Rot at the top

Two Bulgarian researchers, Ruslan Stefanov and Martin Vladimirov, yesterday presented Shadow Power: Assessment of Corruption and Hidden Economy in Southeast Europe here at SAIS. Their powerpoints are here and here. Corruption is now in many ways the most important challenge in the Balkans today, as it hinders economic growth, exacerbates inter-ethnic relations, heightens political tensions, slows the pace of reforms needed to qualify for NATO and EU membership, reduces state legitimacy, and threatens instability. Corruption is second only to unemployment as a concern the public’s estimation. What the Southeast European Leadership for Development and Integrity (SELDI) has managed to do is to measure corruption pressure and practices (not just perceptions, as the Transparency International index does) as well as elucidate “state capture,” in particular in the energy sector.

The results are not edifying: corruption pressure (share of citizens reporting demands for bribes from public officials) has not improved overall since 2014 in the region and has worsened in Albania, Croatia, Macedonia, Kosovo, and Bosnia and Herzegovina, while declining in Bulgaria, Montenegro, and Serbia (notably the countries in which the European Union has arguably been most active on corruption issues). More than half of the population in these Southeast European countries believes it will have to bribe someone to get things done. In all but Montenegro, more than half the population believes corruption cannot be substantially reduced. Irregular, “hidden,” employment is one of the consequences. Another is use of the non-liberalized energy sector to extract rents for state officials.

Bosnia and Herzegovina and Macedonia, and to a lesser extent Albania and Kosovo, stand out as countries in which corruption levels are worsening. Tolerance of corruption in those four countries is also highest, and they are among the countries in which 50% or more of the population believes corruption cannot be substantially reduced. The public thinks the most corrupt officials in the region are political party and coalition leaders, members of parliament, ministers, and local political leaders. In short, what we’ve got here is deep-seated, endemic corruption, with the rot worst at the top.

What is to be done?

The report recommends “effective prosecution of corrupt high level politicians and senior civil servants,” EU Commission engagement with civil society, and independent monitoring mechanisms. That is certainly logical, but I challenged whether this was adequate after the presentation at SAIS, noting that the successful prosecution of my wartime friend and former prime minister Ivo Sanader in Croatia seems to have had the opposite impact: the “Sanader effect” has made top politicians more cautious about reforms. Ruslan wisely underlined that the prosecutions could not be one-off but rather should be sustained, as they are in the US. I can’t fault the idea of stronger EU engagement with civil society, which Ruslan and Martin thought had been much weaker than in Romania and Bulgaria, where improvements are evident.

I am however still skeptical about anticorruption bodies. The kind of civil society monitoring SELDI has done is important, but most official anticorruption agencies are ineffectual, because corruption is not an aberration of the system but rather the system itself. The opposite of corruption in these countries is not anticorruption. It is good governance. I see more promise in improving transparency and accountability, in particular in political parties. Most of them in the countries of greatest concern are run as fiefdoms of the party bosses, with little possibility of changing the guard and lots of opportunity to reward loyalists with corrupt rents. Srdjan Blagovcanin and Boris Divjak have made this point for Bosnia and Herzegovina. It seems to me likely to be valid in other countries as well.

But that point should not detract from the courageous and perspicacious work Ruslan and Martin have done. They have greatly enhanced the tools available to measure corruption and corruption pressure and offered some important suggestion of what to do about it. That these accomplishments are coming from inside the Balkans, not outside, represents real progress. Bravi!