Captured states in the Western Balkans and Turkey

A law passed in Albania has given A.N.K Sh.P.K., a company close to the ruling Socialist Party, a hugely overpriced contract for building a 17.2 km road. The construction costs are expected to be almost €300 million, over twice the amount the government had envisaged. In Turkey, a law reclassified a protected wetland so that Istanbul’s new airport could be built on it. Six people in Macedonia are accused of laundering around €4.5 million to finance the VMRO-DPMNE political party. Among them is former prime minister Nikola Gruevski, who is also implicated in several other corruption scandals.

These are examples of state capture, when powerful individuals and groups use corruption to shape a nation’s policies, laws and economy to benefit their own private interests. It allows the corrupt to maintain their power, get rich from the state and avoid punishment.

Ordinary citizens pay for this through loss of livelihood, poor public services, limited opportunities and by losing trust in democracy as they see government institutions serve private interests.

This is happening at all levels of government – from local authorities to the executive – in Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, Serbia and Turkey. Here, chains of loyalty and mutual benefits are leading officials to abuse their office and tighten the grip of a few networks on these countries.

A new Transparency International report on the Western Balkans and Turkey reveals the causes of this state capture, as well as two enabling factors that allow it to happen: undue influence on the judiciary and on law-making.

An independent judiciary is vital for stopping corruption, and in turn, state capture. If high-level corruption goes unpunished, undue influence over governments, institutions and sectors can go unchecked. Like in the Macedonian money laundering example, the €5 million that the politicians laundered helped fund their election campaigns and maintain power.

Unfortunately, in the seven countries featured in the report, too many of those who hold power are influencing the independence and impartiality of the justice process to secure impunity for high-level corruption. Criminal justice systems often fail to effectively investigate, prosecute and sanction high-level corruption cases. Most of these cases get stuck at the investigation and prosecution stages and do not lead to convictions or systemic change. Those who are convicted often receive disproportionately light sentences.

Undue influence on law-making is also very damaging. It can lead to opportunities and impunity for corruption and even legalise state capture. Tailor-made laws help serve private interests. This often happens at the cost of others, including the public. Although a tailor-made law seems to have a general purpose, in fact it applies to a particular matter – like a business opportunity or weakening a public institution – and prevents courts from stopping and punishing specific instances of corruption.

Governments in the region have passed many tailor-made laws. They include giving privileged contracts, monopolising industries and employing poorly qualified public officials who enable corruption. These laws are creating an environment for corruption to flourish as they ensure that trying to stop certain wrongdoing would infringe the law. If the authorities arrested those building the Turkish airport on the wetlands, they would be acting unlawfully as the destruction of that nature reserve has been legalised.

Since these countries started the process to join the EU, efforts have been made to create regulations and transparent, accountable institutions to address state capture. However, this is constantly being undermined by politicians abusing their office with governing practices that prioritise private gain.

While judiciaries and law-making processes need to be reformed, laws revoked, and political finance and lobbying regulated, more fundamental changes are necessary. The political practices and motivations that drive state capture must be addressed. New incentives and perspectives that build integrity-based politics should be introduced. This involves shifting the focus of political parties from personal exchanges to long-term political programmes with a shared vision to serve the public good beyond a particular network.

Based on these findings, some key recommendations for all stakeholders – from EU and national decision-makers to local officials and citizens – must be addressed:

• Develop political measures that take into account how power and special interests determine – and can undermine – the implementation of reforms.
• Identify and empower public officials and political party members to act as change agents and drive integrity-based politics within established systems.
• Use the power of social norms to promote society-wide opposition to impunity for grand corruption and the creation of tailor-made laws by supporting civil society and awareness campaigns.
• Incentivise the adoption of mechanisms for implementing anti-corruption and anti-undue influence legislation, including through conditions for accessing multilateral finance.
• Further promote and empower a civic culture supportive of integrity-based politics and democracy by creating spaces for dialogue between different stakeholders within countries.
• Harness this dialogue to involve citizens more in political decision-making, and create alternative incentives in politics focused on benefitting society as a whole.

Read Transparency International’s report, Examining State Capture: Undue Influence on Law-Making and the Judiciary in the Western Balkans and Turkey.