State Business Relations Research Articles

Industrial policy and State-business relations in Brazil: the governance of productive development policies

This article deals with the new productive development policies in countries that, like the case of Brazil, have political systems permeable to business elite particularistic interests. In this regard, the analysis of industrial policies is important because public-private coordination use to be needed. The establishment of a new cycle of industrial policies between 2003 and 2016 was accompanied by the construction of a governance structure to increase coordination with companies, supposedly in more innovative and competitive sectors. However, using historical institutional analysis, it is intended to demonstrate that these governance structures, as formal institutions, were supplanted in practice by the traditional rules of the game in the relationship between the State and businessmen. These rules of the game tend to promote enterprises and sectors that are already well established. In this way, policies that were designed to favor a structural transformation, ended up having a protectionist and defensive bias of traditional industries.

Application of Public-Private Partnership Mechanisms to Ensure Innovative Development of the Healthcare Sector

INTRODUCTION. The pursuit of technological sovereignty in the current geopolitical situation has led to a growing emphasis on studying relations in the field of government support for healthcare innovation, in particular, the institute of public–private partnership (PPP). In the face of the challenges presented by sanctions, the economic crisis, and a potential deficit in sustainably competitive national innovative medical products, the Russian government is confronted with the necessity of financing the development and production of innovative medical products, including through involving private partners (investors). The use of PPP mechanisms is essential for the achievement of technological sovereignty. In addition to attracting private capital and competences, PPP mechanisms can significantly accelerate the development, realisation, and introduction of innovative medical products, improve the quality of medical care, and increase the production of medicines and medical devices.AIM. This study aimed to analyse existing PPP mechanisms for the development of the Russian healthcare, science, and technology sectors within the framework of state–business relations and to identify optimal models for the development, realisation, introduction, and production of innovative medical products.MATERIALS AND METHODS. The study analysed Russian federal legislation using an information-based analytical approach to identify the most promising mechanisms for innovative development in healthcare, with a focus on PPP models.RESULTS. The article considers frequently encountered forms of possible government involvement in and support of innovative healthcare development with the aim of increasing efficiency and scaling up the realisation and introduction of innovative medical products. Additional aspects covered include the funding of technological sovereignty projects, the expansion of preferential regimes, and the concept of using PPP models. The article presents various PPP realisation mechanisms, including special investment contracts, concession agreements, and PPP agreements, which allow placing infrastructure facilities under the management of private partners. The transferred facilities may include production facilities, research centres, and other facilities necessary for innovative development. The article pays particular attention to the terms and features of concession agreements in the healthcare sector, considers the distribution of duties and responsibilities between the parties involved, and investigates the use of the risk-based approach. Additionally, the article analyses established business practices to identify conditions that are necessary for the parties to a concession agreement.CONCLUSIONS. The realisation of PPP projects in the innovative development of the healthcare sector requires taking into account and overcoming constraining factors, including technological and administrative barriers that may hinder effective development. The authors believe that the most preferable PPP form is the concession agreement model.

Industrial policy and the green state: Forging a world after growth

Abstract The resurgence of industrial policy is reshaping the global political economy and creating emergent formations that could help create green states. Such green states can seed a world after growth. Growth is often taken for granted as a natural purpose of states and an appropriate basis of public policy. However, it has a recent political-economic and cosmological history. This suggests that an age after growth is not only possible but likely. In the current conjuncture of crises and challenges, industrial strategies that bring together environmental, social justice, and pro-growth coalitions offer the best chance to meet climate goals and improve the prospects for inclusive prosperity globally. In addition, there is evidence that industrial policy is providing a platform to build active states, rebalance state–business relations, forge new systems of calculation, and gather cosmological resources for new action.

