Two Faces of Decline in Public Governance: Accountability Erosion and Rent-Seeking

This paper investigates the interrelationship between institutional drift and rent-seeking in Georgia from 2005 to 2024, using a political economy framework and high-resolution governance data from the Varieties of Democracy (V-Dem) project. The analysis constructs two original composite indices: a Rent-Seeking Index, derived from six indicators of corruption and executive integrity, and an Institutional Drift Index, capturing the negative year-to-year change in horizontal, vertical, and diagonal accountability. Using time-series methods (including Pearson correlation, ordinary least squares (OLS) regression with Newey–West robust standard errors, and Granger causality tests), the study assesses both the contemporaneous and temporal dynamics between the two processes. Results show a strong and statistically significant positive correlation, indicating that periods of declining accountability are consistently associated with higher levels of rent-seeking. However, the absence of temporal precedence suggests that the relationship is coevolutionary rather than causal. The findings support the concept of structural parallelism, where institutional erosion and rent-seeking evolve jointly as interdependent outcomes of a shifting political equilibrium characterized by elite consolidation and weakened checks and balances. Policy implications emphasize the need for early detection of “soft erosion” through continuous monitoring of accountability indicators and for institutional reforms aimed at strengthening horizontal and diagonal oversight mechanisms.