The integrity of corrupt states: Graft as an informal state institution

Politics and Society

Volumn 36, Issue 1, 2008, Pages 35-59

  Darden, Keith ^a  

^a YALE UNIVERSITY   (United States)

Author keywords

Corruption; Informal institutions; State; Ukraine

Indexed keywords

EID: 38949168775     PISSN: 00323292     EISSN: 15527514     Source Type: Journal    
DOI: 10.1177/0032329207312183     Document Type: Article

References (86)

1. For example, Gerald M. Easter, Reconstructing the State: Personal Networks and Elite Identities in Soviet Russia (New York: Cambridge University Press, 2000);
2. Lily Lee Tsai. "Substituting for the State? The Logic of Private Efficiency in Chinese Local Governance" (paper prepared for the annual meetings of the American Political Science Association, San Francisco, CA, August 30-September 2. 2001):
3. Steven Levitsky and Lucan A. Way, "The Rise of Competitive Authoritarianism," Journal of Democracy 13, no. 2 (April 2002): 51-65:
4. Lucan A. Way. "The Dilemmas of Reform in Weak States: The Case of Post-Soviet Fiscal Decentralization," Politics and Society 30 (December 2002): 579-98:
5. Anna Grzymala-Busse and Pauline Jones Luong. "Reconceptualizing the State: Lessons from Post-Communism." Politics and Society 30, no. 4 (December 2002): 529-54;
6. and Natasha Hamilton-Hart, "The Singapore State Revisited," The Pacific Review 13. no. 2 (2000): 195-216.
7. See. for example. Otto Hintze, The Historical Essays of Otto Hintze, ed. Felix Gilbert (New York: Oxford University Press. 1975);
8. Max Weber, Economy and Society. (Berkeley: University of California Press, 1978);
9. Charles Tilly, Coercion, Capital, and European States, AD 990-1990 (Cambridge. MA: Blackwell. 1990):
10. Theda Skocpol. "Bringing the State Back In: Strategies of Analysis in Current Research," in Bringing the State Back In, ed. Theda Skocpol. Dietrich Rueschemeyer, and Peter Evans (New York: Cambridge University Press. 1985). 3-43;
11. Kenneth N. Waltz. Theory of International Politics (New York: McGraw-Hill, 1979):
12. and Stephen D. Krasner, Defending the National Interest: Raw Materials Investments and U.S. Foreign Policy (Princeton, NJ: Princeton University Press, 1978).
13. Weber defines the state as "a compulsory organization with a territorial basis" that "upholds the claim to the monopoly of the legitimate use of physical force in the enforcement of its order." by which he meant that " the use of force is regarded as legitimate only so far as it is either permitted by the state or prescribed by it." But to a great extent this "legitimacy" is self-assigned; the state allots to itself the inherent right to secure compliance regardless of whether its subjects consider it legitimate. Weber, Economy and Society, 54-56.
14. It is also important to note that the definition of the state used here is broad, but not all-inclusive. See Jeffrey Herbst, States and Power in Africa: Comparative Lessons in Authority and Control (Princeton, NJ: Princeton University Press. 2000):
15. and Hendrik Spruyt, The Sovereign State and Its Competitors (Princeton. NJ: Princeton University Press, 1994). Organizations that do not impose consistent rule across their claimed territorial domain are not states: the national bureaucracies of Georgia and Tajikistan for much of the 1990s or many of the African cases with large hinterlands described by Jeffrey Herbst in States and Power in Africa are not states because the organization's rule extends only marginally beyond the capital city. For similar reasons, the historical tribute-taking empires and most contemporary warlord or rebel factions cannot be considered states. See Spruyt. The Sovereign State and Its Competitors. Where the authority of the national bureaucracy is not monopolistic and the organization truly competes with robust rivals outside the state apparatus such as tribal chiefs (e.g., the King of Buganda in Uganda), clans, societies, or associations (e.g., Tammany Hall), the state is weak or nonexistent. Where the hierarchical nature of the bureaucracy has been undermined, where the command relationship between superiors and subordinates is subverted so that the national bureaucracy becomes nothing more than an assemblage of relatively independent principals (such as the Hanseatic League or the loose coalitions behind the facade of many African states), then it makes more sense to speak of a "syndicate" than a state. This definition of the state also eliminates all organizations that are voluntary in nature, even large, taxing hierarchical organizations such as the Medieval Catholic church. This definition also rules out any organization that does not lay claim to an exclusive and sovereign right to impose rule over a territory, even if such organizations-such as mafias-may exercise a great deal of de facto control.