China in Africa: companies as enablers and beneficiaries? An empirical evaluation of state-business relations in the Forum on China-Africa Cooperation

Abstract China’s strong economic presence in Africa has resulted in an increased interdisciplinary debate. Our contribution is the incorporation of a business perspective by uncovering the prominence and role of business in China’s diplomatic Africa engagement. Our theoretical contribution by applying the state-business relations (SBR) literature is to examine whether established frameworks can be expanded by an international dimension through intergovernmental initiatives like the Forum on China-Africa Cooperation (FOCAC). The paper conducts a document analysis of all declarations and Action Plans of all FOCAC conferences in the period 2000–2021, combining both a content and a thematic analysis based on an explorative and iterative coding process. Our data suggests that the prominence of businesses has increased while the scope of their activities and the number of focus sectors (especially infrastructure) has risen particularly since 2012. Companies are considered as enablers for political and economic goals in the state-driven FOCAC. We find that SBR frameworks are applicable to international contexts and propose an expanded SBR approach integrating transnational intermediary institutions like the intergovernmental FOCAC and transnational business platforms which facilitate positive state-business relations across countries and a conducive business environment.

Corporate (social) responsibility in state-business relations from the perspective of critical state theory: a historical case of early modern China

This article presents a theoretical framework for analysing corporate responsibility through the lens of critical state theory, focusing on the dynamic interplay between state and business. Traditionally, corporate responsibility is seen as voluntary corporate actions for public welfare. However, it is increasingly viewed as integral to business strategy and subject to regulatory oversight. Utilizing Jessop’s strategic-relational approach, this study underscores the state’s role in structuring corporate behaviour, revealing how shifts in political elite networks influence corporate responsibility practices. A historical analysis of early modern China highlights these dynamics within specific national contexts characterized by developmentalism and authoritarianism, demonstrating the profound impact of state-business symbiosis on corporate responsibility. This analysis contributes to a deeper understanding of corporate responsibility in diverse political and economic settings, demonstrating how state power, corporate influence, and social welfare are mutually reinforcing and shaped by broader socio-political dynamics.

Making “strategic autonomy” rhyme with “fiscal austerity?” Unresolved conflicts of (geo)economic ideas in EU infrastructure policy

As a reaction to intensifying global competition, measures related to strategic autonomy are gaining traction on the EU level. Yet they coincide with a general return to fiscal consolidation. With current developments more inconclusive than previously suggested, this article asks how the central actors in EU economic policy, both public and private, position themselves in the autonomy-austerity conflict. It introduces a political-economic approach to the role of (geo)economic ideas and state-business relations in EU policy formation. The article focuses on infrastructure policy as a main field within which the conflict unfolds. A content analysis of official documents systematically maps the positions of relevant actors. While an influential group of southern finance ministries, Directorates-General, center-left parties, and trade unions is promoting strategic autonomy, a shrinking constellation around fiscal austerity contains relevant veto players. The deadlock results in the attempt to reconcile both ideas via “targeted flexibility”: consolidation via the expenditure side and a delegitimization of non-investment spending, coupled with a public de-risking of private investments. The approach is supported by European capital, yet highly inconsistent and runs up against pro-austerity forces. The findings have strong implications for the EU’s future geoeconomic strategy and its ability to compete globally.

Multilateral financial flows and state–business relations in Morocco

ABSTRACT Political economy explanations of regime resilience often look at domestic support bases and patronage systems. Foreign aid to the state is seen as a direct form of propping up regimes. This article attempts to track the flow of foreign assistance to one part of the domestic support base of a regime, namely the economic elite, thereby making a connection between domestic explanations and foreign support explanations of regime resilience. The core argument of this article is that multilateral financial flows from Western dominated institutions may preserve regimes in the Middle East and North Africa. Multilateral flows from the World Bank Group, the European Investment Bank, and the European Bank for Reconstruction and Development went to regime insiders and thus potentially strengthened existing economic elites during the time in which the former Islamist opposition party led a coalition government. I draw on the linkage dimension of Levitsky and Way’s model to show the importance of specifying the nature and destination of multilateral financial ties with Morocco’s private sector. This contribution helps us link the international dimension to the domestic political economy. It thus potentially adds to our understanding of monarchical regime resilience post-Arab Spring by highlighting how multilateral financial institutions support an important part of the economic elite.

