The corrupt politics of state capture
Solly Rakgomo | Friday February 16, 2018 16:00
In fact, as I was penning this article, news were streaming in that the National Executive Committee of the ruling African National Congress (ANC) have given him a 48-hour ultimatum to have handed over his resignation. It was further reported that the ANC parliamentarians have called a caucus meeting to table a motion of no confidence against Jacob Zuma.
Zuma’s presidency has always been mired in controversy for a long time. There have been many allegations of him being involved in acts of corrupt dealings with some influential financial elites especially the Guptas whom many South Africans have accused of having literally captured the South African state. It is interesting to note that every time the name Zuma crops up in a screaming headline; the concept “state capture” is also mentioned. In this article I want to briefly examine the concept of state capture in relation to corruption. Mind you, the year 2018 has been declared a year to eliminate corruption in Africa.
In the common understanding, corruption is often referred to either as bribery practice or major embezzlement/plundering of public resources/monies. The former type of bribery is usually called administrative or petty corruption and the latter is grand corruption. This also includes bribes paid to higher levels within the public tender. State capture is the third form of corruption which is less known but still very pervasive, often found, but not exclusively in transition countries such as South Africa. State capture occurs when the ruling elites (such as Zuma) or powerful businessmen (in this case the Guptas) manipulate policy formation and influence the emerging rules of the game. This includes laws and economic regulations to their own advantage. The captured economy ( in this case South Africa) becomes trapped in a vicious circle in which the policy and institutional reforms necessary to improve governance are undermined by collusion between powerful firms and state officials who extract substantial private gains from the absence of clear rule of law.
According to Anne- Lougin- Moulin state capture can be further refined by distinguishing amongst the types of institutions subject to capture such as legislative, executive, judiciary, regulatory agencies, public works ministries and the types of actors actively seeking to capture ( such as large private firms, political leader, high ranking officials, interest groups etc.
For instance, capture firms belonging to these powerful financial elites such as the Guptas more than often receive extra advantages not only in the form of sales increases, but also in the provision of public goods such as property rights, by purchasing individualised protection of their property rights from the state ( led by Jacob Zuma of course). The sad thing about this state of affairs is that this usually comes at a significant social costs if corrupt politicians like Zuma and his cabal can minimise their political risks by selling privately such public goods to a few individual firms in exchange of economic revenues. This makes them to have little or no incentive to provide the long suffering ordinary people at large with open access to these goods. This is corruption in a naked form.
One might ask? Why is state capture so prevalent in transition countries such as South Africa (transition from decades of apartheid to all-inclusive multi-party democracy)? One of the reasons is that most of those transition countries have undertaken partial reforms, which has in most cases produced market distortions and have hence generated a pattern of concentrated gains and dispersed losses in the short terms. Such distortions, as Lugon –Moulin puts it, include for instance, state owned enterprises sold at low prices to politicians or new laws designed in a way of favoring specific economic actors in a given sector at the expense of free and fair competition for all. All in all concentration of both economic and political power is also likelihood to lead to serious state capture, which usually goes hand in hand with a very weak civil society.
Another question worth asking is, in the post-Zuma presidency what must be done to attempt to eliminate the corrupt symbiotic relationship between financial elites and powerful politicians? There is a huge need of transparent governance reforms to better share power in the society, both horizontally and vertically and to put in place a very clear conflict of interest rules.
Lugon Moulin calls for state institutional safeguards to prevent them from being “owned” by specific individuals enjoying high discretionary powers. On the other hand a strongly vocal civil society, provided civil liberties are ensured, would point at governance deficiencies, call for a better accountability and responsiveness from the state of government.