From Corruption to State Capture: A New Analytical Framework with Empirical Applications from Hungary

• Published in: Political research quarterly Vol. 69; no. 2; pp. 320 - 334
• Main Authors: Fazekas, Mihály, Tóth, István János
• Format: Journal Article
• Language: English
• Published: Los Angeles, CA SAGE Publications 01-06-2016; SAGE PUBLICATIONS, INC
• Subjects: Business structures; Central government; Centralization; Community structure; Competition; Contract negotiations; Contracts; Corruption; Data corruption; Data quality; Decision making; Elections; Funding; Government contracts; Government corruption; Hungary; Network analysis; Political corruption; Politics; Power; Procurement; Radicalism; Risk; Scholars; Social networks; Studies; Hungary; state capture; public procurement; Hungary; corruption; methodology
• ISSN: 1065-9129; 1938-274X
• DOI: 10.1177/1065912916639137

State capture and corruption are widespread phenomena across the globe, but their empirical study still lacks sufficient analytical tools. This paper develops a new conceptual and analytical framework for gauging state capture based on microlevel contractual networks in public procurement. To this end, it establishes a novel measure of corruption risk in government contracting focusing on the behavior of individual organizations. Then, it identifies clusters of highcorruption-risk organizations in the full contractual network of procuring authorities and their suppliers using formal social network analysis. Densely connected clusters of high-corruption-risk organizations are denoted as the domain of state capture. The paper demonstrates the power of the new analytical framework by exploring how the radical centralization of the governing elite following the 2010 elections in Hungary affected centralization of state capture. Findings indicate the feasibility and usefulness of such microlevel approach to corruption and state capture. Better understanding the network structure of corruption and state capture opens new avenues for research and policy on anticorruption, budget deficit, market competition, and quality of democracy. Supporting further empirical studies of corruption, the data are made available at digiwhist.eu/resources/data.