Anti-Corruption Strategies in EU and NAFTA Member States
Abstract
The report comparatively presents anticorruption strategies under integration in two regional
associations – the European Union and North American Free Trade Agreement (NAFTA). Proceeding
from the postulate of ineradicable nature of corruption which can only be minimize to non-dangerous
level, the author took into account some important points: general favorable factors for spreading
corruption, local peculiarities of some countries, “culture of corruption”, impact of integration, and
specific approaches to the problem in the EU and NAFTA. The difference between ritual anticorruption
campaigns and appropriate effective policies was also under investigation. The study is based on
international statistic data, legal documents of the EU and NAFTA, expert evaluation etc. The data
certified strong positive dynamics in overcoming corruption almost in all member countries.
Nevertheless, three states (Ireland, Italy and Mexico) became the matters of special examination
through their controversial experience. Anticorruption potential of civic society was a question of
special interest in the paper. Some implications concerning main trends, challenges, and perspectives of
anticorruption strategies are proposed.
Key words: the European Union, North American Free trade Agreement, anti-corruption strategy,
“culture of corruption”.
It is now generally recognized that corruption comprehensively affected both public
and private sectors of all the countries and their regional associations. Hence, fighting
this phenomenon became an integral part of their policies. Nevertheless,
counter-corruption strategies of integration unions differ to some extent. Therefore,
comparative approach presumably could be effective in studying corruption under
integration.
Anti-corruption policies are greatly influenced by one or another integration
models. Among them one can distinguish two main variants represented by the
European Union (EU) and North American Free Trade Agreement (NAFTA). They are
comparable in certain chronological period: NAFTA agreement (between the USA,
Canada, and Mexico) became valid from January 1994 and the EU began to function in
modern format from November 1993 (after signing Maastricht Treaty). In this paper,
period under examination covers 1995-2007. Lower chronological border of the period
(1995) is conditioned by availability of appropriate data needed for comparative
measuring of corruption. This date also coincided with the year of the forth enlargement
of the Union (EU-15). Upper line of the period (2007) marks the last pre-crisis year.
Later period of time is worth of separate studying because financial crisis changed the
situation and behavior of actors. Nevertheless, sometimes these years are considered in
the paper to show of one or another tendency.
Brief characteristics of two above-mentioned regional communities can definitely
clarify their approach to counter-corruption strategy. Chronologically, the EU was the
first integration union which passed through several stages of association (free trade
area, custom union, monetary union, common market, and economic union). At the
same time, NAFTA is not so advanced: it still remains on the stage of free trade.
Nevertheless, it does not mean that NAFTA represents an underdeveloped copy of the
EU: they are rather different patterns of integration movement. Actually, the European
Union is based on institutional model of integration. It implies the decisive role of state
factor in making supra-national structures and elaborating common socio-economic and
politicies. In contrast, NAFTA sticks to liberal version based mostly on market relations
with minimal state intervention.
Both associations consider corruption to be a matter of special concern.
Nevertheless, their integration formats affect general approaches and specific strategies
of these communities. In the European Union corruption is regarded as a factor which
harms the EU as a whole by lowering investment level, hampering the fair operation of
the Internal Market and reducing public finances. The European Commission stresses
that economic costs incurred by the corruption in the EU possibly amount to EUR 120
billion per year. This is one percent of the EU GDP, representing only a little less than
the annual budget of the EU [2]. Besides, it is accepted that corruption is harmful for the
Union not only financially but also socially, because it usually weaken citizens’
confidence in government institutions both on national and supra-national levels. Such
circumstances together with institutional approach shaped the Union’s anti-corruption
policy. Proceeding from general international acts of counter-corruption character
(United Nations Convention against Corruption, OECD Convention etc.) in cooperation
with numerous international and appropriate regional structures (European Anti-Fraud
Office, Eurojust, Europol, European Anti-Corruption Network, Group of States against
Corruption) special documents and institutions of the issue were created by the
European Union. Among them one can mention European Anti-Fraud Office (OLAF)
which was formed in 1999 through a series of corruption affairs in the European Union
commission. This structure is commissioned to work on various tasks including fighting
corruption and the effects of interest conflicts with annual reports of its work. In 2013
the Union implemented one more comprehensive mechanism against corruption –
“Anti-Corruption Report”. This document will be published every three years to monitor
and evaluate the state of things in order to reveal weaknesses and negative tendencies
and to encourage exchange of best experience [7].
