5.2.3 State capture and corruption

Helpful prior knowledge and learning objectives

Helpful prior learning:

Section 1.1.1 The economy and you, which explains what an economy is and how it is relevant to students’ lives
Section 1.1.2 The embedded economy, which explains the relationship between the economy and society and Earth’s systems
Section 5.1.1 The state as a system, which defines the state, its parts and their relationships, and some ways to classify states
Section 5.1.2 Origins, legitimacy and power of states, which explains how states came about, how they gain legitimacy and maintain power
Section 5.1.3 Functions of the state, which explains the various roles of the state in providing goods and services, protecting the population, and stabilising and guiding change
Section 5.1.4 Balancing state and non-state power, which explain the importance of balancing state and non-state economic power and strategies to achieve such a balance
Section 5.1.5 State narratives: Neoliberalism, which describes the neoliberal narrative and explains how it came to dominate economic thinking
Section S.1 What are systems?, which explains what a system is, the importance of systems boundaries, the difference between open and closed systems and the importance of systems thinking
Section S.2 Systems thinking patterns, which outlines the core components of systems thinking: distinctions (thing/other), systems (part/whole), relationships (action/reaction), and perspectives (point/view)

Section S.7 Network models, which explains how social networks shape human knowledge, cooperation, influence, opportunities and social tipping points
Section S.8 Leverage points, which describes various leverage points for systems change
Section S.9 System traps, which explains how system structures, like reinforcing feedback, too weak or late balancing feedback, and/or pursuing flawed goals, can create persistent problems.

Learning objectives:

discuss how state capture and corruption threaten the state’s ability to meet human needs within planetary boundaries

In 2010, the United States Supreme Court made a decision that changed how money influences politics. In Citizens United v. Federal Election Commission, the court ruled that corporations, unions, and wealthy individuals could spend unlimited independent money to support or oppose political candidates. Supporters called it free speech. Critics warned it gave the richest people and corporations too much power to influence elections.

Since then, election campaign spending has grown quickly. Corporations and billionaires use organisations called Super PACs to support candidates who favour their interests. These organisations should stay separate from the candidate’s election campaigns. In practice they often work closely together.

Photograph of a state building with a group of protesters holding a lighted sign saying "money corrupts"

Figure 1. Is it possible for the state to represent the interests of the people if money has so much influence on elections and political decisions?

(Credit: Joe Brusky, CC BY-NC 2.0)

To carry out its many important functions (Section 5.1.3), the state has to act in the public interest. But when decisions are shaped by powerful and wealthy people, the state cannot meet its responsibilities. This is where corruption and state capture become serious threats.

What are corruption and state capture?

Corruption is the abuse of power for private gain. It comes in many forms. Bribery is when someone offers money or something valuable to persuade a person in power to act in a certain way. Nepotism is when officials favour their friends or family in hiring or contracts. Embezzlement is when someone steals public or business funds. These acts usually involve individuals misusing their position. A local official might accept a bribe to ignore building rules, or a public servant might award a contract to a friend’s company instead of choosing the best offer.

Figure 2. There are many forms of corruption, bribery is one of them.

(Credit: Bobboz, licensed from Adobe Stock)

Figure 3. According to Oxfam, about 26% of billionaire wealth has come from forms of corruption or monopoly power, which occurs when states do not stop reinforcing feedback loops of market power, profit and wealth.

(Credit: Oxfam)

State capture is a broader and more organised form of corruption. Instead of breaking rules, powerful groups work to shape the rules themselves. They use their influence to control how laws are made, how policies are enforced, and who is appointed to key positions. This kind of power is harder to see, but often more damaging. It allows powerful groups to steer the entire system in their favour to accumulate ever more power, profits and wealth, while the public interest is ignored.

Networks and lobbying

Elected representatives rarely make decisions alone. They are part of networks that shape how they understand issues and what actions they consider possible. These networks include political parties, lobbyists, civil society organisations, advisory groups, and professional associations. They provide information, offer different perspectives, and sometimes apply pressure. When these networks include a wide range of voices such as grassroots movements or scientific communities, they can strengthen democracy by helping representatives understand public needs more fully.

