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The Legacies of 1989

The Transformative PoWer


of Europe Revisited
Alina Mungiu-Pippidi

Alina Mungiu-Pippidi is director of the European Research Centre


for Anti-Corruption and State Building at the Hertie School of Gov-
ernance in Berlin and the founder of www.romaniacurata.ro, a good-
governance social-media platform. Her latest book is the edited volume
Controlling Corruption in Europe (2013).

The enlargement of the European Union to the former communist


countries of Central and Eastern Europe (CEE)—made possible by the
fall of the Berlin Wall in 1989 and the subsequent disintegration of the
Soviet Union—marked the end of an era but not the end of history.1
After a decade of expansion and unprecedented prosperity that bolstered
a euphoric belief in the “transformative power of Europe,” the global
fiscal crisis and the euro crisis have brought Europeans back to reality.
This is not to belittle the enormous achievement of the postcommu-
nist EU members in building democratic regimes. Nor is it to question
the protection that EU membership provides to political rights and civil
liberties, or the economic and other advantages that it brings. Yet mem-
bership in the EU provides no guarantee that national governance will
improve. In fact, most of the new CEE member states had made little
progress in the area of good governance in the run-up to accession, and
since then they have mostly stagnated.
This is not because the EU has made no effort to promote good gover-
nance. Issues such as judicial reform, public administration, policy-mak-
ing structures, and the civil service featured prominently in the negotia-
tions over accession. Conditionality was strong (particularly for Romania
and Bulgaria), and the European Commission (EC), along with other in-
ternational organizations, invested considerable effort and resources in
assisting, monitoring, and coaching in these areas. In addition, the EU
created the Mechanism of Cooperation and Verification as a safeguard
against new members’ failure to meet their commitments in the areas of
corruption and justice. Yet EU enlargement and good-governance pro-

Journal of Democracy Volume 25, Number 1 January 2014


© 2014 National Endowment for Democracy and Johns Hopkins University Press
Alina Mungiu-Pippidi 21

motion seem to have had little impact on governance in the CEE member
states, just as EU membership over a longer period has failed to funda-
mentally alter the nature of governance in Italy and Greece.
Meanwhile, poor governance at the national level is becoming a big-
ger problem than ever for the EU, especially for Eurozone members who
are tied together by a common currency. A country’s capacity to balance
its budget is significantly associated with control of corruption at the
national level,2 as are its levels of tax collection and its absorption rate
of EU funds. Thus the quality of governance in a member state affects
the magnitude of both its national contribution to the EU budget and the
benefits that it receives from the EU.
Why has the EU succeeded in promoting democracy in the new mem-
ber states but failed in promoting good governance? To answer this ques-
tion we must begin, first, by distinguishing governance from political
regimes, and then we must explore to what extent national governance is
susceptible to being improved by external pressure or intervention. This
will require that we briefly consider the global experience in this area
over the past quarter-century before zeroing in on developments in the
CEE countries and the rest of the postcommunist world.
By the term “governance” I mean the set of formal and informal insti-
tutions that determine who gets what in a given country—in other words,
how public goods are allocated. Governance orders, which frequently do
not coincide with political regimes, may be located on a spectrum, rang-
ing from open access with universalistic exchanges at one end to closed
access with particularistic exchanges at the other.3 Governance orders
reproduce fundamental patterns of social organization and power distri-
bution in a society, and thus tend to be stable once they reach a certain
equilibrium. They are hard to transform even by means of a change of
political regime.
Such equilibria are usually described in terms of “rule of law” or
“control of corruption.” The latter refers to a society’s capacity to con-
strain corrupt behavior in order to enforce the norm of individual integ-
rity in public service and politics, to prevent state capture by particular
interests, and thus to promote the public interest and social welfare.
Control of corruption and rule of law overlap within a complex equi-
librium that includes a government subject to the law, the equality of
citizens before the law, respect for individual rights, and correspond-
ing societal norms such as respect for law and order. “Thick” rule of
law therefore implies control of corruption and vice-versa, and therefore
my definition of “governance” encompasses both. The advantage of the
concept of governance is that it simultaneously highlights the state, the
society, and their relation to each other.4
To identify trends in governance, including changes resulting from
policy interventions, we need to be able to measure it. In order to do so,
I use three yardsticks: 1) the Control of Corruption (CC) indicator of the
22 Journal of Democracy

