Transcript 1. EU-Turkey relations

CORRUPTION AND POLITICAL INSTITUTIONS IN
GREECE: PRELIMINARY SURVEY
C. Kafteranis, A. Bitzenis, P. Kontakos
University of Macedonia, Thessaloniki, Greece
Sunday, January 11, 8:30 AM-10:45 AM, Capri Room, Riviera Hotel, Las Vegas
Session [4]: Investing in Financial & Human Assets, Peak-Load Pricing & Monetary Aggregates
25th B&ESI Conference 2015
Las Vegas, USA, January 10-13, 2015
Note: The current paper is presented under the auspices of the
THALES Research Programme. THALES Programme has been cofinanced by the European Union (European Social Fund - ESF) and
Greek national funds through the Operational Program “Education and
Lifelong Learning” of the National Strategic Reference Framework
(NSRF).
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Foreword to our Project
• Our aim is to research and measure the various aspects of
shadow economy in Greece, including corruption, tax avoidance,
social contribution avoidance, undeclared or illegal work, shelf
consumption, illegal acts (black or underground economy).
• It will cover all economic agents in Greece, such as citizens and
corporations (e.g. public and private individuals, companies and all
professional categories, etc.)
• The research is also performed at sector levels, e.g. to identify the
extent of tax evasion and corruption in the trading of oil in Greece.
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Foreword to our Project (cont.)
• Emphasis is given to the qualitative analysis of questionnaire
results which it aspires to reveal the opinions of households,
enterprises and institutional entities and public services.
• It does not aim to the precise percentage regarding the
measurement of Greek shadow economy but aims to the qualitative
analysis and the comprehension of the problem so that we can
reach essential and thorough proposals to the government in order
to minimize the problem.
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Agenda
1. Introduction
2. Objectives of our research study
3. Definitions
4. Preliminary results from our questionnaire survey
5. Conclusions
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1. Introduction
• Corruption is part of shadow economy and efforts have been
made by governments of all developing and developed countries in
order to fight it.
• Corruption is not a new phenomenon as its existence is located
since ancient years.
• Fighting corruption in recent years has decisively involved
international organizations (UN, OECD, European Commission)
and more attention is paid as most countries have realized that
corruption affects in a negative way the national economy, growth
and investments, while creating a hostile environment for FDI.
• It has a negative impact in the implementation of democratic
institutions as well as creating an "unethical culture" and "a
moral decline phenomenon".
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2. Objectives of our research study
• The study of corruption requires explicit knowledge of the
workings of the political and social system as well as the
functioning of the administrative mechanism of the country
under research.
• In the case of Greece, political parties and political interrelation
have contributed significantly in the creation of a culture of
corruption through briberies, sponsorships, when Greek state banks
(such as ATE) offered uncontrolled loans in the political parties.
• The present study followed a qualitative field research analysis
method in the collected information and data.
• The study aspires to provide a clearer picture of how the political
corruption essentially "institutionalizes" corruption in all social
strata and at the same time does not allow the development of a
healthy competitive environment.
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3. Definitions
• Political corruption is any transaction between private and
public sector actors through which collective goods are
illegitimately converted into private-regarding payoffs.
• Political corruption involves political decision makers. It is when the
politicians and state agents, who are entitled to make and enforce
the laws in the name of the people, are themselves corrupt.
• Political corruption can be distinguished from bureaucratic or petty
corruption, which is corruption in the public administration, at the
implementation end of politics.
• Bribery is the payment of a fixed sum, a certain percentage of a
contract, or any other favor in money paid to the state official in
charge of making contracts on behalf of the state or otherwise
distribute benefits to companies or individuals, businessmen and
clients.
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3. Definitions (cont.)
• Embezzlement is theft of public resources by public officials, and as
such it is understood as another form of misappropriation of public
funds. The state official steals from the public institution in which he
his employed and from resources he is supposed to administer on
behalf of the state and the public. Embezzlement is not
considered as corruption from a strict legal point of view.
• Fraud is a crime that involves some kind of trickery, swindle or
deceit, and it is a broader legal and popular term that covers both
bribery and embezzlement.
• Extortion is money (or other resources) extracted by the use of
coercion, violence or the threats to use force. “Protection” or
“security” money is resources extorted in the classical, infamous
mafia style.
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4. Preliminary results from our questionnaire
survey
• The preliminary results are based on a questionnaire survey and
structured interviews performed with public officials in Greece in
H2, 2014.
• The areas of questions addressed to the participants have
attempted to reveal the following aspects:
a. The existence of a positive or negative relation between GDP
recession and corruption;
b. Their perception regarding corruption ( i.e. to what extent they
consider corruption as legal or illegal, or part of the local culture);
c. To understand if we have petty, political corruption and
corruption from below or from above.
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4. Preliminary results from our questionnaire
survey (cont.)
• There is petty corruption in Greece;
• There is “room for manoeuvre” (due to the complicated legal
system and low tax morale and weak controlling mechanisms);
• As corruption has spread in Greece throughout the years (especially
after 1980s), the social acceptance of it may have also increased.
When it is generally understood that there is a climate of corruption,
still more people will believe it is inevitable and expected;
• Many have argued that corruption is not a crime whenever it is a
part of the local culture (e.g. bribing officials to speed-up public
procedures/overcome administrative obstacles).
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4. Preliminary results from our questionnaire
survey (cont.)
• The perception of corruption varies across countries according
to the national legislation and national customs (i.e. actions in
Greece which can be considered as corruption, whereas the same in
other countries NOT; for example abroad a commission for a
transaction is legal whereas in Greece counted as under the table.)
• We have concluded that Greek people have high perception of
corruption whereas the corruption is less in practice; this is also
due to the misleading theory and fraud definition aggregations as
aforementioned.
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4. Preliminary results from our questionnaire
survey (cont.)
• In theory the level of corruption varies negatively with the level
of economic prosperity; as a country grows richer, the level of
corruption decreases.
• The preliminary qualitative data of our interviews conducted under
the THALES Programme indicate, however, that despite the
contraction in GDP in Greece in the period 2008-2013 by approx.
25% cumulative, there is a decrease in the size corruption,
although the crisis has turned people to devise ways to support their
lost income.
• This is related to the introduction of stricter control mechanisms
(punishment rules / increased number of tax audits and inspections
carried out), the e-governance, and the more effective political
institutions, which have all contributed to the reduction of corruption
due to the risks and penalties associated from being discovered.
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5. Conclusions
• According to evidence from the interviews performed, progress has
been achieved in recent years in the containment of political
corruption despite the significant contraction in GDP growth, which
in theory are mainly negatively related.
• This is primarily related to the enhancement of the control
mechanisms and the introduction of e-governance, which is also in
accordance with the classical model.
• As mentioned by the authors, the perception (and to some extent
definition) of corruption varies across countries according to the
national legislation and national customs; thus corruption is
necessary to be interpreted within the specific context of the country
under review when country comparisons are performed.
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