Understanding the Rules of the Game and State Capture Using Social Network Analysis

ANTICORRP researcher István János Tóth presented his newest paper with Mihály Fazekas: “In respectable society: on how elite configuration influences patterns of state capture in Hungary” at the Midwest Political Science Association Annual Conference in Chicago on 3 March 2014.

This presentation was part of a panel discussion on “Novel approaches to the study of corruption and governance” including other papers which made use of big data to develop novel indicators of corruption and to analyse governance and its determinants.

Tóth and Fazekas presented their recent work in developing an innovative set of indicators, the Corruption Risk Index (CRI), to measure institutionalised grand corruption in public spending. This index measures the prevalence of ‘red flags’ and irregularities in public procurement tenders which are associated with a lack of competition and high winner market share. In other words, the index assesses the risk that a certain contract might be awarded particularistically, ie, not fairly and transparently.

The authors constructed a network of issuers and winners of public procurement tenders with awarded contracts as ties among actors. By identifying high corruption risk clusters within the whole network, the authors point out that there are large parts of the Hungarian public administration where particularism is the norm and public organisations have lost most of their autonomy to act in pursuance of public goals (i.e. state capture). In addition, the network position of captor organisations appear to reflect governing elite configuration, with the highly centralised conservative government of Viktor Orbán also centralising state capture and rent extraction.

The paper is the latest in a series by Tóth and Fazekas on institutionalised grand corruption in procurement. They recently won the U4 Proxy challenge for their new indicators.

Slides from the presentation are available here: http://www.crcb.eu/wp-content/uploads/2014/04/Fazekas_Toth_MPSA_140403_1111.pdf

Tags: ,