Warner, Carolyn M. --- "Common Market institutions, fraud and informal networks" [2004] ELECD 26; in Christiansen, Thomas; Piattoni, Simona (eds), "Informal Governance in the European Union" (Edward Elgar Publishing, 2004)

Book Title: Informal Governance in the European Union

Editor(s): Christiansen, Thomas; Piattoni, Simona

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843763512

Section: Chapter 4

Section Title: Common Market institutions, fraud and informal networks

Author(s): Warner, Carolyn M.

Number of pages: 19

Extract:

4. Common Market institutions, fraud
and informal networks1
Carolyn M. Warner

INTRODUCTION
International politico-economic organizations such as the EU are expected to
lower barriers to trade, raise the efficiency of economic exchanges as well as
promote economic and political development and cooperation. Yet it is possi-
ble that international organizations are just as likely to promote, as side-
effects, various forms of fraud. Recent instances of possible fraud (and
corruption) in the EU's main administrative body (the Commission) serve to
highlight the vulnerability of international organizations to illicit financial
practices.
Is fraud the result of national patterns being brought into the international
arena, or a negative externality inherent in any international organization?
How do we analyse the occurrence of fraud in the EU? Is the EU, in this
regard, one of several instances of international organizations or is there some-
thing about the EU's particular institutional configuration ­ for example the
diffusion of informal governance mechanisms ­ which makes it particularly
prone to fraud? This chapter will explore answers to these questions by look-
ing at various policy areas, but particularly at agricultural and cohesion poli-
cies.


DEFINITIONS AND HYPOTHESES
To study fraud, we need to know what it is. Fraud is usually defined as the
wrongful appropriation of funds in the private sector, or by a private actor
against public funds, while corruption is defined as `behavior by a public
servant, whether elected or appointed, which involves a deviation from his or
her formal duties because of reasons ...