Sociology of Corruption: Patterns of Illegal Association in Hungary

By David Jancsics

In Sociology of Corruption, David Jancsics provides a fresh approach to the study of corruption in Hungary, which once seemed to be the most likely of the ex-communist bloc nations to catch up to the West and is, according to many experts and scholars, a country with a highly corrupt dynamic.

Based on data from 2022, Hungary is now the most corrupt member state of the European Union. There is also a consensus among experts that a small clique of corrupt political actors has captured most Hungarian state institutions and a significant portion of the business sector.

What fostered corruption in Hungary? What are the most typical forms of corruption in this country? What do Hungarians think about it? What is the role of prime minister Viktor Orbán in this? Sociology of Corruption proposes a novel sociological theory of corruption focusing on social status and relationships, network structures, and power dynamics as important explanatory factors of corrupt behavior. Although his focus is on Hungary, Jancsics's findings are applicable to other nations and cultural contexts.

• Language: English
• Publisher: Cornell University Press
• Release date: Apr 15, 2024
• ISBN: 9781501774348

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Cover: Sociology of Corruption, Patterns of Illegal Association in Hungary by David Jancsics

SOCIOLOGY OF CORRUPTION

Patterns of Illegal Association in Hungary

David Jancsics

CORNELL UNIVERSITY PRESS ITHACA AND LONDON

To my father, Péter,

and my wife, Veronika

Contents

Acknowledgments

List of Abbreviations

Introduction

1. A Sociological Conceptualization of Corruption

2. From Low-Level Petty Corruption to State Capture

3. Dealing with Strangers

4. The Agent Side

5. Just Helping Friends

6. Finding and Sharing Contacts

7. Do It for the Company

8. Oligarchs and Politicians

9. Patron-Client Networks and Professional Corruption Brokers

10. A Completely Captured System as of 2022

11. Policies against Corruption

References

Index

Acknowledgments

This book has been a long time in the making and owes a great deal to many people. It was largely inspired by Paul Attewell, my mentor at the City University of New York (CUNY), who urged me to research corruption in Hungary. For several years, week after week, he invited me for outstanding pizza and beer at an Irish pub in Midtown Manhattan, where he offered helpful comments regarding my ongoing research. I also benefited from the intellectual guidance of two other mentors at CUNY, John Torpey and Philip Kasinitz. I am thankful to Mauricio Font, director of the Bildner Center for Western Hemisphere Studies, for helping me survive in New York City while I was working on this book.

I want to thank fellow scholars and coauthors in different projects whose research also focuses on corruption and informal practices Abel Polese, Adam Graycar, Alena V. Ledeneva, Alina Mungiu-Pippidi, Bálint Magyar, Davide Torsello, Elizabeth Dávid-Barrett, István János Tóth, Mihály Fazekas, Peter Hardi, and Yahong Zhang. I am deeply indebted to my late coauthor, István Jávor, who introduced me to the amazing world of organizations.

I am grateful to former and current members of Transparency International, including Ádám Földes, Ágnes Bátory, Ágnes Urbán, Gabriella Nagy, József P. Martin, Miklós Ligeti, Miklós Marschall, and Noémi Alexa, who supported this book in many ways. I would also like to thank friends at other anti-corruption institutions: Saul Mullard at Chr. Michelsen Institute’s U4 Anti-Corruption Resource Centre, Jacopo Costa at the Basel Institute on Governance, and Steven Earl Gawthrope at the Anti-Corruption Research Network.

I have also been bound to a large group of reporters and investigative journalists. I have benefited from their ideas, suggestions, and deep insights into Hungarian politics. My thanks go especially to András Pikó, Attila Mong, Balázs Pándi, Beni Novák, Péter Uj, Sándor Léderer, and Tamás Bodoky.

From Cornell University Press, I am very indebted to Roger Haydon, who nurtured this book at a very early stage, and to Jim Lance, who finally brought it to completion. I am also grateful to Clare Jones for the editorial and logistical assistance.

I have been fortunate to find a supportive academic home in the School of Public Affairs at San Diego State University. I am indebted to all members of the school, past and current, who helped foster this book, especially Rod Colvin, Salvador Espinosa, and Shawn Flanigan. I particularly thank Sherry Ryan and Paul Kaplan for editing some of my writings.

