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Economic integration and corruption: The corrupt soul of the European Union

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Abstract

We study the link between corruption and economic integration. We show that if an economic union establishes a common regulation for public procurement, the country more prone to corruption benefits more from integration. However, if the propensities to corruption are too distinct, the less corrupt country will not be willing to join the union. This difference in corruption propensities can be offset by a difference in efficiency. We also show that corruption is lower if integration occurs. A panel data analysis for the European Union confirms that more corrupt countries are more favorable towards integration but less acceptable as potential new members.

Suggested Citation

  • Juan J. Ganuza & Esther Hauk, 2000. "Economic integration and corruption: The corrupt soul of the European Union," Economics Working Papers 482, Department of Economics and Business, Universitat Pompeu Fabra.
    • Handle: RePEc:upf:upfgen:482
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    Cited by:

    1. Mushfiq us Swaleheen, 2007. "Corruption and Investment Choices: A Panel Data Study," Kyklos, Wiley Blackwell, vol. 60(4), pages 601-616, November.
    2. Claudio Weber Abramo, 2003. "Prevention and detection in bribery-affected public procurement," Public Economics 0309001, University Library of Munich, Germany.
    3. Ganuza, Juan-Jose & Hauk, Esther, 2004. "Economic integration and corruption," International Journal of Industrial Organization, Elsevier, vol. 22(10), pages 1463-1484, December.

    More about this item

    Keywords

    Corruption; procurement; economic integration;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • F15 - International Economics - - Trade - - - Economic Integration
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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