Report on Romania on institutions in public procurement for the infrastructure sector

Improving infrastructure in Romania has been a significant project in the past 25 years. Unfortunately, although large amounts of public funds were spent in the construction sector from 2007 to 2013 (an average of 6.6% of GDP), the physical results in terms of project quality and completion do not match this investment. One of the explanations for this is that public contracts were awarded to companies based on corrupted practices or political connections, the focus being on redistributing public money and not achieving high quality construction works.The present research points to the fact that statistical data analysis can be used in detecting corruption. The practice of single bidding and the tendency to establish political connections exist in the entire public procurement market. Nonetheless, non-EU funded contracts present a higher corruption risk. Only 1 out of 7 contracts receiving European funding were awarded to a single bidder, as opposed to 1 out of 4 contracts financed by the state budget. Still, 1 out of every 3 contracts won by a politically connected firm involved European funding. Data analysis also concluded that the number of contracts awarded per company can be explained by single bidding and the existence of a political connection in 44% of the cases. The agency-capture analysis revealed that favouritism in public procurement occurs especially at the local level and in state-owned companies. Most of the companies that “captured” contracting authorities are politically connected firms.At the same time, the case studies give an account of how firms’ owners go to great lengths to consolidate a network of relationships with high ranking officials so as to keep their doors open and contact political elites, but also various state institutions whose activity can favour or disrupt their companies’ economic well-being.

Report on Hungary on institutions in public procurement for the infrastructure sector

This report aims to document and to investigate the extent and the determinants of government favouritism in EU funded infrastructure development. It uses a variety of qualitative and quantitative research methods. While predominantly relying on the analysis of contract-level quantitative data on Hungarian public procurement, it also provides a discussion of the institutional framework and particular cases based on document analysis and interviews.It finds that public procurement of infrastructure from national or EU Funds is a hotspot for corruption in Hungary just like in the other countries investigated by ANTICORRP Work Package 8. However, corruption is not pervasive everywhere and even high-level political influence has it limits. While the economic environment has varied greatly, public procurement spending on infrastructure followed a political logic with elections, EU funding cycles, and political power games playing a crucial role. It has proven to be one key public resource up for grabs for corrupt elites. Controls of corruption in public procurement in general are weak: not only is effective transparency very limited and declining rapidly since 2010, but also institutional remedies are likely to be controlled by the current governing party.As a result of extensive public resources available, weak controls, and a complex regulatory environment facilitating close cooperation between bidders and public bodies, corruption is widespread in infrastructure provision. Political connections, far from having a uniform impact, are effective in facilitating rent extraction only when organisational integrity is weak and both the bidders and contracting entities are politically controlled. In micro-cosmoses of high integrity, political connections are ineffective at best, but may even handicap companies.

Report on Germany on institutions in public procurement for the infrastructure sector

Germany has the highest public procurement expenditure in the EU, with an average of 370 billion euros a year between 2009 and 2013. The main objective of this report is to shed some light on the inner workings of the German public procurement system by providing a general overview of its historical development, the current trends in procurement spending and assessing potential risks for corruption. Given that Germany has two parallel procurement systems active at the time, one for contracts above the EU thresholds and one for the contracts underneath these limits, each one of them is evaluated separately. The lack of high quality tender-level data for the case of Germany made it impossible to base the risk assessment on objective indicators. Therefore, this report relies on different sources of data to determine the size of the procurement spending in the country, the manner in which it is allocated and the potential risks of corruption. The study concludes that the public procurement system in Germany – especially the one in place for contracts underneath EU thresholds – is vulnerable to corruption given its complex legislation that damages nation-wide competition, the lack of transparency in the awarding process, a clear or unified national legislation and the low utilization of e-procurement platforms.

