Gaming the system
Original text by Philip Hanson
The notion of ‘gaming the system’ may be summed up as manipulating the formal rules and procedures that are intended to preserve an existing system, in order to exploit that system for one’s own purposes. The notion does not, however, lend itself to a simple definition, as is shown by the complexity and richness of the material contained in this chapter. In my introduction, I offer some reflections on the degrees of complexity of the informal practices described here; on family resemblances across the practices of different countries; on the importance of symmetry between formal rules and informal norms, and, since the period that followed the end of communism in the Soviet Union and Eastern Europe offers so many rich examples of gaming the system, on the effects of post-communist social change.
A system can be gamed with widely varying degrees of elaboration. Parking your car in a disabled parking space barely qualifies as gaming the system, even if you get away with it. You have secured the advantage of a parking place by breaking a formal rule; that is all. That is akin to simple fare-dodging. If however you illicitly acquire a ‘Disabled’ sticker for your car and then park in a disabled parking space, you are gaming the system in a slightly more elaborate way.
A cartoon by Alex (The Daily Telegraph 2016) illustrates a particularly sophisticated variation on the theme of insider trading (see insider trading in USA). A City trader thanks a financial analyst for his share tips, which are invariably wrong. The gratitude is double-edged. By basing some of his trades on those tips, the trader can keep his overall performance down to a level at which it does not arouse suspicion. The rest of his trades are based on inside information.
In gaming the system, complexity can vary a great deal. Blat in Romanian usage can refer to something as straightforward and innocent as hitching a ride, through fare-dodging on public transport to giving (and taking) bribes. In Arabic, wāsta can refer to informal intermediation in family disputes but also to ‘politicians swapping political largesse for votes.’ In Azerbaijani, taps—where an intermediary gains a favour for a supplicant from someone in authority—may entail simply the speeding-up of a bureaucratic procedure or it can be used to ‘protect students from extortion of informal payments by instructors and teachers.’
Some of the terms explored in this chapter, however, are highly specific. They do not permit a great deal of variation in the sophistication with which they are applied, and they seem to be endemic to a particular country. This is true in particular of externe Personen in Germany and flipping by British members of parliament. What makes them so apparently specific? Could they be assimilated into informal practices of a more general kind?
‘Gaming the system’ applies to a range of activities that bear a certain family resemblance to one another. In this it resembles the word ‘game’ itself. It is impossible to concoct a neat definition of ‘game’ that covers card games, board games, ball games and children’s games like ring-a-ring-a-roses. Very little is in common between all of these. Rather ‘Similarities crop up and disappear,’ like family resemblances (Wittgenstein 1953).
Are there groups of family resemblances within the most general characteristic of gaming the system, namely that of winning some advantage by acting against the spirit of the formal rules? It seems that there are.
One family resemblance is the role of informal, sometimes illicit, intermediaries who secure, or try to secure, some advantage for someone from a third party who is in a position to provide that advantage. Wāsta in the Middle East, torpil in Turkey, tapş in Azerbaijan, pulling strings in the UK and USA, and raccomandazione in Italy all have this in common.
This family resemblance is visible across societies in which patron-client relations are readily observed and societies in which they are not. In each case the practice can take forms that are regarded as scandalous and other, milder forms that may be regarded as routine.
Another family resemblance across the varieties of system-gaming is that an element of wheeling and dealing is involved, something that requires a certain skill, know-how and daring. This is apparent in a number of the practices described below but perhaps most strongly in the Bulgarian s vrutka and the Polish kombinacja.
The item on s vrutka in Bulgaria says that ‘The phrase…invokes creativity, fluidity and mastery of the social milieus and social and cultural knowledge.’ The item on kombinacja in Poland quotes sociologist Joanna Kusiak as saying that kombinacja ‘has been considered a skill which one should be proud of’ (Kusiak 2012: 296-7). These descriptions lead one to wonder what the relationship may be (across countries) between entrepreneurship and the wheeling-and-dealing varieties of informal practice. Are s vrutka and kombinacja practices that amount to informal (unincorporated) enterprise? Or are they behaviour that is provoked by a bureaucratic environment inimical to business?
There is a rich source of data on national rates of business ownership and on national environments for enterprise, assembled from surveys conducted by the Global Entrepreneurship Monitor. That might be one source on which to draw in making cross-country comparisons of entrepreneurial informal practices.
Formal rules and informal norms
The item in this chapter on cash-in-hand in the UK raises the question of the correspondence or lack of correspondence between the norms, values and beliefs underlying a society’s informal institutions, on the one hand, and its formal institutions on the other: where there is a lack of correspondence between the two, cash-in-hand is more likely to be a common practice. Empirical studies across many European countries support this conclusion.
