An Evaluation of the Effectiveness of Directives 2014/23, 2014/24 and 2014/25 on Indicators of Transparency and Corruption
Ever since the signing of the Treaty of Rome in 1957, the European Union has aimed to increase transparency and decrease corruption in procurement by several directives and policies. In this study, we will assess whether the Directives 2014/23, 2014/24 and 2014/25 have led to more transparency and less corruption in public procurement. We measure transparency through the presence of key information fields in tender notices, while corruption is measured through the risk indicator of single bidding. We first regress eight indicators of transparency on single bidding in eight different binary logistic models. Here we find that a ratio indicator of transparency, in which the share of key missing information fields on the tender notice level is calculated, shows the highest effect on single bidding. Using this ratio transparency indicator, we observe no clear increase in transparency after the transposition of the directives. Likewise, our models do not provide support for a decrease in single bidding after the transposition of the directives. We find that the leeway the generic nature of the 2014 Directives provides may decrease the level of previously well-established procurement laws and norms in specific countries. We recommend increasing the monitoring and enforcement power of the Union to ensure proper compliance. We also propose to implement a Unionwide tender data repository and platform to foster research and open competition in tenders.
Recent evidence shows that Germany is a laggard on anticorruption policies in Europe. This is acknowledged by OECD, as Germany’s implementation of the anti-bribery convention is no longer convincing, by the Council of Europe, whose GRECO body has labelled Germany’s compliance as unsatisfactory and by the German media and civil society. The new data on transparency and public accountability produced by our centre shows that GRECO is right, and Germany falls below the European average at most public accountability regulations. Moreover, while the EU asks accession countries to have a pro-active policy related to corruption scandals, Germany repeatedly failed to do so. The new government should propose a comprehensive anticorruption policy plan, implement GRECO recommendations on conflict of interest for politicians in full and revive the attempt to make businesses truly responsible for corruption. The new majority in the Bundestag should also move decisively to have anti-corruption institutions truly independent and acting far more decisively and prompt against a large set of practices amounting to systematic undue profit from political connections. The elections winners should propose a comprehensive anticorruption policy plan, implement GRECO recommendations on conflict of interest for politicians in full and revive the attempt to make businesses truly responsible for corruption. The new majority in the Bundestag should also move decisively to have anti-corruption institutions truly autonomous so that investigations are prompt and independent of political considerations. But as the Green Party proposed the only comprehensive plan against corruption this might not happen.
This paper explores the evolution of the World Bank’s anti-corruption programming and examines its driving and limiting factors. Building on a novel dataset of World Bank anti-corruption activities and on expert interviews, the paper investigates the impact of factors internal and external to the World Bank on the institution’s anti-corruption programming. The analysis distinguishes three agendas operating under the anti-corruption label that differ in their conceptual understanding of corruption as “a crime”, “a matter of public administration”, and “a matter of power and politics”. The paper finds that internal factors related to the World Bank’s legal and policy mandate, the underlying financial model, and the organizational culture are among the most significant in explaining the evolution of the institution’s anti-corruption programming. Findings suggest that addressing those factors will be crucial for the effective renewal of the World Bank’s strategic and operational approach to doing anti-corruption.
Following the increasing attention the topic received over the last years, this paper is looking at the use of distributed ledger technology (DLT) in public administration and, in particular at its most prominent example: Blockchain technology. While offering a gentle introduction to the topic, the paper establishes an overview of the attributes and potential use cases of DLT in the context of public administration and bureaucracies. As a technology establishing a decentralised, high-trust data management system, DLT has potential to be used for the storage of administrative data and for increasing the effectiveness and efficiency of administrative data management. While potential uses are wide-ranging, this paper offers a simple typology of these. Furthermore, it offers a critical view of the challenges and drawbacks that the technology currently poses to public officials looking at using DLT in their processes. Ultimately, this paper takes the view that DLT can be a potentially valuable tool for public administrations to make use of, but the drawbacks and difficulties associated with this technology are often not discussed or acknowledged as often or as thoroughly as needed, giving a false picture of how easy it would be for governments to use this technology successfully.
