State capture is the exercise of illicit influence on the development and adoption of legal acts and public policy, as well as functioning of institutions of power by influential persons and/or organizations, including public actors, in their own interest.

Unlike the common definitions of corruption that normally cover manipulation of the existing order, state capture implies that persons and/or organizations ensuring the order change the rules in place and create their own order. Therefore, state capture may seem to be quite legal, as the existing norms change in parallel with it. As a result, the author states that the price of state capture can be considerably higher than the damage inflicted by traditional corruption.

What is more, comprehensive assessment of state capture has not been undertaken. The author makes an attempt to fill this gap by creating a State Capture Index (SCI) for 172 countries for a period spanning between 1996 and 2022.

The index is based on three indicators:

1. Corrupt and Captured Rule of Law, consisting of the following variables:

• Corrupt legislature;
• Corrupt judiciary;
• Corrupt high-level executive;
• High court independence;
• Corrupt media;

2. Captured Political Access and Policy:

• Power distributed by socioeconomic position;
• Disclosure of campaign donation;
• Election vote buying;
• Captured (particularistic) public goods;
• Policy reform justification by political elite;
• Range of consultation with stakeholders in decision-making;

3. Captured enabling environment:

• Lack of voice and accountability;
• Lack of regulatory quality;
• Lack of rule of law;
• Extent of corruption;
• Income and wealth distribution.

The first two indicators are based on a number of specific variables of the Varieties of Democracy (V-Dem) dataset, while the latter is based on the assessments of the Worldwide Governance Indicators (WGI) and the World Inequality Dataset.

The calculation of the SCI was carried out in the following manner:

1. For each component, a simple average for a three-year period (nine periods of three years in total) is calculated;
2. These values are normalized and transformed into a range between 0 (low capture) and 100 (high capture);
3. Based on the output, percentile ranks (a percentage of values in the percentage distribution of indicators lower that a given indicator) are calculated for each indicator;
4. The SCI was calculated as a simple average of percentile ranks of the three components for each period; the countries in the index are ranked not in a descending order of the SCI with the sequence numbers assigned as it normally happens in rankings, but in the alphabetical order due to the fact that small differences in points could be statistically insignificant.

Having calculated the SCI, the author compared the findings with the indicator «extent of corruption» of the WGI and came to a conclusion that these assessments considerably differed in many countries during some periods. For example in 2020-2022 for 78 countries (45%), the difference between the two indicators was at least 10 per cent, and for 42 countries (26%) – at least 15.

The discrepancies were detected also for specific countries even throughout the whole period reviewed. For instance, Canada and Uruguay that are traditionally ranked as countries with a low level of corruption have slightly higher state capture. The United States and Chile, countries with relatively low or medium corruption, experience considerably higher state capture. On the contrary, Slovakia and Greece that have considerable corruption, have medium state capture.

Based on the findings, the author concludes that in order to effectively combat corruption, it is important to measure not only its «traditional» forms, but the level of state capture as well. This indicator can be less evident than, for example, bribery, but is if no less importance for assessing the extent of illicit activities in a country.

*The global non-profit consulting organization Results for Development cooperates with public officials, leaders of non-governmental organizations and other stakeholders in different countries to support them in detecting the existing challenges, including corruption, finding ways to address them based on international experience and taking further practical steps to implement the necessary measures.