Transparency New Zealand

‘State capture’ obtains when a small number of firms (or such entities as the military) is able to shape the rules of the game to its advantage through massive illicit, and non-transparent provision of private benefits to officials and politicians. Examples of such behaviour include the ability to control legislative votes, to obtain favourable executive decrees and court decisions. A relatively new concept, the main proponents being World Bank researchers, it echoes that of ‘crony capitalism’ and covers cases where high-level corruption is pervasive.
Read more: http://www.answers.com/topic/state-capture#ixzz1E0fTEZHG

Fighting corruption in the capture economy

By recognizing the dynamics of state capture, we gain a much clearer understanding of the factors underlying the persistence of corruption in many transition countries. Although corruption has usually been seen as a symptom of weak state institutions, our analysis highlights the powerful forces that have a strong interest in fostering and maintaining these weak institutions.

Any reforms to improve the institutional framework, which might undermine these highly concentrated advantages, will be strongly opposed by captor firms that have the political influence to derail such reforms. Consequently, tackling the problem of state capture is a prerequisite for reforms to improve governance and strengthen the legal, judiciary, and regulatory environment. But once the capture economy has become entrenched, how can the country break out of the vicious circle?

How does it relate To New Zealand?

we need only look at the  workings of   the former  Waitakere City Council   and its relationship with the  Auckland film studios as an example of state capture .

Over the next few days I will be revealing the  inside story   for a  taster  visit How to invest using public funds

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