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Cronyism is a specific form of in-group favoritism, the spoils system practice of partiality in awarding jobs and other advantages to friends or trusted colleagues, especially in politics and between politicians and supportive organizations. [1] For example, cronyism occurs when appointing "cronies" to positions of authority regardless of their qualifications. [2] This is in contrast to a meritocracy , in which appointments are made based on merit. Politically, "cronyism" is derogatorily used to imply buying and selling favors, such as votes in legislative bodies, as doing favors to organizations, or giving desirable ambassadorships to exotic places. [3]
The word crony first appeared in 17th-century London, according to the Oxford English Dictionary ; it is believed to be derived from the Greek word χρόνιος (chronios), meaning 'long term'. [4]
A less likely but oft-quoted source is the supposed Irish term Comh-Roghna, which translates as 'close pals, mutual friends'.[ citation needed ]
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Government officials are particularly susceptible to accusations of cronyism, as they spend taxpayers' money. Many democratic governments are encouraged to practice administrative transparency in accounting and contracting, but there often is no clear delineation of when an appointment to government office is "cronyism". [5]
In the private sector, cronyism exists in organizations, often termed "the old boys' club" or "the golden circle"; again, the boundary between cronyism and "networking" is difficult to delineate. [6]
It is not unusual for politicians to surround themselves with highly qualified subordinates, and to develop social, business, or political friendships leading to the appointment to office of friends, likewise in granting government contracts. In fact, the counsel of such friends is why the officeholder successfully obtained their powerful position; therefore, cronyism usually is easier to perceive than to demonstrate and prove.[ citation needed ][ original research? ][ inconsistent ] Politicians with representatives of business, other special interests, as trade unions and professional organizations get "crony-business" done in political agreements, especially by "reasonable" and lucrative honorariums to the politician for making speeches, or by legal donations to one's election campaign or to one's political party, etc.[ citation needed ][ original research? ]
Cronyism describes relationships existing among mutual acquaintances in private organizations where business, business information, and social interaction are exchanged among influential personnel. This is termed crony capitalism, [5] and is an ethical breach of the principles of the market economy; in advanced economies, crony capitalism is a breach of market regulations.
Given crony capitalism's nature, these dishonest business practices are frequently (yet not exclusively) found in societies with ineffective legal systems. Consequently, there is an impetus upon the legislative branch of a government to ensure enforcement of the legal code capable of addressing and redressing private party manipulation of the economy by the involved businessmen and their government cronies.
The economic and social costs of cronyism are paid by society. Those costs are in the form of reduced business opportunity for the majority of the population, reduced competition in the market place, inflated consumer goods prices, decreased economic performance, inefficient business investment cycles, reduced motivation in affected organizations, and the diminution of economically productive activity. [6] A practical cost of cronyism manifests in the poor workmanship of public and private community projects.
Cronyism is self-perpetuating; cronyism then begets a culture of cronyism. This can only be apprehended by a comprehensive, effective, and enforced legal code, with empowered government agencies which can effect prosecutions in the courts.
Some instances[ examples needed ] of cronyism are readily transparent. With others,[ examples needed ] it is only in hindsight that the qualifications of the alleged "crony" must be evaluated. All appointments that are suspected of being cronyism are controversial. The appointed party may choose to either suppress disquiet or ignore it, depending upon the society's level of freedom of expression and individual personal liberty.
Crony capitalism, sometimes also called simply cronyism, is a pejorative term used in political discourse to describe a situation in which businesses profit from a close relationship with state power, either through an anti-competitive regulatory environment, direct government largesse, and/or corruption. Examples given for crony capitalism include obtainment of permits, government grants, tax breaks, or other undue influence from businesses over the state's deployment of public goods, for example, mining concessions for primary commodities or contracts for public works. In other words, it is used to describe a situation where businesses thrive not as a result of free enterprise, but rather collusion between a business class and the political class.
Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. The defining characteristics of capitalism include private property, capital accumulation, competitive markets, price systems, recognition of property rights, self-interest, economic freedom, meritocracy, work ethic, consumer sovereignty, economic efficiency, profit motive, a financial infrastructure of money and investment that makes possible credit and debt, entrepreneurship, commodification, voluntary exchange, wage labor, production of commodities and services, and a strong emphasis on innovation and economic growth. In a market economy, decision-making and investments are determined by owners of wealth, property, or ability to maneuver capital or production ability in capital and financial markets—whereas prices and the distribution of goods and services are mainly determined by competition in goods and services markets.
Corporatocracy or corpocracy is an economic, political and judicial system controlled or influenced by business corporations or corporate interests.
In economics, a free market is an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of government or any other external authority. Proponents of the free market as a normative ideal contrast it with a regulated market, in which a government intervenes in supply and demand by means of various methods such as taxes or regulations. In an idealized free market economy, prices for goods and services are set solely by the bids and offers of the participants.
Meritocracy is the notion of a political system in which economic goods or political power are vested in individual people based on ability and talent, rather than wealth or social class. Advancement in such a system is based on performance, as measured through examination or demonstrated achievement. Although the concept of meritocracy has existed for centuries, the first known use of the term was by sociologist Alan Fox in the journal Socialist Commentary in 1956. It was then popularized by sociologist Michael Dunlop Young, who used the term in his dystopian political and satirical book The Rise of the Meritocracy in 1958. While the word was coined and popularized as a pejorative, its usage has meliorated. Today the term is often utilised to refer to social systems in which personal advancement and success primarily reflect an individual's capabilities and merits, frequently seen as equality of opportunity.
