Oligarchical Business Structures
As well as clientelism, there are other differences between countries like Greece and Argentina on the one hand and advanced economies on the other.
These two countries both feature conglomerates run by oligarchs. Because there’s so much corruption and bureaucracy, you have to be big and have influence with the government and with the lawyers – and also pay them, effectively with bribes. It’s not free competition; it’s a rigged game, with semi-protected monopolies and so on.
The clientelist relationship between interest groups and the state, created through Peronism and similar attitudes in Greece, are fundamentally different from northern Europe. Russia has these features. So does Turkey, Greece and Argentina. The oligarchs often own newspapers and TV stations – and so can influence the politicians and public opinion.
They have their own bank, so they can finance themselves. They have an industrial group.
They are organisations geared towards fostering close contacts with ruling politicians and buying favours. Studies highlight how transition economies are more prone to corruption. One study notes how partial economic liberalisation ‘has been combined with a continuing powerful state role in the economy, leading to a situation where there are unprecedented opportunities for firms and government officials to collude, resulting in large-scale corruption’.
