Country: European Union

For a clean and sustainable reconstruction of Ukraine

European Research Centre for Anticorruption and State Building (ERCAS)
corruptionrisk.org | acrec.org.ua | ercas@hertie-school.org


We need to collect needs based on multiple sources, involve civil society from planning to audit, set targets for both the public procurement process and outcomes and tie them to the performance evaluation of a newly trained generation of public managers in charge of allocating and managing reconstruction funds.

 

Nothing creates more opportunities for corruption than war. But a war where foreign money pours in is bound to multiply exponentially such opportunities, especially in an already enabling environment. An estimation based on Forbes billionaires database by The Economist magazine found that in 2021, Russia topped the world when comparing crony versus non-crony sectors’ contribution to GDP: but Ukraine also came in fifth place, nearing 40% of Russia’s bad performance (see Figure 2). However, Ukraine had embarked in a variety of serious reforms prior to the Russian invasion (see Figure 1): but none triggered the self-sustainable virtuous circle able to clean the country, in a manner similar to the earlier success stories of Estonia and Georgia. Hence the lack of popularity of both Presidents Poroshenko and Zelensky with Ukrainian civil society before the war.

This short text presents five clear issues that the reconstruction has to grapple with and indicates the type of solutions. This is not a detailed report, but simply a statement of principles needed for a sound reconstruction.

 

Figure 1. Enablers and disablers of corruption in Ukraine 2021.
Source: www.againstcorruption.eu

 

Issue number one is how to organize an evidence-based needs assessment. Public procurement is often corrupted before it has even taken place, by discretionary purchases or distorted terms of reference. A central system based on a validation mechanism (at least two sources) and a decentralized and plural data collection, relying on transparently published needs statement at the local level may alleviate a part of the risk. Due consideration needs to be given to avoid the reconstruction turning into either a Samaritan dilemma, where the purchases are driven by the needs of the suppliers rather than the ones of the buyers, or a locally captured process, where higher kickbacks from more concentrated rents get priority over the rest. At such a scale of destruction, this is no easy task. This is why the collection of information should rely on civil society (in the broadest sense- including the private sector and communities, not only NGOs), on local government and central government, with findings triangulated in a central mechanism (as an online map with various categories). This can be completed with special reports on specialized areas commissioned to international NGOs which have experience working in disaster areas of developing countries.  Development agencies such as the World Bank or UNDP could contribute to the centralization of the needs assessment.

  

Figure 2. The Economist crony capitalism assessment 2021.

 

Issue number two is how centralized should the reconstruction process be. It is natural that the government of Ukraine wants to have ownership of the process, but we know from international experience that the ownership that guards against corruption is one exercised by the whole society, not just the recipient country’s government. The proposals of civil society to create a central purchasing body run by NGOs, both national and international are too radical to have a realistic choice of being accepted. However, a middle ground exists. The model, albeit just as a starting point, are the integrity pacts that the European Commission funds to enable civil society: Transparency International and national anticorruption NGOs- to audit the procurement process at the national level. As it stands, the model (funded by DG Regio) is a good idea poorly put into practice. The governments select what contracts civil society can audit (therefore setting aside those that matter to them), and the process is technologically primitive, based on a few observations instead of the observation of all data and follow-up of red flags. For Ukraine, which already has pro-Zorro, a far better process can be constructed, where civil society is involved from the writing of terms of reference to the allocation, negotiation, signing and execution. Such a process would also create a sustainable model of good governance where representatives of the entire community would be involved on a permanent basis in procurement decisions. Central purchasing bodies tend to reduce corruption risk, but the involvement of civil society, especially the one with relevant knowledge and representation (geographical or sectorial) would be in this case the key to building sustainable good governance in Ukraine, both at the central and local level.

Issue number three is how to shift from post-factum anticorruption – after the corruption act has already taken place- to preventive anticorruption, which deters corruption from the onset. No successful control of corruption has ever worked post-factum except where corruption was already exceptional and isolated and public integrity the norm. Convictions in Courts take years even in countries where they happen, and they can get reversed: recovering assets is highly expensive and takes years. Turning judiciaries which are themselves problems into solutions to corruption is highly unrealistic, although building a non-corrupt and effective judiciary is a worthy goal- in itself. Ukraine has already invested too much in the top architecture, with very high political risks as we have seen (US presidential candidates fighting over who gets appointed general prosecutor in Ukraine!). Ukrainians proved great solidarity and resilience after the invasion, showing that the main institutions work, and the public cooperates with the state as in a high-trust society. The existential threat helped the nation get together. So, an anticorruption focused on the past, on repression rather than prevention would not achieve control of corruption but might bring political risks that Ukraine can do without. After the war ends, the anticorruption of Ukraine should focus on reforms: to eliminate the sources of economic privileges, the monopolies and oligopolies of every sector rather than spend years putting in jail those who profited in earlier times from such political opportunities. Ukraine needs sustainability and national consensus, and profiteers of earlier times who survive the war can always be overtaxed to bring their contribution. But the fight against them should not absorb the core resources and energy.