In spite of the EU, NAFTA is characterized by great socio-economic disparities
between its member states. So, the level of corruption also substantially differs. The
matter of special concern is drug-traffic in which Mexico is considerably involved. In
conformity with liberal model of integration, legal market in NAFTA is considered to be
sanitary mechanism for reducing social and economic disproportions within the union.
Hence, corruption schemes in North America, especially connected with drug-traffic,
negatively affect free trade and prevent opening borders for free labor mobility. In
contrast with the European Union, NAFTA prefers not to form special supra national
anti-corruption institutions; it rather focuses on joint activity with the accent on the most
serious matters. At the same time, Canada and the USA try to support Mexico’s efforts
to raise anti-corruption standards through adapting their best practices. The attitude
towards corruption was elaborated mostly on the base of Inter-American Convention
against Corruption (1996). Its provisions were implemented and enriched during some
further events. Among them one can see the Meeting of the States Parties of that
Convention, the summit of Organization of American States (OAS) in Nuevo Leon
(both in 2004 [5] etc. The participants of the event adopted a moderate variant of
common counter-corruption policy. Stricter version which considers some countries as
totally corrupted states – were rejected by some members through vague definition of
that phenomenon and possible misusing.
Tentative results of anti-corruption strategies of the EU and NAFTA could be
examining through some international statistical data. As corruption is latent and
complex issue it was of great significance to choose appropriate indicators for it’s
measuring. The other controversial question is applicable definition and interpretation of
that phenomenon. In our case among various variants the most suitable definition
belongs to Transparency International. As its data are employed in this paper we provide
in such a way the conformity of theoretical approach and diagnostic methods of
corruption. According to the chosen definition corruption is defined as abuse of
entrusted power for private gain [13].
The factors which definitely promote corruption are as follows: numerous
bureaucratic barriers, many levels of government, Spanish colonial domination, a lot of
time spent on communication with administration officers, great costs of capital and
investments, excessive freedom of government regulation. At the same time there are
some factors which certainly brake the spreading of corruption. Among them one can
see economic increase of a country, Protestant religious traditions, former British
colonial status, openness of trade, availability of democratic government together with
long democratic experience [15, p 348].
Some factors correlate with the state of corruption but their cause-and-effect
importance is a matter of academic and political discussions. As an example one can
mention gender aspect of corruption. It is of common knowledge that increase of women
segment in government is an indicator of reducing corruption in a country. A large
number of scholars think that women are less corruption-minded; other scientists argue
that positive changes in society (including curtailing of corruption) result in coming
more women to power. The same debates are conducted around the notion “culture of
corruption” broadly defined as “popular attitudes and opinions about corruption and
participation in the area” [10, p.2]. There are different thoughts about the correlation
between “culture of corruption” and corruption as itself. Some scholars consider culture
of corruption to be the result of long spreading of corruption; other researchers regard
this social phenomenon as the stimulus for corruption activity in a country. Anyway,
corruption definitely produces favorable surrounding and tolerant attitude towards this
social evil; such treatment, in its turn, becomes independent factors which promote
corruption. In the societies where corruption is considered to be a life style, cultural
environment nourishes this criminal issue. Furthermore, correction of people’s opinion
about corruption is presumably the most difficult thing which needs both significant
efforts and a long period of time.
