State capture: the concept and phenomenon

“Democracy dies in darkness”

a phrase beneath Washington Post online masthead

When The Washington Post coined their slogan “Democracy dies in darkness” just after Donald Trump’s inauguration, many people well argued that it was a manifesto to the eccentric head of state. The slogan was officially extracted from the paper’s owner Jeff Bezos’s[1] speech in a tech forum ascertaining that “many of us believe this, that democracy dies in darkness, that certain institutions have a very important role in making sure that there is light.”[2] Though providing for freedom of speech is of vital role to form a democratic society and consequently the prosperity of a country, there are far more far-reaching frontiers for achieving the desired democracy which is directly related with influential persons such as Mr. Bezos.

Corruption in the vertical of state government has a very little, albeit poisonous, effect on the functioning of the democratic system as a whole and the consequential economic prosperity of a country. The concept of ‘state capture’ in the more modern meaning of the phrase is something I personally consider to have an immense influence over not only the vertical of state management, but also trade, industry, health, public education and the society as a whole.

As a concept ‘state capture’ was defined first by researchers working on a World Bank study into the political and economic changes occurring in the countries of Central and Eastern Europe and Central Asia following the collapse of the Soviet Union. The term was largely used to describe a trend in corruption within the systems of governments during the transition from authoritarian socialist systems to democratic market economies. Authors Joel S. Hellman, Geraint Jones and Daniel Kaufmann contrasted state capture with influence and with petty forms of administrative corruption within taken sample countries. Authors stressed that state capture which is a form of deeply rooted corruption shaping and affecting formulation of the rules of the game through payments to public officials and politicians and differ from administrative corruption from its deep-rooted and targeted corruption strategies.

Almost all sample countries after the collapse of the USSR targeted open market economy fearing the return of the leviathan state. The main challenge of the transition economies came with even and fair redistribution of formerly state resources, industries and profit-generating channels. While most governments aimed at searching the most convenient methods of interactions of state with firms and private interests, the other side of the quest has been left with no consideration at all. Thus, influence and collusion of private interests with state officials has been left to side, which led to private firms (mostly owned or lobbied by public officials) privately occupying the rent-generating positions of the formerly state affairs.

Being identified as a phenomenon at the dawn of the millennium ‘state capture’ has been largely researched into in the example of political discourse of South Africa, while the main sample countries from the former soviet bloc were left in the dark. A careful insight into the peculiarities of state capture in the Central Asian states will be provided in the next articles.

[1] Jeff Bezos owns the paper through Nash Holdings after USD 250 mln. cash deal with the longtime controlling Graham family


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