Worldwide Governance Indicators (WGI) project, an aggregate measure


(scores range from -2.5 to +2.5) in existence since 1996; 2) the Corrup-
tion Risk indicator from the PRS Group’s International Country Risk
Guide (ICRG), an expert score (ranging from 1 to 6) in existence since
the early 1980s; and 3) public-opinion and expert surveys. While aggre-
gate indicators have been severely criticized for their lack of validity,
reliability, and theoretical foundation, the fact remains that—as most
measurements are highly correlated—governance can be measured.5
Consistency is apparent not only across sources—for instance, the
Global Corruption Barometer (a general-population survey) and the
World Economic Forum’s Executive Opinion Survey (an expert survey)
correlate highly—but also across the various dimensions of governance.
When the WGI aggregates its rankings on rule of law, corruption, regu-
latory quality, state effectiveness, and voice and accountability, they
all correlate highly. Just as the quality of the dimensions of governance
seems to be extremely consistent, the same is true of the perceptions of
those experiencing them. Thus it stands to reason that measuring control
of corruption will give a fairly accurate impression of the quality of
governance overall.
A country’s quality of governance is in large part determined by its
degree of modernization, as operationalized by its score on the UNDP’s
Human Development Index (HDI), but there is also room for other fac-
tors to make a difference. In the case of the European Union, the Scan-
dinavian countries are doing far better in terms of governance than even
their excellent HDI scores would predict, whereas Italy and Greece are
doing much worse, as are Turkmenistan, Russia, and Ukraine, which
under-perform their modernization legacy dramatically. For most coun-
tries, however, the HDI score is a reasonable predictor of control of
corruption.
Moreover, political regimes and governance orders are not tightly
linked. For example, in Poland, the largest and most successful of the
new EU member states, control of corruption (as measured by the ICRG
since 1984) was largely unchanged between 1989 and 1998, despite the
country’s dramatic improvement in political pluralism. In 1998, control
of corruption actually began to decline slightly, and it remained at a
lower level throughout the EU-accession process and even after Poland
attained membership in 2004.
A quarter-century is a considerable period of time, but is it sufficient
for a country to achieve a significant change in governance? The best-
performing countries today are the European first-generation achievers
(those countries that had achieved good governance by 1900)—Austria,
the Benelux countries, France, Germany, Great Britain, the Scandina-
vian countries, and Switzerland—and their former overseas colonies in
North America and Oceania. Most other countries that enjoy good gov-
ernance today also achieved it quite a while ago.
Alina Mungiu-Pippidi 23

Of the 199 countries covered in 2010, 151 experienced no significant


change by the CC indicator between 1996 and 2012; only 21 countries
showed any statistically significant improvement over the past fifteen
years; and 27 countries significantly regressed. In short, improvement
in governance is rare.6 Among those countries that have managed to
make such strides in recent times (Estonia, South Korea, and Uruguay),
the key has been a holistic approach toward good governance rather
than piecemeal anticorruption campaigns, which have little success in
places where corruption is institutionalized. Clearly, then, improving
governance in the postcommunist countries is no easy task for the EU.

