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A taxonomy of state capitalism

The developmental phases of Russia, Kazakhstan, South Korea and Singapore - a comparative institutional analysis


Axel Wölk

What is the economic order of state capitalism? Furthermore,how can its significant performance differences be explained? The firstquestion is tackled with the help of New Institutional Economics by developinga model of state capitalism. This topic is furthermore dealt with in Chapter 3 wherea taxonomy of state capitalism is presented. This chapter already explains someof the performance differences. In the last chapter with the help ofsemi-structured interviews and literature surveys – in four case studies –propositions are forwarded as to why state capitalist orders vary so widely intheir performances. Two points stick out: the quality of the bureaucracy aswell as a varying degree of commitment of the political leadership to adevelopmental course. 
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1 Introduction


“History is the unfolding of miscalculations.”

Barbara Tuchman


In this introduction the research question is formulated and the scientific relevance of analyzing the phenomenon of state capitalism demonstrated. As a matter of fact, the research question can be formulated as follows: “What is state capitalism and how can its profound performance differences be explained?” This topic is to be tackled with the theoretical framework of New Institutional Economics (NIE). So far, in the literature no theoretically based definition of state capitalism has been given and the literature is also largely reticent on reasons for the performance differences. In the course of this introductory chapter there are also antecedents of state capitalism and a short synopsis of the developmental trajectory of Russia and China illustrated.

Keywords: Research question, Performance differences, New Institutional Economics, Developmental trajectory of Russia and China, Antecedents

1.1 Overview

With the fall of the Berlin Wall in 1989 and the demise of the Soviet Union in 1991 there seemed to be no alternative to a market capitalist economic model anymore. In every conceivable way, the possibility of erecting a communist economic and political rule seemed to be outmoded. Some observers even saw a new era coming, where there was no competition between economic systems.

In this regard Fukuyama (1992) even proclaimed the end of history. He argued that market capitalism will be the sole surviving economic order until the end of...

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