Is the UK sliding into state capture?

AuthorDavid-Barrett, Liz

State capture is a concept that I first came across at the beginning of my career, when I was a journalist in eastern Europe in the late 1990s. It is a kind of high-level and systematic corruption, and is something quite different from classic bribery or what is sometimes called administrative or petty corruption. In administrative corruption, someone pays a bribe to influence a decision about the implementation of rules or policy. Say, a property developer pays a bribe to get permission to build on a piece of brownfield land - a one-off benefit that distorts how the existing rules are implemented.

State capture is also about improperly influencing those in power, but it's not about influencing the way they implement the rule; it's about being able to change the rules themselves. Going back to the previous example, it would be capture if the property developer, instead of giving a bribe to gain a one-off permission to build somewhere, gave a big donation to a political party in exchange for a government minister changing the rules about what kinds of property could be built on brownfield.

The defining feature of state capture relates to process: the political process in which laws and policy are formed is distorted because narrow interest groups have too much control over it. It departs from the pluralist democratic model, in which many interest groups compete for influence fairly, and those which are best able to build broad coalitions gain the power to shape laws.

In state capture the competition among interest groups is not fair. Captor groups gain influence because they have personal connections to those holding political power, and those holding political power are prepared to abuse it by making secret deals in which they provide influence, and do so in exchange for various kinds of 'loyalty' from the captor group.

This loyalty can take many forms. It can involve the use of violence to quieten political opposition; influence over key bodies of voters through trade unions or regional vote-buying; or donations to political parties or individuals.

State capture has a longer-term impact than administrative corruption. After influencing the law or policy through state capture, a developer can get access to a whole new landscape of opportunity. Rather than influencing one decision, they've changed the whole rules of the game. When they build on brownfield in the future, they're not breaking any laws. They don't need to. They've already changed the law and baked in their advantage. State capture thus tends to exacerbate inequality. Those groups that gain economic power through state capture are also better able to influence political leaders in the future, further shaping the laws to their own benefit, and consolidating their dominance in a self-perpetuating dynamic.

The term state capture was coined to describe practices common in the first decade of transition in the former Soviet Union and Eastern Europe. Then, the captors were typically business people with good political connections. They came to be known as 'oligarchs', as their control over vast swathes of the economy grew. But their method was pretty simple - they purchased influence through personal connections to the individuals and parties holding political power, sometimes through direct kickbacks or other kinds of favours. And the public office-holders were prepared to sell their influence over policy formation. By using state capture to change the laws themselves rather than just their implementation, the oligarchs made sure that their actions afterwards were legal, and their power was consolidated. Indeed, that is partly why it is so difficult today to go after the corrupt gains of these individuals, despite the UK having developed instruments such as Global Anti-Corruption Sanctions, which provide for asset freezes or travel bans to be imposed on those involved in serious corruption.

In the 1990s, state capture in Russia was driven by business interests, or at least it was assumed to be. The political sphere was regarded as vulnerable to this exploitation, and as complicit in it, but not as an active agent. But in the last two decades, we have seen a new type of state capture emerge in which politicians are driving the process. In Hungary, Turkey and Brazil, for example, leaders have got into power through elections but then radically changed the rules of the game in ways that have entrenched their power and made it more difficult to challenge them, let alone hold them to account.

This politics-led state capture is a more serious variant. It...

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