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Theoretical analysis of state capture and its manifestation as a governance problem in South Africa
State capture became topical in South Africa in March 2016 following the dismissal of the then Minister of Finance, Nhlanhla Nene, on 09 December 2015. ‘Nenegate’ revealed poor understanding of state capture among politicians and the general public. The literature indicates that state capture lacks analytical clarity as there is no clear demarcation between legitimate political lobbying and state capture created by corruption. The research question addressed in this article is: What is state capture and how is it manifested in South Africa? Firstly, it systematically unpacks the phenomenon as a type of business–state relationship distinct from influence, corruption and lobbying and outlines its types, features and essence. Secondly, the article explores state capture in contemporary South Africa. Methodology-wise, a combination of literature study and current research reports is used to illuminate the phenomenon and its manifestation. The article contributes to existing knowledge by not only clarifying a concept conflated with corruption but also analysing the manifestations of state capture in South Africa.
... Meanwhile, in Guinea, mining investors captured the state and pay bribes to the country in exchange for access to natural resources (Mbaku, 2018). South Africa is another example of a captured state where the Gupta brothers -President Zuma's friends -wield enormous influence that includes appointing and sacking ministers and senior government officials (Dassah, 2018). Dassah (2018) notes that the Gupta brothers claimed to be in control of coal supplies to Eskom; the power utility. ...
... South Africa is another example of a captured state where the Gupta brothers -President Zuma's friends -wield enormous influence that includes appointing and sacking ministers and senior government officials (Dassah, 2018). Dassah (2018) notes that the Gupta brothers claimed to be in control of coal supplies to Eskom; the power utility. They were also responsible for the dismissal of Nhlanhla Nene, the Finance Minister in 2015 and his replacement by Des van Rooyen. ...
Many African states experienced democratic transition following the third wave of democratization that spread across the region in the 1990s. Such democratic states became characterized by multiparty elections, tolerance for opposition tolerance, media freedom, protection of human rights and respect for the rule of law. However, recent trends show that democratic growth has stalled while its gains are short-lived in many states. This is evidenced in the rise in third ter-mism, constitutional coups, military coups and digital authoritarianism that plagues the continent-suggesting a wave of democratic relapse and autocracy. One is therefore poised to ask what the state of democracy in Africa is and what trends and practices have led to a general decline in levels of democracy. To this end, this paper assesses the incidence of democratic recession in Africa by adopting a descriptive and analytical approach that relies on secondary data sourced from peer-reviewed journal articles, reports, briefs and internet sources. It was found that the decline in democratization, otherwise democratic relapse heralds an epoch of democratic instability and entrenched autocracy in the continent. This is not unconnected with the spate of bad governance, violent electoral contestation, digital repression and widespread violation of human rights that is prevalent on the continent. It was therefore recommended that priority be given to good governance, the strengthening of state institutions and tolerance for opposition.
... Cyril Ramaphosa is the President of South Africa. When he took office as President on February 15, 2018, he inherited an administration riddled with corruption and mismanagement allegations, stemming from his predecessor, Jacob Zuma's term in office (Cook, South Africa: Current Issues, Economy, and U.S. Relations, 2020;Dassah, 2018). President Ramaphosa promised South Africans that his administration will work relentlessly to address the triple challenge of poverty, inequality, and unemployment, including the issues, discussed further below on corruption, state capture, political instability, etc. that are impeding South Africa's path to a unified and thriving country (PwC, 2018). ...
... • State Capture: State capture became a heated topic in South Africa when the then-Minister of Finance, Nhlanhla Nene, was dismissed on 9 December 2015 (Dassah, 2018); ...
This paper analyses the relationship between Public Administration, Knowledge Management and Service Delivery and to understand if improved Knowledge Management in the South African Government can improve public sector service delivery. This paper is a systematic analysis of 150 secondary literature sources. Even though not all the secondary literature sources analysed are used or cited in the paper, they nonetheless contributed to the identification of several key issues. The main finding of this paper is that improved Knowledge Management in the South African Government would ultimately result in improved public sector service delivery. There is a dearth of empirical research on Knowledge Management in the South African Government, including whether the public sector's adoption of private-sector methods to better itself is effective. From a Public Administration standpoint, none of the literature analysed explains how to successfully integrate Knowledge Management in the "South African Government to improve service delivery." More research on this subject is necessary. Especially, to determine the impact of Knowledge Management on investor confidence, and the inflow of Foreign Direct Investment. The research will benefit governments of developing countries, particularly South Africa, Public Administration scholars, and Knowledge Management professionals.
... The national policy of the post-apartheid ruling party, the ANC, has been found to be rooted in neoliberalism [105,106]. Corruption is highly prevalent in the country, and a governance crisis exists, where leaders have exploited the vulnerability of citizens rather than utilising the state's power to promote the public interest [107,108]. It would be useful to investigate this corruption discourse further, as well as to explore how other health related and broader discourses shape the NHI discourse. ...