Level of corruption in the EU and NAFTA member countries in the given period is
measured according to Corruption Perception Index (CPI) produced by Transparency
International from 1995. The data are presented in the table below. The table includes
CPI score from 0 (the worst result) to 10 (the best indicator) and rating of a country in
comparison with other ones. Only the EU-15 countries are chosen for examining as
more representative and reliable cases, because other members joined the Union just 3
year before 2007.
Table 1.
Corruption Perception Index in the EU and NAFTA member countries (1995-2007)
EU Member Countries
1995
2007
Rating
CPI score
Rating
CPI score
Austria
14
7,13
15
8,1
Belgium
17
6,85
21
7,2
Denmark
2
9,32
1
9,4
Finland
4
9,12
2
9,4
France
16
7,00
19
7,3
Germany
11
8,14
16
7,8
Greece
28
4,04
56
4,6
Ireland
10
8,57
17
7,5
Italy
31
2,99
41
5,2
Luxembourg
17
6,85
8
8,4
Netherland
8
8,69
7
9,0
Portugal
20
5,56
28
6,5
Spain
24
4,35
25
6,7
Sweden
5
8,87
4
9,3
United Kingdom
10
8,57
12
8,4
Canada
5
8,87
8
8,7
Mexico
30
3,18
72
3,5
USA
13
7,79
20
7,2
NAFTA
Member
Countries
Source: Corruprion Perception Index. Transparency International [3]
Analysis of the data focuses mostly on the CPI score because this indicator displays
more real state of things. As to a country’s rating, it greatly depends on the increase of
countries included and on success or reverse of other world states. Sometimes one can
see a paradox: the higher the score, the lower the place among the countries and vice
versa [9, p. 4]. Nevertheless, this marker is also taken into consideration to reveal
leaders and laggards within the EU and NAFTA members: thus, we can observe
complete picture of the situation in the dynamics.
A majority of the EU countries improved their indicators excepting Germany,
United Kingdom, and Ireland. Two of them – Germany and UK – worsened their score
not very substantially (the difference was accordingly 0, 34 and 0, 17). It is more or less
normal deviations due to the high CPI scores of these countries: presumably, theses
moves do not reveal any significant tendencies. The worst situation is seen in Ireland:
the difference came almost to one (0, 93). Therefore, this case is worth of separate
examining. Nevertheless, some of other countries also demonstrate distinctive features
of the dynamics of corruption. They are Greece and Italian examples with their positive
changes but the worst CP indicators and ratings among all the other EU and NAFTA
states.
NAFTA countries displayed more pessimistic transformation. Despite the fact that
Canada and the USA had comparatively high scores in all the period under study, in
2007 they got worth results than in 1995: difference between them was correspondingly
0, 17 and 0, 59. At the same time, Mexico was characterized by positive dynamics
although not very considerable (0, 32). In spite of its modest success, Mexican case is
interesting through its specific strategy of combating corruption.
The most striking example of corruption is presented by Ireland, where situation
became worth (from 8.57 to 7.5). It is very strange through extraordinary success of
“Celtic tiger” in socio-economic sphere. Possibly, main causes of this are rooted in
political life: among them – clientelism and patronage, absence of political will to
combat corruption, peculiarities of business, and shortcomings of state legislation [11, p.
34-36]. Political corruption in Ireland is usually considered in the terms of
“gombeenism” concept. This word means pervasive form of representation when people,
chosen to produce laws, take care of nothing but their private business; they demand
money for providing services which are really free. Such political behavior
overestimates power and facilitates electorate’s ignorance. [6]. The report of National
Integrity System (program for Ireland shaped by Transparency International) informed
about availability of so called “legal corruption” that was functioning in the frames of
Irish legislation: while no one law was violated, widespread personal relations and
patronage substantially influenced political decisions [11, p. 16-19]
Therefore, it is possible to determine the principal cause of increasing corruption in
Ireland: political life lagged behind remarkable economic advancing. In such
circumstances some systematic anti-corruption measures were conducted along with
numerous political moves. Among them – signing and ratification of the set of
international counter-corruption acts, establishing special legal structures – tribunals – to
investigate the most striking cases of corruption in government. Although the tribunals
were wide open to criticism for high cost and low effectiveness, they continued to
function due to their roles in rising of social standards.