Report on Croatia on institutions in public procurement for the infrastructure sector

This report seeks to assess the extent of favouritism – i.e., preferential treatment for some bidders over others – in the allocation of public procurement contracts in the construction sector in Croatia. The methodology is based on identifying opportunities for favouritism and evaluating the effectiveness of constraints. The research finds that Croatia’s public procurement law sets a high standard and there are numerous transparency and control mechanisms in place. Nevertheless, the integrity of procurement is undermined because a large share of it is contracted by entities which are owned by government units and thus subject to political influence and constrained by a much weaker control framework. Data on the procurement of high-value construction works is analysed for indicators of favouritism in the process or outcomes. Whilst there is only limited use of restrictive procedures, competition for public contracts is surprisingly weak in a sector under considerable economic pressure. Moreover, around one-half of the total contract value is won by tenderers which are not private companies but rather entities that are partially or fully owned by the state. This raises further questions about the potential for political leaders to influence the process in order to achieve favouritism in the allocation of public contracts, to benefit themselves or third parties. Evidence from the verdict of a trial involving high-ranking politicians suggests further that such favouritism may be widespread.

Report on Bulgaria on institutions in public procurement for the infrastructure sector

The Bulgarian public procurement market constituted 9% of national GDP on average from 2009 – 2013, which is lower than the EU average. Public procurement has been particularly important for the construction sector in the country, with approximately a third of total sector turnover deriving from public procurement in 2013. Since the onset of the economic crisis in 2008 the survival of the construction sector in Bulgaria has essentially hinged on public procurement, coming mostly from EU funds. This concentration of market power in the hands of the public administration, coupled with a history of lack of effectiveness, integrity and control, and persistent structural governance deficiencies imply significant corruption risks. Although the legal framework has continuously improved, it is subject to too frequent changes to ensure proper implementation.The firm-level analysis of the public procurement contracts awarded to the top 40 construction companies included in the paper, confirms the trend of concentration of the construction sector. The data does not confidently detect a specific type of favouritism but corruption risks are detected in specific cases, especially involving large-scale construction projects in the infrastructure and energy sectors. Anecdotal evidence abounds that powerful private operators exert pressure on the public administration to channel public procurement to major companies, linked either legally and/or through circles of influence to them.

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.

Old habits die hard: Challenges to participatory governance in post authoritarian Mexico.

This his article provides ethnographic evidence about the factors that shape the attitudes of citizens towards the state among communities in the Mexican state of Chiapas. Because we are interested in studying whether political democratization can offer real opportunities for the empowerment of previously oppressed or disadvantaged groups, the communities studied were low income, rural and mostly populated by indigenous groups. Furthermore, these communities are also geographically remote, which means that ensuring good governance and accountability of state officials poses special challenges to regional authorities in these areas. For the same reasons, the population in these communities is especially vulnerable to the impacts of corruption. Specifically, the study focuses on the interactions of community members with health service providers, where corruption can have specially deleterious consequences.

Corruption at the business-politics intersection in the city of Monza, Italy

In 2012 a new law in the matter of transparency and anti-corruption was approved in Italy. The law has set within new frames the understanding of corruption mechanisms, as well as the definition of core concepts of the anti-corruption discourse, such as ‘prevention’ and ‘transparency’. Moreover it has also re-defined the roles and tasks of actors and employees of the public sector. In December 2013 the city of Monza, Northern Italy, was hit by the biggest corruption scandal of its history. Investigations evidenced the existence of a well run system of corruptive practices between the public sector and the City Council, which were aimed at favouring certain companies for public works and calls for tenders.

The recent events that occurred in Monza acquired even more relevance in light of the principles contained in the new legislation, particularly its stress on anti-corruption discourses (and rhetoric), as well as on the practical and performative role of virtues and ethical values in the public office.

This paper looks at how employees of Monza City Council perceived and (re)signified corruption as a whole consequent to the 2013 scandal and to the introduction of the new law, not only considering their impact at a local level, but also in a wider perspective in relation to corruption perception and practices at a national level.