Varieties of Postcommunist Governance


The postcommunist countries vary greatly in terms of the type of
communism that they experienced, their levels of modernization, and
the outcome of their transition paths. They generally fall into one of
three governance categories: neopatrimonialism, characterized by near-
ly full state capture and power monopolies; competitive particularism,
in which political factions compete with one another in corruptly al-
locating public resources; and open access, where ethical universalism
(meaning everyone is treated similarly) has become the rule of the game.
Quite a few countries are still on the border between competitive par-
ticularism and open access.
A survey of corruption control in the CEE countries reveals three
clusters: 1) good-governance achievers—namely, Estonia and Slovenia,
which rank at about 7 on a recoded CC scale of 1 to 10; 2) borderline
cases scoring around 5—the Czech Republic, Hungary, Latvia, Lithu-
ania, Poland, Croatia and Slovakia; and 3) competitive-particularistic
cases, lagging behind with scores below 5—Romania, Bulgaria, Mace-
donia, Serbia, Albania, Kosovo, Bosnia and Herzegovina, and Montene-
gro. Nevertheless, Serbia, Croatia, Macedonia, Latvia, and Bulgaria all
registered significant improvements between 1996 and 2012.
Still, the region as a whole has a long way to go, as reflected in the
wide gap in most of these countries between laws on the books and
actual practice in the control of corruption—what the nongovernmental
organization Global Integrity calls the “implementation gap.” Roma-
nia, Serbia, Macedonia, and Montenegro—countries that now have anti-
corruption legislation that ranks among the best in the world—all have
huge implementation gaps, with scores between 30 and 40 on a scale of
1 to 100 (with 100 indicating a complete split between law and practice).
Albania, Bulgaria, Croatia, and Hungary were close behind with scores
in the 20s. Furthermore, most countries in the region, including such top
performers as Poland, backslid between 2008 and 2010.
Estonia is the outlier, a champion in progress toward good gover-
nance. Long ahead of the pack—by the end of the nineteenth century the
24 Journal of Democracy

country was more urban and literate than its neighbors—Estonia contin-
ues to be a real achiever, outperforming its HDI. Beginning in 1992, Es-
tonia’s government implemented policies designed to strengthen legal
constraints against corruption and reduce the opportunities for graft. It
went on to pioneer liberal reforms such as the flat tax that were used to
combat tax evasion and the informal economy.
Since 2000, when the Estonian Parliament passed legislation guaran-
teeing Internet access to the general population, Estonia has become one
of Europe’s most “wired” countries, earning it the nickname “E-stonia.”
There are many free points of Internet access throughout the country,
and every school in Estonia has Internet access. It is the only European
country where taxes and parking fines can be paid with the same digital
identity card used to vote in national elections. More than half of all
households pay their bills electronically, and citizens can access their
official records via the government’s website. Also important for curb-
ing corruption are Estonia’s e-procurement system and its more recent
online expense-tracking system.7
The twelve non-Baltic countries of the former Soviet Union (FSU)
have fared far worse than the CEE states in controlling corruption.
With an average CC score of -0.94, they constitute the most corrupt
region in the world.8 Even the FSU’s top performer, Georgia, has had
only mediocre scores. Between 1996 and 2011, ten of the twelve coun-
tries had CC scores that consistently ranked in the bottom third world-
wide; only one country (Turkmenistan) significantly worsened, and one
(Georgia) showed improvement. Georgia, Moldova, and Ukraine have
experienced changes of government without violence since 1989 and
are the most democratic of the group. Kyrgyzstan’s citizens have long
been struggling against neopatrimonialism, and the country is currently
experimenting with new anticorruption measures. The modernization
legacy of all these countries is poor; they have large rural populations
and relatively low levels of income, education, and life expectancy.
Georgia, Moldova, and Kyrgyzstan have CC scores that closely mir-
ror their HDIs, while the CC scores of Azerbaijan, Kazakhstan, Russia,
Turkmenistan, and Ukraine are nearly twice as bad as their HDIs would
predict—a consequence of political systems that have prevented the de-
velopment of constraints on elite predatory behavior.
Georgia is the anticorruption star of the FSU. The country’s CC score
climbed from -1.39 in 1996 to -0.02 in 2011. Since the 2003 Rose Revo-
lution, Georgia’s various anticorruption campaigns—prosecuting cor-
rupt senior officials, reforming the police and civil service, and liberal-
izing the business sector—have succeeded in reducing petty corruption.
The country still has a long way to go, however, particularly in com-
batting more clientelistic forms of corruption such as the discretionary
distribution of public services by the state in order to secure the loyalty
of powerful groups or individuals.
Alina Mungiu-Pippidi 25

