Kleptocracy

Article byNanditha Saravanakumar
Reviewed byDheeraj Vaidya, CFA, FRM

Kleptocracy Meaning

Kleptocracy, also known as thievocracy, refers to a form of government where leaders use their power to confiscate citizens’ property for their advantage. Such governance is unfair to commoners and can lead to a political, social, economic, and financial disintegration of a nation’s systems.

What is Kleptocracy?

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Many social evils accompany kleptocracy, like corruption, illegal activities, etc. Moreover, kleptocratic leaders’ utter disregard for citizens’ rights, like equality and freedom, eventually transformed into a dictatorship. Even though the term might sound archaic, it is prevalent in many parts of the world.

Key Takeaways

  • Kleptocracy refers to a system of governance where political leaders use their power to confiscate citizens’ properties.
  • Such leaders view their country and subjects as cash cows from which they can benefit. Kleptocratic governments encompass versions of dictatorships, autocracies, plutocracies, and oligarchies.
  • It can adversely affect a country leading to the collapse of all systems and the eventual demise of a nation in extreme cases.
  • In the modern context, kleptocracy countries have high levels of corruption and absolute government control that political leaders will be above the law.

Kleptocracy Explained

Kleptocracy etymologically means to steal. The roots of the word can be traced to the Greek language. Since the 1960s, there have been many kleptocratic governments worldwide. This is probably due to major political and economic transformations in the aftermath of two world wars, accompanied by falling colonialism.

But at present, too, there are some countries where this is followed. Mostly, kleptocratic governments are associated with developing and least-developed nations. Especially in some African countries, corruption is extremely high, and the people do not receive adequate legal representation, resulting in many illegal activities occurring on the government’s behalf.

So what exactly happens in kleptocracies? Governments seize private property. People do not get adequate legal representation and hence no justice. Third, the leaders launder money into foreign countries and maintain assets abroad.

There will not be any economic developments, probably because leaders are too busy spending public money on themselves. Therefore, major economic indicators like literacy, employment, GDP, and growth rates will be unfavorable.

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Examples

Let’s look at some examples of kleptocratic governments.

Example #1

Country Q belongs to the least-developed countries. The government confiscated the properties of citizens and allowed multinational companies (MNCs) to set up factories on people’s lands. The government even displaced villages and areas closer to rivers and lakes. As a result, people lost their agricultural lands. Agriculture was the primary income for the country.

Though some people were employed in the factories, the wages were too low for families to sustain. The government took bribes from MNCs and, thus, was irresponsive to the needs of the people – remuneration, environmental concerns, scarcity of food and water, etc. The leaders spent most of their time on vacations outside the country and bought assets in foreign countries, using the money they received from the MNCs.

The economy was stagnant, and though companies built factories, none of the activities helped the 20 million population. The literacy and employment rate was in the single digits. Further, infant mortality was rising, and life expectancy was falling.

Example #2

Here is an example of Russian kleptocracy. With the Russia-Ukraine war, the United States government has sought to crack down on the money laundering activities of the Russian elites. As a result, the U.S. government, in February 2022, called the Russian government a kleptocracy.

Many skepticisms about the Russian elite and their corrupt activities have been running around. However, with the war and the many sanctions imposed on Russia, the U.S. government has planned to confiscate and repatriate the elite’s assets.

Kleptocracy vs Plutocracy vs Oligarchy

Kleptocracy, plutocracy, and oligarchy are similar forms of government in that there is no equitable political representation. Further, most activities take place for the benefit of the rulers.

In an oligarchy, the government formed only constitutes a few with common characteristics belonging to a particular class or section of society. In a plutocracy, a select few belong to wealthier sections.

So automatically, some or most of the actions of such a government will be unfair or disadvantageous to others who do not belong to the leaders’ group or circle. Kleptocracy governments, too, are unfair to the people in that they lawfully steal their subjects’ properties. But they can also harm people.

Hence, though these three forms of government are different, they are not entirely suitable for the citizens and encourage all types of inequality – political, economic, financial, and social. And in the long run, they might become detrimental to the country.

Frequently Asked Questions ( FAQs)

1. What is a kleptocracy government?

Kleptocratic governments expropriate citizens’ properties and lawfully steal their assets. They use the capital rightfully belonging to people to finance their needs and launder the money to foreign countries. In such a situation, all citizens, except those who form the government, are usually not well-to-do. Slowly, kleptocratic governments transform into dictatorships.

2. What are examples of kleptocracy?

At present, kleptocracy countries have high levels of corruption and low level of economic growth. Apart from this, countries where elites with foreign associations run the government, too, are most likely to be kleptocratic.

3. Where did kleptocracy come from?

Etymologically, the word’s origin can be traced to the Greek word ‘klepto,’ which means to steal. Historically, many sources suggest that the concept must have originated somewhere in the 1960s. This could’ve been due to the waning effects of colonialism, the effects of two world wars, and the power distribution between two axes – the U.S. and the U.S.S.R.

This article has been a guide to Kleptocracy and its meaning. Here, we explain it with examples and compare it with plutocracy and oligarchy. You may also find some useful articles here –

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