Corruption and State Capture under two Regimes in Guyana

Full text

Corruption and State Capture under two Regimes in
Guyana
Duane C. Edwards
May 1, 2017
Abstract
This paper compares and contrasts the nature of corruption under two regimes in Guyana.
It argues that corruption in ethnically plural societies such as Guyana is influenced by two
main factors. In the first instance the states in these societies were not natural evolution from
the societies but were established with the explicit aim of institutionalizing the dominance
of one ethnic faction over all others. Secondly classes and class positions in these societies
are invariably fluid and mutable. The state therefore is used by ethnic groups as a means
through with both economic and political power can be attained and exercised with the
latent function of enhancing the socio-economic position of the ethnic groups in the socio-
economic stratification system. Consequently, the nature of this battle for power creates an
environment of uncertainty which serves as a pressure upon the ethnic group in power to
accumulate as much political or economic power by both legitimate and illegitimate means
before its hold on political power comes to an end. Based on this analysis, the paper also
proposes some measures which are likely to minimise the temptation to engage in corruption
practices.
Keywords: Corruption, State Capture, Ethnicity, Social Stratification, Social Cohesion

1 Introduction
Guyana has been consistently gaining low scores and high ranking on the Corruption Percep-
tion Index (CPI) of Transparency International. Prior to the 2015 election, while there were
always challenges to these ratings in some sections of the society, the general view seems to
have accorded with TIs ratings. For about a decade preceding the 2015 election, Guyana, in
the perception of many, had fallen victim to an interesting manifestation of state capture and
corruption. Scholars and opinion shapers struggled in their attempt to apply a label to this
phenomenon in a way which could capture its main dimensions and characteristics. Thomas
et al. (2011) describes the state during this period as a criminalized state to highlight the link
between the state and the criminal underworld. Fredrick Kissoon, by employing the label
of elected dictatorship, makes a deliberate attempt to capture and highlight the irony of a
government having all the electoral trappings of a democratic state but could still be con-
sidered dictatorial because of the subverting of the constitution in other aspects of political
life (Kissoon 2010). Khemraj (2013) uses the label elected oligarchy to capture the the way
in which a small group of ethno-political leaders monopolizes the resources of the state and
aspects of the private economy.
Though the descriptions employed by Thomas and Kissoon capture essential features of
the government in the period in question, it is the analysis of Khemraj which seems more in-
structive. his analysis moved beyond the conceptual and highlights the historical, legislative
and ethnic dynamics which provided the enabling environment exploited by the ethnopolit-
ical elite. The current paper adopts a similar approach but with respect to state capture
(operationalized as political corruption) and financial corruption by Cabinet members.
This paper agrees with Tanzi (1998, 30) that corruption (political, economic of otherwise)
is a complex phenomenon which is influenced by different factors in different countries. The
solution to corruption, then can be no single, simple solution. Accepting this postulate it is
logical to assume that the causes or factors which influence corruption in largely homogenous
societies will be different in ethnically plural societies. It is argued here that corruption in
ethnically plural societies such as Guyana is influenced by two main factors. In the first
instance the states in these societies were not natural evolution from the societies but were
established with the explicit aim of institutionalizing the dominance of one ethnic faction
over all others. Secondly classes and class positions in these societies are invariably fluid and
mutable. The state therefore is used by ethnic groups as a means through with both economic
and political power can be attained and exercised with the latent function of enhancing the
socio-economic position of the ethnic groups in the socio-economic stratification system.
Consequently, the nature of this battle for power creates an environment of uncertainty
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which serves as a pressure upon the ethnic group in power to accumulate as much political or
economic power by both legitimate and illegitimate means before its hold on political power
comes to an end. Based on this analysis, the paper also proposes some measures which are
likely to minimise the temptation to engage in corruption practices.
The paper is organized in the following form. The first part makes a case for the fore-
grounding of corruption on the national agenda and the national consciousness. This is
followed in the second part which presents a brief literature review that covers some concep-
tual, theoretical and empirical issues covered by the literature on corruption. The third part
highlights and analyses the manifestation of corruption during the post-independent Govern-
ment led by Forbes Burnham. This is followed by an analysis of the evolution and changing
form of corruption under the post-1992 government, specifically during the period by Bharrat
Jagdeo. This is then followed by the fifth part which provides a general discussion of some
of the issues brought out in the historical/sociological analysis of corruption during the two
periods in question. And, the final part provides some policy recommendations informed by
the preceding analysis.
2 Why is it important to know about and address cor-
ruption?
2.1 Corruption threatens social cohesion by enhancing ethnic sus-
picion and intra and inter-ethnic stratification
Before the General Election in 2015, the perception of corruption was very high. This per-
ception was no doubt fueled and informed by almost daily reports in the mainstream media
about corruption especially among the Executive arm of Government. This high level of
corruption in the society resulted in two simultaneous, though opposing tendencies in the
society. On one hand, it resulted in heightened criticism of the Government. This criticism
came from various sections of the society, namely the independent media, the political op-
position, and the supporters of the political opposition. Of the three sections referred to
above, the political opposition and its supporters criticised not only the acts of corruption
but the tendency for the beneficiaries of these corrupt acts to be persons of a particular eth-
nic group. The Executive was quick to place an ethnopolitical spin on these criticisms and
thereby used it as a means of galvanising its own support base. The high levels of corruption,
therefore, indirectly heightened and reinforced ethnic tension in the society and became a
threat to social cohesion. On the other hand, however, perception of corruption resulted in
the emergence of a small multi-ethnic group inspired and held together only by its need for
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a more conscionable approach to governance in Guyana. This group is a relatively small
group, but it was large enough to effect electoral changes by combining its voting power with
that of the opposition. While this integrating tendency is very important and should be
further analysed, this paper will focus on the disintegrating tendency of corruption and the
perception of corruption in Guyana.