Culture, organizational change and bounded morality in the Hungarian public administration

This paper deals with the analysis of ethnographic data on public administration cases in Hungary. The main focus is on the perception that public administrators have of integrity challenges, how far these influence their daily tasks, the most relevant changes introduced at the government and policy level, as well as the socio-cultural explanations that are most commonly given in relation with the issue of corruption in the country. I have chosen to deal with the public administration in general because of three reasons. First, understanding the everyday work of public administration in a country is a complex task which, departing from the study of the organisational structure and its dynamics and expanding to the changes introduced at the policy level, it needs a nuanced and interdisciplinary approach. Nonetheless, I believe that through the innovative lens of the anthropological approach, it is possible to investigate some of these features through a bottom- up perspective that looks at ways how administrators perceive the main challenges, strengths and their changes in the field of integrity. Second, since corruption is a phenomenon that affects longitudinally all levels of the public service in a country (although to different extents), I consider that information gathered from different sectors in the public administration and analysed comparatively may provide a multifaceted and dynamic picture of the phenomenon. Finally, and due to the overarching nature of corruption that covers any field in which the public sphere meets the private, it can be useful to understand what are the common risks and the diverse challenges that any of the sectors under investigation are determined by, in the exercise of the public office.

International Anti-corruption Normative Framework: the State of the Art

This paper looks into the main debates in International Relations on norm compliance. It looks at the three causal factors that help us explain the origins of norms in relation to anti-corruption introduced by McCoy and Heckel (2001): (1) post-Cold War era; (2) social process, i.e. interaction among actors and diffusion of information; and (3) internal process where ‘cognitive and motivational processes of individuals’ may contribute to the generation of norms. Using the model developed by Finnemore and Sikkink (1998) on the life cycle of a norm, it shows how international anti-corruption norms took root by tracing the development of various regional and international legal instruments. Finally, the UNCAC is analysed in more detail, as it has been recognised as a reference framework for the fight against corruption, due to which many countries formally adopted ethical universalism as a norm. The paper argues that international actors must put in place such a monitoring mechanism; otherwise implementation of UNCAC could become an end in itself. However, it is not possible to have significant progress without domestic demand for new rules of the game and public participation in a sustainable mechanism which would prevent the eternal reproduction of privilege.

The Anticorruption Report. Volume 2: The Anticorruption Frontline

From Turkey to Egypt, Bulgaria to Ukraine, and Brazil to India, we witness the rise of an angry urban middle class protesting against what they see as fundamental corruption of their politicalregimes, perceived as predatory and inefficient. Corruption is near the top of all global protesters’ list of grievances – from the Occupy movement to the Arab Spring. There is increasing demand for good governance resulting in quality education and health systems, and denunciation of sheer bread and circus populism. Volume 2 of the ANTICORRP Anticorruption Report tackles these issues across key cases and developments.

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

Institutional performance and social values: Mexico case study report

The contribution of The Basel Institute on Governance to ANTICORRP WP4, (the ethnographic study of corruption practices) involves field research in two countries: Mexico and Tanzania. This report describes the activities and findings form the research conducted in Mexico.

The report summarizes the results from the application in the Mexican context of the ethnographic survey on institutional performance and social values that all ANTICORRP partners working in WP4 have agreed upon and will apply in their respective case study countries. Additionally, the information on the survey is supplemented with additional insights that were obtained through semi-structured interviews with key informants as well as focus group discussions.

The field research in Mexico contributes to the ongoing work in WP4 in several ways.

First, by applying the standardized survey on institutional performance and social values to a Latin American context, it enriches the sample covered by the work of WP4. This is specially meaningful given the fact that the approach of this work package is that of ethnography. Therefore, inclusion of the Mexican case adds to the increase the breadth of cultural, demographic and geographical variation that the WP4 work will cover, contributing to the goal of bringing together a comprehensive view of how local contexts shape different understandings and perceptions of corruption.

