Competing for Power and Money. State Capture and Limited Political Competition in Transition Countries

The dichotomy between autocracy and democracy has long been used in the academic literature as a discriminating feature for characterizing political regimes in Eastern Europe. However, this distinction neglects the fact that a considerable number of countries must be characterized as ‘hybrid regimes’, thus neither fulfill – albeit contested – criteria for a full-fledged democracy nor can be characterized as autocratic. I argue that patterns of political competition are one crucial feature by which different types of hybrid regimes can be distinguished which is, however, conceptually underdeveloped. In the proposed paper, I will address this analytical gap and offer a new perspective by introducing the concept of ‘state capture’ to systematically explore hybrid regimes with limited political competition. Specifically, the proposed paper looks at countries in transition from autocratic to democratic rule. Initially, liberal reforms opened the intermediary space between citizens and the state for new groups, thus intensified the contest for power. However, nascent democratic institutions are often too weak to effectively outweigh old structural incentives and replace informal networks. Regular elections and a high-turnover of personnel set incentives for elites to realize short-term gains, leading to a ‘scramble for spoils’. Increased political competition and new opportunities in party and campaign financing also open a ‘market’ for vote-buying. Thus, rather than firmly anchoring political competition within democratic institutions, transition processes offer incentives for informal decision-making and rent-seeking elites in order to control and limit competition. State institutions and intermediary actors, such as political parties or parliaments, get ‘infiltrated’ by entrenched clientele networks – a phenomenon which can be described as ‘state capture’. Originally, the concept was developed by Hellman et al. (2000) for transition economies in Eastern Europe. In the past years, the term was increasingly applied by academicians, think tanks, international organizations and civil society actors alike to describe a destructive form of corruption. In the proposed paper, I will develop the concept further and introduce the ‘state capture trap’. I argue that informal clientele networks dominated the widening public space and shaped the laws and rules according to their own interests, securing individual private gains (money) and access to public positions (power). Thus, via official and formal intermediary institutions, entrenched informal networks exclusively dominated the input and the output in the policy cycle of the state. In the political public space, state capture creates obstacles for free and fair competition – by giving monopoly powers to a few prominent actors, by excluding systematically non-captor social stakeholders, generating oligarchic and highly concentrated political markets and finally by discouraging small and new (civil) organizations from ‘market entry’, which are a key source for fair and open political competition. At worse, legitimate forms of exerting influence are completely ousted by illegitimate patronage networking with monopoly powers. A captured state is unable to reform and adapt, thus caught in a stagnating hybrid status quo and showing strong resilience to any change. The Western Balkan region serves as an illustrative case to plausibilize the argument.