February 6, 2014
Escaping Denial
By Michael Levi
Member, Expert Group reviewing the EU Commissioner for Home Affairs's report on corruption

The recent report by the European Union’s Commissioner for Home Affairs, Cecilia Malmström, finds that corruption within the EU costs its economy up to EUR 120 billion per year. Professor Michael Levi, who participated in a committee that reviewed the report, argues that law enforcement alone isn’t enough to solve the problem.

A rise in crime rates can sometimes represent social progress rather than decay if it reflects a growth in awareness and intolerance of the conduct in question. So it is with corruption. When officials extort bribes from businesspeople and citizens shrug their shoulders and accept this as an inevitable reality, there is insufficient outrage to solve the problem.

“Problem-oriented policing” requires an assessment of the problem and the development of a strategy to reduce it or eliminate it altogether. Once this process has begun, it becomes harder and harder to deny the problem. That doesn’t mean that there is always enough political will for real change to occur, but it is a start.

While the cost of corrup- tion will never be known precisely, the report estimates its cost to the EU economy at EUR 120 billion per year.

The European Commission’s first report on corruption in the EU should be seen within this framework. Ever since Transparency International developed the first crude Corruption Perceptions Index in 1995, corruption league tables have challenged countries to improve their relative standing.

When EU Commissioner for Home Affairs Cecilia Malmström was persuaded that there was a need for the EU to take a stronger line against corruption, she approved the idea of a biennial review of how well or badly the EU and its institutions were performing against corruption.

The first review was released in a report earlier this week. This report was written by staff in Malmström’s department and went through the commission’s usual internal consultation process. Members of the appointed expert group – myself included – provided feedback on individual draft chapters. The contents of those deliberations are confidential, but what follows is a personal judgment about the exercise and what it communicates.

While the cost of corruption will never be known precisely, the report estimates its cost to the EU economy at EUR 120 billion per year. This does not include social and cultural costs, which may be much larger than the bribes. For example, small bribes for not properly checking road and building construction can have huge environmental consequences.

There are reports on corruption and countermeasures in all individual countries in the EU – though (rather unfortunate for the Commission’s credibility), not on corruption in EU institutions, as was originally envisaged. But the main report is a little shy about naming and shaming. It does not even mention, for instance, that Germany is the one EU member state that has failed to ratify the UN Convention against Corruption. This reflects political sensitivity, but is hard to justify if the commission is claiming to be bold.

The word “corruption” has a flexible meaning. To some people, it means cronyism, or that powerful interests can override popular ones because of political funding (or sometimes personal bribes). So it is not surprising that most of the people who think their country is corrupt have never been asked for or offered a bribe. In this sense, seeing your country as corrupt is a vote of no confidence in its meritocracy and fairness.

There are wide variations within the EU in both the experience and perceptions of corruption. Southern Europeans and those from the former Soviet Union (e.g., Poland, Lithuania, and Slovakia) are most likely to say they have witnessed corruption and that their country is corrupt. As for EU businesses, they stated that corruption was the biggest problem in construction and IT/telecoms.

I would add that criminal law alone does not guarantee action, and that we also need civil liability to strip the gains.

The report notes that formal anticorruption mechanisms do not necessarily reduce corruption, and that, “In some Member States, politicisation of recruitment for mid-management and lower positions in public administration at central or regional/local level have been highlighted as serious problems.”

The report also makes a tough statement against political opposition: “in the Commission’s view, in order to come to a common approach in the EU, there is a need for a clear harmonisation of criminal liability of elected officials for corruption offences.” (I would add that criminal law alone does not guarantee action, and that we also need civil liability to strip the gains.)

In addition, the report criticizes lack of transparency in party funding in some member states, and pushes for more effective asset disclosure and preventative efforts using non-criminal mechanisms.

Altogether, the report contains a useful range of anticorruption measures and practices that are of interest throughout the world. EU member states vary culturally and economically, and they offer an interesting crucible within which we can see the effects of policies and practices.

This first report shows that the European Commission appreciates that corruption is a serious issue affecting its own legitimacy and credibility. Future reports would benefit from greater boldness and efforts to evaluate anticorruption measures rigorously, as has been attempted recently with procurement.

The key message is that we cannot rely on criminal justice, or on institutions alone. We need to focus on practices of transparency, prevention, and whistle-blowing on the ground – but if you whistle and nobody does anything about the problem, no progress will be made.

Michael LeviMichael Levi was part of an appointed Expert Group that reviewed the report on EU corruption by the Union's Commissioner on Home Affairs. He teaches criminology at Cardiff University and is a top expert on corruption in Europe.