European Union funds and corruption in the ex-communist member states

ABSTRACT

The paper analyses the impact of European Union (EU) funds on corruption in the EU ex-communist countries by following a panel Autoregressive Distributed Lag (ARDL) approach. The panel includes 10 former EU communist countries, over 2007–2019. The key findings reveal that an improvement in the EU funds paid and their rate of absorption can reduce the level of corruption in the long-run in the recipient EU ex-communist countries. This is due to better monitoring of EU funds paid compared with national resources, and a more efficient and fairer channel of EU funds absorption. In parallel with the EU funds, corruption can be controlled in certain conditions by the degree of economic development, size of government, level of democratisation and religiosity.

KEYWORDS:

• Corruption
• EU funds
• panel analysis
• ex-communist countries
• implications

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

The data that support the findings of this study are available in [ecrg.ro] at [ecrg.ro/dataset.xlsx], reference number [not applicable]. These data were derived from the following resources available in the public domain: Worldwide Governance Indicators, and World Development Indicators (World Bank online database); European Commission DG REGIO online database; EUROSTAT online database; Heritage Foundation online database; Economist Intelligence Unit of the Economist Group online database; Association of Religion Data Archives online database.

Notes

1. The sample includes only the countries being EU members whole considered period (i.e. Croatia is not included in the sample, as that country became EU member in 2013).

2. Many other amendments have been done, notable being the Regulation (EU) 2017/1371 of 17 July 2017 (EU Regulation 2017), and Regulation (EU, Euratom) 2018/1046 of 18 July 2018 (EU Regulation 2018).

3. After years of investigations, OLAF reports in 2022: 256 investigations concluded; 275 financial, judicial, disciplinary and administrative recommendations; 426.8 mil. Euro recommended for recovery; 192 investigations opened; 1017 selections made; and 197.9 mil. Euro prevented from being lost (OLAF, 2022). Herein, Hungary, Poland and Romania occupy the top five of investigations.