2.2 Corruption leads to state capture and the subverting of na-
tional institutions
Menke (2011) argues that one of the fundamental differences in pre-colonial and (ex)colonial
societies is that while the nation precedes the state in the former, the relationship between
the nation and the state is inverted in the latter. Along with this inversion of the nation/state
relationship, there is also an inversion of the class/state relationship. In Western European
societies of the 19th century the development of economic classes preceded the development
of the state, the state therefore was the creature of a particular class with a particular
class interest. In the ex-colonies the reverse is true - the state preceded the formation and
crystalisation of local classes. The state then became the instrument through which classes
are formed and crystalised. There is the tendency then for ethnic groups to capture the state
with the sole intent of converting its social capital to financial and economic capital - of
transforming its horizontal relationship with other ethnic groups into a vertical relationship.
2.3 Corruption could forestall national development
Corruption and the perception of it can serve as a threat to overall national development
by inducing a spirit of selfishness and greed rather than a spirit of service and collective
responsibility resulting in the diverting of attention from transforming the economy for the
benefit of the nation to extracting as much as possible from the economy for the benefit of
specific groups. Governance and development becomes then, secondary to rent-seeking and
corruption.
2.4 Corruption contributes to capital flight
Gains from corruption are better saved and hidden outside the country in order to avoid
detection and confiscation. This will no doubt have a negative financial impact on the
economy in question. There is a growing body of literature which assesses and highlights the
relationship between corruption and capital flight. Swaleheen (2008) for example, by means
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of an empirical cross-country analysis, presents evidence that corruption adversely affects the
gross national savings rate.
2.5 Corruption could Induce a spirit of hopelessness influenced by
a breakdown of the expectations of a meritocratic system
Modern societies are held up by the value of equality of opportunity. Everyone expects that
s/he should be able to work through legitimate means and be able to move up the socio-
economic ladder based on merit and hard work. Whenever persons sense that their social
mobility is being hindered because of their race, ethnicity and other such ascribed factors,
they tend to lose confidence in the fundamental principles which undergird modern societies.
This inspires a feeling of hopelessness by those who are not near to the centers or network
of socio-economic power. When the societies are racially/ethnically divided this dynamic no
doubt is manifested racially/ethnically (McDougall 2008).
2.6 Fighting corruption could be costly
The proliferation of corrupt practices necessitates the creation and function of oversight
institutions which divert both government and masses focus and resources away from more
sustainable development programs. In countries such as Guyana which are beset by numerous
developmental challenges, corruption adds to the menu of social challenges which beg for
immediate attention. This lessens and leads to the exhaustion of both the physical and
intellectual resources which could have been channelled in more productive areas.
3 Popular Explanations of Corruption: Reviewing the
Literature
3.1 Conceptual issues
Corruption is generally defined as any act by persons holding public position which contra-
venes standing rules or ethics for personal benefits (Transparency International 2016). This
definition, as most definitions, tries to capture the concept on a very general level taking into
its conceptualisations a countless numbers of acts and activities by persons holding public
offices. This generalized definition, notwithstanding, corruption is one of those concepts, like
ethnicity, which have multiple dimensions and types and are therefore used differently by
different persons to refer to different things. Any cursory glance at the literature of cor-
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ruption readily reveals this reality. This signals the need for the development of a typology
of corruption which would add conceptual and theoretical clarity. Towards this end Khan
(2006,2004) attempts the development of a typology which correlates intervention types in a
four cell table. Bussell (2015) proposes a typology which takes into consideration the kinds of
resources which are extracted and the persons who have direct and indirect control over those
resources. While these typologies are useful, a typology which takes into account the flow of
benefits is also needed especially with regard to societies such as Guyana. With some types
of corruption, the benefits flow from officials tasked with power and responsibility to persons
close to them in some regards or persons who share their political or social characteristics.
In other cases the benefits flow the other way. And, yet in other cases, there is a two way
flow of benefits. Although all these acts may be in contravention of formal rules, much can
be learnt from the direction of flow of benefits, thereby differentiating the types of corruption
on a practical level.
The lack of a comprehensive typology does not however hinder the development of theo-
retical explanations of corruptions, although in many instances these theoretical explanations
are too general to be of any assistance on a practical, policy intervention level. Some of these
theoretical explanations are reviewed below.