My most heartfelt thanks are reserved for my family. I wrote many parts of this book in the shadow of a deep loss. My father, Péter Jancsics, died in August 2013. I am grateful for his unconditional support of this book. He connected me with some important interviewees in the traditionally working-class eighteenth district of Budapest, called Pestszentlőrinc-Pestszentimre. I dedicate this book to his memory. I owe a tribute to my treasured grandmother, Jancsics Henrikné Omami, who helped me schedule an important interview. I thank my mother, Margit Dombi, and mother-in-law, Veronika Devecseri, for their backing. My greatest gratitude goes to my wife, Veronika Szűcs, whose steadfast and unconditional support, encouragement, and patience made this book possible. She has been my bedrock during the writing of this book. I owe a lot to our dogs, Elvis, Pierre, and Balu, who have lived with us over these years. My best ideas came during the long morning walks with these beautiful creatures.

There is a special place in this section for Jonathan Wexler, the longtime editor of my manuscripts. He is the best, not only at detecting errors in the text but also for providing key comments and critiques, illuminating flaws in the logic, and even offering a few theoretical contributions. Without him this book would not exist.

Finally, I would like to extend deep appreciation to all my interviewees, who were willing to sit down with me and talk about such an important topic. I am sorry that I cannot name you for privacy reasons, but you know who you are, so thank you.

Portions of the following chapters, including interview materials, have been previously published, yet they have been substantially revised in this book: chapter 1 and chapter 11 as Corruption as Resource Transfer: An Interdisciplinary Synthesis, Public Administration Review 79, no. 4 (2019): 523–37; chapter 3, chapter 5, and chapter 6 as Petty Corruption in Central and Eastern Europe: The Client’s Perspective, Crime, Law and Social Change 60, no. 3 (2013): 319–41, reprinted by permission from Springer Nature, copyright 2013; chapter 6 as A Friend Gave Me a Phone Number—Brokerage in Low-Level Corruption, International Journal of Law, Crime and Justice 43, no. 1 (2015): 68–87, reprinted with permission from Elsevier, copyright 2015; chapter 4, chapter 7, and chapter 11 as The Role of Power in Organizational Corruption: An Empirical Study, cowritten with István Jávor, Administration and Society 48, no. 5 (2016): 527–58; and chapter 9 as Offshoring at Home? Domestic Use of Shell Companies for Corruption, Public Integrity 19, no. 1 (2017): 4–21.

Abbreviations

INTRODUCTION

This book is based on ten years of ethnographic fieldwork on corruption in Hungary. The country, which once seemed to be the most likely of the ex-communist bloc nations to catch up to the West, is regarded by many experts and scholars as highly corrupt. According to the findings of Transparency International’s Corruption Perceptions Index (CPI) 2022, Hungary dropped thirteen points on a 0–100 scale, the most points lost by any country in Central and Eastern Europe (CEE) since 2012; it is now the most corrupt member state of the European Union (EU), with a score of 42 (Transparency International Hungary 2023). There is a consensus among scholars and experts that a small clique of corrupt political actors has captured most state institutions and controls a significant portion of the business and cultural sectors in contemporary Hungary (Transparency International Hungary 2011; Innes 2014; Ágh 2015; Fazekas and Tóth 2016; Jancsics 2017a; Fierăscu 2019; J. P. Martin 2020). When and how did this happen? What are the most typical forms of corruption in the country? What are the differences between these forms, and how has their significance changed over the years? What is the role of prime minister Viktor Orbán’s illiberal government in the spread of corrupt practices at multiple levels of society? This book attempts to answer these questions.

I am Hungarian; I lived in Hungary for thirty-four years. Since relocating to New York City in 2007, I have visited my family in my home country once or twice a year. Sometimes I spent entire summer breaks there. During these trips back home, I realized that corruption was discussed much more often in everyday conversations in Hungary than in the United States. Indeed, the contrast was striking. After several informal talks with Hungarian family members, friends, acquaintances, and former colleagues, I became excited about listening to their experiences with corruption. Even if people do not participate in corruption, they usually know someone who does and have an opinion about it. Hungarians even have their own native term for shady informal practices: mutyi. Although I heard a few stories about corruption in New York as well, none of them were about the present. For example, my dog-walker friend in Brooklyn told me about scandals involving corrupt police officers, mayors, and trade union leaders, but all these cases were back in the 1970s, when, according to him, corruption was widespread in the city. I asked myself why corruption is such a hot topic in Hungary and why it does not seem to be among the most serious everyday social problems in the United States, where corrupt cases—if discussed in the media at all—are instead relegated to corporations and extremely prominent politicians.

