The Center for the Study of Democracy, coordinator of the SELDI initiative and the Turkish Economic and Social Studies Foundation (TESEV) held a workshop: State Capture: Drivers, Outcomes and Measurement in Istanbul, Turkey, on 3-4 December 2015 with the support of the Think Tank Fund of the Open Society Foundations. The workshop gathered leading European and US anti-corruption and good governance experts to refine the definition of state capture and identify potential ways to measure the phenomenon, including in particular sectors, such as energy, banking, telecommunications, etc. The main focus of discussion was put on ways to provide practical metrics of the risks and impact of state capture in transition countries – new member states, candidate, and prospective EU candidate countries.
State capture refers to the situation when private interests use corruption to mold institutions in such a way as to preserve a monopoly on resources in key economic sectors. They often use the system of public funds allocation to sustain otherwise largely uncompetitive businesses in strategic economic sectors, where clientelistic networks can exploit enormous rents from the corporate governance of SOEs, the management of large-scale projects, and the allocation of public procurement. Foreign governments or international companies can also can use their dominant economic position to capture elites and, hence, to directly influence decision-making, sometimes at a catastrophic cost for the political stability and territorial integrity of a country.