Do nepotism and cronyism have payoff boundaries? A cross-country investigation
Do nepotism and cronyism have payoff boundaries? A cross-country investigation
In modern business, “nepotism” and “cronyism” are often observed, usually associated with corruption in the public sector and abuse of public resources. However, these phenomena are international in scale, and no country or sector of the economy is free from them. Existing research does not identify shared and contradictory interests of individuals based on nepotism or cronyism. This study aims to fill this research gap. A research hypothesis was developed and tested to determine a point from which nepotism and cronyism are not beneficial to their perpetrators. The research data included Poles and Albanians. This study identified some thought-provoking issues that will help better understand nepotism/cronyism. Based on this study and the literature review, the following mechanisms of nepotism/cronyism can be identified:
1) the mechanism of closeness and, consequently, the tendency to help relatives;
2) the mechanism of reciprocity, which assumes that someone who helps can reciprocate and help in the future.
Nepotism/cronyism is associated with negative social capital. This study confirms the argument that the unfavourable option of social capital is manifested in preserving benefits for some individuals and relatives. In such circumstances, “interest groups” are deliberately created and maintained to obtain illegal privileges. The affirmation of nepotism/cronyism simply because it benefits their participants, leads to ethical collapse, leads to social inequality, and gives the same generalization. Characteristic features of low social capital are the expressed distrust of others by the respondents and the “culture of silence,” which can even lead to the spread of crime.
This study shows that Hamilton’s relative altruism may explain the phenomena of nepotism/cronyism. Reducing uncertainty due to nepotism/cronyism experienced by attackers is seen as a benefit. In addition, this study shows the limits of common and conflicting interests of individuals based on nepotism/nepotism. The extent of nepotism/cronyism practice depends on the common interests of the beneficiaries of such practice. The Pareto set allows one to define a set of propositions of nepotism and cronyism. The study has shown that the standard part of the Pareto set and the possible discussion area between people who use nepotism/cronyism to help others find a job, a better job or salary, and those who support nepotism/cronyism are areas of common bargaining. Negotiations on the form of change (hiring additional, new “supported people”) will be conducted in this area, defined as – nepotism and cronyism. This study contributes to a better contextual diagnosis of the reliability of organizations.
