State Capitalism as Economic Strategy in the Age of Geoeconomic Fragmentation
DOI:
https://doi.org/10.59890/mjst.v3i5.228Keywords:
State Capitalism, State-Owned Enterprises, Sovereign Wealth Funds, Industrial Policy, Development Finance; Mixed Ownership, Geoeconomics, Party-State Capitalism, Sustainability Transition, Global Political EconomyAbstract
This article reframes state capitalism not as a deviation from capitalism, but as a durable and evolving mode of capitalist governance in which public authority shapes accumulation through ownership, finance, industrial policy, development banking, sovereign investment, and geopolitical strategy. The central argument is that contemporary state capitalism is best understood as a spectrum of institutional arrangements rather than a single regime type. Its effectiveness depends less on the mere presence of state ownership than on the quality of governance, mission clarity, institutional discipline, and the alignment between public objectives and firm-level incentives. Recent scholarship shows that state-owned enterprises, mixed-ownership firms, sovereign capital, and policy banks can promote structural transformation, technological upgrading, and long-horizon investment, but that these same instruments can also generate soft-budget constraints, politicised capital allocation, opaque governance, and international backlash when accountability is weak. The article also argues that the current revival of industrial policy, green transition strategies, and geoeconomic competition has expanded the relevance of state capitalism far beyond the classical cases of China and Russia. In this setting, the decisive analytical question is no longer whether the state should intervene, but how intervention is institutionalised, disciplined, and legitimised across domestic and transnational arenas. The result is a more balanced assessment: state capitalism can be developmental, extractive, adaptive, or destabilising, depending on the political and institutional conditions under which it operates
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