3.2 Social structures and corruption
One set of literature attributes corruption to the kinds of social relations which characterise
a given society. According to this viewpoint, many countries have thrown off the shackles of
colonialism approximately 50 years ago. Before the advent of colonialism, these countries were
steep in traditions which conflict in very fundamental ways with many of the requirements of a
modern bureaucratic state. Colonialism transformed these spaces to culturally invaded spaces
in which many traditional norms survived along with imposed rules-governing bureaucratic
behaviour. Felson (2011) for example argues that corruption is an effect of the tension
between the primary human imperatives of close-networks guided by kinship values and the
bureaucratic logic of systems organised on the basis of organic solidarity or rational-legal
values. Using a Weberian framework, the author argues that traditional and patrimonial
social systems are organised in such a way that there is hardly any conflict between primary
human imperatives and systems imperative. Societies which are organised along the modern,
rational-legal, bureaucratic form conflicts in many ways with these primordial instincts. In
line with this theory Constantine (2016a), who focused primarily on perception of corruption,
argues that the perception of corruption is fundamentally determined by the degree of formal
or informal politico-socio-economic interactions and these are in turn determined by the
economic structure of the given society. In those countries which are dominated by informal
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interactions, there is a high degree of the perception of corruption as the modus operandi of
the actors in those countries differs from those in countries where the formal bureaucratic
rules dominate. Moreover, there is a tendency in developed countries to change rules to
accord with dominant interest thereby lessening the perception of corruption (Constantine
2016a;Johnston 2013). There is a fundamental contradiction in this thesis as it is not clear
whether the perception of corruption arises because of tensions between the two forms of
organising society (organic as opposed to mechanical solidarity) or because the rules in one
society accords with (or deviate from) group demands. In one case there is the argument
that in societies characterised by informal rules, those rules tend to accord with the natural
demands of the groups in the society, and on the other hand there is the thesis that societies
in which formal rules dominate, those rules are changed to accord with dominant group
interest.
3.3 Social and economic functions and corruption
In attempting to explain the persistence and ubiquity of corruption, some theorists have
argued that corruption is functional to modern societies. The functional benefits of cor-
ruption range across a broad spectrum of social life. Abueva (1970,1966), for example,
argues that corruption serves certain institutional and societal needs. The grease the wheel
viewpoint posits that in countries with tardy and inefficient bureaucracies and governance
institutions, corruption could play a positive role by providing an avenue in which certain
processes could be expedited resulting in higher bureaucratic efficiency (Huntington 1968;
Leys 1965). The opposite view is posited by M´eon and Sekkat (2005) who, by means of
empirical evidence, posit that corruption is even more harmful in countries where governance
is poor. Another set of literature examines the relationship between corruption and economic
growth. Literature which highlights the negative impact of corruption on economic growth
and development abounds (Abed and Davoodi 2000;Ak¸cay 2006). Arguing against this gen-
eral treatment, Drury et al. (2006) found that the negative economic effects of corruption
are more likely in non-democratic societies than in democratic societies, because while cor-
ruption can be found in both types of societies, the democratic mechanism prevents it from
becoming too entrenched and disruptive of economic progress in democratic societies. On
the other hand, Swaleheen (2008) found that while corruption has a negative direct effect on
per capita growth, it is Important to take into any analysis, the levels of corruption and qual-
ity of democracy. Low levels of corruption could have negative effect on growth in genuine
democracies, while high levels of corruption was found to have growth enhancing effect in
countries with low levels of democracy. This view is supported by Houston (2007) who also
found that corruption can positively impact economic growth by serving as a substitute for
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a tardy bureaucracy and unsound legal frameworks. Making a distinction between growth
and sustainable development, Aidt (2009) argues that while the average effect of corruption
on GDP growth might be negligible, there is certainly a significant effect of corruption on
sustainable development.
There is also a set of literature which attempts to explore the relationship between eth-
nicity, corruption and the perception of corruption. This set of literature is particularly
relevant in the Guyana case, Guyana being a country characterised by ethnic pluralism and
continual low-intensity ethnic conflicts. As in the other cases, there is hardly consensus on
the relationship between ethnicity and corruption or the nature of the relationship. This
notwithstanding, this set of literature is very instructive in the Guyana case as it highlights
some issues which are not covered in the other literature but which are very relevant to
Guyana.
Cerqueti et al. (2012) finds a nonlinear relationship between ethnic fractionalisation and
corruption. When a country is either ethnically diverse or ethnically homogenous, there is
a higher tendency for corruption than when ethnic fractionalisation is intermediate. In the
latter set of countries, they argue, opposing ethnic groups serve as checks and balances against
the corruption by the leaders. Svensson (2000) suggests that foreign aid is associated with
corruption but that this is most likely in societies with competing social groups especially
countries with ethnolinguistic fractionalization.
As a supplement to the literature on the association of ethnic fractionalization and corrup-
tion, another set of literature seeks to explore the function of corruption in ethnically plural
societies. While some researchers argue that corruption could actually lead to social cohesion
in ethnically divided societies by overcoming elite cleavages and providing opposing groups
with socio-economic value, another set of literature argues the opposite. Abueva (1966), for
example, argues that corruption can aid in the national development and stability by serving
certain institutional and administrative needs. Huntington posits a similar thesis by claiming
that corruption can help integrate alienated groups thus staving off violent conflicts. The
functionality of corruption can be demonstrated in two ways using the Guyana case. In the
first case, it is the high instances of corruption which effected the forging of a cross-ethnic
coalition among the leadership elite which eventually led to democratic turn-over after 23
years of the rule of one party. After this change, however, persons are becoming aware that
the tendency to get involved in corrupt practices is not restricted to one ethnic group or
political party as was the view formerly, but that the behaviour cuts across ethnic groups
and political parties This could be used as a basis for a genuine cross-ethnic unity among
the masses (instead of among the elites) out of which a genuine cross-ethnic leadership could
emerge. It is in this sense that some writers posit the view that corruption could be socially
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functional.