Background Media is a crucial factor in shaping public opinion and setting policy agendas. There is limited research on the role of media in health policy processes in low- and middle-income countries. This study profiles South Africa as a case example, currently in the process of implementing a major health policy reform, National Health Insurance (NHI). Methods A descriptive, mixed methods study was conducted in five sequential phases. Evidence was gathered through a scoping review of secondary literature; discourse analysis of global policy documents on universal health coverage and South African NHI policy documents; and a content and discourse analysis of South African print and online media texts focused on NHI. Representations within media were analysed and dominant discourses that might influence the policy process were identified. Results Discourses of ‘health as a global public good’ and ‘neoliberalism’ were identified in global and national policy documents. Similar neoliberal discourse was identified within SA media. Unique discourses were identified within SA media relating to biopolitics and corruption. Media representations revealed political and ideological contestation which was not as present in the global and national policy documents. Media representations did not mirror the lived reality of most of the South African population. The discourses identified influence the policy process and hinder public participation in these processes. They reinforce social hierarchy and power structures in South Africa, and might reinforce current inequalities in the health system, with negative repercussions for access to health care. Conclusions There is a need to understand mainstream media as part of a people-centred health system, particularly in the context of universal health coverage reforms such as NHI. Harmful media representations should be counter-acted. This requires the formation of collaborative and sustainable networks of policy actors to develop strategies on how to leverage media within health policy to support policy processes, build public trust and social cohesion, and ultimately decrease inequalities and increase access to health care. Research should be undertaken to explore media in other diverse formats and languages, and in other contexts, particularly low- and middle-income countries, to further understand media’s role in health policy processes.
... During the period in which the CBM was active, only a relatively small number of businesses mobilised in any decisive way for positive change, while many more were actively engaged in the maintenance of the apartheid state (Nattrass, 1999;Truth and Reconciliation Commission of South Africa [TRC], 1998). And in the 25 years since the CBM was wound up, increasing numbers of commentators describe a business community that is perceived as being at best indifferent to issues of social justice and at worst deeply complicit in the perpetuation of a political economy of division with its roots in the apartheid and colonial eras that underlies the crises the country now faces (Dassah, 2018). ...
Purpose: This study aimed to better define the boundary conditions of voluntary business engagement for social and economic transformation.Approach: Case study of the Consultative Business Movement (CBM) in South Africa’s democratic transition through historical narrative and analysis, applying both contemporaneous and contemporary lenses.Findings: The analysis demonstrates that creating shared value requires shared power, an arrangement into which incumbent businesses may reluctantly enter, and from which they may quickly exit when their own political interests are met but before transformational economic goals have been achieved. Thus, exogenous forces are necessary to dependably shape a private sector that is fully aligned with economic transformation and peaceful development.Practical implications: Economic and political carrots and sticks combined with the mandatory embedding of business actors in broader networks may be required to ensure that business strategies and operations are more directly the result of consensus reached with more progressive social and economic agents in ways that advance societal goals. Those managers who do want to lead change should take from the experience of CBM the imperative to take no unilateral decisions but rather to share decision-making power with civil society and community actors.Originality/value: The article challenges and refines discourse that assumes that business interests are broadly aligned with sustainable societal outcomes. It thus sheds light on the boundary conditions for the variety of propositions in the management literature that business and societal aims are largely aligned that have been underexplored.
... This was an innovation of the MTE. 23 Martin, & Solomon, 2016;Shai, 2017;Dassah, 2018;IMF, 2001;Madonsela, 2019;Mulaudzi, & Masenya, 2018. . 24 Interviews with NIE, August 2020 25 NAFAB interviews, August -October 2020 26 Workshop report, 2012 associated benefits of taking this risk. ...
This terminal evaluation provides a systemic and systematic evaluation of Taking Adaptation to the Ground: a small grants facility (the Project). Of particular interest was to understand the Project as a pilot to test an innovative financial mechanism of Enhanced Direct Access (EDA).
... Corruption Allegations: Claims of bribery and corruption relating to President Jacob Zuma's time in office, including, but not limited to, allegations of the improper awarding of contracts and tenders[28; 3]; • State Capture: When Nhlanhla Nene, South Africa's Minister of Finance at the time, was fired on December 9, 2015, the issue of "state capture" became a highly debated topic in the country; • Political instability: Since 1994, South African presidents have not been able to serve more than two terms. ...
