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Home , Corruption, Corruption in Ukraine, Cronyism, Nepotism, Political corruption

Volume 9 - Issue 29 / May 2020 163

DOI: http://dx.doi.org/10.34069/AI/2020.29.05.19

Nepotism, favoritism and as a source of : or not?

Непотизм, фаворитизм та кронізм як джерело конфлікту інтересів: корупція чи ні?

Received: February 5, 2020 Accepted: March 28, 2020

Written by: Anna Tytko79 ORCID ID: 0000-0002-5669-2208 Mykhailo Smokovych80 ORCID ID: 0000-0003-1710-4044 Yuliia Dorokhina81 ORCID ID: 0000-0002-2799-3933 Olena Chernezhenko82 ORCID ID: 0000-0002-4344-2605 Serhii Stremenovskyi83 ORCID ID: 0000-0001-6547-2576

Abstract Анотація

The purpose of the article is to analyze the Метою статті є аналіз понять “непотизм”, concepts of “”, “favoritism” and “фаворитизм” та “кронізм” як форм конфлікту “cronyism” as the forms of conflict of interest, as інтересів, а також виявлення взаємозв'язку між well as to identify the relationship between the поширенням цих явищ та детермінантів dissemination of these phenomena in the context останнього. Методологія. Враховуючи мету of conflict of interest and the determinants of the статті, на основі методу системного аналізу latter. Methodology. Taking into account the визначено зв’язки між корупцією та purpose of the article, the links between the непотизмом, кронізмом, фаворитизмом як corruption and nepotism, cronyism, favoritism as формами конфлікту інтересів. Логічний метод, forms of conflict of interest have been defined а також порівняльно-правовий метод based on the method of a systematic analysis. допомогли проаналізувати поняття The logical method, as well as comparative and “непотизм”, “кронізм”, “фаворитизм” та legal method helped to analyze the concepts of “клієнтизм”. Метод індукції та дедукції “nepotism”, “сronуіsm”, “favoritism” and дозволив виділити основні риси фаворитизму, “”. The method of induction and кронізму та непотизму. Метод герменевтики deduction enabled to distinguish the key features надав можливість інтерпретувати of favoritism, cronyism, and nepotism. The вищезазначені поняття крізь призму method of allowed to interpret the особливостей корупції. Системно-структурний above concepts through the prism of the features метод допоміг у встановленні логічного of corruption. The system and structural method взаємозв’язку між конфліктом інтересів та made it possible to make a logical connection проявом фаворитизму, непотизму та кронізму. between the conflict of interest and the Завдяки методу правового моделювання були manifestation of favoritism, nepotism and сформульовані основні висновки та пропозиції. cronyism. The legal modeling method was Результати дослідження. У результаті helpful in drawing conclusions of the research. дослідження визначено переваги та недоліки The results of the study. The pros and cons of використання сімейних зв'язків та дружніх

79 PhD in Law, Leading Research Associate of the Scientific Laboratory on Problems Counteracting of of the National Academy of Internal Affairs, . 80 Doctor of Law, Honoured of Ukraine, Associate Professor of the Department of Municipal Law and Administrative Law Disciplines of I. Malynovskyi Institute of Law of the National University of Ostroh Academy, Ukraine. 81 Doctor of Law, Associate Professor, Professor of the Department of Special Legal Disciplines of V.I. Vernadsky Taurida National University, Ukraine. 82 Doctor of Law, Senior Research Fellow of the Scientific Laboratory for Counteracting Crime Problems of the Educational and Scientific Institute №1 of the National Academy of Internal Affairs, Ukraine. 83 PhD in Law, Associate Professor of the Department of Jurisprudence of Pylyp Orlyk International Classic University, Ukraine.