Issue number four is how to achieve this functioning, self-driven prevention system. Ukraine has previously done many reforms: but, prior to the invasion, the Ukrainian civil society complained that while transparency is perfect, it only allows seeing how corrupt the country is because accountability is missing. Figure 1. shows that Ukraine has indeed arrived on top of the world when administrative transparency was concerned. But that is not enough. Anticorruption is like a bicycle, which manages to stand as long as it runs: but its separate pieces are worthless if they do not amount to a full-running bike. Transparency is only one wheel: accountability is another, and different parts of the government are supposed to deliver these different wheels. Pro-Zorro was a model monitoring system of procurement when e-procurement was concerned. But the responsibility and accountability of procurement are not with the public procurement agency (PPA). Nowhere do PPAs manage the last part of the cycle, accountability, which belongs to the government. The role of the monitoring agency is to show exactly what buyers (contracting authorities) from the government fail to reach the targets of competitiveness, value for money and integrity: an administrative sanctions mechanism needs to be in place to discipline the buyers, who are appointed by the government. The sanctioning is generally done by auditors when finding procedural problems and Ukraine did not have a high rate of sanctions prior to the war. In 2021, 265 officials were subject to disciplinary sanctions, of which 45 were dismissed from their positions and 274 were subject to financial liability from the 1,500 enterprises, institutions and organizations that were inspected by Ukrainian State Audit Agency. However, we know that favouritism in public procurement is not always openly illegal: single bidding, the main indicator of corruption, that the European Commission has now used to motivate the sanctioning of Hungary, is legal in most countries (meaning that the bidding process is not suspended and reorganized if only one bid is presented). What is needed is that the government itself sets targets (as the EU Public Procurement webpage indicates) and sanctions its PP buyers if they do not meet them, even in the absence of evidence of fraud in order to ensure the integrity and value for money of the process. A simple rule for integrity could be that no bidding is allowed outside pro-Zorro, that the admissible single bidding is allowed only on the EU-27 average (currently very high at around 20%, see Figure 3) and that all single bids instances are automatically audited with priority.

How many public officials were sanctioned or dismissed due to their incapacity to meet the standards of an effective and clean public procurement? An effective prevention system is not based on a case-by-case investigation, followed by prosecution, but by the existence of clear targets and their enforcement by monitoring followed by administrative sanctions. Aside from transparency (pro-Zorro), and accountability (PP targets enforced by administrative sanctions), the system needs some Government Buying Standards to define product specifications, including price, which should be mandatory for the central purchasing agency and other buyers.[1] Seeing that due to the war the Ukrainian government had to even fix some prices the development of a permanent cost standard unit would answer more needs than one.

 

Figure 3. Red flag single bidding across the European Union Member States
Source: https://single-market-scoreboard.ec.europa.eu/policy_areas/public-procurement_en
Legend : average marked in red

 

The final issue is about the human resources needed for a clean and effective management of reconstruction at all levels (from national, down to towns and villages). In environments such as Ukraine (countries with similar corruption indicators in times of normal, non-war situations) the administration is very politicized: who appoints those directly in charge of procurement purchases, for instance, decides de facto who wins and who loses a bidding process. Those who should disburse administrative sanctions are in fact those who decide who wins and who loses. Where should the human resource come from for the reconstruction money to avoid a return to the vicious circle where the principal and the agent collude, with the result of government favouritism? Aside from the macro-organization solutions suggested here, a small share of reconstruction funds should go into creating new project management procurement experts and auditors, by training a new force of civil servants and civil society as integrity compliance officers who would then become the backbone of an integrity system. This reconstruction is not business as usual: and neither should be those who work for it.

 

[1] Department for Environment, Food and Rural Affairs. (2017). Sustainable procurement: the Government Buying Standards (GBS). Available at https://www.gov.uk/government/collections/sustainable-procurement-the-government-buying-standards-gbs#history.

European public accountability trends now updated!

The European Union is the absolute achiever on standards and benchmarks. Thousands exist and are strictly guarded by various enforcement agencies: some inspired anecdotes were furiously disputed over the Brexit divorce. Less spoken about are EU standards on public accountability, in spite of the bloc now having a Rule of Law (ROL) Report on the member states and monitoring processes for accession countries. There is a very simple reason for this: they do not exist as such. While we uphold a Europe that embraces ideals of rule of law and free of corruption as ideals for member states and aspiring countries, we do not actually have a standard way of achieving those, or clear European benchmarks. Finland and Denmark are quite unregulated on public accountability but extraordinarily transparent, and they lead in all good governance charts. Hungary and Poland have been backsliding on both rule of law and democracy but their legal arrangements are quite thick. In some areas, at least.

To understand how Europeans succeed in having transparent and accountable governments ERCAS has created as part of the EU-funded project DIGIWHIST a repository of legal data. We organized them as tools, described in detail as to coverage and instruments, and quantified – assigned a score for each extra provision, resulting in a higher score for countries with more comprehensive regulation. This is Europam.eu, an exceptional legal repository created in 2017. Today we update it at the level of 2020 data. You can find out there how countries are doing on freedom of information, oversight of assets and conflicts of interest of officials, party funding, and public procurement, as well compare each country against the rest of Europe and understand what is the mechanism which enables public accountability – or not.

Despite unprecedented discussion on rule of law in the European space and neighborhood, we found few changes since 2017. All the data is available at Europam.eu, and we present here only two chapters.

 

On public procurement, the average remained roughly the same, from 63 points in 2017 to 62 points in 2020 (from a total of 100), but more jurisdictions declined than improved.

  • Previous best scorers Slovakia (2020: #1) and Hungary (2020: #5) remained in the top 5, but Czechia dropped 5 positions. Romania (2020: #2), Malta (2020: #3) and Bulgaria (2020: #4) complete the top 5;
  • Out of the 3 previous lowest scorers, only the Netherlands (2020: #32) remained in the bottom 5. Poland was the worst jurisdiction, having lost a few points. Other countries at the bottom – Georgia (2020: #34), Sweden (2020: #33), and Iceland (2020: #31) – did not see real variation from their previous points (around the 50 points-mark), which suggests that other countries doing better, rather than them doing worse, is the cause of their poorer performance;
  • Countries that declined: Belgium, Croatia, Czechia, Denmark, Finland, France, Greece, Italy, Lithuania, Luxembourg, Poland, Serbia, Sweden, and the European Union as a whole – 14/35 jurisdictions;
  • Countries that improved: Austria, Bulgaria, Germany, Ireland, Latvia, Malta, Norway, Romania, Slovakia, Spain, and the UK – 11/35 jurisdictions;
  • Countries that remained roughly the same: Armenia, Cyprus, Estonia, Georgia, Hungary, Iceland, Netherlands, Portugal, Slovenia, and Switzerland – 10/35 jurisdictions.