However, when networks are dominated by powerful groups, they can create unfair influence. This is where lobbying plays a complicated role. Lobbying means trying to influence lawmakers or officials about a particular issue. In principle, it allows different groups to share information with decision-makers. When done openly and fairly, lobbying can improve policies.

Power imbalances in the political space

In practice, lobbying is usually unbalanced. Large corporations and wealthy individuals often hire professional lobbyists with strong political connections and deep knowledge of how laws are made. These lobbyists may meet regularly with decision-makers, provide advice and research, and shape the early drafts of laws. There may be a ‘revolving door’ between lobbying firms and politics, with politicians taking well-paying lobbying jobs when they leave office, profiting from their experience and continued access to lawmakers. Meanwhile, groups working on social justice or environmental protection often cannot afford the same access. Without a balance of voices, public concerns are drowned out. This is how lobbying, even when legal, can support state capture.

Corruption and state capture weakens the state and deepens economic inequality. When officials act for personal gain or benefit of a powerful elite, public services like schools and hospitals suffer. Trust in the state falls, and fewer people take part in elections. Corruption also harms workers and the environment, as rules are ignored or changed to help powerful groups.

Figure 4. Fossil fuel companies have used their vast financial resources to influence state decisions, delaying and weakening regulations to reduce greenhouse gas emissions.

(Credit: TexasRaiser, public domain)

What are some examples of corruption and state capture?

Corruption and state capture are not limited to one region or type of state. They can occur in democracies, authoritarian states, low-income and high-income countries alike. Examining cases from different parts of the world helps us see the many forms state capture can take, and why it remains a critical challenge for governance everywhere.

In the United States, state capture often happens through legal channels. Since the Citizens United ruling, large donors have been able to influence elections and public policy in ways that favour fossil fuel, pharmaceutical and tech industries. Lawmakers sometimes pass laws that help these industries, even when they harm public health or delay climate action. State capture has accelerated in the United States since the start of 2025 under the Trump administration (Figure 5).

Figure 5. Elon Musk (left in photo) is the world’s richest man, as of January 2025 also heading a Department of Government Efficiency with the aim of drastically cutting the spending of the US government. How might Musk’s participation in government decision-making and the cuts to state budgets affect trust in the state?

(Credit: Wikimedia Commons, public domain)

In the United Kingdom and the United States, close relationships between financial firms and regulators played a role in the 2008 financial crisis. For years, bankers and investors in the finance industry pushed for deregulation so they could take more profitable and riskier bets in financial markets. When those bets went wrong, the state had to spend public money to rescue major banks to prevent global financial system collapse. Despite the bank rescues, many ordinary people lost jobs or faced cuts to public services, while the companies most responsible were not held fully to account.

Figure 6. People lined up in front of a UK bank, wanting to withdraw their money during the 2008 financial crisis.

(Credit: Dominic Alves, CC BY 2.0)

In Brazil, the ‘Operation Car Wash’ investigation revealed a major corruption network around the state oil company Petrobras. Construction firms overcharged the state and paid part of the extra money to politicians. Billions were lost. The scandal damaged investment in public services and shook trust in the political system.

Between 2009 and 2018, South Africa experienced one of the most well-documented cases of state capture. The Gupta brothers, a wealthy business family, formed close ties with then-President Jacob Zuma. They influenced government appointments and won lucrative state contracts, effectively controlling parts of the state for their own gain. Public outrage led to mass protests and eventually forced President Zuma to resign.

Figure 7. A protest placard depicting Atul Gupta at a Zuma Must Fall protest in Cape Town

(Credit: Discot, CC BY-SA 4.0)

How can corruption and state capture be stopped?

Corruption and state capture are serious problems, but they can be challenged. This requires strong institutions, clear rules, and active public participation.