The trends in governance in the postcommunist world indicate little


room for outside influence. The successes of both Estonia and Geor-
gia are products of domestic agency and have come about by similar
means—the drastic curtailing of opportunities and resources for corrup-
tion through such neoliberal policies
as eliminating red tape, increasing
The institutional anti- transparency, cutting discretionary
corruption frameworks government spending, and adopting
built during the run-up to flat taxes. These are not the policies
that the EU uses or recommends in
EU accession began to be
the fight against corruption, but they
dismantled almost imme- seem to be ones that work.
diately after accession was The attraction of joining the EU
official without ever being should create important incentives
implemented. for domestic reform, and the EU has
some instruments that should confer
leverage: the ability to make large
grants and the conditions attached to membership and even association
agreements. How have these performed in recent years?
The CC and ICRG scores point to two important facts: First, the CEE
“achievers” already had good scores at the beginning of the accession
process. Second, contrary to expectations, conditionality and technical
assistance did not lead to further improvement in governance during and
after the EU accession process. None of the eight new EU members re-
corded any significant progress after being invited to join between 1998
and 2000. In fact, most regressed. Only Albania, which planned to apply
for EU membership, made significant progress during those years (al-
though those gains would later vanish). It seems that once EU member-
ship is offered, progress begins to slow. And after countries join, they
actually backslide as political elites start to show less restraint.
The institutional anticorruption frameworks built during the run-up
to EU accession began to be dismantled almost immediately after ac-
cession was official without ever being implemented. Anticorruption
agencies, if their very survival was not in question, saw their budgets cut
and their leaders threatened with removal. In Romania and Latvia, anti-
corruption “heroes” were fired after accession, just when their agencies
had begun to make some significant arrests. Slovenia’s anticorruption
agency, which was monitoring politicians’ assets, was saved in extremis
by the Constitutional Court when Parliament tried to shut it down. The
high courts of Poland and Romania, however, dealt serious blows to
reform by declaring their countries’ anticorruption legislation unconsti-
tutional years after its enactment. In Slovakia, the government signifi-
cantly weakened the anticorruption court, while in the Czech Republic,
the anticorruption unit was completely shuttered. Directly following ac-
cession, domestic elites in the region thus regained some of the control
26 Journal of Democracy

that they had lost during the accession process and tried to secure their
immunity.
The EU showed its greatest muscle in demanding the prosecution of
Croatian prime minister Ivo Sanader, who was forced to resign in 2009
during EU-accession negotiations. In 2013, Croatia became the latest
entrant to the EU, nine years after the first enlargement wave. By then,
some bitter lessons had been learned, especially about the importance of
acting before accession. The mechanism that seems to have worked here
is “selectivity” rather than “conditionality.” That is, EU candidates must
emulate good institutions in order to achieve progress and to be selected
for membership. By contrast, countries that have already been invited
to join slow down or reverse reforms, even when tough conditionality
is in place.
It is important to note that governance as a whole—and not just in-
dividual cases of corruption—is at stake. When asked in a 2013 survey
question whether hard work or connections had a greater role in de-
termining success in the public sector, respondents in CEE countries
leaned toward the latter. The answer “In the public sector, most people
can succeed if they are willing to work hard” was rated 0, while the
response “Hard work is no guarantee of success in the public sector for
most people—it’s more a matter of luck and connections” was rated 10.
Every new CEE member state surveyed scored above 5. Of the older EU
members, only Greece, Italy, and Portugal ranked connections as more
important than hard work.
As a sign of how far they are from having merit-based systems, Bul-
garia, Slovakia, Serbia, and Croatia returned the highest (that is, the
worst) scores. Moreover, citizens of the new member countries were
highly skeptical about their governments’ efforts in fighting corruption,
especially in Slovenia (91 percent), the Czech Republic (87 percent),
Latvia (85 percent), Lithuania (81 percent), Romania (79 percent), Slo-
vakia (79 percent), and Hungary (73 percent).9
Hungary, which used to be perceived as one of the cleanest countries
in the region, has shown worrying signs of institutional corruption since
its EU accession. For example, its political parties are perceived as the
most corrupt sector in the country, and companies favored by the party
in power are awarded public contracts. For many years after Romania
joined the EU in 2007, only Romanian companies or firms with Roma-
nian ties won public-procurement contracts for EU-funded projects in
the country, with major European companies being shut out of the mar-
ket entirely. In 2013, Bulgarians revolted against favoritism in public
procurement after numerous reforms failed to take root in their country.
Slovenia’s top businessman was discovered to have made his fortune
through state-owned companies. This, of course, was the case with most
businesspeople who got rich during the transition period; they formed a
new generation of capitalists who flourished on state rents. In the Czech
Alina Mungiu-Pippidi 27