Over the past three decades, the study of corruption across several disciplines has greatly increased. Despite the progress on knowledge, anti-corruption scholars and practitioners deplore the lack of progress in the fight against corruption as measured by rankings such as the Corruption Perception Index (CPI). Mungiu-Pippidi (2015), for example, identifies a maximum of ten countries that have managed to reduce corruption significantly in the past 20 years. This leads to the question on whether there is a gap between corruption theory and practice, and if so, what can explain it? This chapter reviews the relevant literature to argue that what looks like a possible disconnect between theory and practice is the product of lack of conceptual clarity and insufficient cross-pollination between different strands of academic literature. It considers two of the main streams of literature, that in favor of less government intervention with anti-corruption policies based on incentive manipulation rather than repression and that in favor of government intervention and legal deterrence. It thus attempts to bring some clarity to the debate around the effectiveness of market and legal solutions for anti-corruption by combining the latest findings and lessons learned from the anti-corruption literature with the main theories of change originated from the economic literature. In addition to the theoretical discussion, I run a few tests of the theories I discuss to substantiate my argument.
This research is focused on the Colombian Government’s flagship post-conflict and statebuilding policy from 2009 to 2015, known as the “Consolidation Policy”. The Government’s policy aimed to transform the governance in post-conflict regions from a social order functional to the armed conflict to such a social order that would promote good governance and inclusive governmental institutions.
The analysis sheds light on the limitations and achievements of the policy on the control of corruption and examines the extent to which it shaped the governance order of post-conflict regions in the short term using a mixed methods approach including a differences-in-differences estimation and semi-structured interviews. The analysis is based in the Equilibrium Theory of Control of Corruption, which identifies policy-actionable variables that promote good governance and the control of corruption. This theory was operationalized in the context of post-conflict Colombia. This research determined the changes produced by the Government policy on the control of corruption by comparing control and intervention municipalities. The analysis revealed a mixed effect on the control of corruption where the intervention occurred. The results showed that the Consolidation Policy was associated with more civil society collective actions, at least in a group of municipalities, and an increase in local government accountability to citizens. On the contrary, there seems to be no association of the policy with increments in local government procurement transparency, or disciplinary sanctions to local civil servants by the Office of the Inspector General, one of the state control agencies
The research identifies the main issues that limited the Consolidation Policy’s mixed effect on the control of corruption. First, instead of a quick-impact approach, this research recommends a gradualist, long-term approach that combines insecurity reduction and empowering citizen group’s to keep corruption in check. Second, given the limitations of the Colombian State to regulate governance in conflict affected areas, civil society should be a central partner in the initiatives of good governance promotion.
In the past years, a growing literature has examined the impact of corruption accusations on voting behavior and found that, although incumbents appear to suffer some vote share loss after being associated with corruption scandals, a vast majority of them gets reelected nonetheless. If voters do not exercise electoral accountability against corrupt politicians as effectively as democratic theory would expect, what conditions explain this pattern? Which factors favor or hinder their decision to remove corrupt incumbents from office? The literature suggests a number of contextual factors and voters’ attitudes that may condition corruption voting, but most studies examine them in a fragmented way. This paper seeks to address this gap in the existing scholarship on the topic by building a comprehensive model to test the validity of five central hypotheses discussed in previous works. Original corruption data from randomized audits in 383 Brazilian municipalities are used in the analysis. The results provide partial evidence for only two of the hypothesized mechanisms: (a) electoral accountability of corrupt incumbents is weakened by recent positive assessments of their performance in office, in particular in terms of improvements in economic conditions, and (b) voters appear to punish more strongly politicians facing more corruption accusations, but this is conditional on the timing of the audit.
Corruption has risen on the European agenda considerably from the last European elections and is
likely to play a prominent role in the 2019 campaign for European Parliament. But while pro-European
parties will advocate for a stronger Europe and populist parties might try to blame all corruption on Brussels
and mainstream parties, a deeper understanding on the linkage EU-national government in curbing
corruption becomes imperative. This paper uses the case of Greece to discuss the impact of Europe about
governance quality in EU Member States and asks if the new European elections find both Greece and
Brussels more prepared to deal with corruption. The conclusion is that EU driven reforms in Greece remain
scattered, fragmented, not locally “owned” or driven by any group whose interest good governance would
serve. Meanwhile, the groups opposing change are well articulated. Greece’s genuine good governance
congregation has yet to coalesce, and the 2019 European and legislative elections are a good opportunity,
especially if civil society would not allow parties to instrumentalize anticorruption but engage them to
promise the still missing good governance reforms during electoral campaign and then monitor them.
