Why does bureaucratic corruption occur in the EU?
- 573 Downloads
Why does bureaucratic corruption occur in the EU system? Several examples suggest that bureaucratic corruption exists and that the Commission’s anti-fraud agency, OLAF, is not a fully independent authority. We thus develop a novel interpretation of the principal-supervisor-agent model to cope with non-independent anti-fraud units. This model shows that corruption is likely to occur when the expected value to the client from bribing the agent is larger than the expected value to the principal of truth-telling by the supervisor. Overall, this analysis points to the risks of flawed incentives and the lack of institutional independence among principal, agent, supervisor and client. Our main policy recommendations as a result of these findings are that OLAF should be placed outside the Commission, and that whistleblowers should receive adequate protection.
KeywordsEU Bureaucratic corruption Principal-supervisor-agent OLAF Commission
An earlier version of this paper was presented at the Martin Paldam Workshop, Aarhus University, September 28–29, 2012. We thank the other participants and three reviewers of this journal for helpful comments.
- Bjørnskov, C., & Paldam, M. (2005). Corruption trend. In J. Lambsdorff, M. Taube, & M. Schramm (Eds.), The new institutional economics of corruption (pp. 59–75). New York: Routledge. Google Scholar
- Carozza, D. (2004). Telling the truth and living in limbo. Fraud (September-October). http://www.fraudmagazine.com/article.aspx?id=4294967831. Access date 24-11-11.
- Deutsche Presse-Agentur (2011). EU parliament, anti-fraud agency bury hatchet in corruption case. Europe News, April 1. http://www.monstersandcritics.com/news/europe/news/article_1630129.php/EU-parliament-anti-fraud-agency-bury-hatchet-in-corruption-case. Access date 24-11-11.
- Downs, A. (1957). An economic theory of democracy. New York: Harper & Brothers Publishers. Google Scholar
- Europa (2011). Transparency Register. http://europa.eu/transparency-register/index_en.htm. Access date 24-11-11.
- European Parliament (2003). Report on the Commission green paper on criminal-law protection of the financial interests of the Community and the establishment of a European prosecutor. European Parliament COM (2001) 715; C5-0157/2002; 2002/2065(COS); A5-0048/2003 final, 24 February. Google Scholar
- European Parliament (2011). EP leaders agree to develop new rules for lobbyists and stronger code for MEPs. European Parliament on Institutions, March 31, 2011. http://www.europarl.europa.eu/da/pressroom/content/20110331IPR16697/html/EP-leaders-agree-to-develop-new-rules-for-lobbyists-and-stronger-code-for-MEPs. Access date 24-11-11.
- European Student Think Tank (2011).Cash-for-amendments scandal rocks European Parliament. April 6, 2011. http://studentthinktank.eu/blogs/cash-for-amendments-scandal-rocks-european-parliament/. Access date 24-11-11.
- EU ABC (2007a). Whistleblowers. http://da.euabc.com/word/962.
- EU ABC (2007b). Schmidt-Brown, Dorte. http://da.euabc.com/word/1293.
- George, S., & Bache, I. (2001). Politics in the European Union. Oxford: Oxford University Press. Google Scholar
- Goodman, M. (1989). Preserving privilege in Yucatan. In A. J. Heidenheimer, M. Johnston, & V. T. LeVine (Eds.), Political corruption: a handbook (pp. 639–658). New Brunswick: Transaction Press. Google Scholar
- Greenwood, J. (1997). Representing interests in the European Union. London: MacMillan. Google Scholar
- Kurrild-Klitgaard, P. (1998). The constitutional dilemma of European integration. In A. Wivel (Ed.), Explaining European integration (pp. 270–296). Copenhagen: Copenhagen Political Studies Press. Google Scholar
- Nielsen, J. U. M., & Svendsen, G. T. (2012). EU lobbying and anti-dumping policy. Journal of World Trade, 46, 187–212. Google Scholar
- Office de Lutte Anti-Fraude (2011). Our mission. Brussels: European Anti-Fraud Office, European Commission. http://ec.europa.eu/dgs/olaf/mission/index_en.html. Access date 19-9-11. Google Scholar
- Olson, M. (1965). The logic of collective action. Cambridge: Cambridge University Press. Google Scholar
- Olson, M. (1991). Rational ignorance, professional research, and politicians’ dilemmas. In W. H. Robinson & C. H. Wellborn (Eds.), Knowledge, power, and the Congress. Washington: The Congressional Quarterly. Google Scholar
- Svendsen, G. T. (2003). Political economy of the European union: institutions, policy and economic growth. Cheltenham: Edward Elgar. Google Scholar
- Svendsen, G. T. (2008). Lobbyisme I EU (lobbying in the EU). Copenhagen: Samfundslitteratur. Google Scholar
- Tirole, J. (1992). Collusion and the theory of organizations. In J.-J. Laffont (Ed.), Advances in economic theory (Vol. II, pp. 151–206). Cambridge: Cambridge University Press. Google Scholar
- Tullock, G. (1967). The welfare costs of tariffs, monopolies, and theft. Western Economic Journal, 5, 224–232. Google Scholar
- Uslaner, E. M. (2009). Corruption. In G. T. Svendsen & G. L. Svendsen (Eds.), Handbook of social capital: the troika of sociology, political science and economics (pp. 127–142). Cheltenham: Edward Elgar. Google Scholar
- van Buitenen, P. (2000). Blowing the whistle: one man’s fight against fraud in the European Commission. London: Politico’s Publishing. Google Scholar
- Warner, C. M. (2003). Common market institutions, fraud and informal networks. In T. Christiansen & S. Piattoni (Eds.), Informal governance in the European Union. Cheltenham: Edward Elgar. Google Scholar