kleptocracy

kleptocracy, in politics, a form of government by individuals who primarily seek personal gain at the expense of those they govern. Kleptocracy is a major problem both in individual countries and internationally, as kleptocratic countries tend to adopt broadly destructive policies and to subvert international institutions. The process of uprooting kleptocracy, sometimes called “dekleptification,” is a major project for anti-corruption advocates.

Features of kleptocracy

Kleptocracy is a form of government corruption, but unlike more typical instances, such as a politician taking a bribe, kleptocracy entails the systematic use of the government’s powers to enrich political leaders. Kleptocratic rulers are rarely concerned with good governance, and their neglect or violation of their official duties usually leads to economic and social dysfunction. Kleptocratic leaders, or kleptocrats, use the resources they have stolen from their countries as well as the institutions they have subverted to maintain their power.

Kleptocracy tends to arise in countries that lack strong democratic institutions that would limit the power of political leaders and hold them accountable to the public. It is naturally associated with authoritarian regimes, particularly dictatorships, as the leaders in these governments are largely unaccountable to the people they govern. Kleptocracy and authoritarianism can be mutually reinforcing because the greater capture of economic resources allows for the greater capture of political power, and the greater capture of political power allows for the greater capture of resources. Kleptocracy is also common in countries that are rich in natural resources, the control of which allows such countries’ leaders to increase their wealth.

Kleptocracy is closely related to plutocracy, or rule by the wealthy. A distinction can be made between the two based on the legality of the methods used to enrich rulers. While in a kleptocracy rulers subvert political institutions to embezzle or misappropriate their country’s wealth, in a plutocracy wealth is channeled to the ruling class through public and legal means. Kleptocrats commonly hide their wealth and obscure how they acquired it, frequently hoarding it in other countries to protect it from recapture. Despite these differences, plutocratic and kleptocratic practices may coexist within the same government.

Kleptocracy in the world today

Kleptocracy has been a major problem in the late 20th and early 21st centuries, as increased globalization has made it easier for kleptocrats to hide and protect their wealth. Kleptocrats invest heavily in countries outside their own and often hire legal teams, lobbyists, spokespeople, and other representatives to protect their reputations. Although kleptocracy is a problem that often afflicts countries with weak or nonexistent democratic institutions, even wealthy and long-established democracies have effectively enabled foreign kleptocrats by allowing them to use the democracies’ financial institutions. Major cities in wealthy democracies, such as New York City, London, and Los Angeles, are common destinations for the laundered wealth of kleptocrats. Each year billions of dollars in illicit funds leave developing countries for banks in wealthy countries and for tax havens overseas.

Many countries struggled with kleptocracy during the 20th century, including Zaire (now the Democratic Republic of the Congo) under Pres. Mobutu Sese Seko, the Dominican Republic under Pres. Rafael Trujillo, the Philippines under Pres. Ferdinand Marcos, and Indonesia under Pres. Suharto. In the 21st century, perhaps the most powerful country widely considered kleptocratic is Russia under Vladimir Putin, who has ruled the country as president or prime minister since 1999. One study of Russia, completed in 2015, found that as much as 52 percent of the country’s wealth was held abroad. Many wealthy oligarchs in Russia are former government officials or KGB agents (including Putin) who have enriched themselves by means of their government connections. In addition, the harmful effects of global kleptocracy, including the weakening of political institutions and practices of good governance, are increasing in other countries with large economies, including the United States. The interconnected web of global kleptocracy comprises shell companies, opaque financial instruments, and secretive investments in real estate and businesses in the world’s wealthiest countries.

Although many governments have adopted laws or established programs designed to combat corruption or restore expropriated wealth, experts and activists believe that much more can be done. Financial transparency—a set of practices that makes it difficult to hide wealth or to obscure its origins—is a key goal of anti-corruption activists. Many activists also argue that tolerance of corruption results in the institutionalization of corruption, and so new laws and norms to create a culture opposed to any level of corruption are needed. Dekleptification is always deeply challenging, however, because it requires sustained support from reformers and the public, often at the risk of a violent backlash.