A report from researchers at the University of Gothenburg, among other places, identifies six high-risk areas where corruption threatens to have far-reaching and system-threatening consequences within the EU. One of these areas is the public procurement sector, which accounts for 14 percent of the EU’s GDP.
According to the European Parliament, corruption within the EU costs up to €990 billion per year. According to estimates, this amount could eradicate world hunger and provide all people on Earth with access to electricity, clean water, and sanitation. “Corruption is one of the biggest threats to our society and its institutions. It undermines democracy, development opportunities, societal trust, and the legitimacy of the political system. Moreover, corruption benefits a small corrupt elite at the expense of society at large,” says one of the report’s authors, Anna Persson, Associate Professor of Political Science.
Together with two co-authors, she examined which areas within EU member states are most vulnerable to corruption. The results are presented in the report “High-risk areas of corruption in the EU: A mapping and in-depth analysis”, commissioned by the European Commission.
While corruption exists in many other sectors, the report shows that these high-risk areas share certain criteria that make them particularly relevant for anti-corruption efforts. Besides handling large sums of money, which attracts unscrupulous actors, these sectors often directly impact the lives of many EU citizens. According to the report, corruption in these areas risks not only limiting citizens’ access to the public services they are entitled to but also undermining overall societal trust.
A common feature of the high-risk areas is that they involve many different actors—public institutions, private companies, various professional groups, and organized crime—which, according to the authors, makes it especially difficult to ensure that money and resources are used properly.
“The involvement of many actors can create complex corruption networks, which is problematic. Corruption also tends to spread and reinforce already corrupt behavior in other parts of society. At the same time, it is hard to combat only at the national level since it often crosses borders,” says Anna Persson.
What Corruption Looks Like
According to the report, corruption in the six high-risk areas is characterized by striking similarities in methods, actors, and structures. Bribery, fraud, embezzlement, favoritism, nepotism, money laundering, and conflicts of interest are common and often systemic elements that maintain corrupt mechanisms. The report shows that bribery is the most widespread and visible form of corruption in all the identified areas.
“Bribes can occur anywhere, anytime, and in any industry. In public procurement, for example, it often involves officials accepting money to bypass regulations and favor political allies or business partners. Illegal payments are also common in arms deals, where transactions are hidden through complex networks of international banks and intermediaries.”
Money laundering is also highly prevalent. About 70 percent of criminal networks in the EU use some form of money laundering to finance their operations and hide their assets. In sports, money laundering is especially common in connection with match-fixing and online gambling.
Fraud occurs across all high-risk areas. The investigation for example shows that corrupt bidders often submit fake invoices or falsified information about previous experience in public procurement, while officials deliberately withhold information to favor certain actors.
Recommendations
The report calls for several measures to combat corruption in the six high-risk areas:
- It must be easier for different actors to share information so that decisions can be made correctly and without manipulation.
- Monitoring and control mechanisms over how decisions are made and resources allocated must become more effective. Weak oversight enables both corruption and undue influence.
- Transparency must increase. When information is hidden or difficult to access, the risk of corrupt behavior rises.
“EU countries need better knowledge of the extent and impact of corruption. With increased understanding, stricter oversight, and effective law enforcement, anti-corruption measures can become more targeted. In Sweden, transparency, integrity, and accountability help keep the level of corruption relatively low, but more affected countries often require different and more powerful interventions,” says Anna Persson.