 

On conflict of interest, the average improved slightly, from 40 points in 2017 to 44 points in 2020, and more jurisdictions improved than declined. This is good news for GRECO, which tirelessly promotes COI further restrictions in many countries.

  • Previous best scorers remained at the top – namely Latvia (2020: #3), Croatia (2020: #4), and Slovenia (2020: #5) – with Georgia improving significantly to get to the first spot and Serbia improving slightly (2020: #2);
  • Previous lowest scorers also remained at the bottom – namely Denmark (2020: #33) and the Netherlands (2020: #32) – with Finland (2020: #34) dropping significantly to get to the second-worst position and Belgium decreasing a few points to be the worst jurisdiction;
  • Countries that declined: Armenia, Belgium, Finland, France, Germany, Lithuania, Luxembourg, Norway, Slovakia, Sweden, and Switzerland – 11/35 jurisdictions;
  • Countries that improved: Czechia, Denmark, Estonia, Georgia, Greece, Hungary, Iceland, Italy, Malta, Netherlands, Poland, Portugal, Romania, Serbia, Spain, and the European Union as a whole – 16/35 jurisdictions;
  • Countries that remained roughly the same: Austria, Bulgaria, Croatia, Cyprus, Ireland, Latvia, Slovenia, and the UK – 8/35 jurisdictions.

 

To those who are surprised by these figures we just remind that laws and practices are poorly correlated when rule of law and corruption are concerned. Clearly, there is a great difference between high honesty countries and low honesty countries, with the latter regulating far more. But does more regulation increase public integrity, and which regulation? That is what we study next, and we invite you also to use the freely available Europam for your own analyses.

EU Rule of Law Report Captive on its Tracks

The European Commission is already planning a second rule of law report, although the first brought no further evidence to the already known problems of Hungary or Poland, and only showed the weakness of conceptualization and methodology at this stage. The German presidency made the concession to Hungary and Poland that Courts will have the first say in the event of a sanction. While critics were fast to denounce Merkel to have yielded to the populists, the most elementary legal common sense shows that Courts would have anyway got involved. Is it not better, then, to have them involved sooner rather than later?

Quite a few Parliaments and Governments invited me since then to present my criticism of the report from this Carnegie paper (thank you) and the alternative ways to go about solving the rule of law problem. While I have nothing to add to the criticism and the commission seems unwilling or unable to modify anything in the bureaucratic logic of the report (and the power mechanisms which made it that Wirecard case did not even get a mention) the alternative is the one that I had already suggested. We need to separate the issues, which are luckily correlated. If we want to cut EU funds, we need to use the public procurement policy and its very good monitoring by another part of the Commission (in the EU Single Market PP Scoreboard). Member states who do not reach targets there are the same who infringe on rule of law: Hungary, Poland, Romania, Malta, Czech Republic. That is a technical issue and as such, it is entirely at the disposal of the Commission, which had already done a first excellent step in letting Hungary know that it would not get the funds until it proves it is able to spend the money correctly [1]. For freedom of speech and judicial interference we need to use the other mechanisms- political in essence, as the final and sustainable solution to the EU rule of law problems is to persuade voters not to endorse leaders who are against rule of law. Both on legal and on persuasive grounds, it is better to cut funds for poor governance and corruption than for motives Mr. Orban can say are just matters of different political opinion.

But the EC seems these days, as on the vaccine issue, a train captured by its own tracks and unable to adjust course sensibly. The second round of consultations on the ROL report, thus, is not really a consultation more than the first has been. It is merely an attempt to crowdsource, collecting information, and of course leaving at the absolute discretion of the Commission if to mention Wirecard, BAFIN, and the rest at all.

It is rather clear that the report could hardly help, had the case of some infringement end in Courts, where legal reasoning would instead prevail. The question then is why spend all this money to produce a weak and biased report, when the Commission could instead outsource reports on freedom of the press, corruption (not anticorruption, as the meagre report attempts, as there is no way to separate the two which makes any sense) and judicial independence to those who generally deal with these issues and are both independent and professional? Such reports could be cited by those who work on the legal cases, as we have already seen in the legal cases against Hungary and Poland so far, although, of course, they would not make the bulk of the argument any more than the ROL report would. At least, however, there will be no stringent omissions.

The rule of law report was a concession by Von der Leyen to those who think populism can be fought only by populism, by publishing unsubstantiated figures of social loss due to corruption that no reviewer would ever validate in a normal academic review procedure or by piling up facts which do not amount to evidence, as many are simply irrelevant. The fact that it goes on like nothing happened during last year negotiations and no justified criticism was made by governments and experts who are not on the side of Poland and Hungary is not proof of resilience, but one of incapacity of a bureaucracy to learn and adjust, and the indifference which accompanies too much money one can spend.

[1] EU tells Hungary to change procurement, cites ‘systemic’ fraud | Financial Post

Europe’s Burden: Promoting Good Governance Across Borders

The EU is many things: a civilization ideal to emulate, an anchor of geopolitical stabilization, a generous donor, and a history lesson on cooperation across nations. A fixer of national governance problems, however, it is not. In this book, Mungiu-Pippidi investigates the efficacy of the European Union’s promotion of good governance through its funding and conditionalities both within the EU proper and in the developing world. The evidence assembled shows that the idea of European power to transform the quality of governance is largely a myth. From Greece to Egypt and from Kosovo to Turkey, EU interventions in favour of good governance and anti-corruption policy have failed so far to trigger the domestic political dynamic needed to ensure sustainable change. Mungiu-Pippidi explores how we can better bridge the gap between the Europe of treaties and the reality of governance in Europe and beyond. This book will interest students and scholars of comparative politics, European politics, and development studies, particularly those examining governance and corruption.