Is this true of informal practices in general? If most of the individuals in a society trust that society’s politicians, policemen and tax inspectors and have internalised the values embodied in official arrangements, there will be less tolerance of tax-evasion. The same might well apply to pulling strings in the UK, insider trading in the USA, and otkat (kick-backs) in Russia, to take a few more examples of informal practices described in this chapter.
There are however some other practices that amount to a semi-formal repair of a defective area of legislation: the no entry system in Hyderabad, India, for handling property transactions on land where formal property rights are not established, is one example. It has evident uses in Third World countries; there are parallels in Bogota, Cairo and in some sub-Saharan African countries. It is not obvious that in cases like this an asymmetry of informal and formal norms and values is necessarily involved; rather, the defective machinery of state needs patching-up, and the patching-up is done by an informal practice that has acquired a degree of formal support.
Other informal practices seem mostly to depend on a divergence between formal and informal norms. That probably would help to explain two phenomena: the popular view of some practices that they exist in ‘good’ and ‘bad’ versions (for example, kombinacja in Poland and tapş in Azerbaijan) and that there is often a moral stigma attached to a practice in which many people nonetheless engage (such as raccomandazione in Italy).
Are there countries where formal and informal norms substantially converge, and confidence in formal institutions is high, so that our informal practices play only a marginal role in people’s lives? This may be idle speculation, but I am struck by the absence, in the wealth of material provided here, of examples from the Nordic countries – the perennial good guys (along with New Zealand) in Transparency International’s Corruption Perceptions Index. Perhaps there really is an unusual degree of congruence between formal and informal norms in the Nordic countries (see janteloven in Denmark, Norway and Sweden, and vetterliwirtschaft in Switzerland).
The end of communism in Europe meant the end of certain informal practices. For example, the tolkach—the Soviet enterprise’s supply fixer—was needed only as long as the Soviet Union was a shortage economy with centralised supply-planning. The end of enterprise output-targets meant the end of the games described by the economist Janos Kornai for Hungarian light industry. In a rare empirical study of state-enterprise performance, Kornai showed how fulfilment of output-targets had a bi-modal distribution. If, near the end of the year, it became clear that you, the enterprise director, were going to miss your output-target and therefore fail to collect your bonus, it made sense to miss it by a clear margin in the hope of securing a correspondingly easier target next year. If you were going to collect this year’s bonus anyway, it equally made sense, for the same reason, to over-fulfil only narrowly (Kornai 1959).
At the same time, the end of communism meant the beginning of many other informal practices that replaced blat and enabled the transition to work (Ledeneva 2006). Some could exist only in a world of private enterprise. The Russian term dzhinsa, for example, denotes paid-for material presented in the media as ordinary news. Ukrainian deryban—the looting of state property—is also dependent on there being non-state entities to sell to or otherwise do business with. It might be argued that the environment required for these practices is not simply that of a private-enterprise, market economy, but a poorly-regulated private-enterprise, market economy. In any case, private enterprise is a necessary, if perhaps not a sufficient, condition for such practices to flourish.
Some practices, including deryban in Ukraine, may be limited to the early phase of economic transformation: the period depicted so vividly for Russia in Steven Solnick’s Stealing the State (Solnick 1998; see also Chayes 2015). After all, the point comes when, in the popular phrase, there is no more state left to steal. What happens then? One answer, at any rate in some ex-communist economies, is asset-grabbing from existing private owners, or reiderstvo. As is described in this chapter, reiderstvo has evolved from asset-grabbing by the use of private violence to asset-grabbing with the assistance of law-enforcement agencies and the courts. Indeed it can on occasion end with the state’s taking back an asset previously privatised: capture of the state gives way to capture by the state.
If this is really the case, and not just a reflection of unavoidably incomplete coverage, it suggests that many informal practices observed in the ex-communist world are a response not to capitalism as such but to capitalism when combined with a weak rule of law.
References and Bibliography
- Global Entrepreneurship Monitor http://www.gemconsortium.org
- Transparency International. Corruption Perception Index http://www.transparency.org/cpi2015#results-table
- Wittgenstein, L. 1953. Philosophical Investigations. Oxford: Blackwell.
- Kusiak, J. 2012. 'The Cunning of Chaos and Its Orders: A Taxonomy of Urban Chaos in Post-Socialist Warsaw and Beyond,' in M. Grubbauer and J. Kusiak (eds), Chasing Warsaw: Socio-Material Dynamics of Urban Change since 1990. Frankfurt: Campus Verlag: 291-320.
- Kornai, J. 1959. Over-Centralization in Economic Administration. Oxford: Oxford University Press.
- Ledeneva, A. 2006. How Russia Really Works. The Informal Practices That Shaped Post-Soviet Politics and Business. Ithaca: Cornell University Press.
- Solnick, S. 1998. Stealing the State, Cambridge, MA: Harvard University Press.
- Chayes, S. 2015. Thieves of State: Why Corruption Threatens Global Security. New York: W.W. Norton & Co.