Anti-corruption drives that turn cronyist can worsen the scourge

The relative elasticities of corruption among groups in favour and out of it could end up sending aggregate pelf even higher

- KAUSHIK BASU

Imagine the following scenario. A political outsider wins a critical election by promising to root out corruption. Even if that is a sincere intention, upon assuming office, the winner will quickly realize that it is best to focus on critics of the government and opposition political parties, since going after one’s own allies for corruption will erode one’s political base. Hence, an unintended consequence of the original plan is to plant seeds of cronyism. Even while targeting corruption, protecting friends and doling out favours to allies strengthens the leader’s hold on power, and the country slides towards authoritarianism. In the end, corruption, too, could end up rising rather than falling.

This story has been repeated numerous times in countries across the developed and developing world. Naturally, such a transition can have huge negative effects on political leaders’ own countries. But in today’s globalized world, the consequences of cronyism often extend beyond national borders.

Russia is a case in point. In his 20-plus years in power, as either president or prime minister, President Vladimir Putin has built a plutocratic regime characterized by a particularly pernicious form of crony capitalism. While his friends and close allies have captured the bulk of Russia’s wealth creation over the past two decades, ordinary Russians are increasingly finding themselves in a stagnant, sclerotic economy.