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Tytko, A., Smokovych, M., Dorokhina, Y., Chernezhenko, O., Stremenovskyi, S. / Volume 9 - Issue 29: 163-169 / May, 2020 164 using ties and friendly relations, відносин, залежно від сфери розповсюдження depending on the scope of nepotism, favoritism непотизму, фаворитизму та кронізму. and cronyism have been identified as a result of Досліджено зв’язок між цими явищами та a study. The connection between these поширенням конфлікту інтересів на державній phenomena and the spread of conflicts of interest службі. Практичні наслідки. Зроблено спробу in the public service has been examined. дослідити фаворитизм, непотизм та кронізм як Practical implications. An attempt to identify форми конфлікту інтересів. Для подолання цих favoritism, nepotism and cronyism as the form of негативних явищ надано рекомендації щодо conflict of interest has been made, as well as внесення змін до відповідних нормативно- some recommendations to amend the relevant правових актів. Співвідношення / legal acts have been provided. Value / originality. оригінальність. Уперше автори дослідили For the first time, the authors examined the можливість отримання позитивних результатів possibility of having positive results from using від використання непотизму, кронізму та nepotism, cronyism and favoritism in forming фаворитизму у підприємницькій діяльності. business environment. Ключові слова: фаворитизм; кронізм; Keywords: favoritism; cronyism; nepotism; непотизм; кумівство; конфлікт інтересів; nepotism; conflict of interests; clientelism; клієнтелізм; лояльність. loyalty.

Introduction

The conflict of interest, which is manifested business interests in the form of , through informal types such as nepotism, equity, board membership, investments, favoritism and cronyism, is in the stage of active influencing the decision- development in Ukraine. The conflict of interest making and non-decision-making processes or as a phenomenon related to corruption is a the actions in favor of the private interests of prerequisite that contributes to the development interested parties. of corruption offenses. The emergence of a conflict of interest precedes extracurricular Literature Review relations that have, or may have, potential corruption risks associated with family, close The phenomena of nepotism, cronyism and relationship or business interests. As a rule, this favoritism are explored by many scholars. In concerns officials, who directly represent the particular, G. Abramo, C. A. D’Angelo and interests of public authorities and local self- F. Rosati (2014) studied the phenomenon of government, and who, at the same time, have nepotism in academic spheres. They came to the their own private interests, which is contrary to conclusion that nations with high levels of the interests of the . We regard nepotism, corruption and higher systems with no cronyism and favoritism as prerequisites for or low intensity of competition among conflicts of interest underlying private interest. universities are generally more exposed to Therefore, the conflict of interest is a broader and phenomena of favoritism in faculty recruitment deeper corruption phenomenon, covering not and career advancement, while the high intensity only the existence of a potential conflict of of rivalry among universities in competitive interest, decision-making under the conflict of higher education system in itself represents a interest, but also generating corrupt links within practical antidote to nepotism. the State mechanism, the spread of such phenomena as the appointment of close relatives, Some forms of nepotism were also investigated giving benefits and privileges to friends, etc. by M. Padgett and K. Morris (2005), D. M. Safina (2013), A. Siegert (2008), G. Kerse The conflict of interest has for many years been and M. Babadağ M. (2018). The issues of a hidden threat in the context of personal nepotism as a socially destructive phenomenon in public decision-making. These were discussed by D. Zaykov (2017), issues mainly focus on traditional sources of Yu. Matsiievskyi (2010) and other researchers. influence, such as personal or family relationships and or hospitality offered to The concept of “favoritism” was examined by government officials. The convergence of the N. Komliev (2000), D. Kreimer (2012), public and private sectors has broadened the A. Kopystyra (2013). scope of the conflict of interest and led to private

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The issues of clientelism were investigated by P. In the course of the study general and specific Keefer Philip and R. Vlaicu (2008), who stressed scientific methods were used. Thus, based on the that policy outcomes in poor-performing purpose of the article, the links between the are often identified with the corruption and nepotism, cronyism, favoritism as influence of clientelism and, specially, of forms of conflict of interest have been defined patrons. The analysis here suggests that the with the help of the method of systematic influence of patrons is a symptom of the absence analysis. of credibility. Given that politicians are not credible, patron influence on policy outcomes is The logical method, as well as comparative and mixed rather than unambiguously negative. legal method helped to analyze the concepts of Politician reliance on patrons actually improves “nepotism”, “kronism”, “favoritism” and outcomes relative to the situation in which “clientelism”. These concepts were also politicians can do nothing to make themselves generalized and systematized due to comparative credible. and legal method.