Those measures resulted in reducing of corruption in Ireland beginning with 2008
(7, 5 in 2007, 7, 7 in 2008, 8, 0 in 2009-2010, although 7, 5 in 2011). Possible
explanation for the improving of the situation was suggested by the Chair of
Transparency International: in his opinion, positive changes were caused by world
financial crisis. As a matter of fact, it was crisis that made small European economies
dependent on investors who demanded fair management and transparency in exchange
for their trust [8]. It is also interesting that the Irish are the only European nation who
demonstrated optimism concerning counter-corruption activity of their government [12,
p. 13]. Such evaluation is very significant because mature civil societies are usually
more skeptical about their administration.
In spite of certain positive changes Greece is considered to be one of the most
corrupt countries in the EU. Low CP score of Greece can be explained by complex of
causes. The most substantial among them – heritage of the past – long civil war and
authoritarian power that caused lack of constitutional democratic priorities, civil
knowledge and appropriate educational network. Economic segment of Greece was
characterized by rude form of market capitalism, underdeveloped civil society,
consumer values of the population. Paternalist state with corporatist interests and
finance-oriented affairs also worked in favor of corruption. Information component does
not performed its sanitary role too: a majority of media structures belonged to separate
owners; therefore, corruption and the struggle against it were not effectively reflected in
mass media.
To change the situation, power administration tried to control financial side of
political life. In the period under study there were three attempts of that kind. The most
radical law passed in 2002; it regulated financial side of political parties’ activity. That
law also established equal excess of all the parties to mass media in order to disseminate
their programs [4, p. 1-6]. Then the next law which limited financial share in mass
media was adopted to combat corruption in Greece, although that act was discussed by
the EU for its potential danger for democracy Nevertheless, those moves were not
enough to change the situation radically.
As to Italy, it is characterized by its stable developed links between state and
mafia’s institutions. Italian political life also gives reasons to consider corruption as
inalienable part of its reality. Notorious corruption scandals became the routine of Italian
reality. For example, Silvio Berlusconi, famous Italian politician, has been permanently
accused in corruption as well as many other high level officials. Such situation was
hardly possible in other European countries. In Italy it reflects indifferent or even
tolerant attitude of citizens towards ethical side of political life. Moreover, sometimes
Italian people regard politician, who has never been accused in crime, as ineffective
political figure because he possibly failed to get influential enemies. Despite the
mentioned circumstances, in the given period we can see substantial positive dynamics –
corruption reduced almost twice as much. These changes were resulted from radical
transformations in Italian state. On the one hand, Christian Democratic Party lost its
dominant position in political life which it possessed after the Second World War. As a
result opposite powers gave the impulse for changing Italian political landscape. On the
other hand, so called “crises of legitimacy” took place in Italy at that time. It was caused
by destruction of steady interrelations between corruption, clientele system and
mismanagement strengthened by organized crime. Those three components shaped
vicious circle which resulted in system crises, but the liquidation of political monopoly
led to “virtuous circle”. It implied the ruining of clientele support of political parties
which were defeated. Some structures of organized crime lost political protection, was
weakened and in its turn deprive corrupt politicians of their support.
The next important anti-corruption factor was increased expectations of citizens and
businessmen in the context of Maastricht Treaty. Loss of legitimacy favored numerous
investigations according the program “Clean hands” (1990s years). Such circumstances
simplified the activity of justice officers especially judges who possessed specific
institutional independence and substituted administration [14, p. 286]. It must be
mentioned that it was more than ritual campaign but wide system combating corruption.
Nevertheless, progress was not so striking through long tradition to support old
corrupted system (“culture of corruption”).
