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Why does bureaucratic corruption occur in the EU?

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  • Urs Brandt
  • Gert Svendsen

Abstract

Why does bureaucratic corruption occur in the EU system? Several examples suggest that bureaucratic corruption exists and that the Commission’s anti-fraud agency, OLAF, is not a fully independent authority. We thus develop a novel interpretation of the principal-supervisor-agent model to cope with non-independent anti-fraud units. This model shows that corruption is likely to occur when the expected value to the client from bribing the agent is larger than the expected value to the principal of truth-telling by the supervisor. Overall, this analysis points to the risks of flawed incentives and the lack of institutional independence among principal, agent, supervisor and client. Our main policy recommendations as a result of these findings are that OLAF should be placed outside the Commission, and that whistleblowers should receive adequate protection. Copyright Springer Science+Business Media New York 2013

Suggested Citation

  • Urs Brandt & Gert Svendsen, 2013. "Why does bureaucratic corruption occur in the EU?," Public Choice, Springer, vol. 157(3), pages 585-599, December.
    • Handle: RePEc:kap:pubcho:v:157:y:2013:i:3:p:585-599
    DOI: 10.1007/s11127-013-0095-5
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    References listed on IDEAS

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    Cited by:

    1. Esteban Alemán Correa & Michael Jetter & Alejandra Montoya Agudelo, 2016. "Corruption: Transcending Borders," Kyklos, Wiley Blackwell, vol. 69(2), pages 183-207, May.
    2. You, Jing & Nie, Huihua, 2017. "Who determines Chinese firms' engagement in corruption: Themselves or neighbors?," China Economic Review, Elsevier, vol. 43(C), pages 29-46.
    3. Sounman Hong & Jeehun Lim, 2016. "Capture and the bureaucratic mafia: does the revolving door erode bureaucratic integrity?," Public Choice, Springer, vol. 166(1), pages 69-86, January.
    4. Karsten Mause & Friedrich Gröteke, 2017. "The Economic Approach to European State Aid Control: A Politico-Economic Analysis," Journal of Industry, Competition and Trade, Springer, vol. 17(2), pages 185-201, June.
    5. Perera, Mark & Patz, Ronny, 2013. "Square pegs and round holes? Challenges in assessing the EU-level integrity system," SocArXiv 3jtcy, Center for Open Science.

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