This part of the book describes cases of kleptocracy and state capture, two terms used to describe systematic abuse of entrusted power by elites. “Kleptocracy” focuses more on the role of an individual leader and emphasizes the accumulation of money and power through theft. As a phenomenon, it has become more prevalent as a result of the globalization of financial and legal services, which has made it easy for individual kleptocrats to hide the proceeds of corruption using transnational and secret financial structures (Bullough 2018). Several initiatives advocating for a stronger global policy response to grand corruption and illicit financial flows favour this term, with the US Congress, for example, having established, in June 2021, a bipartisan caucus against foreign corruption and kleptocracy.

The concept of “state capture” was widely used in the late 1990s to characterize a particular pattern of corruption that had emerged during the first decade of transition in the former Soviet Union and eastern Europe. Hellman, Jones & Kaufmann (2000) conceptualized state capture as one of two types of corruption prevailing in this region and era. “State capture” occurs where the formation of laws and policy is captured by a narrow interest group, typically a few oligarchs with good connections to the political leadership. “Administrative corruption”, by contrast, occurs when the implementation of laws and policy is improperly influenced by a group or individual (Hellman, Jones & Kaufmann 2000).

Hence, the defining feature of state capture relates to process – the political process in which laws and policy were formed is distorted because narrow interest groups have too much control over it, therefore departing from the pluralist democratic model in which many interest groups compete for influence fairly and those that are best able to build broad coalitions gain the right to shape laws. State capture represents a deviation from this ideal by virtue of the fact that the competition among interest groups is not fair. Captor groups gain influence because they have personal connections to those holding political power, and because those in political power are prepared to abuse their power over the policy-making process by making secret deals in which they exchange influence for various kinds of “loyalty”.