State Capture: Comparative Analysis of Corruption Networks

• In Event: A Contract in our Mutual Interest: Interest Group Collaboration Networks

Abstract

State capture is the process by which a significant part of a state function serves the interests of a narrow group of individuals, at the expense of the public good. Although state capture and high-level corruption are pressing issues across different regions of the world, knowledge about these phenomena is fragmented and limited. Public procurement is one of the most vulnerable areas to institutionalized corruption in a state. Annually, national governments spend between 5% and 40% of their budgets on public procurement. Questionable distribution of public money affects confidence in state institutions and political actors, the quality of products and services acquired and used by citizens, as well as the broader quality of governance and institutional development processes. The institutionalization of corruption practices through favoritism changes gradually the nature of interactions between public institutions and business organizations. They become predictable informal networks, the situations of high corruption risk can hardly be avoided, and the impact of these corruption networks on the social, political and economic system in general, can be devastating and long-lasting.
A recent assessment by the OECD (2015) of the impact of global anti-corruption programs over the period 2007-2013 has not found even a single case of a country that has successfully transitioned from generalized corruption to corruption as exception following the interventions and the implementation of anti-corruption policies (Mungiu-Pippidi 2017). This finding raises a few important questions: what are the reasons for this discrepancy between anti-corruption efforts and investments, and the lack of sustainable results? And how can we contribute to systematically improve them?
The study of high-level corruption is not new. But the study of corruption by pursuing the distribution of public money as quantifiable networks based on large and objective data is a new approach. This project aims to analyze big data on public procurement networks of public institutions and private organizations across 31 European countries, between 2009 and 2014, with the aim to reveal the relational building blocks of corruption networks in public procurement, and to compare levels of state capture, varieties of state capture (business versus political capture) and geographical patterns of state capture across these countries. By mapping and analyzing more than 1 million public procurement contracts linking an estimated of more than 300 billion euros into corruption networks, I will be able to make explicit and test the mechanisms at work behind the formation, evolution and dynamics of corruption networks across procurement markets, countries and over time.
The proposed project contributes to the development of sustainable, data-driven and evidence-based anti-corruption policies at European level, by developing systematic, replicable, comparable, accurate and innovative research for a better understanding of state capture and the institutionalization of corruption in public procurement.

Author

• Silvia Ioana Fierăscu, West University of Timisoara