The Economist: Czechia ranks second worldwide in crony capitalism

The study reveals that many wealthy individuals in Czechia gain advantages through relationships with the state.

Thomas Smith

Written by Thomas Smith Published on 04.05.2023 11:03:00 (updated on 04.05.2023) Reading time: 1 minute

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Illustration: iStock - Sotnykova
Illustration: iStock - Sotnykova
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The Economist has ranked Czechia second in its 2023 worldwide crony-capitalism index, suggesting that the country has an unhealthy amount of billionaires who derive their wealth via a relationship with the state.

Crony capitalism refers to individuals or businesses getting preferential treatment through close relationships with the government. This can involve things like lobbying for favorable regulations or contracts and receiving subsidies, grants, or tax breaks.

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According to the index, 15 percent of Czechia’s GDP is made up of billionaires in so-called crony sectors. Only Russia has a higher amount of cronyism, according to the study. In the 2021 index, Czechia did not even make the top 20 countries.

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The Economist’s methodology is based on surveying 10 industries that tend to have close links with the government. These include investment banking, real estate, telecommunications, and aviation. 

The study then breaks down the source and quantity of billionaires’ wealth in so-called rent-seeking sectors, which is where wealthy individuals lobby the government for grants, subsidies, or tariff protection. It uses data from Forbes magazine to assess this – there are currently 11 Czechs in the latest Forbes list of dollar billionaires.

On a global scale, the index finds that billionaires who have a cronyistic relationship with the state collectively own USD 3 trillion (about CZK 69 trillion) in assets – about 3 percent of the world's GDP.

#billionaires #Corruption #cronyism #daily news #economy #money #rankings #wealth
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