Republic, Prime Minister Petr Ne¡cas—known as “Mr. Clean Hands” for


having campaigned in 2010 on an anticorruption platform—was forced
to resign after prosecutors charged his chief of staff with corruption and
abuse of power. And upon learning of massive conflict-of-interest vio-
lations in Bulgaria and Romania after their succession in 2007, the EC
sanctioned both countries by cutting most of their EU funds.

What Works and What Does Not


To understand how EU policies do or do not affect corruption, we
must first understand how control of corruption works. One important
stream in the corruption literature conceptualizes the control of corrup-
tion as an equilibrium.10 Using the WGI’s CC indicator as a dependent
variable, I developed an explanatory model that follows on and enriches
this stream.11 Control of corruption at the national level is an equilib-
rium reached when opportunities (resources) for corruption are checked
by deterrents (constraints) imposed by the state and society: This equi-
librium can be reached at different levels of resources and constraints.12
In short, control of corruption equals the opportunities for corruption
(discretionary power plus material resources) minus the legal and nor-
mative deterrents against corruption.
Opportunities and resources for corruption result not only from
monopolies and oligopolies but also from privileged access under
other power arrangements—for example, negative social-capital net-
works, party cartels, and other collusive arrangements. Other sources
of opportunity for corruption include intentionally poor regulation,
which encourages administrative discretion, and the lack of transpar-
ency, which transforms information into privileged capital for power-
holders and their associates. Statistical models find a strong associa-
tion between poor control of corruption and excessive red tape, lack
of transparency, and overregulation. 13
The material resources conducive to corruption include foreign aid,
EU funds, weak limits on discretionary budget spending, natural re-
sources, and any other public resource that can be abused, be turned into
spoils, or generate rents. The empirical literature and my own statisti-
cal model show that mineral resources, assistance funds, and sizeable
government investment in discretionary projects (rather than fixed al-
locations for things such as education) are associated with poor control
of corruption.
What are the legal constraints on and normative deterrents against cor-
ruption? Legal constraints consist of an autonomous, accountable, and
effective judiciary able to enforce legislation; corresponding audit and
control agencies, as well as a body of effective and comprehensive laws
and regulations that address conflicts of interest; and the enforcement
of a clear separation between the public and private sectors. Countries
28 Journal of Democracy

where judges have life tenure are usually found to be less corrupt in sta-
tistical models—a finding not of great use in the EU, where all countries
grant fixed tenure to magistrates. Moreover, according to other research,
common-law countries tend overall to be more successful at controlling
corruption, while the existence of a specialized anticorruption agency or
the adoption of more anticorruption laws or treaties in a country that is
very corrupt does not seem to make much difference. For instance, with-
in the EU it is only transparency of political-party financing and not the
type of financing itself (from public, private, or combined sources) that
seems to make a difference in curbing corruption. Yet experts continue to
recommend that countries change from one financing system to another
despite there being no evidence that it makes a difference.
Normative deterrents against corruption work when existing societal
norms endorse public integrity and government impartiality, and when
public opinion, the media, civil society, and a critical body of voters per-
manently and effectively monitor deviations from that norm. The statis-
tical model shows that countries with more civic associations, more free
media, more people online and using e-government services, and even
more Facebook users control corruption significantly better.14

The Right Strategies?


