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Cronyism is the practice of partiality in awarding jobs and other advantages to friends or trusted colleagues, especially in politics and between politicians and supportive organizations. For instance, this includes appointing "cronies" to positions of authority, regardless of their qualifications.
Cronyism exists when the appointer and the beneficiary such as an appointee are in social or business contact. Often, the appointer needs support in his or her own proposal, job or position of authority, and for this reason the appointer appoints individuals who will not try to weaken his or her proposals, vote against issues, or express views contrary to those of the appointer. Politically, "cronyism" is derogatorily used to imply buying and selling favors, such as: votes in legislative bodies, as doing favors to organizations, giving desirable ambassadorships to exotic places, etc.
The word crony also appears in the 1811 edition of Grose's Vulgar Tongue with a decidedly non-collegiate definition, placing it firmly in the cant of the underworld. Another oft-quoted source is the supposed Irish term Comh-Roghna [koˈronə], said to translate as "close pals", or mutual friends. However, this term apparently originated with Daniel Cassidy (fabricator of many fake Irish terms) and is completely unknown in the Irish language. (See Ó Dónaill's Irish-English Dictionary p. 288, where the term is conspicuously absent).
Government officials are particularly susceptible to accusations of cronyism, as they spend taxpayers money. Many democratic governments are encouraged to practice administrative transparency in accounting and contracting, however, there often is no clear delineation of when an appointment to government office is "cronyism".
It is not unusual for a politician to surround him- or herself with highly qualified subordinates, and to develop social, business, or political friendships leading to the appointment to office of friends, likewise in granting government contracts. In fact, the counsel of such friends is why the officeholder successfully obtained his or her powerful position; therefore, cronyism usually is easier to perceive than to demonstrate and prove. Politicians with representatives of business, other special interests, as unions and professional organizations get "crony-business" done in political agreements, especially by "reasonable" and lucrative honorariums to the politician for making speeches, or by legal donations to ones election campaign or to ones political party, etc.
Moreover, cronyism describes relationships existing among mutual acquaintances in private organizations where business, business information, and social interaction are exchanged among influential personnel. This is termed crony capitalism, and is an ethical breach of the principles of the market economy; in advanced economies, crony capitalism is a breach of market regulations, e.g., the Enron fraud is an extreme example of crony capitalism.
Given crony capitalism's nature, these dishonest business practices are frequently (yet not exclusively) found in societies with ineffective legal systems. Consequently, there is an impetus upon the legislative branch of a government to ensure enforcement of the legal code capable of addressing and redressing private party manipulation of the economy by the involved businessmen and their government cronies.
The economic and social costs of cronyism are paid by society. Those costs are in the form of reduced business opportunity for the majority of the population, reduced competition in the market place, inflated consumer goods prices, decreased economic performance, inefficient business investment cycles, reduced motivation in affected organizations, and the diminution of economically productive activity. A practical cost of cronyism manifests in the poor workmanship of public and private community projects. Cronyism is self-perpetuating; cronyism then begets a culture of cronyism. This can only be apprehended by a comprehensive, effective, and enforced legal code, with empowered government agencies which can effect prosecutions in the courts.
All appointments that are suspected of being cronyism are controversial. The appointed party may choose to either suppress disquiet or ignore it, depending upon the society's level of freedom of expression and individual personal liberty.
Some instances of cronyism are readily transparent. As to others, it is only in hindsight that the qualifications of the alleged "crony" must be evaluated.
- Daniel Garza (March 12, 2012). April 2012 "Government Cronyism is Back" Check
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- "Oxford Dictionaries - Dictionary, Thesaurus, & Grammar". Retrieved 2 July 2015.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
- "Crony: An intimate companion, a camrade; also a confederate in a robbery" - Classical Dictionary of the Vulgar Tongue, 1785 . Grose
- "Definition". askdefine.com. Retrieved 26 April 2012.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
- https://www.ced.org/cronycapitalism CED.com, official website of: The Committee for Economic Development (CED), "Crony Capitalism: Unhealthy Relations Between Business and Government"
- Staff (2010). "Do Old Boys' Clubs Make The Market More Efficient?". The Free Marketeers. Retrieved 26 April 2012.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
- Begley, T., Khatri, N., Tsang, EWK. 2010. Networks and cronyism: A social exchange analysis. Asia Pacific Journal of Management, 27:281-297
- Khatri, N., Tsang, E.W.K., & Begley, T. 2006. Cronyism: A cross-cultural analysis. Journal of International Business Studies, 37(1): 61-75. [Also in T. G. Andrews and R. Mead (Eds.), Cross Cultural Management, Volume 2 -The Impact of Culture 1: 126-150. Routledge, UK.]
- Khatri, N., Tsang, E.W.K., & Begley, T. 2003. Cronyism: The downside of social networking. The Best Papers Proceedings of the Academy of Management, Seattle
- Khatri, N. & Tsang, E.W.K. 2003. Antecedents and consequences of cronyism in organizations. Journal of Business Ethics, 43: 289-303.
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