State capture and rise of the unelected in a democracy

As a firm supporter of democracy, democratic institutional norms and values, I am also a believer in the ability of democratic governance structures to manage the relationship between the ruler and the ruled.

Cynically, I also believe that democratic governance systems are a part of the global business system. Therefore, unable to change the status quo of democratic governance, I accept business-government linkages, institutional varieties of corruption as well as the need for elected officials to manage business interests of the key financial supporters. But I do not at any point accept the capture of legitimate governance systems by any non-elected actors.

Last week (Feb 2017) as we alternated between the rants, tweets and retreat of the leader of the free world (President Trump, the southern Indian state of the Tamil Nadu played host to a political crisis of its own. An elected public official and head of government (OP Paneerselvan) was forced to resign due to a combination of threats, mass hysteria, and manipulation of state resources and the blatant use of criminal non-state actors by an unelected non-state actor (Ms Sasikala). Elected members of the legislative assembly were placed under house arrest and cajoled into supporting Sasikala as the new head of government.

The thought of this happening in a mature democracy like India has forced me to go back to the literature around the capture of the state.

The theoretical background behind the capture of the state has revolved around relationship with the firms, the rent generating advantages provided by public officials and the whole business of lobbying generated in the captured economy. In their paper, Hellman, Jones and Kaufmann (2000)[i] have sought to distinguish state capture with the other types of relationship between the firm and the state; lobbying or influence and administrative corruption.

State capture has been described as the ability of a firm to manage the transactions of governance either by paying elected officials and bureaucrats or by manipulating the rules of the game. Influence on the other hand has been the softer part of the corruption of governance with its linkage to the past, political dynasties, family ties and legacies of both present and past business networks.

In the present context, the capture of the state of Tamil Nadu by an individual who holds no public office and stands accused of corruption, is a serious threat to the legitimacy of the Indian state and its governance attributes. Should Sasikala be invited to form the next government, the moral high ground of democracy and its ability to manage a balance of power between those in power and those who allow them to remain in power will be destroyed. We have already witnessed some erosion of this high ground in recent times across several geographies.

For the central government in India, managing this crisis will be the litmus test for the whole nation as it projects its democratic credentials in other emerging and transition economies.

[i] Hellman, J.S., Jones, G. and Kaufmann, D., 2000. Seize the state, seize the day: State capture, corruption and influence in transition.