16. Weber, Economy and Society, 54-56.
17. Gary S. Becker and George Stigler, "Law Enforcement, Malfeasance, and the Compensation of Enforcers," Journal of Legal Studies 3 (1974): 1-19.
18. Kenneth Jowitt, New World Disorder: The Leninist Extinction (Berkeley: University of California Press. 1992).
19. Skocpol, "Bringing the State Back In," 16.
20. Pranab Bardhan. "Corruption and Development: A Review of Issues." Journal of Economic Literature 35 (1997): 1320-46.
21. For example, Becker and Stigler. "Law Enforcement, Malfeasance, and the Compensation of Enforcers":
22. Edward Banfield. "Corruption as a Feature of Government Organization," Journal of Law and Economics 17 (1975): 587-605;
23. Susan Rose-Ackerman, "The Economics of Corruption." Journal of Public Economics 4 (1975): 187-203:
24. Susan Rose-Ackerman, Corruption: A Study of Political Economy (New York: Academic Press, 1978);
25. and Steven Solnick, Stealing the State: Control and Collapse in Soviet Institutions (Cambridge. MA: Harvard University Press: 1998).
26. Jowitt, New World Disorder: The Leninist Extinction, 150.
27. Becker and Stigler, "Law Enforcement, Malfeasance, and the Compensation of Enforcers," 1-19.
28. Weber, Economy and Society, 956.
29. See, for example. Kiren Aziz Chaudhry. The Price of Wealth: Economies and Institutions in the Middle East (Ithaca. NY: Cornell University Press, 1997):
30. José Antonio Cheibub. "Political Regimes and the Extractive Capacity of Governments: Taxation in Democracies and Dictatorships," World Politics 50 (1998): 349-76:
31. and Kurt Weyland. "From Leviathan to Gulliver? The Decline of the Developmental State in Brazil." Governance: An International Journal of Policy and Administration 11 (1998): 51-75.
32. There is a measurement problem, however, insofar as the World Bank's World Development Indicators (which I use here) measure only the state's official revenue, but their measures for gross domestic product include an estimate of the "shadow economy" or black market. Insofar as graft serves as a centralized informal state revenue stream (e.g.. the informal "loot chains" flowing up the state apparatus in the USSR described by Gregory Grossman. Konstantin Simis, and others), then some of the state's extractive capacity will be "off the books." For this reason, we would expect that this measure would underestimate the actual extractive capacity of the state in some of the more graftridden countries. If official tax revenues are low. it is not possible using World Bank data to determine whether both the informal and formal state capacities are weak or whether the informal capacities are so robust that they have eclipsed the formal revenue stream in importance. See World Bank, World Development Indicators 2004 (Washington, DC: World Bank, 2004).
33. Moreover, an examination of spending in addition to taxation allows us to distinguish between purely predatory states that simply extract resources from society and provide nothing in return. I am grateful to an anonymous reviewer for bringing this point to my attention.
34. Transparency International Corruption Perceptions Index (CPI) 2003, http://www.transparency.org/policy_research/surveys_indices/cpi/2003 (accessed on December 10, 2007).
35. The only exceptions to this rule are the United Arab Emirates, Kuwait. Bahrain, and Oman. Each score just above 5 on the Transparency International Index but have very low levels of tax collection. But in each of these cases, the state gains its resources through direct control of the oil industry rather than tax collection. Hence, the low levels of tax collection do not necessarily reflect an ineffective state apparatus.
36. I am particularly grateful to the editorial board for supplying this clear framing of the relevant issues.
37. Bardhan. "Corruption and Development: A Review of Issues," 1323.
38. John Waterbury. "Endemic and Planned Corruption in a Monarchical Regime," World Politics 25 (1973): 533-55.
39. Keith Darden, "Blackmail as a Tool of State Domination: Ukraine Under Kuchma," East European Constitutional Review 10, no. 2/3 (2000): 67.
40. James C. Scott. "Corruption. Machine Politics, and Political Change," American Political Science Review 63 ( 1969): 1142-58.
41. Bardhan, "Corruption and Development: A Review of Issues," 1329.
42. Ronald Wraith and Edgar Simpkins. Corruption in Developing Countries (London: Allen and Unwin. 1963).
