"Financing Authoritarianism: The Impact of EU Funds on Democratic Developments"

• In Event: Democracy Promotion and the Sources of Democratic Engagement

Abstract

How do fiscal funds allocated by the European Union (EU) to member and candidate states shape democratic developments in recipient countries? The EU’s ideological commitment to liberal democracy has been consistently supported by fiscal policies and allocating programs aimed at promoting economic growth and democratic stability across the Union’s geopolitical space. However, despite multiple financial measures to promote these objectives, several EU member and candidate member countries have in recent years exhibited increasing authoritarian tendencies. Often displayed in the form of escalating political corruption, violations of democratic norms, rule of law, and human rights, these practices signal a misalignment between the intended purpose of EU’s fiscal allocations and de facto implementation of such policies by recipient countries. In fact, some of the states that receive the greater shares of EU’s fiscal flows are also among those most likely to exhibit authoritarian tendencies and challenge EU’s democratic norms.

Why is this the case? What factors underlie the democratic inefficiency of EU’s fiscal allocations? In this paper, I take into account the degree of executive corruption across recipient states to argue that EU’s fiscal allocations are diverted by corrupt governments to support allocating practices and local-level policies that compress political opposition and solicit voter compliance. Hence, under conditions of domestic political corruption, EU allocations are used as a fiscal windfall for underpinning the survival and subsequent authoritarian momentum of incumbent parties. I evaluate my hypotheses by examining data on first, the local-level distributive policies of recipient states, and second, fiscal allocations and investment funds from the EU to member and candidate countries during the period of 2000 to 2018. The findings lend robust empirical support to the argument that EU funds capacitate corrupt regimes to endure despite their authoritarian tendencies. The results highlight the need for EU policy measures that ensure the fiscal transparency of recipient states, strengthen the Union’s monitoring mechanisms, and activate strategies of fiscal punishment for non-complying actors. The findings contribute to an emerging literature concerned with the causes of rising authoritarian trends among EU’s member states and the implications of such developments for the stability and functioning of European democracies.

Author

• Albana Shehaj, Harvard University