There is widespread consensus that the volatility, uncertainty, complexity, and ambiguity (VUCA) environment has contributed to the subpar quality of public sector service delivery in South Africa. Hence, the aim of this paper is to ascertain how the South African government can enhance service delivery in a VUCA world. This article presents a comprehensive study of a number of secondary literature sources. The author makes an effort to draw attention to knowledge gaps that might serve as the foundation for more research in the future. The main finding is that for the South African government to provide good service in a VUCA environment, its employees must be proficient in Results-Based Monitoring and Evaluation, Strategic Planning, Programme and Project Management Methodology, and Change Management Methodology. There is a severe lack of empirical study on the delivery of public sector services in an environment characterized by VUCA. As a result, there is a need for more research on this topic. Specifically, in order to establish the effect that the VUCA environment has on the governments of emerging nations. The research will be beneficial to the governments of developing countries, notably South Africa, as well as to those who work in the field of public administration.
... According to Areff (2012), due to the political deployment, corruption and abuse of resources become fertile ground to breed often resulting in service delivery protests. Dassah (2018) further claims that the board of Eskom was improperly appointed and did not conform to King III's report on good corporate governance. This implies that the board failed to act in the best interests of the country and did nothing to prevent conflicts of interest. ...
International trends suggest that corruption is prevalent in every country (Enste & Heldman, 2017). For instance, Sohail, Arslan and Zaman (2014) contended that corruption is increasingly having negative implications for governments and organisations worldwide. Therefore, this study explores the approaches for curbing corruption in emerging economies. An exploratory research design was conducted. The qualitative research method was adopted to investigate the subject matter. Interviews were conducted among 12 participants in the selected municipalities located in KwaZulu-Natal. Data quality was determined through trustworthiness. The data was analysed using NVivo, version 12.0. Thematic analysis was conducted to observe, organise, describe, and report the patterns obtained from the data set. The overall findings identified key approaches to curbing corruption in the KwaZulu-Natal municipalities, including resource availability, anti-corruption agencies, community involvement and participation, legal frameworks, non-political interference, and accountability. The study provides adequate explanations of the approaches to curbing corruption in emerging economies. The study will help South African public organisations to detect different forms of corruption and take appropriate measures to mitigate them. The study will help accountability, transparency, and good governance in the South African public sector
Good governance is critical in the fight against poverty. It entails reshaping politics to benefit the poor. This article utilised the quantitative cross-section design and the principal components regression analysis (PCA) to investigate the relationship between good governance, particularly government effectiveness, and poverty reduction in South Africa, drawing on the Oxford Global Multidimensional Poverty Index and the World Bank Governance Indicators. The PCA extracted two components; the first component variance represents about 36 per cent of the population who are middle-high income earners. The second component variance comprises approximately 60 percent of the people that earn a low income. The group has been the target of several poverty reduction policies and is the subject of this study. The PCA regression showed that government ineffectiveness, political instability, and corruption are vital factors in the increased poverty levels amongst low-income earners in South Africa. We recommend that; institutions should offer good governance through accountable and transparent administration of poverty alleviation programmes. Research is needed to programme activities and assistance packages that are feasible and geared to country-specific conditions.
As an international and domestic threat to countries, the phenomenon of “state capture” has suddenly gained the attention of scholars and South Africans who have an interest in political issues. Given the fundamentality of its continuity in the context of South Africa, this article solely analyses this phenomenon within the period of 2016–2018. The central aim is to understand the development of this phenomenon and its indicator in the stated period. The adoption of the periodisation approach in this article does not necessarily sideline the fact that the phenomenon of state capture is characterised by the presidency of Jacob Zuma but only gained momentum during the period post-2016. Methodologically, this article relied on a desktop research approach in the form of document review and made use of thematic content analysis to attend to the central objective of the article. Equally important was the adoption of Afrocentricity as the alternative theoretical lens to interpret the nature of this subject. The preliminary findings of this article illustrate that state capture manifests in a form of lobby and influence in government policies and operation, thus leading to poor governance policies and aggravated socio-economic developmental problems. The article recommends a strong call for transparency and effective corruption and state capture watch mechanisms.
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 micro-level contractual networks in public procurement. To this end, it establishes a novel measure of corruption risk in government contracting focusing on the behaviour of individual organisations. Then, it identifies clusters of high corruption risk organisations in the full contractual network of procuring authorities and their suppliers using formal social network analysis. Densely connected clusters of high corruption risk organisations are denoted as the domain of state capture. It demonstrates the power of the new analytical framework by exploring how the radical centralisation of the governing elite following the 2010 elections in Hungary impacted on centralisation of state capture. Findings indicate the feasibility and usefulness of such micro-level approach to corruption and state capture. Better understanding the network structure of corruption and state capture opens new avenues for research and policy on anti-corruption, budget deficit, market competition, and quality of democracy. Supporting further empirical studies of corruption, the data is made available at digiwhist.eu/resources/data.