Reviews for this publication

“A blistering and contrarian critique of EU anti-corruption efforts from one of the field’s leading authorities. Based on extensive quantitative data spanning both EU member states and a large number of the union’s external partners, the book’s findings have troubling implications for the future of EU good governance strategies – and deserve to be considered with the utmost seriousness.”

Richard Youngs – Carnegie Endowment for International Peace, Europe

The EU Rule of Law Report: Unresolved Questions and a Proposal

The EU has chastised member states who do not adhere to its professed values. However, the new report about the rule of law falls short in providing the objective basis to withhold funding to those who defy democracy, a just goal still lacking the proper means. EU funds should be cut on direct and easier to prove criteria related to their poor governance, as shown in the EU Single Market procurement scoreboard. Recovery funds should not go to the political clienteles of government parties trespassing on rule of law, but to the broader constituencies of citizens and businesses in every member state.

 

The European Commission (EC) recently released a communication titled “2020 Rule of Law Report: The rule of law situation in the European Union”. The concept has never passed the test of a feasibility study and President Ursula von der Leyen has not even promised it as part of her original program. It was one of the pledges she had to make in exchange for political support during the hearings for her presidency. The report has been widely expected to offer a basis for the sanctioning of democratic backsliders such as Hungary and Poland. EC communications, however, have no binding power and can serve only to name and shame. The new report can therefore only bring some added value if its contents offer better arguments than those already in circulation. In fact, many are circulating already, as the European Parliament has not been idle and in the last two years alone interpellated Hungary, Poland, Romania, Slovakia and Malta. Hungary and Poland are also fighting an Article 7 procedure. The European Justice Court is also involved and has already issued the first rulings on such problem countries.

The report covers four areas: the justice system, the anti-corruption framework, media freedom, and other institutional checks and balances. The Commission adopted the Council of Europe’s multifold definition of rule of law, but the report exceeds it by including media. This was actually a good decision, as freedom of the media has been declining in nearly all EU countries (except Romania, where it was never very high to start with) over the last decade, and media is an essential component for the control of corruption, aside from its more general role in a democracy (Brunetti and Weder 2001). The country chapters are based upon contributions from the member states and a variety of already available, mostly European sources. The countries are not ranked on any dimension – this would have been impossible, given both the qualitative methodology used and the reticence of member states to any ranking.

The patient readers of the whole report will not find anything new. But in the event that a second edition will ever follow – and the exercise is not discontinued like its predecessor, an anti-corruption report was—a few questions are important to address and eventually debate. And at least one clearer alternative emerges if indeed there is the political will to tie EU funds on rule of law.

 

  1. Country Diagnosis Missing

Why is there not one fact-based problem statement for each country, stating clearly whether there is a problem with rule of law and if so, what does it consist of? Instead the report offers snapshots of judicial reforms in every country. The link between problems they were meant to address and these reforms is either missing or presumed. Some underlying assumption seems to exist that the organization of the judiciary is the source of its independence from government and private interests. Is that is the case, this goes against academic evidence, which shows on the basis of the same data that EC uses (Council of Europe CEPEJ) the contrary (Gutman and Voigt 2017). The independence of the judiciary does not result from specific constitutional arrangements, or the countries with the best such arrangements would have the best and most independent judiciaries. It stems from the historically developed power balance in every given country. The neglect of this simple, although counter-intuitive truth leads the reader confused about the relevance of the reforms presented to strengthen the rule of law, from digitalization in Belgium to reshuffling of the judiciary in Malta. Furthermore, why are bureaucratic mechanisms which did not deliver measurable improvements in the past decade (like the Cooperation and Verification Mechanism) advanced for the next? Is it not significant that Bulgaria—a country being assessed under the mechanism, which proposed a year ago for it to be lifted—was recently reprimanded by the European parliament?

 

  1. Corruption Levels Explain Anticorruption, Not the Other Way Around

Why is the corruption section defined as “anti-corruption framework”? An anti-corruption framework makes sense only in relation to a given country’s corruption problems. Or is everybody supposed to have a similar framework regardless of their individual problems? If a relation existed between the density of regulation on anti-corruption and a reduction of corruption, this would be more understandable. But again, the reality is exactly the opposite: the most successful national integrity frameworks in the EU (and the world) are not the most regulated, but the other way around. Hungary has far more extensive public accountability mechanisms than Finland. Yet still, it is Finland that better manages to control abuse of office for undue profit (see Figures 1,2 below). Keeping track of all changes in regulation certainly has a value in itself, but it cannot replace a sound diagnosis of each problem and a matching policy solution, relevant to the context of every country. The report counts the existence of national anti-corruption strategies as progress, instead of checking real developments. Such an approach has been already pioneered in accession and EU-neighborhood countries, which have all come to have five-year anti-corruption plans (see Moldova, Montenegro and other “champions”). Yet the few successful countries of the last three decades–-the likes of Estonia under its former prime minister Mart Laar, and Georgia under its former president Mikhail Saakashvili—evolved due to reform packages very different from such plans.

Figures 1-3. Poland and Hungary public accountability regulation surpasses Finland on every count but transparency (Source: www.europam.eu)

 

  1. The Report Does Not Cover the EU’s Cross-Border Problems

Does not this piecemeal, country-by-country approach by the Commission somewhat underscore the EU’s severe cross-border problems, which have showed the vulnerability of European common rule of law and public finance to organized crime, corruption and money-laundering? And is it not the role of EU institutions primarily to address such cross-border problems, which end up neglected because they require coordination across member states? There is very little in the report on the fundamental threats to European banks from organized crime and corruption, for instance.

