Abstract
This chapter focuses on the measurement of institutional convergence in the new EU member states and four Southern European EU member countries. Previous studies have used perception data or expert surveys at the country level to quantify institutional convergence. We present a new method which is based on hard micro-level data. Our approach focuses on control of corruption risks in public procurement in European countries. We use a contract-level dataset from 2006 to 2018 with more than 3.6 million observations downloaded from the European Union TED database. We consider control of corruption risks as a proxy for or aspect of institutional quality, and the countries with high institutional quality (high ability to control corruption) as a benchmark to measure differences in test country performance. Our results partially support earlier research on the poor performance of Southern European EU countries and show the considerable differences in institutional convergence between the new EU member states. Slovakia, Estonia and Lithuania have achieved strong institutional convergence and by now have reached high institutional quality in control of corruption risks. Meanwhile, Poland has attained some convergence, but its institutional quality still remains relatively weak. Latvia has shown a certain stability in this regard. Other countries like Hungary, the Czech Republic and Romania have had a low level of convergence starting with weak initial institutional quality. Thus, they now have institutions with a weak or moderate ability to control corruption risks. Slovenia and Bulgaria have displayed the weakest performance, with divergence from the benchmark countries. These findings show that institutional reforms at the national level matter and that EU policies promoting these measures are necessary but not sufficient conditions for successful institutional convergence.
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Notes
- 1.
The description of CPV codes see: https://ec.europa.eu/growth/single-market/public-procurement/digital/common-vocabulary_en
- 2.
Our detailed results see: http://www.crcb.eu/?p=2245
- 3.
Directive 2014/24/EU of the European Parliament and of the Council. Section 2, Article 4. https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32014L0024&from=EN
- 4.
Directive 2004/18/EC of the European Parliament and of the Council. Section 1 Article 7. https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32004L0018&from=EN#d1e2159-114-1
- 5.
Tenderio (2014). Guide to country specific elements on public procurement: Estonia. p. 16. Available at: https://blog.tenderio.com/guide-to-country-specific-elements-on-public-procurement-estonia/
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Annex
Annex
1.1 The TED Database and the Sampling
The TED database contains 6,355,766 records from 2006 to 2018 (see Table 9.6). However, out of these, 178,603 records are duplicates. These are part of the same contracts since they include the purchase of multiple services. Therefore, we excluded these from the sample under examination. The remaining 6,177,163 contracts show a yearly growth (see Table 9.7): from 240,161 in 2006 to 711,155 in 2018.
Then, of the remaining 6,177,163 records, we removed those where the net contract value was missing or the contract value was 0 euros. The TED database is rather deficient in this regard, as a total of 1,994,015 records were classified as meeting the categories outlined above, thus amounting to 31.4% of records lacking basic data.
In order to homogenize the data sample, we pulled out contracts that were framework agreements, since their basic characteristics, especially the contract value, implementation and so on, differed from those of simple contracts. In total, we found 671,847 framework agreements. Furthermore, notices published in TED failed to include multiple important data. We examined four of these in detail: (i) number of bidders; (ii) names of issuers; (iii) names of winners; and (iv) estimated value of the contract. If out of these four, at least three were missing, we did not include them in our analysis. In total, 1566 cases matching the above criteria were found. All in all, 3,644,735 records were used in our analysis (see Table 9.8).
1.2 Threshold Changes in the EU TED Database
From 2015, the number of contracts in the TED database has significantly increased. This stems from Public Procurement Directive 2014/24/EUFootnote 3 in 2014, which replaced Directive 2004/18/EC.Footnote 4 The new law lowered the threshold above which tenders must be added to the TED database.
For public procurement, EU law sets harmonized rules for tenders whose monetary value exceeds a certain amount and which are presumed to be of cross-border interest. For tenders lower than that given value, national rules apply which must respect general principles of EU law (https://bit.ly/2VViHK4). The changes are the following (see Table 9.9).
The European Commission revises the threshold every two years.Footnote 5 For example, Table 9.10 shows the new threshold value for 2018–2019 (according to Commission Delegated Regulation (EU) 2017/2365 of 18 December 2017).
Consequently, the significantly lowered thresholds according to the 2014 law have resulted in far more tenders in the TED database from 2015.
1.3 Results of Estimations
1.4 Two Issues in EU Country Reports: Corruption and Public Procurement
1.4.1 The Appearance of the Word “Corruption” in the European Commission Country Reports, 2006–2018
Number of characters in sentences that contain the word “corruption” in the Country Reports (from 2006 to 2010 the ERAWATCH Country Reports and from 2011 to 2018 the European Semester Country Reports) of the European Commission for the eight new accession countries, 2006–2018. (Source: Authors’ own calculations. Note: N = 104)
Number of characters in sentences that contain the word “corruption” in the Romania and Bulgaria Country Reports (from 2006 to 2010 the ERAWATCH Country Reports and from 2011 to 2018 the European Semester Country Reports) of the European Commission, 2008–2018. (Source: Authors’ own calculations. Note: N = 22)
1.4.2 The Appearance of the Phrase “Public Procurement” in the EU Country Reports, 2006–2018
Number of characters in sentences that contain the phrase “public procurement” in the Country Reports (from 2006 to 2010 the ERAWATCH Country Reports and from 2011 to 2018 the European Semester Country Reports) of the European Commission for the eight new accession countries, 2006–2018. (Source: Authors’ own calculations. Note: N = 104)
Number of characters in sentences that contain the phrase “public procurement” in the Romania and Bulgaria Country Reports (from 2008 to 2010 the ERAWATCH Country Reports and from 2011 to 2018 the European Semester Country Reports) of the European Commission, 2008–2018. (Source: Authors’ own calculations. Note: N = 22)
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Tóth, I.J., Hajdu, M. (2021). Corruption, Institutions and Convergence. In: Landesmann, M., Székely, I.P. (eds) Does EU Membership Facilitate Convergence? The Experience of the EU's Eastern Enlargement - Volume II. Studies in Economic Transition. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-57702-5_9
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