Reihan entertains the idea:
There is a longstanding view, rooted in the rise of the centralized fiscal state in early modern Europe and, more recently, in the rise to affluence and power of states like South Korea, that states often adopt growth-enhancing policies when they’ve run out of other options, e.g., when they face a formidable military threat and find themselves unable to extract aid, or enough aid, from allied states, thus forcing them to rely on internal resources. (Nicholas Eubank’s work on Somaliland offers a distillation of some of this literature.) Yet when states have an easily-accessible resource at their disposal, like point-source natural resources (oil and gas) or government-to-government transfers, they don’t necessarily have to adopt growth-enhancing policies, as political elites can take the easy root of just turning on the spigot and skimming off their cut.
Dalibor Rohac, a policy analyst at the Cato Institute, has thought deeply about this question, and when I asked him to write something for The Agenda on the subject, he kindly agreed to do so. If Dalibor is right, the European Union hasn’t just failed to prevent the deterioration of liberal-democratic norms in central and eastern Europe. It has exacerbated the problem. Dalibor calls this “the curse of European structural funds,” and I think he makes a rock-solid case.
The heart of Rohac’s argument:
The inflow of EU funds into countries with weak institutions does not mean just wasteful spending but also breeds corruption. The impact may be hard to quantify but is very visible. Before joining the EU, Eastern European countries had made significant progress in reducing cronyism and corruption – mainly because of the numerous reforms they had to adopt in order to qualify for EU membership in the first place. After the accession, not only did the progress come to a halt but some measures of corruption actually deteriorated.
The Dish 