From concentrated power to state capture: Georgia’s backsliding anti-corruption reforms

Transparency International’s latest Corruption Perceptions Index (CPI), ranks Georgia as the highest scorer (58 out of 100) in the Eastern Europe and Central Asia region. However, recognising that the country’s anti-corruption progress has stalled over the last decade, Georgia was listed as a “country to watch” due to growing concerns about high-level corruption as well as broader worries about the health of democratic governance.

Georgia is often cited as an example of successful anti-corruption reforms. Over the last 15 years, the country has made significant progress in reducing certain forms of corruption, including bribery in public services. Compared to other parts of the region, where most countries are ruled by highly corrupt governments, Georgia stood out for its anti-corruption efforts. Yet, these efforts fell short in sustaining long-term success in the fight against corruption.

Anti-corruption reforms, which began after the peaceful Rose Revolution in late 2003 produced tangible improvements in important areas of public administration, including public services, education and police.

Notably, significant reduction of corruption in tax collection resulted in rapid growth of tax revenues, providing the government with the necessary resources for performing its most fundamental functions, such as combating crime and developing basic public infrastructure. However, reforms were unsuccessful or absent in other important areas, including the judicial system.

Unfortunately, despite positive developments in anti-corruption reforms, former President Mikheil Saakashvili, who served from 2004 until 2013, along with a small circle of his allies, maintained a growing concentration of power. This influence extended to key democratic institutions such as Parliament and the judiciary, and helped keep the political opposition weak. This state of affairs made it impossible to establish a proper system of checks and balances and resulted in a lack of accountability at the top levels of government, creating extensive opportunities for abuse of power and political corruption.

For example, in 2012, leaked videos showed prison guards torturing inmates in Georgian jails, which exemplify a serious lack of oversight and impunity of public officials. This widespread abuse of power was among the main reasons why President Saakashvili’s party, the United National Movement (UNM), lost the parliamentary elections later that year to Georgian Dream — a coalition of several parties established and led by Georgian billionaire, Bidzina Ivanishvili.

As the system of concentrated power and control, which the UNM had built, began to disintegrate, Georgia had a real opportunity to establish a genuinely pluralistic democracy, based on the principles of accountability and separation of powers. However, rather than advancing toward this goal, Georgian Dream opted, instead, to recreate the old system of concentrated power, albeit with different people in charge.

Still the ruling party today, Georgian Dream has yet to make much progress in strengthening democratic practices or combating corruption in Georgia. Specifically, the country continues to experience an uneven electoral playing field. The ruling party has total control of Parliament and the ability to change all laws, including the Constitution, without consulting other important stakeholders and while ignoring the legislature’s role in overseeing the executive branch. This democratic backsliding makes the country vulnerable to high-level corruption.

The ruling party also exerts significant control over the country’s leading media outlets, including public and private outlets, as well as key public institutions, including law enforcement agencies. As a result, these agencies lack proper professional autonomy and are unable to effectively investigate alleged cases of corruption involving high-ranking members of the government and ruling party.

Finally, corruption occurs throughout the judicial system, where informal agreements exist between the ruling party and a group of senior judges, where those judges who deliver favourable decisions to the government are rewarded with lifetime appointments.

Meanwhile, former Prime Minister Ivanishvili, who resigned in late 2013, remains an effective leader and chief decision-maker of the ruling party, while holding no formal office. As such, he is also exempt from all public accountability procedures.

Within this informal power structure, multiple individuals have moved from jobs in Ivanishvili’s private companies to high-level positions in the government, providing him with further levers of control. Consequently, Ivanishvili’s companies have benefited from a number of government decisions, including those concerning privatisation of public assets and issuing of construction permits in protected areas.

Today, Georgia shows clear signs of state capture, where Ivanishvili and a group of people with close links to him exert significant influence over nearly all key public institutions and exploit them for their own benefit.

Highlighting this point, the government has failed to respond appropriately to a series of corruption cases in late 2018, including the case of apparent extortion of money from private companies for the ruling party’s benefit. In addition, cases of vote-buying and violations of campaign finance rules during the presidential election, further highlights the growing problem of political corruption in Georgia.

Corruption in the judicial systems also remains a challenge. A recent resolution by the European Parliament noted that “high-level elite corruption remains a serious issue” in Georgia and that a “solid track record of investigations into high-level cases of corruption [have] yet to be established.”

Instead of addressing the issue (for example, by considering the civil society’s proposal to establish an independent anti-corruption agency), the government has opted to attack civil society organisations that expose corruption, questioning their impartiality and engaging in a smear campaign against their leaders.

Ultimately, the story of Georgia’s anti-corruption reforms tells us that there is a limit to what a narrowly focused anti-corruption policy can achieve without fundamental changes to democratic governance.

In countries with weak democratic practices, those in power have a strong incentive to keep the status quo and prevent democratic improvements that may lead to a loss of power or punishment for their crimes. To stay in power, these leaders may resort to bending party finance and other electoral rules or awarding government contracts to their cronies.

As our CPI analysis suggests, in order to control corruption, governments need to strengthen institutions that provide democratic checks and balances, bridge the gap between law and enforcement, support a free and independent media and promote citizen engagement in government.

If Georgia is to avoid a reversal of past anti-corruption achievements and make further progress, urgent steps are needed to ensure effective operation of the country’s key institutions, most importantly Parliament and the judicial system. Meanwhile, other countries in the region setting out to implement anti-corruption reforms would be well advised to learn from Georgia’s experience.

Learn more from Transparency International Georgia, our national chapter, which has been at the forefront in the fight against corruption in Georgia since 2000.

This blog is part of a series entitled, “CPI 2018 in focus,” which highlights country content from the 2018 Corruption Perceptions Index (CPI).