Second, the field research in Mexico targets low-income, minority groups living in remote rural areas of the country. These groups, because they have been historically disempowered, and because their characteristics (rural, poor ethnic minorities) can make them especially hard to mobilize, are typically amongst the most vulnerable to corrupt practices. Therefore, developing a better understanding of the manner in which groups like these view their relationship with the institutions of the state and understand corruption is a necessary step to develop better approaches that can protect the most vulnerable from abuse of power.

Third, while the research in Mexico includes application of a shared research tool (the survey on institutional performance and social values) it also takes a unique perspective by placing the focus of the analysis on studying participatory initiatives to prevent corruption in the health sector. This angle will contribute to the overall WP4 effort by adding insights form the health sectors to the work in other sectors (e.g. education, business, electoral systems) that partners in WP4 are undertaking.

Ethnography of corruption: the case of Kosovo

This report includes the findings obtained through a survey, interviews with citizens, NGO and think-tank workers, representatives of public institutions, as well as observations at public workshops and roundtable discussions. In many ways it may reproduce the very techniques of knowledge productions it suggests must be viewed more critically. However, conducting and participating in similar survey projects is an important entry for an anthropologist. The limited ethnographic study conducted here has served to develop a background report, attached to this research report, which makes a particular argument: the need to account for activism and civil engagement against corruption and understand the terms based on which such mobilization occurs. For this purpose a desk review was conducted, one focus group was held with anti- corruption activists, and participant-observation was carried out in a citizens group that organized around claims of corruption in the public Kosovo Electric Company. As was noted in the ANTICORRP project document “a striking tendency of the literature on corruption has been the neglecting of anti-corruption movements”.  Our proposal is that we must take advantage of some very interesting and important ways in which public space and activist networks are linked together in Kosovo in protesting corruption. Current ethnographic research confirms that this approach will give us insight that is often lacking in other analyses, and give an important entry-point to discern for changes in social order and values, particularly definitions of morality and legality within the space of politics and economy.

Institutional performance and social values in Italy

The following report is based on data collected during ethnographic fieldwork, as a part of the ANTICORRP project, Work Package 4 – The Ethnography of Corruption. In particular, it deals with the results of a survey conducted in Italy on a small sample, divided in two groups: inhabitants of the cities of Monza (Northern Italy) and Lecce (Southern Italy). The results will be presented as a whole, although we are aware of the fact that neither of the two cities can be considered as representative of the very regionally diverse Italian reality. As a consequence of that, differences at a macroscopic level will be pointed out, in an attempt to take into account relevant issues that have arisen.

The aim of the survey is to collect information on how different areas of the public and private life are perceived by the respondents, and in particular: public institutions, local development, local customs, and values. The main focus of the questions is to investigate how people deal with the problem of corruption (if perceived at all), its effects, practices, social and cultural norms, as well as with the anti-corruption discourse, both at a local and national level. It is important to stress that the word “corruption” itself is not directly used in the survey, with one exception in section D, where it is used to address one of a series of hypothetical scenarios. Avoiding direct references to corruption as a phenomenon was a choice based on the awareness that corruption itself is hard to define and to frame, since it consists of multiple practices not always perceived as fraudulent or illegal, which are not necessarily fitting the social understanding of object corruption. Using a word that has such strong moral and social implications in the public discourse would have possibly influenced the results of the survey, and make the respondent feel at unease or bias their responses when dealing with such matters.

The survey target has been the ordinary residents in the above mentioned cities, in an attempt to give a bottom-up perspective of the relationship between the citizen and the institutions at multiple levels (from local to nations and supranational), as well as to underline how the citizens relate to such institutions in matter of social trust and ability to interact with them.

The survey is aimed at providing comparable data among the countries it has been conducted in, in the scope of the WP4 research. Therefore it serves a double purpose: attempting a comparison within two different areas in Italy, as well as providing information which could be used in a wider, comparative framework.