 

  1. There Is Little on Transparency

Why is transparency in general, despite being shown to be one of the most effective deterrents of abuse of power and corruption, so marginal in the report? Transparency is easy to monitor and to fix, and several initiatives in Europe monitor transparency in public procurement, spending, financial and banking operations, and so forth. It is the lack of transparency that hostile powers like Russia and others use to launder their money in EU banks and pose veritable security threats. Is it really a twenty-first century strategy to rely on the under-powered European Public Prosecutor’s office, which would anyway act well after the crime is produced and even investigated administratively (by the European Anti-Fraud office) for issues such as VAT evasion? Only full digitalization and inter-connectivity of EU data on financial transactions and public procurement will allow the prevention of such problems—and some instruments exist already. But why would any progress be made if the plan is that a massive problem will be addressed by a few lengthy prosecutions after the fact?

 

  1. The Report Uses Vague and Imprecise Data

Why is the report so reliant on subjective data based on perceptions, such as Eurobarometer surveys [1] with leading questions (such as the rule of law is important, corruption is intolerable, etc.) and the Corruption Perception Index from Transparency International? The Eurobarometer surveys on rule of law and corruption are not panels using the same respondents to allow sound comparison in time—that would probably make them even more expensive than they already are. Academics have long proven that CPI, an average of expert perceptions, is not a proper tool to be used to measure corruption across years. If these surveys miss a measurement or lack a clear fact-based diagnosis of the causes of a particular problem, what can be monitored instead to track progress? Citizens’ perceptions, or the amount of regulation, despite their poor correlation with problems? Compliance with EU regulation and its implementation must be monitored, of course. But they cannot replace measuring the problems directly (judicial independence, lack of transparency, and corruption) to assess whether reforms manage to reduce them or not.

 

  1. There Is Little on Public Procurement

Why is the area most related to EU funds, public procurement, so under-represented in the report? After all, if the goal is to sanction countries by cutting their EU funds, surely the case will be made easier (in the courts as well) if a more direct link were presented between funds and misbehavior? An example are the red flag procurement indicators (such as lack of open call for tenders or single bidding) from the European Single Market scoreboard, where several poor performers openly breech EU policy targets. Yet such indicators are barely mentioned despite data repositories now tracing corruption in procurement in the European Union in real time. For instance, Poland has been leading for years in non-competitive bidding at very high proportions, which could have offered an indication that all was not well there. Similarly, research on procurement has showed Hungarian manipulation of EU funds years before OLAF opened an investigation into Viktor Orban, so such fact-based indicators do exist and deliver.

Figure 4. A Clear Picture of Offenders in EU’s Procurement Scoreboard

 

  1. aps and Biases

Why are major country facts, even for the previous year, simply missing from the report, and what methodology determined what is included and what is excluded? Is not the case of the Airbus corruption, for instance (a footnote in the France country report on the financial settlement mechanism) showing that rule of law was clearly imperfect if such practices were systematic over decades (and leaders above the law)? No word on the fact that the U.S. Foreign Corruption Practice Act seems to be behind the most important investigations into European companies—and not OECD anti-bribery convention? Surely this deserves an analytic paragraph, as it touches also on compliance and implementation, keywords of the rule of law. How can the report on Germany miss the Wirecard scandal entirely? There is now an investigation by the German parliament looking at the regulators’ conflict of interest and their failure to address the problem in time (instead, they acted against the Financial Times whistleblowers, relevant to press freedom, too). How can the report on Romania praise both the National Integrity Agency and the Anti-corruption Directorate, and not remark that the latter charged the head of the former with corruption, only for a court to finally clear him?  Would it not be better to order a deep audit of this and several high-profile cases closed by the courts, before asking for more cases? Why is there no analysis of why the Commission recommended a year ago that MCV be suspended for Bulgaria and now it seems a problematic country again (given that nobody claims that its problems appeared last year, only the protests stepped up). Finally, although the list can be much longer, how can  Luxembourg’s judiciary be praised as top of Europe, when a prison sentence of a court there against the Luxleaks whistleblowers was part of the motivation for the EU regulation on whistleblowing?

 

In conclusion:

Although some critics complained that negative comments are spread across too many countries, it is commendable that the reports tries to cover all EU member states equally and not discriminate against a few countries. However, the lack of clarity and transparency of the criteria for including or excluding facts in the absence of a clear methodology has backfired, leading journalists to assign degrees of seriousness and make diagnoses themselves. This does not necessarily result in more objectivity or depth of understanding of either problems or potential solutions.

It is undeniable that European Union member states have been backsliding on rule of law and democracy, and that action should be taken. But do we have fresher and better evidence after this report than before? And apart from backsliding on democracy, don’t we also need more awareness of what seem to be older problems of corruption and impunity? The issues at companies such as Airbus and Wirecard, in addition to those at many banks, have long been in existence and have been ignored by regulators despite warnings. Effective action needs to be based on serious audits and fact-based research on problems by professionals, not on public opinion surveys: questions like the ones above need to raised and answered for the EU to effectively confront its rule of law problems. It may be that the infringement of rights and the control of media are in a different category of problems from corruption or the imperfect independence of the judiciary, needing different solutions. This must be discussed openly.

However, this does not mean deterring action. For urgent matters, why not connect the procurement scoreboard with the cut of EU funds? The same suspects will be targeted, but with clearer and less controversial evidence: benchmarks already exist and are clear. Recovery funds should not go to the political clienteles of government parties trespassing on rule of law, but to the broader SMEs and populations of every EU MS.

