Nepotism is bad for the economy but most people underestimate it

Nepotism extends personal greed to a specific group’s interest.

Nepotism is bad for the economy but most people underestimate it

Indonesia is one of the world’s most corrupt countries and is making little progress in ending the practice.

Corruption is rampant in Indonesia but so is nepotism, or favouritism granted to family, friends and individuals. Many believe corruption is worse than nepotism.

There has yet to be a lot of studies of nepotism. But, recently, studies have looked at the impact of nepotism on the performances of family-owned business and cooperation.

The studies show that nepotism have resulted in bias in decision-making, unfair treatment and losses to company’s performances in the long term. Recent studies also prove that nepotism makes people feel demotivated, lacking in confidence and alienated. It also hinders competition and innovation.

These consequences can weaken an organisation and eventually will impact economic development as a whole.

Nepotism affects the performance of organisations. However, the lack of research on this topic could potentially mean the impact is far greater than we thought.

Nepotism is indeed bad for the economy but my recent research suggests most people in Indonesia underestimate it.

Nepotism in Indonesia

Corruption is the abuse of power for private gain. Nepotism means the abuse of power is extended to support a specific group’s interest, usually based on personal greed.

In Indonesia, the term nepotism became popular in the late 1990s. Student protesters demanding the end of Suharto’s corrupt and authoritarian rule coined a popular abbreviation KKN. It stands for korupsi, kolusi and nepotisme, or corruption, collusion and nepotism.

Even after Suharto was no longer in power, the practice of favouritism based on kinship remained very strong. Many political parties were formed based on family ties, such as the Democrat Party and Berkarya Party

Nepotism also exists in local governments. In Banten and South Sulawesi, for example, the governors ran their administrations based on family favouritism. Even though these leaders are no longer in power, their political influence remains strong.

These cases show that nepotism appears in every level of bureaucracy in Indonesia.

Individual perception on nepotism

Similarly to corruption, nepotism is everywhere in Indonesia’s political and social system. But how does an Indonesian perceive nepotism? To answer that question, I conducted a survey involving 237 participants from May to June 2018. I also interviewed ten participants between July and August 2018. Some 90% of the respondents were university students.

The research finds most participants agree that corruption is bad. These respondents also rank corruption, including bribery, embezzlement, abuse of authority and money laundering, as worse than political dynasties, collusion and politic cronyism, and nepotism.

Even though 73% of respondents state that it is wrong for the elite officers to give opportunities to their own families, nepotism is considered less damaging than the others.

Respondents’ responses based on which act is worse than others.
Respondents’ responses to the elites giving job opportunities to their relatives.

Despite the numbers, the interviews show that nepotism has worse consequences than corruption.

Seven interviewees considered nepotism to be acceptable, arguing it was human nature for people to choose their own family or friend as their trusted officer/staff because they know them better than anyone. In addition, they would not have to worry that the person might betray them.

These respondents also argued it is their responsibility to ensure that their relatives have a stable job with a good salary. Even when they do not have sufficient skills, the respondents believed they should still be supervised in their work.

Meanwhile, three other respondents who were against nepotism argued that it closed opportunities for others to work and compete fairly. They said the presence of nepotism made them believe there was no point in studying and working harder if merit counts for so little.

The unfair career treatment as a result of nepotism triggers these people to become lazy. It means nepotism removes competition and stymies people’s motivation, making innovation impossible to achieve.

Nepotism a natural tendency

Nepotism can be found not only in workplaces and government, but also in social animals like wasps, bees, ants, termites and monkeys.

In natural science, Neo-Darwinian scholars agree that nepotism significantly affects the behaviour of social organisms.

A queen bee, for example, selects individual workers to stay inside or outside the queen’s cell based on her preferential genotype.

For humans, nepotism also operates in any social classes and influences how people determine other socioeconomic rankings based on their preference on skin colours, looks and style.

Nepotism starts early. It begins with parents’ favouritism towards their children. This kind of favouritism is embedded in the children’s unconscious mind and will influence their future behaviour.

A study from Georgetown University’s McDonough School of Business and research firm Penn Schoen Berland showed the high prevalence of favouritism in workplaces. In interviews with 303 senior executives, researchers found that 84% confirmed that favouritism existed in their organisation.

Similar cases also happen in government bureaucracy where many people are selected based on personal validation instead of quality and qualification. As long as the selected individual fulfils the qualification, they consider nepotism an acceptable act.

Justifications for nepotism can influence how a country perceives it. In a developing country such as Ghana, nepotism is considered to be simply part of human nature.

In a developed country such as Italy, nepotism does not appear until a person goes to higher education. During university enrolment, students from a powerful family in politics will get bigger chances to be supervised by an influential professor.

There is no easy way to end nepotism in Indonesia because it persists in every level of society. The public needs to understand the consequences of nepotism. At the same time, the government should enact anti-nepotism law to prevent the practice in the bureaucracy.