In North America Mexico shows the worst indicators of corruption but positive
dynamics. The explanation must be probably searched in the following factors. First,
from 1980s when Institutional Revolutionary Party was in power for several dozens of
years, “politization” of corruption began to develop. Secondly, neo-liberal economic
reforms caused great polarization of the population and re-evaluation of traditional
values in corruption-minded sense. Thirdly, in that period drug-traffic was activated,
involving significant human resources. Violence, extortion, and “mordida” (new word
for bribe in Spanish) became a part of everyday life in Mexico.
Strategy against corruption was elaborated in radically new political setting. In
2000 party monopoly was broken and opposition employed time resource (6-year period
of presidency) for consistent and concentrated anticorruption policy. Using previous
government measures (in 1997 Mexico joined Convention of OECD against corruption
of foreign officers; in 1999 Mexican branch of Transparency International was
established) president V. Fox made some institutional moves. He established Federal
Investigation Agency (like American FBI) against drug-traffic, Counter-Corruption
Intersecretary Commission, special National Integrity Program was launched. Although
drug cartels experienced temporary defeat during V. Fox governing the next president F.
Calderon put struggle against cartels into the center of his policy; he also financially
stimulated solders, involved them in anti-corruption campaign to prevent their contacts
with drug-dealers. [1].
The most conservative chain in Mexico was deeply-rooted “culture of corruption”.
Enlightenment campaign was institutionalized by government. It included adapting
foreign experience, local academic researches, and educational programs. Children
became priority target group. They listened to special courses, saw appropriate films,
participated in defile, played games on that thematic. Other categories (government
officers, mass media) were also involved in anti-corruption activity. In addition to it
government stimulated the activity of civil society by means of social programs with
transparent distribution of finances.
Thus, new counter-corruption scenario radically differed from previous government
ritual campaigns and involved much more actors. Nevertheless, potential of civil society
was not completely employed. Social polarization, lack of legislative bases, and some
other objective causes slowed down reducing of corruption. Hence, the results of the
counter-corruption activity in Mexico were rather modest [1].
CONCLUSION
In general, this research shows that both the EU and NAFTA care corruption
problem through their negative impact on integration. These associations proceed from
similar approach based on international conventions and regional legislative acts.
Nevertheless, their anti-corruption strategies greatly depend on their integration models
– institutional or liberal one. The European Union attempts to institutionalize its
counter-corruption policy by means of creating special legislative base and shaping
appropriate supra-national structures. The Union’s member countries are characterized
by more homogeneous socio-economic status and appropriate cohesion policy, which
result in comparatively unified strategies. In the period under study we can see general
positive changes although several countries demonstrate worth results. Ireland despite its
“economic wonder” and a set of legislative innovations, experienced unexpected rise of
corruption: the country was not ready to manage with rather backward political system
which lags behind striking economic increase. In Greece high level of corruption
(although some decrease of its level was seen) could be explained by lower economic
and social development, mass media monopoly, and underdeveloped civil society.
Italian case displayed visible improvements after substantial political transformations
but comparatively low indicators of transparency through widespread “culture of
corruption”. In NAFTA market is in the centre of integration process and means of
reducing socio-economic asymmetry; besides, great socio-economic difference between
members lead to more variations in anti-corruption strategies. Along with obstacles
created by corruption for free trade and labor mobility, NAFTA parties suffer from
significant drug-cartels’ activity. Anti-corruption strategy in NAFTA is not oriented on
forming supra-national institutions but on cooperation on strategic directions. Whereas
Canada and the USA in the given period showed a bit worth results, Mexico got better
indicators; nevertheless, they were rather modest. On the one hand, Mexican political
reforms and wide counter-corruption campaigns facilitated positive changes; on the
other hand, the consequences of radical liberal reforms (polarization and marginalization
of people, rising tolerance towards corruption) slowed down the advancing of Mexican
community regarding corruption.
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