Transparency: When political donations, lobbying meetings, and contracts are made public, it becomes easier to hold people to account. Journalists, citizens, and watchdogs can use this information to question unfair decisions.
Independent institutions: Courts and anti-corruption agencies must be free from political pressure so they can investigate wrongdoing and apply the law fairly. Trust grows when people see that the law applies to everyone.
Campaign finance reform: This can reduce the power of wealthy donors. It might include limits on donations, public funding for campaigns, or banning certain types of spending. Countries with strong rules often have fairer elections.
Revolving door rules: These stop officials from quickly moving into jobs with companies or lobby groups they once regulated. Waiting periods or conflict-of-interest laws help protect trust in government.
Civil society and media: Journalists expose hidden corruption. Community groups help people understand how decisions affect them. Protests and campaigns have often led to real change.

Activity 5.2.1

Concept: Systems, power

Skills: Thinking skills (critical thinking, transfer), Research skills (information literacy)

Time: varies, depending on option

Type: Individual, pairs, or group

Option 1: How does state capture and corruption threaten state functions?

Time: 25 minutes

Look back at what you learned about the three main functions of the state in Section 5.1.3 (Figure 8). Then reflect on what you have learned in this section about state capture and corruption.

Work individually, with a partner, or in a small group.

Explain how state capture and corruption can stop the state from carrying out its functions.
Are there some functions that might be more affected than others? If so, why?

Figure 8. Three broad functions of the state. How does state capture and corruption threaten them?

Option 2: Corruption Perceptions Index

Time: 40 minutes

Transparency International, a nongovernmental organisation, publishes the Corruption Perceptions Index (CPI) each year (Figure 10). The CPI ranks countries based on how corrupt their public sector is seen to be.

Use the interactive CPI map and Transparency International’s website to answer the question:

What does the CPI tell us—and not tell us—about corruption in your country or region?

To help you explore this question:

Visit this page to find out how the CPI is calculated.
Discuss what “perception” means in this context. How is it different from direct measurement? What are the strengths and limits of using perception as a way to track corruption?
Explore your region on the interactive CPI map (Figure 10) and find the most recent report for your country or neighbouring countries.

Summarise your findings in a short reflection or group discussion. What did you learn about how corruption is viewed in your region, and how confident are you in this method of measurement?

Option 3: Stopping state capture and corruption in your context

Time: 45+ minutes (depends on how difficult it is to find information and whether students present to others)

All over the world, organisations, journalists, and public institutions are working to challenge state capture and corruption. In this activity, investigate who is active in your country or region and how they are trying to make change.

Work individually or in pairs. Try to find one or two organisations, media projects, or public bodies that are focusing on one or more of the following strategies:

increasing transparency
strengthening independent courts or anti-corruption agencies
reforming campaign finance
addressing revolving door influence between government and business
supporting investigative journalism or public participation

Use the following questions to guide your research and discussion:

Who is working on one or more of these strategies in your context?
What issues do they focus on, and what progress have they made?

Summarise what you learn in a short paragraph or presentation. Be ready to explain to another group or your class how these efforts help protect the public interest and strengthen the role of the state.

Option 4: Leverage points for systems change
Time: 30–40 minutes

In Section S.8, you learned about Donella Meadows’ leverage points (Figure 10), the places in a system where even small changes can lead to big results.

Consider the actions you’ve learned about to stop corruption and state capture. These actions include improving transparency, strengthening independent institutions, changing campaign finance rules, regulating lobbying, and supporting civil society and the media.
Work in pairs or small groups. Choose two actions and decide which leverage points they connect to.
Which actions target deeper leverage points—and why might those lead to lasting change?
Create a short explanation or diagram to show your thinking. Be ready to explain to another student or small group how your chosen actions could help transform the system.

Ideas for longer activities and projects are listed in Subtopic 5.5

Figure 10. Twelve key leverage points for changing systems.

(Credit: Meadows (1999) from DEAL)

Checking for understanding

Coming soon!

Further exploration

Sources

Terminology (in order of appearance)

Coming soon!

Feedback

Page updated

Google Sites

Report abuse