Survey: Institutional performance and social values in Hungary

The following report is based on data collected during ethnographic fieldwork, as a part of the ANTICORRP project, Work Package 4 – The Ethnography of Corruption. In particular, it deals with the results of a survey conducted in Hungary on a small sample of 103 inhabitants of the city of Budapest.

The aim of the survey is to collect information on how different areas of the public and private life are perceived by the respondents, and in particular: public institutions, local development, local customs, and values. The main focus of the questions is to investigate how people deal with the problem of corruption (if perceived at all), its effects, practices, social and cultural norms, as well as with the anti-corruption discourse, both at a local and national level. It is important to stress that the word “corruption” itself is not directly used in the survey, with one exception in section D, where it is used to address one of a series of hypothetical scenarios. Avoiding direct references to corruption as a phenomenon was a choice based on the awareness that corruption itself is hard to define and to frame, since it consists of multiple practices not always perceived as fraudulent or illegal, which are not necessarily fitting the social understanding of object corruption. Using a word that has such strong moral and social implications in the public discourse would have possibly influenced the results of the survey, and make the respondent feel at unease or bias their responses when dealing with such matters.

The survey target has been the ordinary residents in the above mentioned cities, in an attempt to give a bottom-up perspective of the relationship between the citizen and the institutions at multiple levels (from local to nations and supranational), as well as to underline how the citizens relate to such institutions in matter of social trust and ability to interact with them.

The survey is aimed at providing comparable data among the countries it has been conducted in, in the scope of the WP4 research. Therefore it serves the purpose of providing information which could be used in a wider, comparative framework.

A Comparative Assessment of Regional Trends and Aspects Related to Control of Corruption in the Middle East and North Africa, Asia and the Pacific, Sub-Saharan Africa, Latin America and the Caribbean, and the Former Soviet Union

This report analyses the status and dynamics of the control of corruption in five world regions: the Middle East and North Africa, Asia and the Pacific, Sub-Saharan Africa, Latin America and the Caribbean, and the Former Soviet Union. The diverse nature of corruption across the globe is shown by the huge variance within each single region; this variety of corruption is not only related to degrees of corruption but also to the peculiarities and effects of opportunities and constraints for corruption and the trajectories control of corruption or the lack thereof. In the MENA region material resources are abundant, while constraints are weak. Corruption prevails as a persistent social practice and a political strategy. Apart from few but notable exceptions, most countries in Asia and the Pacific as well as in Sub-Saharan Africa perform very poorly on control of corruption. Many of the small Caribbean island states have curbed corruption effectively, but the control of corruption in Latin American region shows little progress otherwise. The Former Soviet Union shows the lowest degree of the control of corruption worldwide. Existing evidence from regional achievers provide multiple insights into the dynamics for the control of corruption. Across these five regions two different pathways stand out: first, authoritarian regimes, with the strong willingness to reduce opportunities and strengthen (nondemocratic) restraints, and, second, democratic regimes with a strong and independent anti-corruption legislation, which is backed up by an independent judiciary have been able to successfully fight corruption. The report draws on the model of control of corruption as a balance between resources and constraints (Mungiu-Pippidi et al. 2011) to review in more detail the contributing factors. These continental comparisons complement the background reports of ‘achiever countries’.

Background paper on Poland

There are many grounds for believing that Poland is close to the threshold of good governance. Accession to the European Union required many changes to be made to the organization of the state and this provided an important drive for modernization. After EU accession, modernization processes clearly lost impetus, for political elites seemed to lack incentives to engage in broader reforms that could significantly improve quality of governance. Local government is over-politicized and the citizenry shows considerable passivity and tolerance towards corruption. While the model of governance in Poland has become more rationalistic and universalistic during transition, recent slowdown of reforms should be a matter of public concern.