Immunities or jurisdictional privileges provide persons or groups of persons some degree of protection against civil or criminal rules that do not apply to all citizens. However, immunities can also be used by public officials as a shield from liability for criminal offences, including corruption. For this reason, international bodies have been pushing, over the past two decades, for a set of legal standards to ensure that immunity does not translate into impunity. The international standards and best practice can be summarised in the following four recommendations promoted globally:
1) Reducing the range of officials provided immunity;
2) Reducing the scope of criminal offences for which immunity can be invoked;
3) Introducing clear guidelines and procedures for lifting immunities;
4) The specification of a time limit for the duration of legal protection.
This study tests empirically whether these legal standards are associated with better control of corruption in practice. The results show weak to no evidence that the set of international standards recommended to countries around the world are associated with better control of corruption. The only evidence of this association, albeit only significant at the 90% level of confidence, is that immunity provisions for MPs which are aligned with international standards are associated with lower levels of bribery. Furthermore, case studies from Greece and Belgium have shown that impunity can be countered without legal changes and that a practice of impunity can be observed even in countries that have robust legal frameworks.
Following the “Snowden effect” and more recent whistleblower scandals, such as the Panama Papers, Luxleaks, Cambridge Analytica or the Danish Tax Fraud, the number of whistleblowing cases and laws for the protection of whistleblowers in Europe and around the world has significantly increased as a tool to combat corruption, fraud and organizational wrongdoings. This paper provides a theory-based and empirical analysis of the theory of change behind whistleblower protection legislation as an anti-corruption policy tool. By introducing a new indicator developed in collaboration with ERCAS and based on international best practices on whistleblower laws – the Whistleblower Index (WI) – the report shows that there is only a slightly upward interaction between stronger whistleblower laws, as of the WI, and slightly higher levels of WGI’s Control of Corruption. It also did not find a statistically significant change in WGI’s Control of corruption after the introduction of a specific whistleblower protection law. Based on the empirical analysis carried out for this study, whistleblower protection legislation only seems to be effective in deterring corruption and organizational wrongdoings in a governance system based on ethical universalism and absence of captive media.
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.
In this paper, we address the question of how political finance regulation affects control of corruption in Latin America from a quantitative perspective. We present a Political Finance Regulation Index with panel data from 180 countries over 20 years (1996-2015). This index was developed using the IDEA Political Finance Database, and once created, was applied to assess the relationship between political finance regulation and control of corruption.
In order to do this, we use the equilibrium model of control of corruption developed by Mungiu-Pippidi (2015). We also included judicial independence and public investment, considered as a constraint and an opportunity to corrupt, respectively. Lastly, we use control variables for level of development.
Results show that, in Latin America, increases in political finance regulation are related with a deterioration of control of corruption. This relationship is statistically significant in the panel estimations. Inversely, the negative relationship between regulation and control of corruption becomes positive in countries with high levels of judicial independence. In a similar way, increases in opportunities to corrupt, represented by levels of public investment, have a significant and negative effect in control of corruption.
For politicians seeking to use a clientelist approach to achieve political and private gain, i.e., to prolong their hold on power and maximize personal profit, control of government contracting is a key tool. We theorise that politicians wishing to exploit government contracting for such ends will seek to increase their influence over three stages of public procurement – policy formation, implementation and monitoring – but that their efforts can be constrained by institutional controls and checks. We examine these influence strategies and institutional constraints by comparing one young democracy and one mature democracy, Hungary and the United Kingdom. Developing new procedural and outcome indicators of corruption risk in contracting, we use a change of government as a natural experiment to analyse partisan favouritism in procurement. We find that, in Hungary, where political influence is systematic and far-reaching, 50-60% of the market is dominated by favoured companies, compared to only 10% of the UK market.
While the last twenty years saw the invention of corruption rankings, allowing comparison over countries and the shaming of corrupt governments, such measurements are largely based on perceptions of experts, lacking both specificity and transparency. New research, based on a comprehensive theory of governance defined as the set of formal and informal institutions determining who gets what in a given context, allows more specific and objective, although indirect measurements of control of corruption. Such measurements focus on the institutional framework which empowers public integrity and eliminates many current anticorruption tools, while validating others. Most importantly, it provides a broader specific context which can empower reforms based on evidence and a clear measure to determine status and progress of corruption control.
This research was made possible by support of the EU FP7 ANTICORRP project (Grant agreement no: 290529) at the Hertie School of Governance.