The Political Economy of State Capture in CentralEurope

Abstract This article demonstrates that most new EU Member States experience serious problems of state capture. It argues that central European states cluster around two dominant modes of party competition. In the first, predominantly ideologically committed elites ( P oland, H ungary, E stonia, S lovenia and E stonia) established relatively ‘electoral professional’ party competitions, only to face deepening fiscal constraints on mainstream ideological competition. Following the collapse of the social democratic left, both H ungary and P oland experienced attempts to reassert political monopoly, i.e., ‘party state capture’. In the second group ( C zech R epublic, S lovakia, R omania, B ulgaria and L atvia), more entrepreneurial political elites established ‘brokerage’ party systems, in which public policy remains a side‐product of an essentially economic competition. All five states show high levels of ‘corporate state capture’ in which public power is exercised primarily for private gain. These findings contest the more optimistic expectations of the institutionalist literature on state‐building and democratic consolidation.