4 The evolution of corruption in Guyana
This paper joins the body of literature which highlights the significant role ethnic dynamics
play in both fostering corrupt practices and heightening the perception of corruption in
ethnically plural societies. It will be argued here that in Guyana, economic and political
corruption stem from the same source. Whichever one takes predominance is a function of
a combination of factors, namely the prevailing value system, the ethnopolitical dynamics
and the occupational dynamics in the country. During the 60s socialism which places a lot
of value on political power was the dominant ideology. Therefore political power became
the most sought after currency. In the post-socialist era, economic and material resources
became the most sought-after currency. And, this partly influenced the changing nature
of corruption in Guyana. More importantly, however, both the nature and the intensity of
corruption or the perception of corruption are fueled by the historically constructed ethnic
and distributional dynamics in the country.
Menke (2011) argues that one fundamental difference between modern postcolonial na-
tions and other nations is the fact that in the former the state precedes the formation of
the nation, while in the latter the nation is an outcome of the state. In the latter case the
state is an outcome of the ideological and economic dominance of one group which is very
successful in making its ideology the dominant ideology and in naturalising its own privileges.
The process of nation-building in these societies is based on a monocultural ethnic ideology
using the power of the state. It is not only the relationship between state and nation which
assumed this form, but also the relationship between state and class. In Western European
societies of the 19th century the development of economic classes preceded the development
of the state; the state therefore became the creature of a particular class with a particular
class interest. Both of these relationships were reversed in the case of ex-colonies. With
respect to the formation and purpose of the states in ex-colonies, the dominant view is that
these states were established with the primary intent of managing the extraction of resources
from these countries. The tasks of nation-creation and nation building were secondary if
not non-existent. This resulted in the existence of states without fully developed nations or
classes, thus inverting the usual relationship between states, nations and classes. These were,
therefore, nations in transition in which the formation and consolidation of powerful groups
were paramount to governance and nation-building (Huntington 1968).
This resulted in two very important socio-political and socio-economic tendencies in ex-
colonies. In the first instance it created the conditions in which various ethnic groups attempt
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to imprint their ethnic image on the fledgeling nation, and in the second instance it created
the conditions in which each ethnic group strives to make itself the economically dominant
group. At the center of both of these tendencies is the need to capture the relatively developed
state after the exit of the previously dominant colonial powers (Despres 1975).
4.1 Burnham, state capture and political corruption
The classical definition of state capture calls attention to the way bureaucratic rule and formal
procedures are manipulated by private firms in their attempt to influence state policies and
laws in their favour (Hellman and Kaufmann 2001;Pradhan 2000). What differentiates state
capture from other forms of corruption is that while in the latter case the intent is on the
selective enforcement of already existing laws, in the former case it is on influencing the very
formation of laws to protect the interest of influential private firms and companies. While
the emphasis is usually placed on private firms and companies, Pradhan (2000) and Uzelac
et al. (2003) highlight instances where other social groups such as ethnic and military groups
are agents of state capture. In spite of the difference between earlier and later definitions,
there seems to be a consensus in limiting the application of the concept to instances in which
outside groups attempt to manipulate the state. This paper deviates from this consensus. It
argues that in societies characterised by the principle of the separation of powers, groups or
individuals within the formal state structure can and do capture the state, change rules and
draft policies to protect their own interest or further their own agenda. It is in reference to
this latter phenomenon that the concept is being applied in this work.
At the beginning of the independence period many governments in the newly emerging
independent states in the Caribbean and Africa were animated by the need to construct a
new nation free from the political, economic and ideological shackles of colonialism (Danns
1982). It was no different with Forbes Burnham in Guyana. After Independence, and as
soon as he was free from the restraints of the coalition partner with whose assistance he
was able to gain political power, he set out on the demanding task of nation creation. His
nation creation thrust had some important components, namely, nationalisation, nationalism,
cooperativism and the self-sufficiency through import substitution (Rose 2002). His approach
to nation creation was distinct from the two other political parties at the time. Though
there were mixed reactions to his development policies (Premdas 1978;Thomas 1983), what
is important to note here, however, is that in pursuit of his vision of a Guyanese nation, he
was forced to involve in state capture for two specific reasons. First of all, the transition
from a colonial government to an independent one does not immediately assures a loyal
and compliant bureaucracy which would bend willingly to the policy direction of the new
leaders. Danns (1982) outlines some of the dynamics created by this transition and some of
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the responses by leaders of the independent nation. Secondly, because the ethnic dynamics
in the country did not afford him the privilege of gaining power as a standalone party let
alone of making any major legislative changes, Burnham had very little options available to
him. Beset by such scarcity of options, he chose the one which entailed consecutively rigging
elections to both keep himself in power and to give himself the two-third majority needed to
make any legislative changes.
