Informal Governance and Corruption

Georgia

Georgia is an extremely interesting case when exploring the interplay between corruption and informal governance. Since Soviet and post-Soviet times, Georgia has been known as a country in which corruption was endemic and pervasive. However, since the implementation of crucial and remarkably swift reforms undertaken during the post-soviet transition, Georgia has come to be regarded as one of the few success stories in the fight against corruption worldwide. Nonetheless, the question remains as to whether this success story is in reality as impressive as it is commonly presented. Has the Georgian governance system really transitioned from a status quo where corruption was the norm to one in which corrupt behaviours are an exception? 

The evidence indeed points to some areas where success has been meaningful and consolidated. Bribery has been effectively eliminated from those sectors where the state interacts directly with citizenry e.g. in licensing, street policing, and other public services. In this regard, and despite any controversies, Georgia represents one of the greatest positive transformations observed since the existence of governance measurement indices.

However, the research evidence also suggests that, beyond the public service delivery sectors, corrupt patterns of informal redistribution of power and wealth continue to be pervasive. Unfair distribution of resources is conditioned by the illicit collusion between politics and business. Loyalty and personal contacts, rather than merit, remain key determinants for promoting individuals in state bureaucracy as well as appointments to the highest Ministerial posts.

Furthermore, the political and economic elites are often consist the same individuals, whose ability to influence political and economic outcomes stems from their command over powerful informal networks. Crucially, their power is not necessarily reflected in the formal hierarchies. In this dimension, the Georgian case turns out to be not very different from the experiences of other countries considered to be endemically corrupt such as Kenya, Kyrgyzstan and Tanzania.

In fact, even though corruption decreased dramatically in the sectors where the state interacts directly with the citizenry, the re-emerging informal state-business nexus has undermined some of the key reforms relating to transparency such as e-procurement, because many of the deals related to public bidding have been negotiated ‘offline.’

The research report maps the disintegration, reconfiguration and evolution of the informal elite networks in Georgia, illustrating in great detail the complexities of informal governance where not only the state co-opts businesses, but private interests also proactively co-opt influential political figures.

Taking stock of the research findings, it seems that the successful anti-corruption reforms of the Saakashvili era represent the crystallisation of a process, undertaken during a limited window of opportunity, where sizable “islands of integrity” were made possible. However, the evidence also suggests that these “islands of integrity” may actually represent a “camouflage” of sorts, hiding the corrupt patterns at the higher echelons of power from the eyes of the international community, whose indices keep scoring Georgia’s control of corruption outcomes very positively.

Download: Georgia country report