Kleptocracy (sometimes Cleptocracy) (root: Klepto+cracy) literally means rule by thieves. It is a pejorative, informal term for a form of government which represents the culmination of political corruption and an extreme form of the use of government for rent seeking.
In a kleptocracy the rulers and their cronies (collectively, kleptocats) use the mechanisms of government to tax the public at large in order to amass substantial personal fortunes. Kleptocrats may use various methods (eg. money laundering, anonymous banking) as a way of protecting and concealing their illegal gains.
Kleptocratic states consistently tend to be economically, politically and socially unstable. That is, the political governance of such states typically consists of one set of kleptocrats displacing their predecessors by subversive or violent means. For much of its history Haiti was such a case.
The economies of kleptocracies tend to perform badly, as the systematic corruption endengered by kleptocratic governance imposes a massive tax on enterprises. Kleptocrats realize that they have more to gain from taking a large share of a stable or shrinking pie than from a shrinking share of an increasing pie. Economies based on the extraction of natural resource (eg. diamonds and oil in a few prominent cases) can be particularly prone to kleptocracy, as the kleptocrats simply tax the Ricardian rent.
In addition, kleptocrats routinely ignore economic and social problems in their quest to amass ever more wealth and power. As kleptocrats do not attempt to build or maintain functioning states, or even maintain large security forces for fear of coup d'états, kleptocracies are generally incompetent in the face of social crises, and often collapse into prolonged civil war and anarchy.
Historically, the socio-political environment associated with colonial rule has been particularly conducive to the later creation of kleptocracies, especially in Africa and South America. The creation of a kleptocracy typically results in many years of general hardship and suffering for the vast majority of citizens as civil society and the rule of law distintegrates.
Among the more infamous examples of kleptocratic government were Zaire (now the Democratic Republic of the Congo) under Mobutu Sese Seko, Indonesia under Suharto, Peru under Alberto Fujimori, the Federal Republic of Yugoslavia under Slobodan Milosevic and Romania under Nicolae Ceausescu.
Older examples include the Barbary states of North Africa in the 17th through early 19th centuries.
Less extreme examples are Nationalist China under Chiang Kai-shek, the Philippines under Ferdinand Marcos and later under Joseph Estrada, Kazakhstan under Nursultan Nazarbayev and Puerto Rico under Pedro Rosselló.
Some observers use the term 'kleptocracy' to disparage democratic political processes which permit corporations to influence political policy. The use of kleptocracy in this context privileges one form of rent seeking over all others that are a normal concomitant of democracy.
Ralph Nader famously denounced the United States as a kleptocracy during the 2000 US presidential campaign.