 

For more details on evidence-based rule of law tools, visit:

https://www.againstcorruption.eu/

www.opentender.eu

http://www.europam.eu

http://www.integrity-index.org

 

[1] See also Europe’s Burden, chapter 5.

 

— This article is a version of a Carnegie Europe comment published under Carnegie’s Reshaping European Democracy project: https://carnegieeurope.eu/2020/10/20/unresolved-questions-on-eu-rule-of-law-report-pub-82999 —

 

Anti-corruption provisions in EU free tradeand investment agreements: Delivering on clean trade.

As the European Commission has noted, trade has already been advancing the cause of good governance. Can international trade do more and become an instrument of promoting anticorruption; and with what effects? This report will summarize the existing evidence and options for the EU by addressing these four questions:

  • What is the connection between trade and corruption? What is the mechanism linking the two, according to empirical evidence?
  • What is the most recent practice in regard to free trade agreements and anticorruption provisions that should be considered by the EU when designing its own strategy for the future?
  • What is the evidence concerning the performance of pure anticorruption provisions, not directly related to trade, in the form of international conventions and treaties against corruption, seeing that their inclusion in trade agreements is increasingly recommended?
  • What are the options for the EU, seeing that it is also the world’s largest development donor, giving aid to more than 110 of the countries it trades with?

The evidence for this brief report is on the one hand based on secondary sources, as organizations such as the OECD or the Bretton Woods institutions have been researching this subject for quite some time, while on the other hand it is based on original research funded by the EU’s own Seventh Framework project ANTICORRP (anticorrp.eu) which is dedicated to anticorruption.

Crony Capitalism in the European Union: Subjective or Objective?

Long before the Panama leaks, nearly three quarters of Europeans (73%) had already endorsed the belief that bribery and connections are the easiest way to obtain public services in their respective countries. Furthermore, pan-European surveys revealed that nearly 7 out of 10 Europeans agreed that corruption was part of the business culture in their country (66% of respondents) and that favoritism and corruption hampered business competition (68% of respondents). But are such perceptions accurate, or do they reflect the general pessimism in times of austerity, uncertainty and growing inequality? This paper uses survey data to deconstruct perceptions of corruption, but also as a premiere uses fact-based data from new research projects on corruption and procurement to understand how much is real and how much is noise in the growing public perception of crony capitalism in Europe. The paper finds that individual perceptions are not disconnected with reality. Although people whose self-ascription places them in the lower part of a status scale are more inclined to perceive generalized corruption, most of the variance at both national and individual level is explained by fact based variables, for instance the number of non-competitive tenders per country.

This paper will be published in a forthcoming edited volume with Oxford University Press. Please cite as Mungiu-Pippidi, M. and Kukutschka, R. M. B (2018). Can a Civilization know its own institutional decline? A Tale of Indicators. In H. Anheier, M. Haber, and M. Kayser (eds), Governance Indicators: Approaches, Progress, Promise. Oxford: Oxford University Press.

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 11th overall, while the OKFN rankings have Russia tied for 105th 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 and the Quality of Governance

Using a panel dataset on 103 developing countries, this paper empirically analyzes the impact of the European aid flows on quality of governance in aid recipient countries. The analysis employs aggregated Official Development Data as well as disaggregated project level data. The results show that while bilateral aid from the largest European donors does not show any impact, multilateral financial assistance from the EU Institutions leads to an improvement in governance indicators. These findings thus suggest that European development assistance can help to promote good governance if aid is allocated at the EU supranational level rather than at the national level of the member states.

EU Aid and the Quality of Governance

Using a panel dataset on 103 developing countries, this paper empirically analyzes the impact of the European aid flows on quality of governance in aid recipient countries. The analysis employs aggregated Official Development Data as well as disaggregated project level data. The results show that while bilateral aid from the largest European donors does not show any impact, multilateral financial assistance from the EU Institutions leads to an improvement in governance indicators. These findings thus suggest that European development assistance can help to promote good governance if aid is allocated at the EU supranational level rather than at the national level of the member states.

Uncovering High-Level Corruption: Cross-National Corruption Proxies Using Government Contracting Data

Measuring high-level corruption and government favouritism has been the object of extensive scholarly and policy interest with relatively little progress in the last decade. In order to address the lack of reliable indicators, this article develops two objective proxy measures of high-level corruption in public procurement: single bidding in competitive markets and a composite score of tendering ‘red flags’. Using publicly available official electronic records of over 2.8 million government contracts in 27 EU member states plus Norway in 2009-2014, it directly operationalizes a common definition of corruption: unjustified restriction of access to public contracts to favour a certain bidder. Corruption indicators are calculated at the level of contracts, but produce aggregate indices consistent with well-established country-level corruption indicators. Due to the common EU regulatory framework, indicators are consistent over time and across countries, while WTO regulations underpin global generalisability. Indicator validity is supported by correlations with well-established perception-based corruption indicators, and novel micro-indicators such as prices and supplier registration in tax havens. The utility of the novel indicators is demonstrated by using them to explain the effect of deregulation on corruption risks at the country level. In order to facilitate wide use of the data and indicators by researchers, journalists, NGOs, and governments, they are made publicly available at digiwhist.eu.

Fixing Europe Is About Performance, Not Democracy

The gradual drop in public confidence in the EU since the beginning of the 2008 economic crisis indicates an erosion of the long-held belief among citizens and elites alike that European integration is the best option to secure a better future. But is it EU democracy that is being challenged here, or is democracy itself challenging the prospects for EU integration? To answer this question, this article briefly reviews first-hand evidence of the basis of trust and the loss of it in European institutions. The evidence is dealt with at a national rather than individual level, and comprises mostly survey data and primary facts that can inform a policy argument. This article does not offer a full explanation of populism nor of attitudes to democracy or globalization, each of which clearly deserve an article in their own right. Instead, it uses data to deconstruct the myths of the EU loss of confidence and its connection with democracy. The two main factors found to decrease trust in the EU are economic growth and confidence in national governments’ performance in terms of controlling corruption.