His attempt at state capture started with the 1968 rigging of elections (Secretariat 2001);
it was the 1973 elections, however, which gave him the parliamentary power necessary to
cement his position. While there is limited actual evidence of rigging the 1973 election,
the outcome of the election, particularly with respect to votes received by the ruling party
deviated massively from all the elections before 1973 and after 1992 when free and fair
election was re-introduced in Guyana. In this election, the ruling party copped two thirds of
the votes cast which gave it legislative power to pursue Burnham s task of nation creation.
This two third majority seat in the National Assembly was engineered so that he could make
the constitutional changes that could give him the power to subject the other organs of state
to his will and to implement his programmes. As part of the legislative changes Burnham
removed the office of the Prime Minister and established himself as the Executive President.
He went on to give himself immunity from any criminal and civil suit while in office. He
also give himself power over the public service and the ability to appoint and remove persons
from key positions.
“He hand-picked his judges and indicated to them what decisions to give; he controlled
the media, trade unions, schools, airport.he dismissed public officers without cause. Public
officers who wanted to be certain of keeping their jobs, or were looking for promotionoften
spent their weekends working on a government coconut estate.” (Gibson 2003).
Another bold move in the direction of state capture is the Declaration of Sophia which
promulgated the principle of party paramountcy thereby reducing the government to the
party serving as one of its executive arms (Burnham 1974). (see Danns 1982, Rose 2002 and
Thomas 1983 for a list of strategies employed by Burnham in his quest to wield absolute
control over the state and country).
Burnham s attempt at state capture was dictated by the exigency of the prevailing situ-
ation. First of all in a society divided both horizontally and vertically along ethnic lines, it
was highly improbable that he would have been able to attract a large cross-sections of the
votes of any other ethnic group than his own. The numerical strength of his ethnic support
was, however, not sufficient to land him the presidency. To gain power therefore, it was
necessary to form a coalition with another group. Governing by means of a coalition calls
for many compromises and hardly results in any radical shift away from the the status quo.
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In some cases it can lead to the enhancement of the status quo, as it has been found that
during the coalition government of 1964-1968, against the socialist inclinations of the larger
party in the coalition, the Portuguese, represented by the smaller party in the coalition, were
able to augment their landholdings (Jameson 1978;Constantine 2016b). The constraints and
discomfort created during this period, no doubt necessitated the rigging of the election if
Burnham and his party intended to maintain power. Furthermore, to carry out some of the
other aspects of nation creation Burnham was forced to capture the state in numerous ways.
Apart from state capture there were also evidence of financial corruption during the
Burnham years. This fact notwithstanding, one get the sense that the financial aspect of
corruption was secondary to, and was an unavoidable outcome of, political corruption. The
main thrust of the Burnham Government was nation creation. The ethnic dynamics in the
country however, made rigging the elections as the most promising option to maintain power
and the concentration of power as a necessary step in order to protect the Government and
leaders from any challenges. Survival in such a context necessitates the political loyalty of
the bureaucratic leaders and the political leaders. This loyalty, however, comes at a price,
that price is a certain amount of latitude for these leaders to be able to enrich themselves
at the expense of the state and people. During the late 1970s and early 1980s period the
level of corruption reached such levels that the government was forced to appear as if it
was adopting an uncompromising policy vis-a-vis financial corruption (Danns 1978). These
lukewarm attempts notwithstanding, finacial corruption was one of the cost attached to
regime survival.
4.2 Jagdeo, state capture and corruption
Another historical period where corruption or the perception of it was very high was during
the presidency of Bharrat Jagdeo, between 2000 - 2013. The nature of corruption during
this period, however, took on a generally different form. It will be argued here that the form
corruption took on during this period is partly owed to the ideological shift in the interna-
tional political sphere, but most importantly to the change in the ethnopolitical dynamics
domestically. There were three important dynamics at play which set the stage for the emer-
gence of a semi-predatory approach to government which was intent on transferring resources
primarily to a small ethnic elite and secondarily to a larger ethnic masses.
In the first instance, by the time the PPP gained power in 1992, the intensity of the
socialist and postcolonial ideologies had subsided as a result of the global triumph of neolib-
eralism. This global ideological shift was accompanied by shifts in the practical approach
to politics and nation building in many ex-colonies. The most characteristic was the shift
from planned economies prescribed by socialism to open market economies prescribed by
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neo-liberalism through the specific institutional mechanism of structural adjustment. The
practical outcome of this shift at the political level saw political leaders role being limited to
managing the societies and economies in steady state and implementing only those changes
which are necessary for the smooth and unhindered functioning of the market. The state
was therefore stripped of any responsibility for nation creation and nation building. Any
attempt at a coordinated and focused approach to nation building in this period would be
solely a function of the internal motivation of the ruling elites than any global third world
ideological pressure. The point being made here is that the post-1992 government was under
no pressure to pursue a well, planned, coordinated and focused development plan.
Secondly, with the re-introduction of free and fair elections in 1992, the basis was set
for the party with the ethnic plurality to form the new government. As long as this party
was able to win a small margin of support from other ethnic groups, it was highly likely
that it would remain in power for an extended period of time. There was therefore no need
to rig elections and engage in the level of political corruption associated with the previous
administration.
