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Principal–Agent Problems with EU Funds: A Case Study of Patronage in Hungary

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  • Kevin Aslett
  • Beatrice Magistro

Abstract

EU funds have been linked to high levels of corruption, even given substantial administrative and regulatory requirements and extensive domestic monitoring. We posit that this divergence between actual outcomes and preferred policies can be attributed to the co-optation of the auditing and monitoring processes by member-state governments. We outline the importance of the auditing process and flow of information to the European Commission using a delegation model and then test what occurred when this process was co-opted in Hungary. We find that the co-optation of the auditing process results in a rise in patronage and corruption.

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  • Kevin Aslett & Beatrice Magistro, 2023. "Principal–Agent Problems with EU Funds: A Case Study of Patronage in Hungary," Europe-Asia Studies, Taylor & Francis Journals, vol. 75(8), pages 1286-1310, September.
    • Handle: RePEc:taf:ceasxx:v:75:y:2023:i:8:p:1286-1310
    DOI: 10.1080/09668136.2022.2122405
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