The crises emanating from the Global Financial Crisis and the COVID-19 Pandemic have underscored, the emergency role of the State and its smooth, seamless reactivation, for situations when private activity and markets are disrupted. In many countries, SOEs have been a crucial part in delivering on that effort as agents of the State. While SOEs are increasingly sought to play a role during emergency situations, evidence suggests that they misallocate capital and mismanage resources.
This is indicative of the conflicts of interests in owning and regulating enterprises as well as between the commercial and non-commercial objectives of SOEs, crony capitalism, the private agenda of public officials, internal management of SOEs, the significant role played by state owned banks and financial institutions and the conflicts that arise in the State's primary role vs. its ownership of enterprises. The studies of eight countries from different regions undertaken for this book, provide answers to these key policy questions related to state capitalism.
Generalizing from the results of multi-country studies to arrive at universally applicable predictions, prescriptions, and policy recommendations, is inherently difficult. Individual countries are quite different in their socio-economic, historical, political, and institutional circumstances. So are their experiences, as the eight country studies highlight, even as the book attempts to extrude, from available research, the principal common characteristics of, and practices followed by, successful SOEs independently of country context. Among other conditions, the two most important conclusions that can be drawn from the country studies are that competition and regulation rather than ownership per se is key to efficiency.
Author(s): Lalita Som
Publisher: Oxford University Press
Year: 2022
Language: English
Pages: 384
City: Oxford
Cover
State Capitalism
Copyright
Dedication
Contents
List of illustrations
List of abbreviations
1. Introduction
The influence of the 1980s Washington Consensus, the 2008–10 Global Financial Crisis, and the COVID-19 pandemic on State ownership
The ‘China Effect’ on State capitalism and the developmental State
Post-2012 rethink about State capitalism
State capitalism and its different instruments
Size, nature, and sectoral distribution of the State-owned sector
Why do States own enterprises at all?
Structure of the book
2. A framework for understanding and evaluating SOE performance
State-owned banks and financial institutions (SOBFIs) as the central pillars of State capitalism
State ownership of enterprises and the regulatory state
Crony capitalism under State capitalism
The private agenda of public officials
The impact of State ownership on productivity and the allocation of resources
Challenges confronting the internal management of SOEs
Conflicts that arise in the State’s primary role vs its ownership of enterprises
3. Country case study 1: Brazil
SOEs in Brazil
The history of SOEs in Brazil
Regulation vs public ownership of SOEs
SOEs and the emergence/impact of crony capitalism
The private agenda of public officials
SOEs and the misallocation of resources
Performance of SOEs and their corporate governance
Conflicts that arise in the State’s primary role vs its ownership of enterprises
Conclusions
4. Country case study 2: China
Contours of SOEs in China
Regulation and ownership issues in SOEs
Communist Party officials, government bureaucrats, and crony capitalism
The private agenda of public officials
SOEs and the misallocation of resources
Internal governance and management of SOEs
Conflicts that arise in the State’s primary role vs its ownership of enterprises
Conclusions
5. Country case study 3: India
The origins, emergence, and significance of SOEs in India
A paradigmatic change in 1991
From ownership to regulation
Crony capitalism
Private interests of public officials
Misallocation of resources and SOE productivity
Internal Management and post-reform performance of SOEs
Conflicts that arise in the State’s primary role vs its ownership of enterprises
Conclusions
6. Country case study 4: Indonesia
SOEs in Indonesia
Regulation vs public ownership of SOEs
SOEs and crony capitalism
The private agenda of public officials
SOEs and the misallocation of resources
The performance of Indonesian SOEs
Conflicts that arise in the State’s primary role vs its ownership of enterprises
Conclusions
7. Country case study 5: Russia
SOEs in Russia
Privatization in Russia
Regulation and State ownership of enterprises
Crony capitalism vis-à-vis SOEs as it has evolved in the Putin Era
The private agenda of public officials
The misallocation of resources in and by SOEs
Challenges confronting the internal management of SOEs
Conflicts that arise in the State’s primary role vs its ownership of enterprises
Conclusions
8. Country case study 6: Saudi Arabia
SOEs in Saudi Arabia
Ownership vs regulation
Saudi Arabian style crony capitalism
The private agenda of public officials
SOEs and the possible misallocation of resources
Performance of SOEs
State ownership of enterprises and its other responsibilities
Conclusions
9. Country case study 7: Singapore
The origins of State capitalism and SOEs in Singapore
The roles of EDB, DBS, Temasek, and GIC in Singapore’s economic development
Regulation vs public ownership of SOEs
Crony capitalism
The private agenda of public officials
The allocation and use of capital resources through Temasek and GIC
Performance of GLCs
Ownership vs other state responsibilities
Conclusions
10. Country case study 8: South Africa
The historical context of State involvement in the South African economy
The evolution of State capitalism and South African SOEs since 1920
Attempts at privatization and their subsequent reversal
Regulation vs public ownership of SOEs
Crony capitalism
The private agenda of public officials
Allocation of resources
Performance of South Africa’s SOEs
Ownership vs other functions of the State
Conclusions
11. Conclusions from a review of SOEs in the country case studies
SOEs and the issue of conflicts of interest arising with regulation
SOEs and crony capitalism
Exercising the private agenda of public officials
SOEs and the misallocation of resources
SOEs and State’s other responsibilities
Evaluating the performance of SOEs in all the countries studied
Bibliography
Index