I decided to conduct qualitative research about corruption in Hungary, a country that was considered fairly corrupt in the 1990s and 2000s but also labeled as one of the most democratic and westernized of the CEE nations. However, this research led me to avoid oversimplistic East versus West comparisons, such as emphasizing that corruption in CEE is much more widespread than in Western Europe or in the United States. The findings of my study suggested that corruption is not a single thing—it takes different forms. There is also a huge gray zone of informal practices; many of them may be regarded as corrupt in the United States but are socially acceptable, although illegal, behaviors in Hungary.

Methodological Note

This study is based on an ethnographic research approach. Between 2009 and 2022, I made ten research trips to Hungary and spent a total of nine months there. During that period, I lived with Hungarians, read local newspapers, watched local TV, followed online chats, and engaged in conversations with people about many things, including corruption. I tried to understand what was happening in my country of origin in terms of corruption. The backbone of my empirical data consists of the more than one hundred semi-structured interviews that I conducted during this research period. To synthesize my transcripts, I used qualitative coding to identify connections between the narratives and the sociological concepts (Charmaz 2006, 43). I translated the interviews from Hungarian into English myself, and I quote from them extensively in this book to illustrate my findings, enhance readability, and provide insights into the social context of corruption (Eldh, Årestedt, and Berterö 2020).

I found that a broad spectrum of Hungarians—from politicians and professionals to ordinary people of all ages and sexes—were quite open to talking about the impacts of corruption on their lives. They were willing to talk about when and where they encounter it and even their own involvement with corruption. I used snowball sampling, meaning that I asked people whom I had interviewed to recommend others they knew who would talk to me about corruption. Especially when the topic is corruption, respondents usually want to know that an interviewer is trustworthy before agreeing to be questioned. Snowball sampling uses interpersonal networks to vouch for the researcher’s trustworthiness, in addition to being a strategy to find new respondents. This procedure meant that beyond my initial contacts, most informants were not previously known to me. There are possible shortcomings of the snowball technique. For example, individuals may nominate others who think like them, limiting the generalizability of any findings (Biernacki and Waldorf 1981). However, I believe that the benefits the snowball method can provide, namely, locating members of a specific secret population and gaining insight into their corrupt activities, outweigh this weakness. I had several starting contacts, whom I drew deliberately from a wide spectrum of people, from low-level private firm employees to top executives of national governmental organizations, based on my own social networks of friends and friends of friends. I also interviewed corruption experts: practitioners and academics working at anti-corruption and pro-democracy nongovernmental organizations (NGOs), investigative media platforms, and research institutes and universities. In the summer of 2022, I went back to talk with fifteen people whom I had originally interviewed in 2009 and 2010. I was interested in their opinions about changes in corruption patterns over the previous decade or so.

I promised and provided anonymity to all informants. I recorded the interviews when given permission, which happened in most cases during the first large phase of my data collection in late 2009 and early 2010. I was interested mainly in their stories about corrupt transactions they were involved in or at least had knowledge of because their family members, neighbors, or colleagues participated. In some cases, the respondent’s social background or demographic characteristics turned out to be important factors, so—only when they are relevant—I mention them in this book. All went well in terms of participation.

Things changed after the parliamentary election in April 2010, when the current prime minister, Viktor Orbán, and his governing party Fidesz came into power. Orbán turned the country toward illiberal democracy. As part of a grandiose social engineering project, the government started to control—with different tools—deeper and deeper spheres of social life. In this newly emerging authoritarian regime, the patterns of corruption transformed too. Its more serious forms became centralized and monopolized by the governing elite, while lower-level corruption became less tolerated by authorities. These changes intrigued me, and I decided to continue my fieldwork in Hungary. While conducting interviews during summer and winter breaks, I realized that people gradually became less talkative. It was increasingly difficult to find interviewees willing to talk about corruption, and even those who agreed to participate in my research were more reluctant to allow me to record the conversations. Consequently, I learned how to take notes quickly during interviews.