Thirdly, the fact that during the previous regime, the African Guyanese Elite had con-
solidated itself as the bureaucratic elite administering state capitalism (Thomas 1983) and
the African Guyanese masses were primarily the working class peopling the bureaucracy, the
new elite could not use the traditional bureaucracy as the principal means of redistributing
resources to its supporters and main ethnic constituency.
These three factors were instrumental in determining the form of and relationship between
state capture and corruption in the post 1992 period. The combination of these factors
resulted in a socio-political environment conducive to exploitation, corruption and capture.
The rigging of elections in the previous period engendered the consolidation of the ethnic
support of the PPP constituency behind the party; it also offered the PPP another platform
upon which it galvanised its support base. Now with the claim that they have been cheated
out of power by the imperialist who have backed Burnham and the claim of continuous rigging
of elections to keep them out of power, it was easy for the PPP to procure and secure the
perennial support of its ethnic constituency. This historical narrative gave the PPP twenty
three years of uncritical ethnic support. During this time the government under the PPP
morphed into an elected oligarchy (Khemraj 2013). This description borrows somewhat from
Zakarias concept of an illiberal democracy (Zakaria 1997). The key argument here is that
though the government was elected in a free and fair process, its behaviour resembled that of
an oligarchy which sought to control and dominate the economic space by transferring state
assets and wealth to close friends and family while creating economic hardships for those
outside that small ethnopolitical network. It functioned as as semi-predatory state which
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was more intent on giving rise to what Jagdeo himself called a Newly Emerging Private
Sector (NEPS), a very apt acronym since this sector benefited massively from the nepotistic
relationship between itself and the government.
In addition to contributing to the political degeneration of the party in power, the ethnop-
olitical loyalties by the ethnic masses to their respective elites also affected the formation and
development of a genuine civil society a necessary social arm in the fight against corruption.
The society therefore lacks common social will - tastes, values, ethics which cut across ethnic
lines. Ethnic demands have taken the place of social demands. Norton (2007) highlights
the important functions of a civil society in any modern society but attributes its absence
in Guyana to the political dominance of parties with deep socialist leanings which have his-
torically dominated both the social, political and economic spheres of the society. While
this assessment bears some validity, the absence of a civil society could be best explained
using the plural society models of Furnivall (1956), Smith (1984,1974), Despres (1975), and
Beckford (1999). All these authors pinpoint the lack of a common social will as an inherent
feature of ethnically plural societies. Civil society in the Guyana case has been ethnicized
even before it was politicized during the period referred to by Norton (Edwards 2016).
In Western societies, there is a bourgeois class and a bourgeois public sphere strong
enough to discourage certain unlawful acts by Government officials. However, in developing
societies both of these institutions are subservient to the state. The process of class formation
in these societies have been left uncompleted.
The lack or ineffectiveness of social demand creates a situation in which criticisms usually
come from the side outside of executive power and those criticisms can and are usually
dismissed as ethnically and politically motivated. And, this is usually the case because the
small pool of critics usually change whenever executive power changes hands although the
form and approach to government remains the same. Political leaders are usually aware of
this fact, so they ignore public criticisms because invariably those criticisms emanate not
from their own ethnic support base but from the other political faction and their followers.
On the other hand the supporters of the party in power are usually silent in the face of some
of the most egregious acts by its ethnopolitical leaders. This creates a situation similar to
what the economists refers to as a moral hazard. Under Jagdeo, The Government became
the second most corrupt in the region according to the CPI Index provided by Transparency
International. Although the CPI measures perception, those perception were fueled by a
series of questionable and glaring acts by the Government.
Another contributing factor to the nature of corruption under Jagdeo has to do with the
nature and configuration of the occupational structure generally and the bureaucracy specif-
ically. When the PPP assumed control of the government in 1992, it inherited a bureaucracy
13

dominated on all levels by Afro-Guyanese who were the main supporters of the then main
opposition. He, therefore, could not use the bureaucracy to benefit his ethnic/political con-
stituency as any large scale reconfiguration of the public sector could have resulted in intense
civil conflict because it would have been threatening the main economic channel for Afro-
Guyanese. Notwithstanding, the bureaucracy could not have been left entirely in place, it
being the official channels through which government policies are executed. The strategy
employed by the PPP was to cleanse the top tier of the bureaucracy by removing those pro-
fessionals which assume the positions under Hoyte and replacing them with persons loyal to
the PPP s agenda (Khemraj 2013). These persons were invariably of one ethnic group. This
party became so bold and glaring in its ethnically biased approach to governance that at one
time there were absolutely no Afro-Guyanese serving in the diplomatic service (News 2011).
While the above strategies were necessary and sufficient for state capture, they were
not sufficient, though necessary, for class formation through transferral of state assets and
resources. Class formation involves the usurpation of large amount of economic values and
resources too large to be justifiably transferred directly to public officials without raising
alarm. This amount, however, can be transferred to private individuals who have legitimate
businesses or who establish businesses just for the purpose of benefitting from this transfer.
