A Quantitative Analysis of the Costs of Corruption in the EU

Corruption occurs when an individual or organisation entrusted with authority misuses his/her position for personal gain. It is a phenomenon that can and does inflict serious harms to societies around the world and it has negative fallouts at social, political and economic levels, which are deeply interconnected. Indeed, corruption may yield significant economic costs (through lower growth of gross domestic product (GDP), loss of economic efficiency and market distortions), social harm (distributional effects, inequality and social cohesion), environmental costs (level of pollution) or political costs (loss of political, institutional and individual trust damages public institutions and undermines the rule of law) (Chêne 2014; European Commission 2017d; OECD 2015; UNODC 2019a). Corruption is an endemic phenomenon that takes multiple shapes and forms across all facets of society. The hidden and informal nature of corruption makes it difficult (or even impossible) to observe and measure, and it remains a major challenge to address for countries worldwide. Several indicators and methodologies have been developed by institutions and organisations to quantify the costs resulting from corruption.