Business and Politics in Urban Indonesia: Patrimonialism, Oligarchy and the State in Two Towns

Studies of the Indonesian political economy suggest a transformation of government-business relationship from a “patrimonial administrative” state, in which bureaucrats are dominant, to a “patrimonial oligarchic” state dominated by business actors. We examine this proposition by analysing government-business relationship in two towns: a town in Sulawesi, dominated by trade, and a town with a strong industrial base in Java. In the first, politics still approximates that of a patrimonial administrative state with a weak business sector and a dominant bureaucracy. In the second, a local business dynasty has come to power, but without promoting regularisation of state-business relationship. Despite the differences, patronage politics are similarly dominant in both locations, which we illustrate by zeroing in on the construction sector and the distribution of infrastructure projects. We conclude by discussing the implications of our findings for the nature of urban politics in Indonesia, underscoring the significance of patronage across a range of settings.

Private infrastructure in geopolitical conflicts: the case of Starlink and the war in Ukraine

Privately owned infrastructures play a central role in the unfolding of geopolitical conflicts. While academic contributions generally support this argument, businesses are mostly treated as enablers or spoilers of state action rather than actors in their own right. This article develops a theoretical framework around the relationship of state and transnational corporations in times of intense global competition, combining it with a political–economic perspective on how private ownership of transnational infrastructures shifts this relationship. It argues that private businesses develop and operate infrastructures for profit-seeking purposes, but that this logic can be amended by preferences for political outcomes. The article undertakes an analysis of the role of Starlink, the world’s largest satellite constellation owned by US-based company SpaceX, in the events following the Russian invasion of Ukraine. It reconstructs SpaceX’s initial decision to enable Starlink in Ukraine and its ensuing strategic readjustment that limited Ukraine’s abilities to retake Russian-occupied areas. The findings support the relevance of both profit-seeking and political motives for explaining businesses’ decision-making, with substantial implications for contemporary state–business relations. SpaceX viewed the war in Ukraine as an opportunity to secure capital and contracts, largely from the United States; at the same time, it sought to appease other states on which it depends, most centrally China. The findings furthermore demonstrate that states will seek to reestablish independence from private infrastructure where other forms of hedging fail. While China and the European Union opted to build their own satellite constellations, the United States relied on its economic pull to ensure SpaceX’s cooperation.

State-Business Relations and Public-Public Partnerships: China’s State-owned Enterprises in Southeast Asia

China’s hegemonic leader, Xi Jinping, had one core agenda, the Belt & Road Initiative (BRI), which was to be implemented primarily by employing his country’s state-owned enterprises (SOEs). Since 2013, BRI projects have featured extensively in Southeast Asia, a region where countries are led by strongmen leading economies featuring strong state intervention. As the presence of China’s SOEs in Southeast Asia grew, this led to major changes in the nature of state-business relations (SBRs). In this context, where structural power lies with the state, or in this case, the two states of China and the host nation, a fundamental query emerges: who governs in these SBRs? This article analyses this question with a focus on three core themes – China’s mounting presence in Southeast Asia through the BRI, the growing role of SOEs in these economies, and evolving SBRs.

Inclusive agro-industrial development and sectoral systems of innovation: insights from South Africa

ABSTRACT The agro-industries are widely viewed as important to inclusive industrial development due to their relatively low entry barriers and acessibility to small firms. However, the agro-industries are more technologically complex than commonly assumed. Small and young firms face challenges acquiring capabilities to compete effectively. The paper explores how differing sectoral systems of innovation (SSI) shape patterns of inclusion and exclusion in the agro-industries, and the factors shaping this. It analyses two contrasting South African agro-industrial sectors, maize processing and fresh citrus. It proposes a partial conceptualization of ‘inclusive’ SSIs (ISSIs) as sectoral configurations of actors and institutions that lower entry barriers and narrow capability gaps between small firms and dominant incumbents at the technological frontier. It argues that ISSIs rely on institutions that coordinate innovation-related activities in a manner benefitting small firms and new entrants, by aiding the broad diffusion of relevant technology and capabilities. Alongside state agencies, business associations can play an important role in this regard. It identifies the characteristics of state-business relations and inter-firm dynamics of competition and collective action as important underlying determinants of ISSIs. Thus, the paper highlights the need for attention to sector-level political economy in understanding the diverse outcomes of SSIs.

