Reducing or Fueling: The Effect of EU International Aid Allocation on the Level of Corruption in Recipient Countries
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The existing literature on the effect of foreign aid on corruption in recipient countries has been controversial and contains methodological issues regarding the use of instrumental variables. In this thesis, based on the work of Carnegie and Marinov (2017), I utilize the EU Council presidency as the instrument to analyze the effects of EU aid on corruption in recipient former colonies until 2006. The results from the instrument variable approach show that while EU aid allocation reduced most types of corruption, the magnitudes of these effects were quite small. The different effects depending on the measurements of corruption were also revealed in the analysis. These results were confirmed by the following quantitative analyses of the contemporary history of EU sanctions against violations of human rights, democracy, the rule of law, and good governance, as well as the case of DRC in which the 2001 Belgian presidency had a concrete influence on aid allocation. The findings suggest EU aid conditionality does not have substantial effects to reduce corruption in recipient countries in comparison to the effects on other development issues such as democracy promotion and human rights improvement when donor countries have little interest to impose sanctions against corruption.
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Efforts to evaluate the impact of anti-corruption programmes face numerous difficulties related to the complexity and hidden nature of corruption, the political sensitivity of the topic, and the ability of corrupt networks to respond flexibly to interventions. This makes it difficult to measure changes in corruption levels and problematic to attribute them to interventions. This article shows how a theory-based evaluation that builds on academic research can elaborate a set of intermediate outcomes for the evaluation of anti-corruption programmes, and showcases several purpose-built tools for evaluating different aspects of capacity building. It also draws on learning from two evaluations of Anti-Corruption programmes in the Caribbean to demonstrate how anti-corruption theory is being translated into law enforcement practice in two ways: (i) through economic models of criminals as rational actors whose behaviour can be changed through incentives and disincentives; (ii) and through social norms models which argue that reducing corruption requires deeper social change that resonates with or adapts local norms.
Given the unprecedented scale of intergovernmental development funding and the importance of institutional quality for human wellbeing, it is imperative to precisely understand the impact of development funds on corruption. In Europe, EU Funds provide a boost to public spending in recipient member states while introducing additional corruption controls. We investigate whether EU Funds increase high-level corruption in the Czech Republic and Hungary in 2009-2012. We analyse newly collected data from over 100,000 public procurement contracts to develop objective corruption risk indicators and link them to agency-level data of the public sector. Propensity score matching estimations suggest that EU funds increase corruption risks by up to 34%. The negative effects are largely attributable to overly formalistic compliance and EU Funds overriding domestic accountability mechanisms in public organisations entirely dependent on external funds. The policy implications are profound: governments should reduce barriers to market entry by lowering red tape and they should prevent excessive concentration of funds.
A growing body of research argues that anticorruption efforts fail because of a flawed theoretical foundation, where collective action theory is said to be a better lens for understanding corruption than the dominant principal–agent theory. We unpack this critique and advance several new arguments. First, the application of collective action theory to the issue of corruption has been, thus far, incomplete. Second, a collective action theory-based approach to corruption is in fact complementary to a principal–agent approach, rather than contradictory as is claimed. Third, applications of both theories have failed to recognize that corruption persists because it functions to provide solutions to problems. We conclude by arguing that anticorruption effectiveness is difficult to achieve because it requires insights from all three perspectives—principal–agent theory, collective action theory, and corruption as serving functions—which allows us to better understand how to harness the political will needed to fight corruption.
This paper explores dimensions of collectivism to explain patterns of reporting organizational wrongdoing in public organizations. The findings herein illustrate that responses to wrongdoing in public organizations in developing countries like Kenya are more rationalized or interpreted within communitarian or supported by parochial social ideologies, which tend to override instrumental accountability norms and structures. Accordingly, responses towards organizational wrongdoing are more informed by the logic of appropriateness, as potential and actual complainants prefer informal channels for addressing organizational wrongdoing over formal reporting mechanisms. These findings present important insights for designing accountability mechanisms or anti-corruption strategies in public organizations. With a focus on unfamiliar settings to the literature on ethical culture, the paper rides on its in-depth analysis while contributing to the current research on organizational behavior and decision-making.
Purpose – This paper investigates the effect of foreign aid on governance in order to extend the debates on foreign aid and to verify common positions from Moyo’s ‘Dead Aid’, Collier’s ‘Bottom Billion’ and Eubank’s ‘Somaliland’. The empirical evidence is based on updated data from 52 African countries for the period 1996-2010.
Design/methodology/approach – An endogeneity robust instrumental variable Two-Stage-Least Squares empirical strategy is employed.
Findings – The findings reveal that development assistance deteriorates economic (regulation quality and government effectiveness) and institutional (corruption-control and rule of law) governance, but has an insignificant effect on political (political stability, voice and accountability) governance. While, these findings are broadly in accordance with Moyo (2009) and Collier (2007) on weak governance, they neither confirm the Eubank (2012) position on political governance nor the Asongu (2012) stance on the aid-corruption nexus in his debate with Okada & Samreth (2012).
Practical implications – The use of foreign aid as an instrument to influence the election and replacement of political leaders in Africa may have insignificant results. It is time to solve the second tragedy of foreign aid and that economists and policy makers start rethinking the models and theories on which foreign aid is used to influence economic, institutional and political governance in recipient countries.
Originality/value – The paper extends the debate on foreign aid and institutions in Africa in the light a plethora of recent studies in the aid literature.
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Cambridge Core - European Government, Politics and Policy - Europe's Burden - by Alina Mungiu-Pippidi
In reply to Marquette and Peiffer's article “Grappling With the ‘Real Politics’ of Systemic Corruption: Theoretical Debates Versus ‘Real‐World’ Functions,” this article employs three criticisms: Marquette and Peiffer's call to grapple with the “real politics of corruption” does not bring much new to the table, is conceptually flawed, and risks serving as an excuse for corrupt elites to pursue “business as usual.” In response, we reaffirm three insights gained from collective action‐based approaches toward corruption. Although corruption might solve individual‐level problems in the short term, it is still a de facto problem at the aggregate level, the tools derived from principal–agent theory will not solve the collective action problem of systemic corruption, and elites will be the least likely to implement reform. We conclude by calling for the continued fight against corruption—a fight informed by empirical and theoretical knowledge.
Political conditionality was first introduced by Western governments into their development aid policy a quarter of a century ago, threatening to invoke aid sanctions in the event of human rights abuses or democratic regression in aid recipient countries. This paper examines how political conditionality has evolved in the subsequent years and analyses what has changed and why. It does so through a review of sanctions cases in the EU and the US aid from 2000 to date, with discussion located within the post-2000 international environment in which foreign policy and aid policy are situated. The paper focuses on three regions: sub-Saharan Africa, the Middle East and North Africa, and Central Asia. Patterns of change and continuity are identified in relation to how political conditionality has been implemented. Our findings are that political conditionality remains a significant policy tool, contrary to the perception that its use has declined. However, while selectivity and inconsistency in policy application continue, security interests have become a more prominent explanatory factor in the post-2000 period. Indeed, the initial normative agenda of political conditionality as a tool for the promotion of democracy and human rights, as stated in policy rhetoric, has been replaced by its use as an instrument to promote Western security interests in line with the securitisation of development.
