From transition to transition. Tackling corruption in emerging Europe

Corruption romania
Corruption remains at the centre of attention when it comes to the transition economies of Central and Eastern Europe. While some countries have become synonymous with state-level corruption, others have made considerable progress towards rooting the problem out of society.

As the countries of Central and Eastern European mark the 30-year anniversary of the fall of the Iron Curtain this year, there is growing discontent about which direction certain countries of the region have taken, with corruption remaining one of the top concerns. According to Transparency International’s latest Corruption Perceptions Index, Estonia is by far emerging Europe’s least corrupt country and the 18th least corrupt out of 180 countries worldwide. Poland, Slovenia, the Czech Republic and Lithuania are also seen as notable performers. While Georgia has emerged as the region’s biggest improver, countries like Croatia and Romania have seen falls in their performance, with Hungary registering its lowest score for political rights since the end of communism in 2019. Despite improving their scores, Ukraine and Moldova are still have a long way to go. Azerbaijan is ranked the most corrupt country in the region.

What can be done?

In the Western Balkans, Albania, Bosnia and Herzegovina, Kosovo, North Macedonia and Serbia all score poorly with only Montenegro showing slight improvement. Over the last few months, tens of thousands of people demonstrated against the government in Belgrade demanding – amongst much else – stronger anti-corruption measures. With all six Western Balkan countries aspiring for EU membership, we are entitled to ask: What can these countries do to enhance the fight against corruption?

“Western Balkans countries have taken some steps against corruption – the legislative and institutional frameworks are in place, although with some gaps,” Transparency International tells Emerging Europe, adding that, however, weak rule of law and state capture remain the biggest obstacles to effective anti-corruption efforts, largely due to lack of true commitment by governments and political elites.

“In the Western Balkans, corruption is mostly petty and at the bureaucratic level, with the usual levels of cronyism seen elsewhere. But in the populist-afflicted countries of Hungary and Poland, corruption is less within the bureaucracy and more in the realm of the elite, concerned with state capture and the use of the political process to capture rents from the market. So there is a definite demarcation in types of corruption, and the countries of CEE are seen as having made some progress in corruption while the Western Balkans is still fighting the ’man with a uniform’ corruption of the 1990s,” says Christopher Hartwell, professor of financial systems resilience at Bournemouth University.

Looking back on the fight against corruption in post-communist countries, former Slovak deputy prime minister Ivan Mikloš argues that the results are different. “The most important was how quickly and effectively particular countries made reforms and integrated themselves into the European Union,” Mr Mikloš told Emerging Europe. “When communism collapsed, there was an institutional vacuum and in principle, there were two options. The first one was to intentionally build a new institutional framework of a functioning market economy and liberal democracy,” the former deputy PM says, adding that if new post-communist elites did not emerge and did not implement/execute the first option, then oligarchic and dysfunctional systems were created as seen in Ukraine, Russia and the Western Balkans. He points out that initial systemic challenges could be overcome with the help of the reforms needed for EU integration. However, as the case of Hungary demonstrates, even initial success can prove insufficient.

Reducing the space for corruption

From the three main methods (punishment, reducing space for corruption, widening access to information), Mr Mikloš believes the latter two are the most effective. “The best ways to reduce space for corruption is to create an open market, liberalisation, deregulation, privatisation, structural reforms, a strong freedom of information act and free media,” he says, noting that in Slovakia, for instance, deep pro-market reforms in 2003-2004 significantly reduced the space for corruption while a lot of evidence from Ukrainian reforms during the last five years is proving the same.

According to Professor Hartwell, shutting down the opportunities for corruption is paramount. “To do that, one must continue to take power away from the state. The most effective way to eliminate corruption is to make sure that there is no opportunity for it in the first place: If you don’t need to interact with the public sector, the public sector cannot impose itself on you,” he says, adding that in transition economies, legal obligations are substantial but the administrative capacity remains weak.

Transparency International argues that the Western Balkans countries themselves have promising ideas. “Initiatives like the independent vetting of judges and prosecutors in Albania have raised hopes, but lack of transparency raises concerns,” TI told me, adding that the process is moving forward at a rather slow pace. “More recently, we see steps being taken in the right direction in North Macedonia where members of the State Commission for the Prevention of Corruption are elected according to legally prescribed criteria, in a very transparent procedure with the participation of civil society and the media.” According to the anti-corruption watchdog, best practices that can serve as examples for this region include mechanisms ensuring contracting and political campaign finance, such as those in Slovakia and the Czech Republic where government contracts have to be published online before they become valid, and political parties must have open bank accounts for all types of elections where all donations and expenditures are made public. “Publicly available registries of beneficial ownership such as the one in Slovakia can also be replicated as a way to address conflict of interest,” TI comments.

Perhaps the most remarkable developments have been in Romania, where the National Anti-corruption Directorate (DNA), under the leadership of Laura Codruta-Kövesi, 37 leading Romanian politicians were convicted of corruption from 2013-18. Alas, Ms Codruta-Kövesi was dismissed by the Romanian justice minister in 2018, and the DNA’s work has since been hampered by highly controversial changes to the country’s penal code.

For the eleven EU member states of emerging Europe, the European bloc offers another solution. From 2020, a newly-created European Public Prosecutor’s Office will investigate fraudulent activities related to EU funds, with Ms Codruta-Kövesi set to become its top prosecutor.

So far, only the Polish and Hungarian governments have rejected membership of the Prosecutor’s Office. However, a petition in Hungary calling on the government to join the institution has collected more than 500,000 signatures over the last couple of months, showing that amongst the general public at least there is a clear desire to punish corrupt officials and oligarchs who abuse EU funds. The government should take note.

Add Comment

Click here to post a comment