43. Bardhan, "Corruption and Development: A Review of Issues," 1339-1340.
44. Harold Crouch, Government and Society in Malaysia (Ithaca, NY: Cornell University Pres, 1996).
45. Syed Farid Alatas. Democracy and Authoritarianism in Indonesia and Malaysia: The Rise of the Post-Colonial State (New York: St. Martin's, 1997).
46. John Waterbury. "Endemic and Planned Corruption in a Monarchical Regime," World Politics 25 (1993): 533-55.
47. Mwangi S. Kimenyi and Njuguna S. Ndung'u, "Sporadic Ethnic Violence: Why Has Kenya Not Experienced a Full Blown Civil War?" in Understanding Civil War: Evidence and Analysis, Volume I: Africa, ed. Paul Collier and Nicholas Sambanis (Washington. DC: World Bank, 2003), 123-56.
48. J. G. Lambsdorff. "The Transparency International Corruption Perceptions Index," 7th ed. (2003), http://www.uni-goettingen.de/~uwvw (accessed on March 7, 2005).
49. Because of its high corruption and low levels of enforcement, even specialists on the country consistently referred to Ukraine as a weak state throughout the 1990s. See Alexander J. Motyl. "Structural Constraints and Starting Points: The Logic of Systemic Change in Ukraine and Russia." Comparative Politics 29. no. 4 (1997): 433-47.
50. Indeed, post-Soviet states have often been perceived as weak based on the fact that bribery and embezzlement are pervasive. Stephen Holmes has put forward the most persuasive and influential articulation of this position. See Stephen Holmes. "Cultural Legacies or State Decay: Probing the Post-Communist Dilemma," In Postcommunism: Four Views, ed. Michael Mandelbaum (New York: Council on Foreign Relations Press, 1996).
51. Alfred J. Rieber, "Civil Wars in the Soviet Union." Kritika: Explorations in Russian and Eurasian History 4, no 1 (2003): 129-62.
52. Office on Drugs and CrimeDivision for Policy Analysis and Public Affairs, Seventh United Nations Survey of Crime Trends and Operations of Criminal Justice Systems, covering the period 1998-2000, March 31. 2004. p. 468. http://www.unodc.org/pdf/crime/seventh_survey/7pc.pdf (accessed on December 10. 2007).
53. The audio files are available at http://www.wcfia.harvard.edu/melnychenko (accessed on March 7, 2005).
54. For an excellent criticism of the notion of the Ukrainian state's weakness, see J. Allina-Pisano, "Sub Rosa Resistance and the Politics of Economic Reform: Land Redistribution in Post-Soviet Ukraine," World Politics 56 (July 2004): 554-81.
55. "Yulyu nado unichtozhit" [Yulia should be destroyed]. Author's translation. Ukrainska Pravda, April 14, 2001, http://www.pravda.corn.ua/710414- 2- (accessed on March 7, 2005).
56. Note, for example, the conversation recorded between Kuchma and Derkach regarding Surkis's foreign accounts ("Vse svyazi evo kievskie vivertaem" [We'll turn inside out all his Kiev connections]. Author's translation. Supposedly recorded on October 3, 2000; source no longer available online; hard-copy transcripts in author's possession).
57. "Suddi vzagali podonki" [Judges are bastards]. Author's translation. Ukrainska Pravda, February 1, 2001, http://www.pravda.com.ua/?1021- 1-8 (accessed on March 7, 2005).
58. "Ob nyogo. yak ob tryaku, nogi vitrut" ... [We'll clean our feet with him ...]. Author's translation. Supposedly recorded on March 29, 2000. Ukrainska Pravda, April 13, 2001. http://www.pravda.com.ua/710413-4-8 (accessed on March 7, 2005).
59. Timoshenko was dismissed and then arrested on corruption charges in spring of 1999.
60. "Fragmenti rozmov Leonida Kuchmi iz zapisiv, zroblenikh ofitserom Mikoloiu Melnichenkom" [Fragments of Leonid Kuchma's conversations from the recordings made by the officer Mikola Melnichenko]. Author's translation. Radio Svoboda. (2001). Epizod 20.http://www.radiosvoboda.org/programs/kuchma/2001/04/ 20010420061624.asp (accessed on March 7. 2005).
61. This was obviously an important element of political control in Soviet times as well. There is evidence that the KGB had a similar practice of collecting compromising materials without acting on them but used them as a means for intimidating the population into compliance. Mark Kramer, the Director of the Cold War Studies Project at Harvard University, informs me that the KGB archives in Lithuania were full of reports on illegal activities that were never acted on by the authorities (discussion with author, 2004, Cambridge, Massachusetts).
62. "Fragmenti rozmov Leonida Kuchmi iz zapisiv, zroblenikh ofitserom Mikoloiu Melnichenkom" [Fragments of Leonid Kuchma's conversations from the recordings made by the officer Mikola Melnichenko].
63. These resources were then used for, among other things, financing Kuchma's reelection in 1999.
