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How to Curb Corruption in State-Owned Enterprises: Comparative Insights from Hungary, Poland, and Spain

European Union
Political Economy
Corruption
Grzegorz Makowski
Warsaw School of Economics
Grzegorz Makowski
Warsaw School of Economics

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Abstract

State-owned enterprises (SOEs) are frequent arenas of political corruption and serve as key instruments of power consolidation. In Hungary and Poland, SOEs have been systematically and radically instrumentalized by ruling parties – Fidesz since 2010 and Law and Justice (PiS) from 2015 to 2023 – to expand clientelist networks and entrench illiberal governance. In Spain, SOEs also experience intense political interference following changes in government, revealing the persistent entanglement between political authority and enterprise management. Drawing on the historical legacies of authoritarian rule and conservative political traditions, this study examines comparatively the conditions under which SOEs facilitate systemic corruption. Employing a mixed-methods design, the article integrates original quantitative data on SOE governance with qualitative political processes tracing and elite interviews across the key sectors in which SOEs are typically active (e.g. energy, finance, or infrastructure). Preliminary findings show that while state ownership often overlaps with informal patronage systems, the scope and mechanisms of capture vary across contexts. We pose a hypothesis that narrow anti-corruption strategies on limiting corruption in SOEs sector (e.g. focusing on improving management), often recommended by international organizations like OECD or the World Bank are insufficient; institutionalized and subtle forms of SOE capture must be addressed to reduce abuses resulting from systemic corruption – especially in hybrid and authoritarian regimes. The paper advances research on anti-corruption policies by demonstrating that effective anti-corruption strategies focusing on SOEs must be holistic and consider more general factors resulting from political, systemic arrangements.