Background paper on Rwanda

In recent years, Rwanda has been praised by a large number of donors and development experts for its recovery from the 1994 genocide, sustained economic growth and improvement of many socioeconomic indicators, partly achieved thanks to massive aid flows. A key feature of Rwanda’s progress is often considered to be governance and particularly anti-corruption: the country is generally regarded as one of the least corrupt in Africa and a success story in reducing corruption. This paper aims to analyze the state of corruption and the wider governance context in Rwanda, attempting to evaluate whether the country’s governance regime is an open access order characterized by ethical universalism, a limited access order dominated by particularism, or a hybrid.  After providing an overview of the country’s anti-corruption framework, the paper analyses a number of governance aspects and assesses the incidence of different forms of petty and grand corruption in a bid to ascertain to which extent claims of Rwanda as an anti-corruption success story are well-founded .

Background paper on South Korea

Korea is a developed OECD country and a young democracy with a relatively effective governance structure. It is often described as a very successful case of state-led economic development and praised for the successful transition from an authoritarian “developmental state” to a consolidated democracy since the 1980s. The Asian financial crisis that hit Korea in 1997 and the election of the first president coming from the opposition in the same year have been another critical juncture. Since then substantial institutional reforms have consolidated democracy, strengthened civil rights and improved the quality of governance. The country has a well-trained, meritocratic bureaucracy and a largely independent judiciary. Despite the substantial improvements in transparency, democratic accountability and prevention of corruption, many problems remain. Democratic behavior is still not deeply rooted in Korean society and is often undermined by entrenched hierarchical and authoritarian thinking. Korean society is divided into competing networks in which personal trust derives from regional origin and high school/university networks. These personal networks are grouped around powerful individuals and compete for influence, power, jobs and public resources. Democratic changes in governments have ensured that not a single group was able to completely monopolize power, but the competition of networks has prevented the emergence of a universalistic attitude oriented towards the common good. In sum, the distribution of resources is on the border between competitive particularism and ethical universalism with a general positive tendency since the beginning of democratization.

Background paper on Taiwan

Corruption has been on the top of Taiwan’s political and social agenda since at least the early 1980s. In many opinion surveys over the years, people have named it the most pressing political issue. Taiwan’s democratization in 1992 did not improve the situation – some observers even argue that corruption has worsened because of the need to finance election campaigns, to win votes and to gain influence in the now-powerful legislature.Since the first change in ruling parties in 2000, the situation has gradually improved. The Democratic Progressive Party (DPP) initiated tough anti-corruption regulations, strengthened anti-corruption organizations and cracked down hard on corruption and organized crime. The Kuomintang (KMT), which came to power again in 2008, continued this policy. Several high-profile corruption scandals in the last years mask the fact that Taiwan’s governance has improved markedly in the last decade. Not only have anti-corruption regulations been passed and are rigorously enforced, but also anti-corruption units in the government were strengthened. However, cultural factors such as the importance of personal relations in Chinese society and the habit of giving gifts not only to friends, but also to strategically important persons like doctors, teachers or business partners make it difficult to completely root out corruption.

Background paper on Latvia

Latvia’s political system has been functioning in a relatively inclusive and democratic way for about the last two decades. However, corruption has been a continuous concern. In the allocation of public resources such as public procurement contracts, public jobs and social services, fairness and impartiality are observed but not uniformly adhered to. Public agencies differ in their perceived degree of capture v. impartiality. The separation between the public and private sphere is the adopted principle but deviations from it are frequent (even if nowadays often hidden). Hence, within the distinction between the limited access order and open access order, Latvia fits as a borderline case.However, along several parameters, Latvia has experienced gradual long-term improvements. Its anti-corruption legislation is well developed. Administrative corruption remains a problem but on a considerably lesser scale than in the end of the 1990’s when solid surveys began. Corruption-related investigations and prosecutions of influential people in power positions have shown that no group is entirely above the law. Occasional expressions of the public outrage against corrupt politics are strong enough to serve as at least a modest restraint on the political elites and the grip of captors of political decision-making eased in 2010-2013.Among the factors which hold back Latvia from becoming a governance regime of the open access order, seem to be the rigid ethic division in the political competition, widespread sense of relative personal economic deprivation and high level of informal economy, the deficit of general interpersonal trust and related difficulties to overcome collective-action problems. Moreover surveys reveal mixed public attitudes towards corruption with both condemnation and tolerance common.