State capture has emerged as a global threat in several countries. The definitions vary from the act of rent-seeking to corruption. Russia, Ukraine, and some countries in Central Asia are several areas where state capture was first observed. Indonesia is not immune from the threat. Several misconducts in the country had already been labeled as state capture. There are some distinctions between state capture and corruption, whereas in a few countries both are considered as the same. Strategies for combating corruption usually involve reducing state capture.
Corruption has recently risen to the top of the development agenda, particularly in the transition economies. However, existing empirical research has been hampered by the lack of detailed and comparative data on the problem. We use the data from the ongoing Business Environment and Enterprise Performance Survey (BEEPS) to unbundle corruption into its specific constituent components and examine their particular causes and consequences. In addition to conventional measures of administrative corruption, we unbundle the measurement of corruption to focus particularly on two corrupt strategies which firms may use in their interactions with the state. First, state capture, defined as the efforts of firms to shape the very institutional environment in which they operate, and, second, public procurement corruption, the payment of kickbacks for securing public contracts. We show that the incidence, costs and benefits to the firm of both types of corruption differ. The evidence suggests that while ‘captor’firms in some environments benefit through higher sales in the short term, such payoff from state capture may not be sustainable. Furthermore, the social costs of state capture are high: firms in an environment characterized by state capture face strong incentives to join the fray, leading to a downward development spiral of increasing
Reorganising Power in Indonesia is a new and distinctive analysis of the dramatic fall of Soeharto, the last of the great Cold War capitalist dictators, and of the struggles that reshape power and wealth in Indonesia. The dramatic events of the past two decades are understood essentially in terms of the rise of a complex politico-business oligarchy and the ongoing reorganisation of its power through successive crises, colonising and expropriating new political and market institutions. With the collapse of authoritarian rule, the authors propose that the way was left open for this oligarchy to reconstitute its power within society and the institutions of newly democratic Indonesia.
The article argues that questions of definition relating to corruption are central to understanding its significance and its prominence in peacekeeping contexts. Definitional issues are discussed and a definition that combines certain universal features while acknowledging the importance of local norms and rules is offered. The definition revolves around actions, decisions and processes that subvert or distort the nature of public office and the political process. The challenge for peacebuilders is to develop and enforce standards for public office that have sufficient linkage with local norms and expectations to command some support, and to do so in a context that, by definition, lacks consensus on norms and principles of legitimacy for public office. The article explores some of the strategies open to those in post-conflict contexts and argues that corruption will frequently be a rational strategy for many, creating a vicious cycle that is hard to break. The article also questions how far corruption should be the major concern of peacekeeping forces, and how the concept might be disaggregated to allow a more targeted approach - one that recognizes that attacking corruption directly may not always be the best strategy, and that sees that corruption may not always be the major priority.
This article demonstrates that most new EU Member States experience serious problems of state capture. It argues that central European states cluster around two dominant modes of party competition. In the first, predominantly ideologically committed elites (Poland, Hungary, Estonia, Slovenia and Estonia) established relatively ‘electoral professional’ party competitions, only to face deepening fiscal constraints on mainstream ideological competition. Following the collapse of the social democratic left, both Hungary and Poland experienced attempts to reassert political monopoly, i.e., ‘party state capture’. In the second group (Czech Republic, Slovakia, Romania, Bulgaria and Latvia), more entrepreneurial political elites established ‘brokerage’ party systems, in which public policy remains a side-product of an essentially economic competition. All five states show high levels of ‘corporate state capture’ in which public power is exercised primarily for private gain. These findings contest the more optimistic expectations of the institutionalist literature on state-building and democratic consolidation.
By recognizing the dynamics of state capture, we gain a much clearer understanding of the factors underlying the persistence of corruption in many transition countries. Although corruption has usually been seen as a symptom of weak state institutions, our analysis highlights the powerful forces that have a strong interest in fostering and maintaining these weak institutions. Any reforms to improve the institutional framework, which might undermine these highly concentrated advantages, will be strongly opposed by captor firms that have the political influence to derail such reforms. Consequently, tackling the problem of state capture is a prerequisite for reforms to improve governance and strengthen the legal, judiciary, and regulatory environment. But once the capture economy has become entrenched, how can the country break out of the vicious circle?.
Large-scale systemic state capture, which is the root of widespread corruption, is acquiring such proportions in Serbia that it may undermine the success of its transition. ‘State capture’ is defined as any group or social strata, external to the state, that seizes decisive influence over state institutions and policies for its own interests and against the public good. The appropriation of state institutions and functions by the political party leadership is being carried out at an alarming rate in Serbia, as supported by research data in this paper by Vesna Pesic, an International Policy Research Fellow. The phenomenon of state capture is explored in depth looking at its background, prevalence and variety of mechanisms in Serbia today. The author concludes with policy options and recommendations to help curb corruption, address the deep mistrust expressed by the Serbian people about their political system, and to pave the way for democratic transition.