ABSTRACT
In 2002, the British economic journalist Samuel Brittan wrote that, for those concerned about capitalism’s abuses, ‘globalised free trade is their best defence against the corruption of politicized capitalism’ (Brittan 2002). That same year, apparently oblivious to the fact that corruption was on the rise, then European Union (EU) Commissioner for Enlargement Günther Verheuhen pronounced that the integration process for the 2004 accession countries was having a positive effect in the battle against corruption.1 And, in 2005, then US Trade Representative Robert Zoelleck gave a speech supporting the Central American Free Trade Agreement (CAFTA), in which he said that CAFTA
will strengthen the foundations of democracy by promoting growth and cutting poverty, creating equality of opportunity, and reducing corruption . . . CAFTA goes beyond cutting tariffs to require broad changes in the way economies and polities operate, challenging those who have grown corrupt and complacent in captive, uncompetitive markets.
(Zoelleck 2005) Reflecting a widely held view, in all three instances, market liberalisation is predicted to reduce corruption. But an unintended and unexpected consequence of the liberal market and political reforms that were, directly or indirectly, the outgrowth of the formation and development of the EU has been the growth of corruption. The formation of the Single Market and the ‘ever closer union’ envisioned in the Treaty of Rome and the Maastricht Treaty led to increased trade and competition across states. Under the EU, exposure to competitive pressures and shared rules and regulations, it was thought, would make firms and politicians less corrupt. But in the face of increased competition, some firms engaged in bribery or succumbed to extortion by politicians in order to survive or to maximise profits; in countries where corruption was already common, new competitors from other states were drawn into local corrupt practices; and the increased competition for access to overseas markets has sometimes led governments to ignore international bribery and even to establish agencies whose work actually, even if unintentionally, encourages corrupt practices.