Background paper on Costa Rica

In spite of the economic and social policy successes of Latin America’s longest surviving democracy, corruption has become a major problem shaking Costa Ricans’ confidence in appointed and elected public officials. In response to the apparent rise in corruption since the start of the new millennium, governments have introduced new laws and created new agencies to combat corruption at all levels of society, with an emphasis on combating particularism by elected and appointed public officials. This report evaluates the apparent increase in corruption, the efforts to limit, expose, and prosecute corrupt acts, and the factors that have facilitated the rise in corrupt actions on the part of state officials and private citizens. In short, acts of corruption that may have previously gone unnoticed (at least unproven) are now exposed by a more aggressive media and prosecuted by new and/or stronger state anti-corruption agencies and laws in response to multiple major political corruption scandals of the early 2000s. State prosecutors show no deference in their investigations of corruption and/or illicit enrichment by public officials and private figures, no matter how powerful. The only limitation is the level of resources available to these agencies. The contemporary increase in the scope of corruption is not in the quotidian actions of low-level officials directly affecting the lives of ordinary citizens, but in influence trading and manipulation of formal processes. A separate, more recent and growing corruption problem comes from international drug cartels that have amplified their activities and money laundering in Costa Rica that some fear might outstrip the state’s capacity to keep corruption under control.

Background paper on Georgia

Georgia had a terrible reputation for corruption, both in Soviet times and under the presidency of Eduard Shevardnadze (1992-2003). After the ‘Rose Revolution’ that led to Shevardnadze’s early resignation, many proclaimed that the government of new President Mikheil Saakashvili was a success story because of its apparent rapid progress in fighting corruption and promoting neo-liberal market reforms. His critics, however, saw only a façade of reform and a heavy hand in other areas, even before the war with Russia in 2008. Saakashvili’s second term (2008-13) was much more controversial – his supporters saw continued reform under difficult circumstances, his opponents only the consolidation of power.Under Saakashvili Georgia does indeed deserve credit for its innovative reforms that were highly successful in reducing ‘low-level’ corruption. At the top, however, many UNM officials saw themselves as exempt: ‘high-level’ corruption continued and even expanded as the economy grew. Georgian Dream has not restored the ancien régime, but has allowed some patronage and clientelism to creep back into the system. The new Georgia has gained a reputation for ‘selective prosecution’; but some of this is dealing with causes célèbres from the Saakashvili era, while some is clearly persecution of the UNM.

Background paper on Estonia

As in all transition countries, corruption has been and remains a concern for Estonia. Still the country is an obvious top-achiever in comparison with the rest of the post-communist area. On the other hand, the last decade has been stable with the level of corruption almost unchanged and representing a certain plateau in development. The Estonian governance regime operates mostly in line with the principle of ethical universalism. Reportedly all key elements of the state are subject to quite high formal standards of transparency. Correct functioning of the public procurement system is the rule, and violations, although common, are more of an exception. Estonia appears to have a high level of equity of access to its education and healthcare systems.The search for causes of Estonia’s success often focuses on cultural factors. The high general level of interpersonal trust in the Estonian society is an unusual cultural feature of a post-soviet society. Plus the civil society and free media represent high normative constraints for corruption and particularism. It has been argued that in the beginning of 1990’s, Estonia experienced the most radical replacement of the political elite compared with Latvia and Lithuania where the old “nomenklatura” networks managed to perpetuate to a much larger extent. The new Estonian elite was willing and ready for thorough reforms of the judiciary and public administration.

Background Paper on Chile

This report examines the successful performance of Chile to control corruption. It discusses the importance of structural and institutional factors that have shaped Chilean political development and its political economy and then it analyses the mechanisms implemented to achieve such a goal.