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Evaluating Determinants of Perceptions of Corruption in the European Union

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Evaluating Determinants of Perceptions of Corruption in the European Union Evaluating Determinants of Perceptions of Corruption in the European Union Jennifer Marek A thesis submitted to the faculty of the University of North Carolina at Chapel Hill in partial fulfillment of the requirements for the degree of Master of Arts in the Department of Political Science, Concentration European Governance. Chapel Hill 2012 Approved by: Gary Marks Liesbet Hooghe Holger Moroff Abstract JENNIFER MAREK: Evaluating Determinants of Perceptions of Corruption in the European Union (Under the direction of Gary Marks, Liesbet Hooghe, and Holger Moroff) Corruption is one of the key problems facing the European Union (EU) as it seeks to integrate the 27 member states into an even more cohesive economic unit during a period of austerity. A number of studies have documented regional patterns of corruption and corruption perception within the EU. Explanations for other variations in perceptions of corruption, however, are left incomplete in the literature. To explain these variations, this author analyzes 2005, 2007, and 2009 Eurobarometer data. This author finds EU-wide increases in the perceived amount of corruption can be linked to the economic downturn. Moreover, exceptional increases can be explained by well-publicized political scandals. In one particularly interesting case, Spain, sizable fluctuations in perceptions of corruption in law enforcement can be associated to the perceived effectiveness of anti- corruption efforts. EU policymakers, who are in the process of structuring programs to reduce corruption, should incorporate these factors into their programs. ii Table of Contents LIST OF TABLES .....................................................................................................................v LIST OF FIGURES ................................................................................................................. vi Chapter I. INTRODUCTION .................................................................................................................1 II. REVIEW OF LITERATURE...............................................................................................4 Economic Factors .......................................................................................................................... 4 Political Factors ............................................................................................................................. 6 Social Factors................................................................................................................................. 8 Hypotheses ..................................................................................................................................... 9 III. CASE STUDY: SPAIN ....................................................................................................11 Hypotheses ................................................................................................................................... 13 Corruption Scandals and Anti-Corruption Efforts ....................................................................... 14 Role of the News Media .............................................................................................................. 15 IV. DATA COLLECTION AND METHODOLOGY ...........................................................21 Eurobarometer Methodology ....................................................................................................... 21 Corruption Perception Index Methodology ................................................................................. 24 V. STATISTICAL ANALYSES ............................................................................................26 Dependent Variables .................................................................................................................... 27 Independent Variables ................................................................................................................. 27 Data Analysis ............................................................................................................................... 28 VI. RESULTS AND DISCUSSION .......................................................................................30 Effects of Economic Factors (H1) ............................................................................................... 30 Corruption Scandals (H2) ............................................................................................................ 34 Case Study: Spain (H3 and H3a) ................................................................................................. 35 VI. CONCLUSION.................................................................................................................41 APPENDIX ..............................................................................................................................43 iii Correlation Matrices ........................................................................................................................ 43 Results of OLS Regression for EU-27 ............................................................................................. 45 Description of Variables .................................................................................................................. 48 REFERENCES ........................................................................................................................51 iv List of Tables 1. Confidence in the Police, Judiciary, and Political Parties (Spain) ......................................12 2. Perceptions of Corruption (Spain 2005-2009) ....................................................................13 3. News Articles on Corruption (2006-2009) .........................................................................17 4. News Reports on Anti-Corruption Efforts-Operación Malaya (2006-2009) ......................18 4a. News Reports on Anti-Corruption Efforts (2006-2009) ...........................................18 5. Spearman’s Rho Correlation Coefficients (EU-27, 1998-2010).........................................31 6. OLS Regression Results EU-27 (2009) ..............................................................................33 7. 2007 Prediction Equation Results (H2) ..............................................................................35 8. Spain Regression Results 2007 ...........................................................................................36 9. Spain Regression Results 2009 ...........................................................................................38 10. Correlation Matrix Economics-PoC EU-27 (2007) ..........................................................43 11. Correlation Matrix Economics-PoC EU-27 (2009) ..........................................................43 12. Correlation Matrix Economics-PoC EU-27 (2011) ..........................................................43 13. Correlation Matrix Demographics-Perceptions of Corruption EU-27 (2005) ..................44 14. Correlation Matrix Demographics-Perceptions of Corruption EU-27 (2007) ..................44 15. Correlation Matrix Demographics-Perceptions of Corruption EU-27 (2009) ..................44 16. EU-27 Regression Results (2005) .....................................................................................45 17. EU-27 Regression Results (2007) .....................................................................................45 17a. EU-27 Regression Results (2007, continued) .........................................................46 18. EU-27 Regression Results (2011) .....................................................................................46 19. Regression Results-Spain (2005) ......................................................................................47 20. Regression Results-Spain: Perception of Economic Situation (2009) ..............................47 v List of Figures Figures 1. Impact of Corruption on the Media ........................................................................20 vi I. Introduction The 2008 Great Recession sent shockwaves throughout the EU shaking its economic, political, and societal foundations. In the ensuing months, it was not at all clear whether or not the EU would remain intact. However, while global players monitored the possibility of the EU’s collapse, the EU and its 27 Member States went to work to reverse the economic downturn. Their efforts focused on all factors that impacted negatively on either the internal market or economic stability. High on that list of barriers was corruption. A 2011 Commission Communication placed a price tag of EUR120 billion on losses directly attributable to corruption.1 Other sources commented on, but could not quantify, the cost of foregone investment opportunities. The negative economic effects of real and perceived corruption were not the EU’s only concern. The EU was also well aware that corruption had a deleterious effect on public institutions, political participation, and regime stability.2 From afar, one would not necessarily associate the EU with pervasive corruption. The EU includes some of the oldest, and wealthiest, democracies in the world. In fact, fully one-third of the EU members rank in the top 20 in the world for low corruption; and nearly all other member states are ranked in the top 50.3 Despite these generally positive rankings, EU progress in this area seems to have stalled. 1 EC 2011: 3. 2 EC 2011: 3. 3 Out of 180 countries worldwide,
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