Does the Defence Industry Capture the State in France?

Renon, E. (2019). Does the Defence Industry Capture the State in France? GTI-WP/2019:03, London, UK: Government Transparency Institute.

State capture is the disproportionate and unregulated influence of interest groups or companies, where they manage to bend state laws, policies and regulations by paying illicit contributions to political parties and for election campaigns, buy parliamentary votes, presidential decrees or court decisions, as well as through illegitimate lobbying and revolving door appointments. State capture can also arise from the more subtle close alignment of interests between specific business and political elites through family ties, friendship and the intertwined ownership of economic assets. The main risk of state capture is that decisions no longer take into consideration the public interest but instead favour a specific group. Laws, policies and regulations are designed to benefit a specific interest group, to the detriment of smaller firms and society in general. In the case of the defence industry, companies have an incentive to either bribe or establish networks of friends within government in order to ensure that the state awards their companies with large public contracts. This would come at the detriment of competitors, which could be producing better and cheaper equipment, and at the detriment of the state itself, which would not be paying a fair price. Given that most defence contracts in France follow a procedure of negotiation without competition, instead of a standard competitive procedure, we wonder whether defence industries are capturing the state in France and, if so, to what extent, how, and what can be done to reduce corruption risks?

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