Now that we have mapped out what works and what does not, we
must see whether the EU’s corruption-control and good-governance
strategies match these findings. EU accession is a heavily bureaucratic
process that relies on the presumption that rule of law and a high capac-
ity for implementation are already in place. If they are not, as was the
case in the Balkans and some CEE countries, then accession signifi-
cantly increases the distance between formal rules and informal prac-
tices. Increasing transparency and cutting red tape were never stressed
as key administrative reforms to be undertaken during accession. On
the contrary, increased opacity and more regulations seem to be unin-
tended consequences of the accession process. Moreover, the EU grants
new funds that are tied to following specific bureaucratic rules and pro-
ducing difficult-to-assess outputs—thereby unwittingly increasing re-
sources for corruption. This is particularly true after accession, when
recipient governments must start matching a quarter of the value of the
EU funds that they receive. Most new member countries regressed with
regard to corruption because of this new source of graft. This is unsur-
prising since in the least clean EU countries, according to my findings,
more structural funds only generate more corruption.
The EC relies entirely on building legal constraints to fight corrup-
tion, a strategy that is sure to have only a limited impact. Judicial coun-
cils, the self-governing bodies of judges that the EC advocates, are a
telling example. Since their adoption, there has been less direct politi-
Alina Mungiu-Pippidi 29

cal meddling with the judiciary, but indirect influence and corruption
remain rife. In many countries, the judiciary has become completely
unaccountable, since judges rule themselves.
In an environment of institutional corruption, anticorruption agencies
are permanently engulfed in political conflict, seldom impartial, and al-
ways threatened by politicians. Still, in the Western Balkans the EU
continues to prescribe the formation of judicial councils, anticorruption
agencies, and the like—a strategy that has already failed in Romania and
Bulgaria. The EU rates countries positively if they adopt such reforms,
rather than allowing national governments the freedom to choose which
reforms to undertake and then measuring the outcomes. There is little or
no assistance from the EU for free media, civil society watchdogs, trans-
parency, and reforms to reduce red tape, all of which matter greatly.
The EU’s European Neighbourhood Policy (ENP) also is tied to good
governance in partner states, and its impact can be assessed. A survey
of the governance performance of partner states shows that the EU’s
influence in initiating change in these countries also has been limited.15
In fact, most countries that received more funding actually regressed.
By contrast, Georgia with relatively low amounts of per capita funding
has progressed substantially. Higher per capita funding does not seem
to produce any statistically significant improvements in the governance
scores of the partner states. This finding supports previous studies show-
ing that higher aid levels lead in fact to worse governance outcomes in
neopatrimonial or competitive-particularistic contexts.
Countries that received higher levels of aid tied to good-governance
programs, however, have shown a little more progress. On average, East-
ern partner states have received governance-related funding of €6 per
capita, while the countries of the Middle East and North Africa, which
made less progress, received only €3.1 per capita. Between 2004 and
2008, only 5 percent of the EU’s aid package to Egypt was dedicated
to good governance.16 The data show that good-governance funding, al-
though modest, has been more effective at spurring governance change
than higher overall funding; this, however, may be due to the fact that
countries more willing to implement reforms have received higher per
capita good-governance funding. Finally, it is too early to assess the im-
pact of the Governance Facility, a new instrument of the ENP that has
been in place only since 2007, but its level of funding is extremely lim-
ited.
While the amount of assistance has grown in recent years, its impact
on governance remains low. In a 2013 report on assistance for public-
finance management, anticorruption, and human rights and democracy
between 2007 and 2013, the European Court of Auditors (ECA) found
that the €1 billion in aid allocated by the EU to Egypt for democracy
programs had been a complete failure—most of the money could not
be traced due to a lack of budgetary transparency, ineffective auditing,
30 Journal of Democracy

and endemic corruption in the Egyptian government. Furthermore, there


was a lack of effective action on the part of the EC and the European
External Service to ensure accountability for EU funds.17
The failure of the EU’s efforts to promote good governance in the Eu-
ropean neighborhood can be explained by several factors: 1) The EU has
conflicting interests in the neighborhood; 2) the Action Plans seem to be
a mere replication of EU-accession policies without any adjustment to
fit local conditions; 3) there is a lack of sufficient incentive structures
for key reform groups; 4) civil society is not sufficiently involved; and
5) there is too much reliance on frontloaded aid.18

