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10 - Learning From Kleptocracy and State Capture Case Studies
- Robert Barrington, University of Sussex, Elizabeth David-Barrett, University of Sussex, Sam Power, University of Sussex, Dan Hough, University of Sussex
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- Book:
- Understanding Corruption
- Published by:
- Agenda Publishing
- Published online:
- 20 January 2024
- Print publication:
- 03 March 2022, pp 159-166
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Summary
The cases in this section relate to four countries – Angola, Turkey, Malaysia and South Africa – and to one organization, FIFA. While it is not a state that is captured in the case of FIFA, the international governing body of football has many state-like features, including a monopoly over the setting and enforcement of rules in this significant realm of economic activity. Sepp Blatter's behaviour is characteristic of a typical kleptocrat: he and his cronies abused their power not only to embezzle funds from the organization but also to shape its development, and that of major international sporting events, in ways that maximized their private gain. By reviewing the mechanisms through which the kleptocrats in these case studies captured the institutions in their respective domains, we seek to make the case for extending these concepts to the study of organizations that play a role in governing parts of the global society and economy.
Chapter 8 set out five areas for comparative analysis of our case studies. The first three correspond to the three spheres of capture – the formation of the rules of the game, their implementation and the disabling of accountability institutions. A fourth category considers the role of external actors in enabling or facilitating the actions of kleptocrats, while the final category considers the impact of rule by kleptocrats on the intended beneficiaries of governance and wider society. The five cases are compared on each of these mechanism areas below and the key points summarized in Table 10.1.
All of these kleptocrats were elected to power, and they do not hesitate to parade this democratic mandate to justify their subsequent behaviour, but questions hang over the fairness of elections in several cases. Blatter's election to the FIFA presidency in 1998 was marked by allegations that 20 members of the “electorate”, comprising the heads of football associations around the world, had received bribes totalling $1 million in exchange for their support (Campbell & Kuper 1999). We learned that Erdoğan was only permitted to run for office because his ally, Abdullah Gül, lifted a ban that otherwise prevented him from doing so. Razak gained power not through an election but because the former prime minister of Malaysia stood down and named him as a successor, although he did have to win the support of his party. He then used his power to appoint himself finance minister and chair of 1MDB.
8 - Accumulating Money and Power
- Robert Barrington, University of Sussex, Elizabeth David-Barrett, University of Sussex, Sam Power, University of Sussex, Dan Hough, University of Sussex
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- Book:
- Understanding Corruption
- Published by:
- Agenda Publishing
- Published online:
- 20 January 2024
- Print publication:
- 03 March 2022, pp 113-120
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Summary
This part of the book describes cases of kleptocracy and state capture, two terms used to describe systematic abuse of entrusted power by elites. “Kleptocracy” focuses more on the role of an individual leader and emphasizes the accumulation of money and power through theft. As a phenomenon, it has become more prevalent as a result of the globalization of financial and legal services, which has made it easy for individual kleptocrats to hide the proceeds of corruption using transnational and secret financial structures (Bullough 2018). Several initiatives advocating for a stronger global policy response to grand corruption and illicit financial flows favour this term, with the US Congress, for example, having established, in June 2021, a bipartisan caucus against foreign corruption and kleptocracy.
The concept of “state capture” was widely used in the late 1990s to characterize a particular pattern of corruption that had emerged during the first decade of transition in the former Soviet Union and eastern Europe. Hellman, Jones & Kaufmann (2000) conceptualized state capture as one of two types of corruption prevailing in this region and era. “State capture” occurs where the formation of laws and policy is captured by a narrow interest group, typically a few oligarchs with good connections to the political leadership. “Administrative corruption”, by contrast, occurs when the implementation of laws and policy is improperly influenced by a group or individual (Hellman, Jones & Kaufmann 2000).
Hence, the defining feature of state capture relates to process – the political process in which laws and policy were formed is distorted because narrow interest groups have too much control over it, therefore departing from the pluralist democratic model in which many interest groups compete for influence fairly and those that are best able to build broad coalitions gain the right to shape laws. State capture represents a deviation from this ideal by virtue of the fact that the competition among interest groups is not fair. Captor groups gain influence because they have personal connections to those holding political power, and because those in political power are prepared to abuse their power over the policy-making process by making secret deals in which they exchange influence for various kinds of “loyalty”.
14 - Understanding Corruption
- Robert Barrington, University of Sussex, Elizabeth David-Barrett, University of Sussex, Sam Power, University of Sussex, Dan Hough, University of Sussex
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- Book:
- Understanding Corruption
- Published by:
- Agenda Publishing
- Published online:
- 20 January 2024
- Print publication:
- 03 March 2022, pp 223-228
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Summary
Corruption is the abuse of entrusted power for private gain, but the cases in this volume demonstrate the great variation in each of those key terms. Those who hold public office certainly have entrusted power, often governed by a foundational document such as a country's constitution and with duties that are clearly defined. But we suggest that many other types of entrusted power are relevant for our understanding of corruption, including power held by those operating in the private sector. In the case of Sepp Blatter at FIFA, we saw how one man's power over an international sporting body can be abused, with implications for global norms in a sphere which prides itself on fair competition (see also Hough & Heaston 2018, for more on this). In the chapters on enablers, we argued that professional services companies specializing in PR, financial or legal services can also have duties that stretch beyond shareholders. They are entrusted to uphold the standards of their professions but, as key service providers to kleptocrats, they all too often abuse that power and ignore these higher responsibilities (see also King & Zavoli 2020, for a good example of the challenges in this regard in the UK property market).
It is self-evident from the case studies that corruption can therefore occur in the private sector as well as the public sector. Indeed, over the past 20– 30 years, the boundary between the public and private sectors has become increasingly blurred in many countries. As the public sector has engaged more in the outsourcing of public services, conflicts of interest have grown and movement through the “revolving door” become more common. The kleptocracy chapters show that oligarchs who buy privatized assets often benefit from straddling the public-private divide. And in the corporate sector, anti-bribery laws encourage us to focus on the role that businesses play in initiating or being complicit in corruption, even if it involves transactions with public officials. Just as the distinction between the public and private sectors has become blurred, so has that between public sector and private sector corruption.
The cases covered in this volume also demonstrate the wide range of ways in which power can be abused.