Anti-corruption and governance indices
The broad field of data transparency and analytics, measurement indices and metrics, the use of technology, and data visualization and infographics is a core strategy of CSOs that seek to aggregate, understand, and disseminate information about corporate capture so as to expose the phenomenon and involve government and business actors to end it.
- TI’s Corruption Perceptions Index:Insofar as capture is concerned, one of Transnational Transparency’s most relevant innovations has been to include State capture “by narrow vested interests” as part of the Corruption Perceptions Index (CPI) Technical Methodology as one of 13 data sources that experts and business executives provide regarding corruption in the public sector. The importance of this lies in the public communication power of the CPI, which is regarded worldwide as among the best reliable indicators of country-level corruption.
- Natural Resource Governance Institute’s Resource Governance Index (RGI):The RGI — a one-of-a-kind tool — measures the quality of governance in the oil, gas, and mining sectors. The version from 2021, assessed resource governance in 18 countries, half of which include both their mining and oil and gas sectors. While the RGI does not specifically include measures of State capture, it does include proxy data such as Enabling Environment issues (Voice and accountability; Government effectiveness; Regulatory quality; Rule of law; Control of corruption; Political stability and absence of violence; and Open data), as well as information about taxation and State-owned enterprises. The potential of this tool, of course, would be if it included measures of State capture and expanded its purview to include corporate capture.
Global Index of State Capture
The Global Index of State Capture, developed by Daniel Kaufmann, aims to measure State capture in 172 countries over three decades, evaluating the rule of law, political processes, and the enabling environment for capture. The Index scores allow us to make comparisons with the results against other tools that measure corruption, for example, clearly distinguishing the phenomenon of State capture.
In May 2023, a small group of academics and anti-corruption data experts, led by Elizabeth David-Barrett, gathered to plan a new index that would more effectively measure State capture.A year later, Daniel Kaufmann published State Capture Matters: Considerations and Empirics Toward a Worldwide Measure, a research paper detailing the results of that effort and its empirical application.
In the paper, Kaufmann — the “godfather” of State capture — recounts how, in the context of Mikhail Gorbachev’s reforms in the Soviet Union, the IMF and World Bank were called in to provide technical assistance. Kaufmann himself headed the World Bank mission in Kyiv. Upon arriving, he encountered not only a system rife with bribery but also “oligarchic corruption,” where a powerful private elite wielded undue influence over politicians and governments in countries transitioning to democracy, such as Ukraine, Russia, and other post-Soviet states.
Soon afterwards, thanks to the growing body of academic research on corruption, in 2000 Kaufmann, alongside Joel Hellman and Geraint Jones, proposed a particular variant at the intersection of grand corruption and the undue power of influential non-State actors, which they named “State capture.” At that time, State capture was understood as “a phenomenon where powerful non-state actors were able to shape the societal (public) rules of the game for their private benefit, in contrast to conventional and largely transactional notions of administrative or bureaucratic corruption, where actors manipulate the implementation of the given rules of the game for their benefit.”
Over time, the concept evolved to also include State actors (politicians, public officials, and political parties, not just powerful private companies) as captors. The scope of capture also expanded to include institutions, policies, regulations, and laws, with a stronger focus on the processes that leads to capture. Furthermore,the concept’s geographic focus broadenedbeyond a limited group of transitioning economies,while incorporating public policy as a key area of study.
Kaufmannreviews previous efforts to measure State capture,including the 1999Business Environment and Enterprise Performance Survey(BEEPS), which was designed to measure company-level experiences with State capture in 21 post-socialist countries in Central and Eastern Europe. Another data source was theEnterprise Opinion Survey from the World Economic Forum’s Global Competitiveness Report(GCR), which included a broader sample of over 7,000 companies across more than 100 countries. This allowed the development of basic proxies for State capture and undue influence. However, the survey had limited questions on capture and these were eventually dropped from subsequent editions. Kaufmann also references other efforts to gauge State capture, such as measuring political connections of companies and the State Capture Assessment Diagnostics (SCAD) developed by the Centre for the Study of Democracy in Bulgaria.
TheGlobal Index of State Capturethat Kaufmann proposesaims to measure the phenomenon across a wide range of countries, time periods, and dimensions.The Index covers 172 countries over nearly 30 years (1996-2022) and assesses various aspects of State capture. Measuring State capture is critical becauseits social costs far outweigh those of conventional corruption.It impactsnot only the economy but also the rule of law, democracy, security, human rights, and accountability,benefiting a powerful few while deepening inequality and social divisions. To demonstratethe difference between capture and corruption,the study compares the results of both phenomena.
The Global Index of State Capturehasthree key components:
1. Rule of law
2. Polity and policy
3. Enabling environment for capture
The first two components draw from a set of variables within the Varieties of Democracy (V-Dem) database, while the third uses proxies from the Worldwide Governance Indicators (WGI) for national governance and the World Inequality Database (WID) for inequality.
When comparing the results of the State Capture Index with the WGI’s Control of Corruption indicator, Kaufmann observes that State capture scores tend to be higher in high-income countries, which typically score low on corruption.However, this finding needs to be examined on a case-by-case basis. In contrast,in Latin America, the Caribbean, and Sub-Saharan Africa, State capture scores are lower than corruption scores.The Index also allows for tracking changes in State capture scores over time. For example, countries like the U.S. and Chile have shown an upward trend in State capture, while countries like Uruguay and Norway have seen a decline over the same period. However, these changes may involve advances and setbacks.
While Kaufmann’s work enhances the measurement of State capture, he acknowledges that the Index could be refined with more precise data sources, without neglecting the need for country-specific diagnostics. Additionally, more research is needed on the relationship between State capture and a country’s development and income levels.
Though the Index is a significant step forward,an ideal tool would specifically measure corporate capture of the State in real-time.This would shift the focus to the actor (the economic elite, in this case) carrying out the capture. In other words,we need more precise indicators on how corporations manage to influence and distort public interest.A combination of the Global Index of State Capture and SCAD from SceMaps could be a promising starting point. Moreover, the recent advancements in data science could be leveraged to gather and process vast amounts of information, allowing for continuous monitoring of corporate capture at both national and global levels.