2.1 State capture and criminal patronage networks

The most serious and destabilising forms of corruption are carried out systematically by criminal patronage networks (CPNs) that operate with political protection and are engaged in the capture and subversion of critical state functions and institutions.
They divert customs revenue at international airports and border crossing points, steal international security and development assistance, and abuse public and private financial institutions at the expense of the nation’s economic stability. The networks may also profit from facilitating, protecting, and participating in the trade of natural resources or narcotics. Their influence stretches across government, including in law enforcement and judicial institutions, helping shield them from investigations and sanctions. They gain legitimacy by protecting those who support them, but deny protection and access to resources to those outside their network.

The insider-outsider division can frequently run along ethnic, tribal or religious affiliations, as factional divisions can both reinforce and be strengthened by corruption. More pronounced factional divisions, especially if they come with inequality in access to resources and government institutions, render the prospect of a stable peace more remote as they undermine the legitimacy and effectiveness of governments. They can also subvert political processes such as elections, which – far from being a basis to establishing a legitimate government – can serve to entrench existing power relations and delegitimise a government.

Patronage networks – whether they are in a dominant position within a country or attempting to extend their influence – are also frequently connected with organised crime groups, including transnational ones. In fragile and conflict states where government institutions only have partial control over the state’s territory, organised crime groups profit in particular from drug trafficking, a significant revenue stream which can reinforce malign groups, further weaken the government, and create insecurity for the population.

CPNs play a key role in de-legitimising a host government. Advancing in a society controlled by a predatory government operating through CPNs relies on who you know and not what you know. Businesses get ahead through personal connections or kickbacks to powerbrokers, and those without links find it too hard or too unprofitable to stay in business. CPNs, especially when based in factional divisions, often capture the state’s defence and security forces, turning them into personal protection forces and undermining their role in protecting the state and its population.

In addition to de-legitimising the government, CPNs strengthen malign actors such as insurgents and criminals. For example, private security firms, logistics providers, and construction companies linked to powerbrokers and their militias may receive contracts from international donors, strengthening their patronage networks and further excluding the majority of the population. Finally, CPNs, especially when connected transnationally, are often responsible for removing significant amounts of money out of the country, parking it in international financial centres such as Dubai and London.

Where international interventions are focused on immediate security goals (for example, counter-terrorism) and do not appreciate second- or third-order effects of their actions, the risk of support for powerbrokers going wrong increases exponentially. If corruption becomes ‘collateral damage’, or an accepted cost of achieving other objectives, there is a good chance that it will flourish and that, in the longer term, it will contribute to the renewal of conflict and seriously complicate the work of international forces.