A. Hicken (2011), having examined clientelism, The method of induction and deduction enabled stated that it is characterized by the combination to distinguish the key features of favoritism, of particularistic targeting and contingency- cronyism, and nepotism. based exchange. This phenomenon exists in a large variety of cultural contexts. Confronted The method of hermeneutics allowed to interpret with , clientelism fades the above concepts through the prism of the away in some political contexts but adapts and features of corruption. Some general and survives in others. distinctive features of the mentioned corruption forms of conflict of interest were also outlined R. Maiz and R. Requejo (2001), in their turn, with the help of this method. These features are: explored the relationship between political the presence of , friendship, business ties, clientelism and certain forms of corruption from unjustified privileges and advantages, the the perspective of the exchange circuits that domination of certain elites on the basis of characterize both of these pathologies of partnerships, the formation of dynastic , the . The scientists believe that the lack of competence. corruption phenomenon that they have labelled corrupt clientelism or bastard The system and structural method made it constitute the mechanism for reproducing and possible to make a logical connection between reinforcing the clientelist linkage networks, the conflict of interest and the manifestation of facilitating the illegal provision of resources favoritism, nepotism and cronyism. along a nested circuit of indirect exchange. The legal modeling method was helpful in Methodology drawing conclusions of the research.

The methods of scientific research are the Results and Discussion methods that allow to solve the scientific problems and to achieve the research goal. Many The issues of nepotism and cronyism have been special scientific problems require the use of studied poorly in Ukraine and are generally special scientific research methods. They perceived as a type of . We represent a certain combination of methods, are trying to find out the peculiarities of the research techniques, principles of cognition that development of these phenomena in the view of are applied in a particular scientific area. corruption, taking into account the experience of the countries of Western Europe. Along with special methods, general methods are also used. They are divided into practical and Such countries as the , theoretical ones. Practical or empirical methods , Spain, Italy, , and the Benelux allow to record and describe phenomena, facts, countries are considering conflicts of interest in relationships between them. The detailed general because of a conflict between their analysis of various facts is carried out, significant authority and their own private interest. patterns are revealed, mental models are formed, and hypotheses are used with the help of the As the practice shows, the conflict of interests theoretical method. has so broadly encompassed all branches of government at all levels, where the presence of any private interest (property, business, family,

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166 social, economic, political, etc.) leads to widespread forms of corruption during decision-making with violation of anti- 1991–2018 (Kopystyra, 2013). Nepotism corruption requirements, bans and restrictions. involves favoritism for family members and relatives regarding hiring or promotion, as well In any case, the conflict of interest is based on the as appointing authorities in some areas. On the private interest, created by property or non- other hand, nepotism involves favoritism for property interests, including those caused by friends or relatives of friends for recruiting or personal, family, friendship or other outside promotion. activities with individuals, including those associated with membership or activities in The dissemination of favoritism in the civil public, political, religious or other organizations. service leads to the disappointment of the “new It is worth noting when analyzing the concept of generation”, “brain drain” of the best university private interest that the source of nepotism, graduates, as the representatives of the so-called cronyism, favoritism, is in a situation, in which “family clans” have an advantage in the person already has such interests, due to in . which there are opportunities to manipulate his own powers for their own benefit and the benefit Favoritism increases the demotivation of the of the other ones. Prohibition of cronyism is not workforce, negatively influences moral a standard for “working without relatives”, but it principles; may be based on sexual services. In prohibits a public servant from using and abusing particular, N.G. Komliev (2000) considers his or her office to obtain public employment for nepotism as the official patronage of relatives the members of the family. and right people. These definitions mean that favoritism and nepotism take place when the Favoritism (from the Latin word “mercy”) has patron, imbued with the power, helps his people the meaning of unjust and biased patronage, to mastermind the career, regardless of their despite causing social harm (Chudinov, 1910). experience, knowledge or ability. Favoritism is revealed through the appointment of the favorites to leadership positions in the Nepotism is also defined as the actual or public sector, despite the fact that they have perceived benefits given to family members. neither the appropriate capacity nor the Nepotism is represented in the employment of experience necessary to fulfill such family members in the same organization. responsibilities. So the favorite is a person, who is trusted, so he (she) influences the decision of According to M. Padgett and K. Morris (2005), the chief to mastermind the career. there are two forms of nepotism at work: hereditary (cross-generational nepotism) and The concept of “favoritism” is closely related to matrimonial nepotism (paired employees). the terms nepotism (from the Latin word Hereditary nepotism involves the appointment of “nepotism” meaning “grandson, nephew”), as the members of the family and the relatives to well as kronism (e.g., employment on the political office, which generally refers to private principle of old university relations), i.e. business, including , businesses, privileges and benefits granted to the relatives or private business entities, etc. Matrimonial friends regardless of their professional values. nepotism refers to the organizations, in which Favoritism, viewed from the standpoint of the one of the spouses is appointed to the same work, form of conflict of interest, is a broader definition where his or her spouse or wife already works. by its etymological content and covers the concepts of “cronyism” and “nepotism”. The Since nepotism is, first and foremost, dangerous report by the American organization Freedom in the appointment of government officials, House reveals the expansion of the process of because it entails a great deal of corruption risks “familiarization” (the role of family ties in and of authority, attention should be strengthening power and corruption) in Ukraine focused on the officials as the main subjects of (Kreimer, Nurik, Sushko, 2012). responsibility for nepotism. This also is confirmed by D. M. Safina (2013), who believes It was in Ukraine during the transition period that nepotism often leads to the artificial creation of nepotism emerged as a of relationships, management positions and even entire driven by stable family ties, which turned departments for the relatives. into a hierarchy of family businesses. For example, favoritism, nepotism, cronyism, Nepotism, as A. Siegert (2008) correctly points patronage and clientelism, bribes, and out, is a manifestation of corruption that lies in trading in influence became especially the for personal gain, namely in