The Challenge for the EU


The findings of this analysis require some qualification. I have exam-
ined the impact of the EU on governance, not democracy, using control
of corruption as a proxy. Although democracy can be defined broadly to
include good governance, using such a comprehensive definition for both
theoretical and statistical analysis would only muddle the findings. Other
problems include the absence in the field of governance of indicators that
can measure the impact of policy intervention, the lack of time-series data
for most relevant factors (for example, longitudinal data on civil society),
and the need for a consistent, accepted theory explaining the relation be-
tween democracy and governance. Has Slovakia’s (or Croatia’s) gover-
nance order changed because the EU managed to maneuver a particular
corrupt leader out of government? While such diplomatic successes make
headlines, we need to take a step back and see if the institutional basis of
governance also changed or if the governance order would perpetuate itself
under new leaders. The latter is what generally seems to have happened.
The use of advanced statistics without a sound understanding of the
mechanisms of change might perhaps explain why some earlier stud-
ies claimed to have found evidence that the EU has contributed to the
spread of good governance, that new member countries are better Euro-
peans than older ones, and that democratic reforms are sustainable after
accession.19 Robust evidence points, however, to only a limited EU im-
pact on governance and a counterintuitive relationship between the level
of EU assistance and the quality of governance reform. It is important
to remember, however, that changes in governance always tend to occur
incrementally, and progress requires complex and tedious changes in
the national equilibrium of power resources. Some studies on Europe-
anization, although in the minority, did warn against overestimating the
impact of conditionality, since compliance could prove purely formal
once incentives changed after accession.20
As a result of the euro crisis and of the corruption and tax-evasion
scandals in many member states, EU officials are keenly aware of the
governance problems troubling the Union. In fact, even earlier—before
Alina Mungiu-Pippidi 31

Bulgaria and Romania joined—the EC had warned about the potential


difficulties. But the political will was behind continued enlargement, so
the EC simply moved forward on an already agreed-upon policy. A few
innovative tools have recently been adopted, however, to address gov-
ernance issues in the enlarged EU and beyond. These include a pan-Eu-
ropean corruption-monitoring mechanism, an EU prosecutor dedicated
to investigating fraud and corruption in relation to EU funds, and a new
European Fund for Democracy meant to help civil society in neighbor-
ing countries.
Thus although some lessons seem to have been learned, improving
governance remains a challenge even for the democratic character of
the European project. First, the fiscal compact, which enables the EC to
check national budgets and eliminate discretionary spending, increas-
ingly takes the power to decide national policy out of the hands of vot-
ers. Second, when Brussels imposes punitive measures on countries that
are flouting EU norms on matters of rule of law and democracy, it risks
pitting the EU as a whole against a majority of voters in particular coun-
tries. The EU recently cut funding to Hungary and Romania in protest
over domestic governance issues, yet each government was elected by
a two-thirds majority of its citizens. That simple fact shows that gover-
nance, and not democracy, is the key problem for Central and Eastern
Europe, just as it has been for Greece and Italy.

NOTES

1. Alina Mungiu-Pippidi, “Is East-Central Europe Backsliding? EU Accession Is ‘No


End of History,’” Journal of Democracy 18 (October 2007): 8–16.

2. Daniel Kaufmann, “Can Corruption Adversely Affect Public Finances in Industrial-


ized Countries?,” Brookings Institution, 19 April 2010, available at www.brookings.edu/
research/opinions/2010/04/19-corruption-kaufmann.