64. Kuchma uses this expression in talking about Timoshenko. In several of the recordings, Azarov and Derkach report to Kuchma on individuals who have taken more than their share or who have taken resources without permission. See the discussion of Feldman and Shuba in "Yulyu nado unichtozhit" [Yulia should be destroyed], March 24, 2000. conversation between Kuchma and Azarov.
65. "Yulyu nado unichtozhit" [Yulia should be destroyed].
66. "Ob nyogo, yak ob tryaku, nogi vitrut..." [We'll clean our feet with him ...].
67. For a history and description of the "thieves-in-law" (vory-v-zakone), see Frederico Varese. The Russian Mafia: Private Protection in a New Market Economy (New York: Oxford University Press. 2001).
68. "Kravchenko: Smirnov znav, zhto yomu tut govorili.... [Kravchenko: Smirnov knew what you told him....]. Author's translation. Ukrainska Pravda, April 24, 2001, http://www.pravda.com.ua/710424-8-8 (accessed on March 7, 2005).
69. "New Tape Translation of Kuchma Allegedly Ordering Falsification of Presidential Election Returns," KPNews, February 14, 2001, http://kpnews.com/main.php?arid=7458 (accessed on March 7, 2005).
70. "New Tape Translation of Kuchma Allegedly Ordering Falsification of Presidential Election Returns," KPNews, 2001, http://kpnews.com/main.php? arid=7458 Ibid.
71. The recordings reveal that Kuchma vigilantly monitored even the local press in every region of the country for opposition. At several points, there is discussion of Kravchenko using a special unit "with no morals" to "muffle" these opposition channels. A television station that Kuchma demands to be shut down was in fact temporarily shut down during the campaign. Organization for Security and Co-operation in Europe (OSCE) Office for Democratic Institutions and Human Rights, "Ukraine Presidential Elections 31 October and 14 November 1999, Final Report" (Warsaw. Poland. 2000).
72. OSCE Office for Democratic Institutions and Human Rights, "Ukraine Presidential Elections 31 October and 14 November 1999. Final Report."
73. Ukraine Presidential Elections 31 October and 14 November 1999. Final Report. Ibid., 18.
74. Ukraine Presidential Elections 31 October and 14 November 1999. Final Report. Ibid., 17.
75. Ukraine Presidential Elections 31 October and 14 November 1999. Final Report Ibid., 18.
76. "Zver'yo Prosto!" [Real Animals!]. Author's translation. Ukrainska Pravda, June 7, 2001, http://www.pravda.com.ua/71067-1-8 (accessed on March 7, 2005).
77. The embezzlement charge stemmed from unpaid loans allocated when Chigir was the chairman of the board of a state-owned bank in 1994. prior to being named as prime minister. Chigir affirmed that the whole "loan repayment" campaign was started by Lukashenko with the single purpose to eliminate him as a political opponent. Belorusskaja Gazeta, March 15. 1999. Note that the presidential elections in this case were unofficial and organized by the opposition.
78. Zhakiyanov argued that he angered Nazarbaev, his former patron, by taking up opposition politics in the previous year (source no longer available online; hard-copy transcripts in author's possession).
79. Amnesty International classifies Kulov as a "political prisoner" and states that the charges were clearly politically motivated. See the Amnesty International Report 2002, Amnesty International Publications 2002, http://web.amnesty.org/web/ar2002.nsf (accessed in April 2003).
80. Interview with author, February 19, 2002, New Haven. Connecticut.
81. At the same time, this form of rule is not "personalistic." In contrast to patrimonialism or other forms of rule where personal ties of loyalty or obligation between specific individuals substitute for the impersonal hierarchical authority of state office, the powers, privileges, and constraints of officeholders are precisely a function of their formal position and exist regardless of their personal identity. The loss of one's formal position leads to the loss of one's informal rewards or powers as well.
82. Steven Levitsky and Lucan A. Way, "The Rise of Competitive Authoritarianism," Journal of Democracy 13, no. 2 (April 2002): 51-65.
83. Government of Pakistan. White Paper on the Performance of the Bhutto Regime, Vol. III: Misuse of the Instruments of State Power (Islamabad. Pakistan, 1979).
84. White Paper on the Performance of the Bhutto Regime, Vol. III: Misuse of the Instruments of State Power, Ibid., 129. Emphasis added.
85. From 300 to 2,300 employees, as reported by Isabel Hinton in "The Government Is Missing," The New Yorker (March 5, 2001).
86. Hinton. "The Government Is Missing."