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giving an advantage to genetic relatives over peculiarity of such relations is that the client is non-family members, regardless of their protected in exchange for his loyalty and political professional background and achievements. support. Patronage and clientelism are indivisible phenomena and vary only in scale. The Nepotism should be regarded as the breach of difference is that clientelism has a hierarchical ethical rules of conduct by the officials, or as an class of intermediaries, and in the case of administrative offense related to corruption, as protectionism (patronage), protectors play a key the appointment of close relatives, by which role. should be considered persons, who reside together, have a joint household, mutual rights Nepotism related to family ties has the following and obligations towards the subject of features: 1) it includes favoritism towards responsibility (except persons, whose mutual relatives and family members in order to be rights and obligations towards the subject are not promoted and to mastermind the career; of family nature), including persons who live 2) the appointment takes place without the together, but are not married, and regardless of assessment of competency, experience, the specified conditions – husband, wife, father, knowledge and skills to perform tasks in the mother, stepfather, stepmother, son, daughter, relevant area of activity; 3) it is based on stepson, stepdaughter, sibling, grandfather, friendships and partnerships. grandfather, grandmother, great-grandfather, great-grandmother, grandson, granddaughter, Nepotism is not always regarded as a negative great-grandson, great-granddaughter, son-in- phenomenon. Thus, the practice of appointing law, daughter-in-law, father-in-law, father-in- relatives and friends to the positions in the law, mother-in-law, adopter or adopted, guardian private sector, which is only gaining momentum, or carer, a person under the guardianship or care is quite positive and is seen as an effective work of the said subject. Chronism, nepotism, organization. This situation is due to the fact that favoritism, or other forms of privileged attitude, professional duties based on blood and friendship according to G. Kerse and M. Babadağ M. (2018) provide reliability and resistance in difficult cannot be regarded as a clear guarantee of the situations in the face of low salaries and manifestation of corruption offenses and offenses organizational insecurity in critical times of the related to corruption, however, it leads to various development of private structures. acts of corruption. Therefore, it is customary to allocate socially Cronyism is a broader term than nepotism, and positive and negative nepotism in international covers the situations, in which benefits and practice, which are caused, first of all, by the privileges are offered to friends and colleagues. source of financial income. Private sector Nepotism is fixed in the expressions “old school institutions and organizations are interested in tie” or “old boys club” in the UK. Thus, establishing strong internal organizational C. Goman (1991) considers that emotional relations with strong management, who is able to communication, the so-called fidelity, has two take responsibility at critical moments and aspects – emotional and behavioral. Firstly, a accomplish complex tasks, notwithstanding time person can express sincere gratitude, the so- and own resources. called loyalty, for the service rendered to him by a close friend or acquaintance, who holds more Typically, this degree of payoff can be obtained favorable position, which is based on the if: a) middle and senior executives are interested relationship between the head and the in the development of the enterprise in subordinate. Secondly, the person’s behavioral connection with their own financial inflows; aspect in the relationship is manifested by the b) such enterprises, as a rule, are family business “peace offering” and making uncritical and have a long enough history of development; comments about the work of the boss, which c) socially positive nepotism has psychological negatively affects the assessment of the situation links based on the motivation of the founders, and creates illusion of a “good leader” (Khatri & owners or investors to increase the profit rate of Tsang Eric, 2019). enterprises (Jaskiewicz, Uhlenbruck, Balkin, & Reay, 2013). Another interesting point was made by F. Fukuyama (2016), who considers such Therefore, the key difference between cronyism phenomena as patronage or clientelism a form of and nepotism is the existence of blood ties or corruption. This kind of relationship implies close relationships, while favoritism is a form of mutual exchange of services between two privileged formation along with nepotism and persons of different status and power. The cronyism.