3. See S.N. Eisenstadt and L. Roniger, Patrons, Clients and Friends: Interpersonal
Relations and the Structure of Trust in Society (Cambridge: Cambridge University Press,
1984); Alina Mungiu-Pippidi, “Corruption: Diagnosis and Treatment,” Journal of Democ-
racy 17 (July 2006): 86–99; Douglass C. North, John Joseph Wallis, and Barry R. We-
ingast, Violence and Social Orders: A Conceptual Framework for Interpreting Recorded
Human History (Cambridge: Cambridge University Press, 2009).

4. Gerry Stoker, “Governance as Theory: Five Propositions,” International Social Sci-


ence Journal 50 (March 1998): 17–28.

5. See Daniel Kaufman, Aart Kraay, and Pablo Zoido-Lobatón, “Aggregating Gover-
nance Indicators,” World Bank Policy Research Working Paper No. 2195, October 1999;
and Stephen Knack, “Measuring Corruption in Eastern Europe and Central Asia: A Cri-
tique of the Cross-Country Indicators,” World Bank Policy Research Working Paper No.
3968, July 2006.

6. For full discussion of trends, see http://anticorrp.eu/publications/global-compara-


tive-trend-analysis-report-1.
32 Journal of Democracy

7. “New System Puts Local Government Spending Under Virtual Microscope,” ERR
News, 21 September 2012, available at http://news.err.ee/sci-tech/7ee96ac8-05b8-43c9-
b60b-38eb0cffc2dd.

8. This region is made up of Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyr-


gyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan.

9. “Corruption,” Special Eurobarometer 374, February 2012, 80, available at http://


ec.europa.eu/public_opinion/archives/ebs/ebs_374_en.pdf.

10. See Robert Klitgaard, Controlling Corruption (Berkeley: University of California


Press, 1988), as well as Jeff Huther and Anwar Shah, “Anti-Corruption Policies and Pro-
grams: A Framework for Evaluation,” World Bank Policy Research Working Paper No.
2501, November 1999.

11. The results of this statistical analysis can be found in Alina Mungiu-Pippidi, Con-
textual Choices in Fighting Corruption: Lessons Learned (Oslo: NORAD, 2011), avail-
able at www.norad.no/en/tools-and-publications/publications/publication?key=383808.
See also the online regression table—in particular Model 4—at www.journalofdemocracy.
org/articles/supplemental-material.

12. See Mungiu-Pippidi, Contextual Choices in Fighting Corruption.

13. See Mungiu-Pippidi, Contextual Choices in Fighting Corruption.

14. See Mungiu-Pippidi, Contextual Choices in Fighting Corruption.

15. See Kristof Kleenmann’s 2010 report, “The European Neighbourhood Policy—A
Reality Check: How Effective Is the European Neighbourhood Policy in Promoting Good
Governance?,” available at www.againstcorruption.eu/uploads/rapoarte_finale_PDF/
The-%20European-Neighbourhood-Policy-A-Reality-Check.pdf.

16. Kleemann, “European Neighbourhood Policy.”

17. See the European Court of Auditors’ 18 June 2013 press release, available at http://
eca.europa.eu/portal/pls/portal/docs/1/22610783.PDF.

18. Kleemann, “European Neighbourhood Policy.”

19. See Frank Schimmelfennig and Ulrich Sedelmeier, The Europeanization of Cen-
tral and Eastern Europe (Ithaca: Cornell University Press, 2005); Frank Schimmelfennig
and Hanno Scholz, “EU Democracy Promotion in the European Neighbourhood: Political
Conditionality, Economic Development and Transnational Exchange,” European Union
Politics 9 (June 2008): 187–215; Philip Levitz and Grigore Pop-Eleches, “Monitoring,
Money and Migrants: Countering Post-Accession Backsliding in Bulgaria and Romania,”
Europe-Asia Studies 62 (May 2010): 461–79.

20. See Gwendolyn Sasse, “The European Neighbourhood: Conditionality Revisited


for the EU’s Eastern Neighbours,” Europe-Asia Studies 60 (March 2008): 295–316; Gerda
Falkner and Oliver Treib, “Three Worlds of Compliance or Four? The EU-15 Compared
to New Member States,” JCMS: Journal of Common Market Studies 46 (March 2008):
293–313.