State Capture

José Zalaquett

José Zalaquett

Head of the Project at MOOC Chile
Lawyer, Universidad de Chile. Doctor Honoris Causa, by the Universities of Notre Dame and City University of New York.
José Zalaquett

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The expression State capture was coined by the World Bank experts Daniel Kauffmann y Joel Hellman some 15 years ago. These authors alluded to the relationship between corporations and the State. They distinguished three modalities : a) administrative corruption, that is the payment by corporations to published servants so that they do not apply the existing laws and public policies properly; b) State capture, which involves corporate payments and bribes in order to influence the content of the laws and public policies; c) influence, meaning the weight carried by certain corporations in the conduction of public affairs by legitimate means.

It is worth noting that the State capture by corporations, religious institutions or political parties rarely acts solely by legitimate means. It may well be that some of the means they often resort to are not strictly speaking outside the law. Yet, as a rule they are at least morally reprehensible insofar the capturing agency wields its power (not only economic power) to ensure that the laws or public policies that are enacted favor its interests or at least do not harm them.

One of the most frequent forms of State capture is through the financing of political activity, especially through contributions to political campaigns. Some big corporations give across the political spectrum; others focus on specific parties or candidates. Be as it may, certainly the candidates receiving the contributions, if elected, have little incentive ‘to bite the hand that fed them’ and may feed them again tomorrow.

There is also an ant-size form of State capture by the party in power. It consists of various modalities of clientelism – distributing public jobs, or public benefits of one sort or another – on the basis of political loyalty rather than equal opportunity and merit. Even though each individual case may not amount to much, and extended practice of clientelism may reach the proportions of an ‘anthill State capture´’.

Certainly all forms of State capture involve corruption because the principle of democratic equality of all citizens and economic agents is disrespected; instead a discriminatory criterion is applied based on the economic or other type of power of some.

In Chile in the first months of 2015 there has been an intense publicity about a major scandal that qualifies as State capture. Is this situation, compatible with the fact that Chile enjoys, together with Uruguay, the reputation s of being the least corrupt country in Latin America? Yes it is because these facts provoked an indignant public reaction rather than mere indifference. So, it may be said that the immune system remains healthy.

Nevertheless, it is important not to lower the guard. The fact that the Chilean society still strongly rebukes corruption is largely do you to the fact that over many years a public conscience has been formed about the importance of public integrity, equal opportunity and transparency. Such achievement ought to be preserved and enhanced.

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