Hidden Depths: The Case of Hungary

In Mungiu-Pippidi, Alina (Ed.) (2013) Controlling Corruption in Europe Vol. 1 (pp. 74-82). Berlin: Barbara Budrich Publishers.

European Research Centre for Anti-Corruption and State-Building Working Paper No. 36

13 Pages Posted: 15 Oct 2013

See all articles by Mihaly Fazekas

Mihaly Fazekas

University of Cambridge - Faculty of Human, Social, and Political Science

Lawrence P. King

Yale University - Department of Sociology

István János Tóth

Hungarian Academy of Sciences (HAS)

Date Written: August 2013

Abstract

This report investigates corruption risk of EU funds spending in Hungary within the framework of the Public Procurement Law. Its finding is that in spite of what is a tight regulatory framework EU funds are likely to fuel the abuse of public spending. Even though public procurement using EU funds faces considerably more stringent regulation, their use poses much greater corruption risks when compared with funds procured domestically and corruption risks are particularly pronounced for large projects. The report also argues that large-scale institutionalized corruption in Hungary may be widespread and driven primarily by political cycles. Such corruption, often labelled “legal corruption”, typically involves neither bribery nor collusion between lower level bureaucrats and private individuals; rather, it operates through contractual relationships which benefit the highest echelons of the political and business elite. There are a small number of new anti-corruption initiatives of the new government which entered office in 2010, but while they might indicate a positive step towards higher public sector integrity, their results are yet to be seen.

Keywords: legal corruption, Hungary, public procurement, EU funds

JEL Classification: D72, D73, H57

Suggested Citation

Fazekas, Mihaly and King, Lawrence P. and Tóth, István János, Hidden Depths: The Case of Hungary (August 2013). In Mungiu-Pippidi, Alina (Ed.) (2013) Controlling Corruption in Europe Vol. 1 (pp. 74-82). Berlin: Barbara Budrich Publishers.. Available at SSRN: https://ssrn.com/abstract=2334178

Mihaly Fazekas (Contact Author)

University of Cambridge - Faculty of Human, Social, and Political Science ( email )

Cambridge, CB3 9DD
United Kingdom

Lawrence P. King

Yale University - Department of Sociology ( email )

493 College St
New Haven, CT 06520
United States

István János Tóth

Hungarian Academy of Sciences (HAS) ( email )

Orszaghaz utca 30.
Budapest, H-1502
Hungary

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