Good governance powers innovation

Many believe innovation can lead the way out of the present economic crisis. In Europe and the United States leaders have repeatedly referred to the importance of innovation, research and education to sustaining economic growth. The concept that innovation is the key to prosperity is great- but we must understand that this applies to a certain governance context which is seldom encountered in the real world.

The Splintering of Postcommunist Europe

There are two radically different versions of the postcommunist narrative. One tells the triumphal tale of the only world region in which the reforms recommended by the “Washington consensus” worked. The other and more realistic account speaks of a historic window of opportunity that lasted for only a quarter-century, during which efforts by the West and patriotic elites of Central and Eastern Europe managed to drag the region into Europe proper, leaving Europe and Russia pitted against each other along the old “civilizational” border between them. This essay argues that while Institutional choices matter in the postcommunist world, geopolitical and civilizational boundaries still set the horizons of political possibility.

ERCAS Awarded Second Major EU Research Project

whistle
Photo credit: Steven Depolo, Flickr

The tell-tale signs of public spending gone wrong are easy to spot: An airport that is many years behind schedule and billions of Euro over budget, or a highway leading to nowhere. In many cases, corruption is at the core of the problem. For too long, it has been hard to identify such core problems and it has been even harder for civil society to play a role in preventing corrupt practices in public sector spending. A project is about to help change this: Together with five other European partners, the European Research Centre for Anti-Corruption and State-Building (ERCAS) at the Hertie School of Governance has just won a new EU-funded research project, DIGIWHIST, aimed at empowering society to combat public sector corruption.

The project is “The Digital Whistleblower:  Fiscal Transparency, Risk Assessment and Impact of Good Governance Policies Assessed” (DIGIWHIST), funded with three million Euro by the EU’s Horizon 2020 programme, will run for three years (March 2015 – February 2018). It is the second major EU Research Project awarded to ERCAS, led by Alina Mungiu-Pippidi, Professor of Democracy Studies at the Hertie School.

The central objective of DIGIWHIST is to improve trust in governments and efficiency of public spending by empowering civil society, investigative journalists, and civil servants with the information and tools they need to increase transparency in public spending and thus accountability of public officials in Europe.

Specifically, the project will create several interactive products:

  • national procurement portals and mobile apps allow users to: 1) making the database and documentation downloadable, 2) providing easy-to-useanalytic tools, and 3) making it possible for users to contribute to data and 4) allowing for anonymous whistleblower reports and freedom of information requests;
  • a European Transparency Legislation Observatory similar to the national procurement portals which allows users to access, and understand, existing legal frameworks related to public procurement;
  • an easy-to-use risk assessment software for public authorities, based on the indicators developed by DIGIWHIST, to assess corruption risks.

Returning to the airport example, an investigative journalist seeking to understand more about the airport project could visit the DIGIWHIST platform and look up the public body overseeing the construction or the construction firms involved, etc. The information on the platform would include whether the public body has complied with public procurement laws, or whether tendering behaviour has posed any corruption risks. This journalist could then file a report with the appropriate government agency to get more information on the project or even file a whistleblowing report if warranted.

“Our research has proven that only the combination of engaged civic actors plus legislative instruments work in fighting corruption,” said Professor Mungiu-Pippidi. “For example, Freedom of Information Acts (FOIAs) are more effective when civil society is empowered to use them and hold governments accountable for corrupt actions.”

The consortium, led by the University of Cambridge, includes ERCAS (Hertie School of Governance), Corruption Research Centre Budapest, Hungary; Datlab, Prague, Czech Republic; Open Knowledge Foundation Deutschland, Berlin, Germany; and Transcrime (Università Cattolica del Sacro Cuore) organised crime research centre, Milan, Italy. DIGIWHIST builds extensively on the partners’ prior innovative work in this area, particularly EU FP7 ANTICORRP.

European civil society groups, investigative journalists and civil servants involved in or concerned about transparency in public spending are invited to contact the project for more information. Contact: Kerry Schorr, ERCAS Communications Officer, schorr@hertie-school.org, +49 (0)30-25-92-19-337.

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.

Misconceptions Distort Views of the Crisis in Crimea

by: Alina Mungiu-Pippidi

1. Russia wants Crimea. For this reason, it invaded and manipulated the referendum.

This strikes me as false. About ten years ago when I put together indicators for the UNDP to warn of a potential crisis in Crimea, the ingredients of the current situation were already present: local authorities who preferred Russia to the Ukrainian Orange government, Kiev’s weak influence over the peninsula, strange paramilitaries registered as NGOs and training in shooting (referred to as the “Cossacks”, whom I had seen thirteen years before in the Transnistrian war), and a Russian-speaking population of recent settlers who saw Russia as their protector and who feared Crimean Tatar’s land claims (restitution demands for property confiscated when they were deported by Stalin).

Local authorities, whom I interviewed at the time, expressed displeasure that Russia was unwilling to have them join. Russia did not want them because they were far more useful as a threat should Ukraine go astray, a potential Transnistria or South Ossetia. Meanwhile, Russian oligarchs bought the best real estate and tourists flooded the coast. They thronged to the site of Vladimir the Great’s baptism at Chersonesos (an old Byzantine city, now merely a Sevastopol suburb), which in the nineteenth century had been canonized as a cathedral of the nation, thus indoctrinating people to the core with the idea that this is the cradle of all Russian orthodoxy. From a nearby hill one could admire the Russian navy at anchor, bearing odd resemblance to the Second World War movies we watched on Russian TV before 1989, but with no formidable rivals in sight.