A market economy is an economic system in which the decisions regarding investment, production, and distribution to the consumers are guided by the price signals created by the forces of supply and demand. The major characteristic of a market economy is the existence of factor markets that play a dominant role in the allocation of capital and the factors of production.
Guanxi is a term used in Chinese culture to describe an individual's social network of mutually beneficial personal and business relationships. The character guan, 关, means "closed" and "caring" while the character xi 系 means "system" and together the term refers to a closed caring system of relationships that is somewhat analogous to the term old boy's network in the West. In Western media, the pinyin romanization guanxi is more widely used than common translations such as "connections" or "relationships" because those terms do not capture the significance of a person's guanxi to most personal and business dealings in China. Unlike in the West, guanxi relationships are almost never established purely through formal meetings but must also include spending time to get to know each other during tea sessions, dinner banquets, or other personal meetings. Essentially, guanxi requires a personal bond before any business relationship can develop. As a result, guanxi relationships are often more tightly bound than relationships in Western personal social networks. Guanxi has a major influence on the management of businesses based in mainland China, Hong Kong, and those owned by Overseas Chinese people in Southeast Asia.
In politics and government, a spoils system is a practice in which a political party, after winning an election, gives government jobs to its supporters, friends (cronyism), and relatives (nepotism) as a reward for working toward victory, and as an incentive to keep working for the party—as opposed to a merit system, where offices are awarded or promoted on the basis of some measure of merit, independent of political activity.
Political corruption is the use of powers by government officials or their network contacts for illegitimate private gain.
Kleptocracy, also referred to as thievocracy, is a government whose corrupt leaders (kleptocrats) use political power to expropriate the wealth of the people and land they govern, typically by embezzling or misappropriating government funds at the expense of the wider population. One feature of political-based socioeconomic thievery is that there is often no public announcement explaining or apologizing for misappropriations, nor any legal charges or punishment levied against the offenders.
Neoliberalism is both a political philosophy and a term used to signify the late-20th-century political reappearance of 19th-century ideas associated with free-market capitalism. The term has multiple, competing definitions, and is often used pejoratively. In scholarly use, the term is often left undefined or used to describe a multitude of phenomena. However, it is primarily employed to delineate the societal transformation resulting from market-based reforms.
Nepotism is the act of granting an advantage, privilege, or position to relatives or friends in an occupation or field - for instance business, politics, academia, entertainment, religion or health care. In concept it is similar to cronyism. The term originated with the assignment of nephews, sons, or other relatives to important positions by Catholic popes and bishops. It has often been witnessed in autocracies, whereby traditional aristocracies usually contested amongst themselves in order to obtain leverage, status, etc.
The merit system is the process of promoting and hiring government employees based on their ability to perform a job, rather than on their political connections. It is the opposite of the spoils system.
Patronage is the support, encouragement, privilege, or financial aid that an organization or individual bestows on another. In the history of art, arts patronage refers to the support that princes, popes, and other wealthy and influential people have provided to artists such as musicians, painters, and sculptors. It can also refer to the right of bestowing offices or church benefices, the business given to a store by a regular customer, and the guardianship of saints. The word patron derives from the Latin patronus ('patron'), one who gives benefits to his clients.
Democratic capitalism, also referred to as market democracy, is a political and economic system that integrates resource allocation by marginal productivity, with policies of resource allocation by social entitlement. The policies which characterise the system are enacted by democratic governments.
Government-business relations are conducted in many ways and through numerous channels in Japan. The most important conduits in the postwar period are the economic ministries: the Ministry of Finance and the Ministry of Economy, Trade and Industry. The Ministry of Finance has operational responsibilities for all fiscal affairs, including the preparation of the national budget. It initiates fiscal policies and, through its indirect control over the Bank of Japan, the central bank, is responsible for monetary policy as well. The Ministry of Finance allocates public investment, formulates tax policies, collected taxes, and regulates foreign exchange.
Regulatory capitalism suggests that the operation maintenance and development of the international political economy increasingly depends on administrative rules outside the legislatures and the courts. In other words, it tells us that capitalism is a regulatory institution – one that is being constituted, shaped, constrained and expanded as a historically woven patchwork of regulatory institutions, strategies, and functions.
Wasta or wāsita is an Arabic word that loosely translates into nepotism or 'clout'. It refers to using one's connections and/or influence to get one's way, usually in governmental matters such as preferential treatment in expedited document-issuing, visa approval, waiving of fines or misdemeanor charges and similar corrupt practices. The term is also extended to cronyism and nepotism in allotment of public sector jobs.
The padrino system, or patronage in Filipino culture and politics, is the value system where one gains favor, promotion, or political appointment through family affiliation (nepotism) or friendship (cronyism), as opposed to one's merit. The system traces its origins to the Spanish colonial period where Filipinos were forced to obtain the consent of the Spanish or a wealthy fellow Filipino, usually a friar, to occupy a government position or improve their social or economic status. The padrino system in the Philippines has been the source of many controversies and corruption.
Myth of meritocracy is a phrase arguing that meritocracy, or achieving upward social mobility through one's own merits regardless of one's social position, is not widely attainable in capitalist societies because of inherent contradictions. Meritocracy is argued to be a myth because, despite being promoted as an open and accessible method of achieving upward class mobility under neoliberal or free market capitalism, wealth disparity and limited class mobility remain widespread, regardless of individual work ethic. Some scholars argue that the wealth disparity has even increased because the "myth" of meritocracy has been so effectively promoted and defended by the political and private elite through the media, education, corporate culture, and elsewhere. Economist Robert Reich argues that many Americans still believe in meritocracy despite "the nation drifting ever-farther away from it."