Unfortunately, apart from a few published studies of corruption and state capture under the
Jagdeo-led PPP/C (Bulkan 2014;Bulkan and Palmer 2008;?) corruption during this period
is a largely under examined phenomenon. This notwithstanding, the private news media
stands as a good source of information on financial corruption and class formation under
Jagdeo. In fact one of the dailies has a section labelled The Heist of Guyana which lists a
number of acts by the government which either borders on corruption or serves as blatant
examples of corruption (Kaieteur News undated). These include, among other acts, the
distribution of the Guyana airwaves to a few friends, family and party supporters; the sale
of a complex on 18.9 acres of land in a prime industrial area in Guyana for significantly less
than it took to renovate it immediately before; the granting of multi-million dollar contracts
to contractor with absolutely no history of contracting experience (the Amaila falls access
road stands as a glaring example) (Kaieteur News 2014). These acts and others stand as
examples of the transference of state resources with the intent of promoting the emergence
of his NEPS, a parallel, subservient business class.
5 Discussion
From the analysis presented above, this paper makes the claim that In the first instance
corruption (financial) was an unavoidable consequence of state capture while in the second
14

instance state capture was only necessary as a means of transferral of unimaginable amount of
wealth from the state to private, ethnic elite. It follows the evolution of corruption in Guyana
highlighting how the nature of corruption changes when the nature of the ethno-political
dynamics in the country changes. Knowledge of the nature and evolution of corruption
is important if we intend to address it in any meaningful manner. Uncritically applying
prescriptions which work elsewhere may or may not work in the Guyana (and countries like
her) situation. This level of uncertainty as to the effectiveness of applied solutions can have
negative impact on the populace; it can spread a high level of cynicism and disinterestedness
which in turn is detrimental to the development of democracy. Countries like, Guyana,
therefore are forced to be very clinical and methodological in their attempt to tackle their
social problems. Intervention strategies should not be uncritically imported from elsewhere,
but must emerge from a careful and thorough study of the nuances and peculiarities of
the local situation. This paper is an attempt in that direction specifically with regard to
corruption and the perception of corruption. The recommendations being discussed and
postulated here are outcomes of the analysis of specified types of corruption in the Guyanese
social context.
Another important point being made by this paper is that the nature of corruption is
largely determined by the prevailing ethnopolitical dynamics of the time. An in depth analysis
of the dynamics of the time could therefore provide some insights into the likely evolution and
outcome of corrupt practices by political leaders. From the historical analysis, the induction
could be made that while the current regime exists in the a socio-economic environment
similar to the immediate previous regime which give rise to high levels of financial corruption,
it is also beset by the same socio-structural constraint of the Burnham regime which give
rise to political corruption and state capture. Therefore, while there is an opportunity for a
different approach to politics, as will be argued, there is also the clear and present temptation
to engage in both types of corruption expounded on in this paper.
The current government is formed by a coalition made up of one large party with an
undeniable ethnic support base, a medium size party which is supported primarily by a small
multiethnic cross section of the population, and some smaller parties which have never been
able to win any seats in the National Assembly. The coalition won the 2015 election by a slim
margin of approximately 5000 votes which translated into a one seat majority in the National
Assembly against a party which held the reins of government for the preceding 23 years
primarily on account of the numerical advantage of its ethnic support base. This means that
the current government rest upon uncertain grounds similar to the PNC under Burnham in
1964. This uncertainty could be either good or bad for the development of Guyana depending
on the inclinations of the leaders, the level of public engagement by citizens and the effective
15

fulfillment of the news media and civil society generally of their watchdog role. On one
hand, the uncertainty could force the political leaders to pursue in a satisfactory manner the
fulfillment of their election promises in order to inspire confidence in those who voted for them
in the 2015 elections and to alleviate the fears of an additional few who had not supported
them in the said elections. This is with the explicit aim of widening the margin of victory
and lessening the electoral uncertainty. On the other hand, there is also the likelihood that
the situational dynamics would pressure the leaders to seek to accumulate as much financial
resources as possible in case of an unfortunate reversal of electoral fortune. Lastly, but more
importantly, the uncertainty could lead to attempts at rigging of elections if any breakdown
in relationships of the coalition partners necessitate the facing of the electorate as single
parties. The breaking down of relationship between the coalition partners, however, seems
unlikely compared to the 1964 coalition as there is no sharp ideological difference between
the major parties in the coalition. Moreover, the lack of any provision for post-election
coalitions in the constitution will definitely serve as a deterrent to the parties in the coalition
going it alone. All these possibilities could become significantly enhanced with the eventual
monetization of the recent oil finds. This, Im convinced, necessitates in depth studies into
the social, economic and political implications of the recent oil finds in Guyana.
6 What can be done? Policy Recommendations
Any simple correlational analysis of the complexity of economies and the perception of cor-
ruption would show that the perception of corruption is highest in countries with less-complex
economic structures. This can mean one of two things or a combination of both. It could
mean, as argued by Constantine (2016a) that developed countries (countries with more com-
plex economic structures) change their laws to accord with the interest of the powerful. Or,
it could mean that, according to Khan (2006,2004) in developed countries the opportunities
to make money outside the political or public sphere is far greater thus lessening the need to
engage in corruption and that in developed countries institutions work better because they
can be financed appropriately. Or, it could be a combination of both. Whichever, of these
explanations turns out to be most valid, the reality remains that there are some structural
issues which fuel corruption and the perception of it in poor countries, therefore, any attempt
to effectively deal with corruption should deal primarily with the structural transformation of
the economy. This is no doubt a long term approach which leaves policy-makers and citizens
helpless in the short and medium term in the face of rampant, sometimes, blatant corruption
by their elected officials. While, I agree with the long term approach, I am of the view that
if a very comprehensive typology of corruption is developed and the causes and consequences
16

of each types are studied scientifically, then countries will be able to tackle effectively some
types of corruption in some ways in the short and medium term thus lessening the overall
instances of corruption, and by extension, the perception of corruption.