Russia already held Crimea in all but name. It just needed a call to provoke the referendum, which could also have been stalled with another call – only the second has never been made.  Russia does not want Crimea, or Kharkov or Donetsk. Russia simply wants Ukraine, so it had to prevent it from joining  the EU, the same way it wanted to prevent Armenia in 2013 (and succeeded) and Moldova and Georgia (and so far failed).

2. We do not change borders in Europe

While the discourse against changing borders is perfectly legitimate, it is not factually correct to say that borders do not change in Europe or that altering borders is not accepted. In the course of EU enlargement borders did change dramatically. Slovenia and Croatia, two secessionist countries recognized by Germany, were allowed to pursue their course without being dragged down by the Milosevic government in Belgrade. Kosovo was then recognized despite formal Serbian opposition, which allowed both Kosovo and Serbia to move on. With Serbia now negotiating to join the EU, the Balkans are finally reaching equilibrium. Were Scotland to secede from the UK at the end of this summer, we would probably look for a legal solution to keep it in the EU, but we would definitely recognize it. And Scotland’s borders were not designed by Stalin and Khrushchev as are Moldova’s, Georgia’s and Ukraine’s.

Presuming that the EU would ever enlarge into Stalin’s borders is preposterous. Nobody would suggest bringing in these reluctant regions, inhabited to a great extent by the Red Army and KGB pensioners, such as Transnistria or Crimea. These borders were artificially created so to accommodate a bomb. It might prove better to detonate the bombs than letting them explode at their will. Why keep entire countries hostage due to them? The discourse that “territorial integrity” is the most important value to protect here is wrong. What matters is the will of people to determine their future themselves.

Ukrainians in major cities want to join Europe. Crimeans want to be part of Russia. Rather than blocking one or the other, we should concede that Ukraine will never join the EU with Crimea included – or Moldova with Transnistria. Plans to unify them will lead nowhere and should be replaced with backup plans to help them separate peacefully if this is what they want. Can we discuss in earnest during the next European Parliament elections where the Eastern border should stop?

3. This is a conflict of interests between East and West, between Russia and Europe

While the conflict may be escalating because of the way Mr. Putin thinks (it is hard to dance tango with someone who thinks you are doing the box step), this is, however, not how the conflict started. As Europeans, we have never wanted Ukraine to join the EU.  We are aware of the artificial borders of this state, which is forcing the cohabitation of two different nations, a new Ukrainian one (which turned out to be quite impressive) and an old Soviet one (widespread across much of the former Soviet space). Ukraine is a also a failed transition by many accounts: It is a crony capitalist state if ever there was one, with corruption lines cutting across pro-Russian-Western camps there. The attractive democratic path does not have clear parties to represent it yet – and its proponents know that. The EU has not been good at curbing crony capitalism and democracy. Just look how little Greece, Italy, Romania and Bulgaria have evolved since joining.  Thus, Ukraine has always been the bridge too far.

But neither can we stand idle forever and listen to the Russian doctrine of legitimate domination in their neighboring countries. Their bullying of Armenia, Georgia, Moldova and now Ukraine has gone too far. This is a conflict between democracy and the right of people to decide wherever they want their countries to go. Between our “empire”, reluctant to expand and Russia’s invasive behavior, our old enlargement policy has us paralyzed. The time has now come to defend those countries against Russia by other means, to convey the clear single message that we do have foreign policy tools other than enlargement, and that these countries can have Western (EU and US) protection even if they are not, and may never be, EU members. These countries want Europe, not the other way around. And if Russia wants them it had better developed an attractive model as the EU has done. By this, I mean one that would attract more than Belarus.

Meanwhile the situation has never been as dangerous since the aborted coup d’etat in Moscow in summer 1991. How did we win that one? The people of Moscow won it for us, and the incompetence of putschists. Let us at least show more dignity than we did then, when some EU member countries rushed to recognize the generals.

Alina Mungiu-Pippidi is Professor of Democracy Studies at the Hertie School and chairs the European Research Centre for Anti-Corruption and State Building Research. She consulted for UNDP’s early warning system in Crimea and the World Bank in the Caucasus. Her research interests include Europeanization, state building, and institutional transformation.

This piece previously appeared on the Hertie School of Governance’s European Elections Blog: “Decision 2014”:  http://www.hertie-school.org/blog/misconceptions-distort-views-ukrainian-crisis-crimea/

The Legacies of 1989: The Transformative Power of Europe Revisited

Why has the EU succeeded in promoting democracy in the new member states but failed in promoting good governance?  This essay seeks to answer this question first by distinguishing governance from political regimes, and second by exploring to what extent national governance—which is defined as the set of formal and informal institutions that determine who gets what in a given country—is susceptible to being improved by external pressure or intervention. It concludes that improving governance remains a challenge even for the democratic character of the European project.

The Anticorruption Report. Volume 1: Controlling Corruption in Europe

The first volume of the Anticorruption Report series provides a comprehensive analysis of causes and consequences of corruption in three European regions, presenting corruption risks for several European countries and concrete policy recommendations on how to effectively address those risks.

Print and e-book version of the report can be purchased here.

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

For many years corruption was seen as a problem only of developing countries, while the European Union (EU) on the contrary was the temple of the rule of law, exporting good governance both to its own peripheries and worldwide. Many European countries indeed remain among the best governed in the world, although the downfall of the Santer Commission on charges of corruption, the enlargement of the EU by its incorporation of new member countries with unfinished transitions, and the economic crisis all strongly indicate that control of corruption is difficult to build and hard to sustain. Older member countries Greece, Italy, Portugal and Spain have all regressed rather than progressed since they joined – the first two of them to worrying levels – and that has raised doubts about the EU’s transformative effect on its members.