Consider a scenario where a political newcomer secures a pivotal election victory by pledging to eradicate corruption. However, even with the best intentions, upon assuming office, practicality might dictate a shift in focus.
The new leader may opt to concentrate efforts on silencing critics from opposing parties and governmental adversaries, believing that targeting their own allies could weaken their support base. Inadvertently, this strategy lays the groundwork for cronyism. In the pursuit of fighting corruption, safeguarding friends and granting favors to allies bolsters the leader’s grip on power, potentially steering the nation toward authoritarianism. Ironically, corruption itself may escalate rather than diminish.
This recurring narrative has played out in diverse nations, spanning both developed and developing realms. Naturally, such transitions bear significant negative consequences within the leaders’ own countries. Yet, in today’s interconnected global landscape, the repercussions of cronyism often extend well beyond national borders.
The case of Russia exemplifies this phenomenon. President Vladimir Putin, during his extensive two-decade tenure as president or prime minister, has cultivated a plutocratic regime marked by a particularly insidious form of crony capitalism. As Putin’s inner circle and close associates amassed the lion’s share of Russia’s economic prosperity, ordinary citizens grapple with an economy marred by stagnation and sclerosis.
Russia’s incursion into Ukraine further accentuated the global ramifications of Putin’s corruption, sending shockwaves across Europe, Africa, Asia, and the Americas. Although it’s tempting to lay blame solely on facilitating political leaders, such attribution isn’t ultimately constructive. To combat cronyism effectively, a deeper comprehension of the mechanisms and incentives that propel leaders toward this path of corruption is required.
Indonesia’s history offers a pertinent example of the dynamics driving political leaders towards embracing cronyism. Following a US-backed anti-communist coup in the mid-1960s, dictator Suharto emerged to power, promising an end to his predecessor Sukarno’s corruption. Yet, Suharto’s pro-Western, business-friendly “New Order” regime echoed the oligarchic ruthlessness of the previous administration. Similarly, Putin aimed to dismantle the oligarchy that flourished under Boris Yeltsin’s rule, but in practice, he often replaced them with his own associates.
To delve into the underlying process, imagine these leaders earnestly dedicated to combating entrenched corruption, a stance many leaders have embraced upon assuming power. Although disentangling the symbiotic relationship between business and political elites is undoubtedly complex, a recent study by economist Dmitriy Knyazev from the University of Vienna outlines potential avenues. For instance, policymakers could levy fines on state officials accepting bribes or incentivize citizens to report such infractions.
In nations grappling with endemic corruption, potential suspects for investigation and prosecution are aplenty. However, counterintuitively, heightened scrutiny might exacerbate the issue. The reasoning is straightforward: leaders who campaigned against corruption recognize that targeting everyone risks alienating their own supporters.
Therefore, unless leaders possess extraordinary moral conviction, a more effective anti-corruption strategy becomes targeting political rivals and their adherents while shielding allies and confidants. Corruption might decrease among political adversaries subjected to heightened vigilance, but it could thrive among allies who perceive immunity. Depending on the relative corruption elasticity between the two groups, aggregate corruption and cronyism could surge.
To avert this outcome, the crux lies in establishing independent institutions empowered to curb unlawful conduct. Singapore’s Corrupt Practices Investigation Bureau, established in 1952, exemplifies the benefits of granting government agencies the autonomy to investigate and pursue cases in the public interest. While Singapore’s political landscape has its own imperfections, it has achieved notable success in combating corruption.
In today’s interlinked world, addressing corruption solely within national boundaries falls short. Given that cronyism and corruption in any country yield far-reaching economic reverberations, a multilateral approach is necessary. Undoubtedly, various obstacles impede effective global anti-corruption endeavors. Nevertheless, forging agreements on rigorous international regulations would be a promising initial step.
* Inputs from Project Syndicate.