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While nepotism demonstrates a privileged 2) an improper performance of duties by a attitude towards relatives, cronyism person due to the presence of personal demonstrates a privileged attitude towards interest; friends. Thus, the dictionary provides an 3) the use of official powers with the violation interpretation of “nepotism” as “patronage given of ethical norms; on the basis of family relations, not merit” 4) the possibility of obtaining property benefit (Business Dictionary, 2020). Nepotism is a form by one or both parties to the alleged conflict of patronage or intercession. Implementation of of interest. both nepotism and patronage leads to the conflict of interest (Fukuyama, 2016). Conclusions

This last opinion is shared by M. Kwon (2006), 1. Nepotism, cronyism, favoritism are hidden who believes that favoritism, nepotism, and forms of corruption, which lead directly to cronyism are stimulants for the development of the conflict of interest and create corruption the conflicts of interest. This is manifested in risks in the exercise of official powers. various spheres, in particular in political and 2. Nepotism, favoritism and cronyism are administrative ones, in which ineffective negative social phenomena when it comes to decisions are made, loss of motivation and a the public sector of government, generated decrease in labor productivity are taken place by the desire to get rich; to advance one’s because of these phenomenon. Chronism is a own status in the social hierarchy; to employ narrower form of favoritism, which is friends and relatives; elimination of the characterized by the expression “the thing is not competency approach when appointing to in what you know, but who you know”. leadership positions in public authorities and local self-government. Thus, the results of a poll conducted by the 3. Nepotism, cronyism and favoritism can have International Republican Institute (IRI) showed a positive impact when it comes to dynastic extremely high public concern about the spread campaigns, which are based on their own of family ties in government. Thus, only 87% of motivation to achieve well-being and respondents indicated that they consider increase profits. corruption the main problem; 83% said that 4. In general, nepotism, favoritism and nepotism is the main problem that causes cronyism are inherently neutral in terms of corruption at all levels of the state apparatus corruption, but under certain conditions may (International Republican Institute & the lead to conflicts of interest and corruption. Government of Canada, 2015). These phenomena are at the core of private interest because of the friendship or kinship It is the spread of unjustifiably high levels of and stimulate conflict of interest as a corruption risks through family and friends that corruption risk. The main indicator is has led to the situation, in which has precisely the presence of interests of public become aggressive to any reform within the authorities through the exercise of official country and has led to frustration and a declining powers by an official authorized to exercise level of trust in Government. the functions of the state. There may be contradictions between the exercise of Having a family relationship is just one of the delegated powers and the personal interests factors that can give rise to the conflict of of an official, and these contradictions are interest, and is complemented by the existence of risk factors when it comes to favoritism, sufficient grounds to believe that under these nepotism and cronyism. conditions, individuals have an opportunity to use their powers for the personal benefit. References Familial ties or links cannot always be recognized as a cause of a conflict of interest, and Abramo, G., D’Angelo, C. A., & subsequently lead to more aggressive forms of Rosati, F. (2014). Relatives in the same corruption. To prove the causal link between the university faculty: nepotism or merit? use of official powers for the benefit of family Scientometrics, 101, 737–749. DOI: members, relatives, friends, etc., and the conflict https://doi.org/10.1007/s11192-014-1273-z. of interest, the following conditions set must be Business dictionary (2020). Favoritism. met: Available at http://www.businessdictionary.com/definition/fa 1) the existence of family relations between the voritism.html. parties to the alleged conflict of interest;

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