Another important source of the empirical material of this book was articles and reports published by Hungarian investigative journalists. Although the Orbán government eventually captured or dismantled a large portion of the previously independent media, many journalists remained autonomous and continued to reveal the corrupt nature of the system. I had many conversations with these courageous people who jeopardized their careers by publishing their reports. If anyone understands the nature of corruption in contemporary Hungary, it is them. Some became my friends.

Conceptual Background

I developed and gradually crystallized my own conception of corruption on the basis of my research findings and my readings of the academic literature. The basic idea underlying my view originally occurred to me after I conducted my first set of interviews. At the time, I was reading Peter Blau’s (1989) republished classic work Exchange and Power in Social Life. Blau (viii) considers micro-level social exchange as the central principle of social life, in which each gains something while paying a price. While thinking about my recently conducted interviews, I realized that almost all the corruption cases described by the respondents could fit Blau’s framework and therefore into the larger framework of social life. In corrupt exchanges, just as in regular transactions, actors exchange different types of resources with each other. Blau’s previous (1955) empirical work dealt with formal organizations—specifically, informal relations in work groups, another important dimension of corruption because at least one actor in a corrupt transaction exchanges organizational resources informally.

My book was also inspired by other sociologists whose scholarship focused on the microdynamics of interpersonal relations and social associations and by some of the economic anthropologists who studied the flow and exchange of goods and other resources in society. From the list of sociologists, I need to highlight the work of Mark Granovetter, Roger V. Gould, and Katherine Stovel. My conception of corruption has also been strongly stimulated by Georg Simmel, who believed that the analysis of social associations and the processes governing them should be the central task of sociology. Yet Simmel also emphasized the importance of more stable social forms that channel and mediate interactions. They are like cups of different sizes and shapes—each molds social experience into forms while at the same time leaves room for agency (Erikson 2017). Another important inspiration came from economic anthropologists such as Marshall Sahlins, Larissa Adler Lomnitz, Christopher A. Gregory, and Karl Polanyi, who studied different forms of exchange in economic life in both ancient and modern societies. And last but not least, I have to mention Marcel Mauss, whose work on gift giving and reciprocity, which crossed the boundaries between sociology and anthropology, had a significant influence on my study. All these great authors were important to this book because their concepts inspired me to write on corruption from a sociological perspective. Apart from attempting to deconstruct the theoretical formulas developed by these scholars through the help of ethnography, the book also provides a corruption-centered narrative of the transition from communism and especially the post-transition history of Hungary. Here I tried to capture the evolution of different corruption patterns over the past three decades.

The sociology of corruption in this book is a middle-range theory, presented in the form of a parsimonious typology, that proposes particular mechanisms to explain a wide-ranging empirical phenomenon (Merton 1945; Erikson 2017, 287). Although the main focus of this study is on individual-level exchange, I do not deny the existence of mezzo-level (organizational) or macro-level (societal) social arrangements that impose constraints on social relations. Social facts are real and have their place in this analysis. My interviews suggest that corrupt actors are embedded in multiple layers of social life, including interpersonal relations, microsocial orders, organizational hierarchies, situations and opportunities, and larger components such as social class and cultural history. Therefore, corruption is a complex phenomenon that has several forms and dimensions and that cannot be fully understood by applying to it only one universal conception.

As I am finishing this manuscript in the fall of 2022, Orbán has already started his fourth consecutive term as the prime minister of Hungary. That makes him the longest-serving elected leader in Europe. Orbán and his party Fidesz scored a landslide victory in the election in April 2022 and secured a supermajority in the single-chamber parliament, which again allows them to change the constitution and even further consolidate their power. At the same time, there is a war in neighboring Ukraine, and many people expect a global economic downturn, which could seriously affect most of the world, including Hungary.

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The chapters of this book are organized to follow the structure of my corruption typology. I move from an abstract sociological conceptualization of corruption to a brief historical overview of actual corrupt patterns in postsocialist Hungary. In chapter 1, I discuss the analytical approaches to developing a new typology and to ensuing a sociological theory of corruption. This new resource transfer–based conceptualization reveals important social and organizational aspects of corruption and encompasses major forms of the phenomenon. Chapter 2 provides a chronological outline of corruption in postcommunist Hungary. I discuss the development of different types of