Mineva, D., Kostova, T., Fazekas, M., Poltoratskaia, V. (2023). Bridges to Nowhere: State Capture and Corruption Risks in Fiscal Transfers and Public Procurement at the Local Level in Southeast Europe. Center for the Study of Democracy. Sofia, Bulgaria.
This report analyses the risks entailed by the misuse of fiscal transfers from central to local governments in nine SEE countries (Bulgaria, Croatia, Hungary, Romania, Albania, Bosnia and Herzegovina, North Macedonia, Montenegro, and Serbia). Such transfers are typically a tool of equalisation policies seeking to offset disparities in the economic development of territorial units. When the general rule of law is compromised, however, intergovernmental transfers can be susceptible to corruption risks which undermine the effectiveness of these transfers and lead to misallocation or diversion of funds. The distortions created by clientelistic transfers are at risk of being further exacerbated by rigged local government procurement.
Read the full report here