This articles deals mainly with corruption among the cabinet ministers and it explains
the nature of that corruption and the causes and consequences. The recommendations put
forward here, therefore, do not extend to other forms of corruption nor are they intended
as a final solution. Moreover, they are specific to Guyana and do not extend beyond the
borders of Guyana to countries which might be grappling with the issue of corruption. Three
main contributing factors have been highlighted, namely ethnic pluralism, weak institutions,
and the lack of enabling legislations. The recommendations proposed here will therefore be
directed towards resolving to the extent possible some of the issues in these three areas.
As a long term solution, the political leaders need to focus on an appropriate approach
to development which involves increasing the economic pie through structural transforma-
tion and forward and backward linkages in the economy which would create more legitimate
avenues of wealth accumulation and social mobility. It would also create new areas of eco-
nomic activities thus differentiating the labour force. Development will increasingly lessen
the necessity for the direct role of the state in the economy (Brownsberger 1983). This is
different from the virtuous circle theory which posits a circular effect from economic growth
to better institutions to further economic growth. This policy recommendation assumes the
validity of the link between economic differentiation and low perception of corruption posited
by Constantine (2016a).
Legislative change to encourage post-election coalition which would encourage the forma-
tion of smaller parties with interest which are not necessarily ethnic. This could lead to the
shift from ethnicity based issues to class based politics as occurred in Nigeria (Brownsberger
1983). Although it is a widespread view that third parties in the Caribbean both perform
poorly and are short lived, the Alliance for Change (AFC), one of the parties which make
up the current coalition, performed impressively well at all elections since its inception, and
in the 2013 election it copped as much as 7 seats in the National Assembly, the highest ever
won by any third party in Guyana. This serves as an indication that voters are starting to
despise the lack of voting options and the post-election contempt and disregard displayed
by the two larger parties. A third party will not be able to pull much weight and exercise
any influence if it is constrained by the constitution. Constitutional changes are therefore
needed to encourage post-election coalition. This recommendation is in line with the analysis
made by ?, who pinpointed the Burnham constitution as instrumental in aiding the elected
oligarchy under Jagdeo.
A generally agreed upon solution to corruption is the establishment of anti-corruption,
17

good governance, and oversight institutions. The Guyana case, however, has shown that
these tend to become victims of the same problems they were established to solve. The Eth-
nic Relations Commission, the Ombudsman Office, other established commissions are either
underfunded, not allowed to carry out the work for which they were established, or they
become themselves victims of state capture. Although these institutions are vulnerable to
capture and are usually toothless in terms of prosecution, the outcome of the recent election
shows how the perception of corruption can galvanise popular support against the guilty
parties leading to democratic turn-over. So even if they merely serve the function of high-
lighting malpractices by Government, that can be a critical function which could additively
lead to changes and development. To minimise the economic strain these institutions can
have on the economy and thereby enhance the prospects of political and civil society buy-
in along with the effectiveness of the institutions, one solution against the proliferation of
non-functioning institutions is generalisation as opposed to the specialisation of roles which
are found in developed societies. Developed societies can afford to fund highly specialised
institutions because, in many cases, the the level of specialisation is consistent with the level
of development and income. Conversely, in developing countries there is a tendency for the
division of social labour to outrun the division of economic labour thereby leading to dys-
functional institutions (Riggs and MacKean 1964). One institution which is very necessary
in developing countries is the enhancing of asset declaration laws and the full functioning
of an independent institution answerable to parliament and funded directly out of national
coffers rather than by the Executive. Gokcekus and Mukherjee (2006) found that these laws
could be effective as a deterrent of corruption if they come with a threat of prosecution for
those who fail to obey the law, otherwise, they are not too effective.
Lastly, in the area of ethnic conflicts, I agree with Cerqueti et al. (2012), Collier (2001)
and Alesina et al. (2003) that it is difficult to draft policies to deal with issues of eth-
nic fractionalization. I however am aware that if we unpack ethnicity, we will be able to
grasp its dimensions and draft policies to tackle issues relating to those dimension (Edwards
2016;Danns 2014). For example, Edwards (2016) found that there is a geographic/spatial
dimension to ethnic fractionalisation in Guyana. Policies could be crafted which seek to
progressively tackle this problem. One such policy is a national housing policy. Within the
past decade Guyana has embarked on a noteworthy housing policy which distributed house
lots based on a lottery system. This approach to house lot distribution has the potential
to randomise the ethnic distribution of citizens in the new housing areas thus removing one
dimension of ethnic fractionalization in Guyana. There needs to be an empirical study of how
the land distribution so far has led to the randomisation and enhancement of the interaction
of persons from different ethnic groups and how that has affected ethnic sentiments in those
18

areas.
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