from 0 to 100 (perfect corruption control). Data from the Worldwide Governance Indicator (WGI) Control of Corruption, published by the World Bank, are also pessimistic in this respect. On a panel of 196 countries ERCAS researchers found that for the vast majority of them the scenario is of stagnation. Only 21 countries showed statistically significant improvement, and 27 countries significantly regressed. In a regional perspective, some positive trends were identified: the region with strongest positive development was Central Europe and the Balkans, followed by Latin America and the Caribbean. On the other hand, Middle East and North Africa, together with Asia and the Pacific, have on average worsened.

We also checked the trends for distinct groups of countries based on income level and democracy status. In both cases, the picture is rather gloomy. For all four income groups (low, lower-middle, upper-middle and high), the average in the control of corruption indicator has declined since 1996, with a steeper deterioration in the case of upper-middle income countries. When contrasted with the significant increase in the number of countries in the top two income categories, these results suggest that countries are becoming richer much faster than they are catching up with good governance standards.

Much of the concern with corruption in the last fifteen years emerged due to evidence of its detrimental impact on growth. The last two decades have produced over 16.000 entries on Google Scholar with ‘corruption’ in the title, the last ten years returning nearly four times more articles than the previous ten. The most quoted paper in the lot is “Corruption and growth”, by economist Paulo Mauro from the International Monetary Fund (IMF), which claims corruption damages growth significantly and sizably. Nevertheless, Transparency International acknowledges in its comments to the 2012 CPI that ‘[a]ll but one of the world’s fastest growing economies scores less than 40 out of 100’. In other words, we have nearly no growth success due to progress on governance to show. The few which exist are disputed. Estonia, Georgia, Uruguay seem to be the top contenders among democracies.

On the relationship between improvement in control of corruption and democracy, it is rather difficult to judge the countries where political pluralism is low, from Singapore to the United Arab Emirates, a new champion of good governance, and from Botswana (where the dominant party always wins elections) to new best reformer Rwanda (where the opposition is not doing so well). In the analysis of countries at different democracy levels, based on the classification by US-based NGO Freedom House, all three groups of countries (free, partially free and not free) show on average slight deterioration in control of corruption.

It will probably take the next fifteen years for the growing international anti-corruption expert community to make the step to more effective policies. To start, instruments must be improved to arrive at better indicators, more sensitive to policy intervention and to change over time. It is hard to believe that Rwanda is doing better than Czech Republic, Ghana better than Romania and that Italy and Tunisia are practically similar, as the latest CPI suggests. Also the links between corruption and development, or corruption and pluralism, need to be better understood beyond the slogans of the last fifteen years. And finally, the focus on bribery, worthy as it is, should be re-examined. There must be more to corruption if so many anti-bribery efforts have produced so little effect. What we aim to eliminate is any favouritism from the government and to create states autonomous from private interests. We should stop thinking that they are so by default and that bribery is only an occasional trespass on this rule, and understand that in all highly corrupt countries the state has simply never managed to become autonomous from the interests of a ruler, oligarchy or elite, who do not need to bribe, as they have the power to use public resources as their own. Placing bribery in the bigger picture would also allow us to understand why two thirds of citizens around the world are so pessimistic about the impact of anti-corruption even in the future. They understand it as it is, as a vicious form of social order structuring whole societies and economies, and, due to globalisation, corrupting even across those borders where a superior equilibrium, based on more fairness and integrity, was reached. But control of corruption should not be conceived as a temporary exercise, but as a permanent one. Once we understand that control of corruption means that societies themselves need to have the collective action capacity to constrain any particular interests which would capture the state, rather than the state itself punishing a few culprits in an otherwise well-ordered society, we are on the right track for a more effective next anti-corruption generation.

Related material

– 2012 Corruption Perceptions Index Launched

– “Contextual Choices in Fighting Corruption: Lessons Learned”

(The picture featured above is from www.trust.org and is credited to Reuters/Khaled Abdullah Ali Al Mahdi.)

The Bi-Polar Background

The “Open Secrets” of the Ukrainian Sistema

Living with Ambivalence

References

Subscribe to our Newsletter