Official statistics and big data in Latin America: Data enclosures and counter-movements

With the rise of the data-driven economy, the state-owned sector of official statistics has been pressurised to ‘modernise’ and engage with big data. However, most of these data sources are controlled by tech corporations. We address the conflicts this brings about from a Latin American perspective through three case studies involving national statistical offices, international organisations, and the private sector. We investigate strategies for enabling data markets for official statistics and analyse how the statistical field has acted in this context. In doing so, we contribute to understanding the political economy of big data in Latin America and debates on how digitalisation encompasses the reshaping of state-business relations. Supported by secondary data and semi-structured interviews, we appraise Bourdieu's theory of fields, Marxian readings on the enclosure of commons, and Polanyi's double movement to analyse how data commodification challenges data as public goods – a fundamental principle for official statistics. The findings demonstrate that data enclosures have prevented the state's access to compiling official statistics and show that the initiatives for introducing big data in Latin American national statistical offices have involved testing data markets through public–private partnerships supported by international organisations and big tech. As a result, the statistical field has reacted to the data market with a ‘double movement’: mobilising symbolic capital such as ‘trust’ for partnering with businesses to access data and technologies and, conversely, defending the public value of data in counter-movements protective of the relative autonomy of the national statistical offices and the state's control over informational capital.

Captured institutions and permeated business – the longevity of Hungarian autocracy

ABSTRACT The aim of the article is to show how modern autocracies can distort traditional institutions’ principles of functioning and form state–business relations for their own benefit. Our case study is Hungary, an autocratic system within a democratic union, where the economic conditions have worsened in the past couple of years. Based on documentary evidence, data and interviews, we demonstrate how the regime’s longevity depends on three main factors: alternative institutional arrangements, perceived individual economic welfare and support of business actors. The tools to handle foreign investors and control domestic business are different but creative and effective and can result in a long-term conciliation of different players and the stabilisation of the ruling power even in case of economic difficulties.

State autonomy, economic reform & business elite influence in the GCC

ABSTRACT This study challenges traditional rentier state theory and contributes to a new generation of scholarship focused on state-business relations by evaluating the relationship between different degrees of state policymaking autonomy and business elite influences in political and economic institutions. The findings of this study address central policy questions about economic reform in the Gulf Cooperation Council countries. Using primary data from my case studies of Qatar and Kuwait, I posit two arguments. First, states with lesser business elite influence over political institutions have more autonomy to realise their economic reform goals; a less dominant and influential business elite circle will more likely submit to state-led economic reform initiatives. Greater business elite dominance, meanwhile, tends to create a powerful bloc undercutting economic change, such as labour reform or new regulatory frameworks, that would benefit the long-term stability of the state. Second, rentier states with higher degrees of state-led capitalism have more autonomy to conduct economic reforms; state-led capitalism produces more coherent and cohesive state apparatuses that can incentivize business elite cooperation.

Selling the jewels: patient capital, state-business relations, and the privatization of strategic utilities in Italy and Spain

The privatization of public utilities marked a turning point in European capitalism, reshaping the relationship between the public and private spheres of the economy. However, the extent of state disinvestment varies greatly from country to country. While in some countries direct state ownership has disappeared, in others the state still acts as a reference shareholder in strategic companies. Despite their institutional similarities, Italy and Spain provide a puzzling example of this divergence. While Spain completed the privatization of all public utilities, the Italian state retains a controlling stake in many of them. Through historical case studies based on official documents, legal texts, archival research of newspaper articles, secondary sources and memoirs, this paper explains this divergence. Contributing to recent debates on patient capital and state-business interactions, it is argued that Spain completed the privatization process because the state was able to orchestrate the creation of shareholder alliances among private investors. Crucially, these investors were willing to ensure that management prioritizes long-term investment plans over the distribution of short-term financial profits. In the absence of domestic private providers of patient capital, the Italian state had to keep the role of anchor investor for itself after unsuccessfully experimenting with various privatization strategies.

The Specifics of the State-Business Relations in Modern China

For the further development of Russian-Chinese cooperation, it is fundamentally important to understand fully the specific characteristics of the political, economic and social system of this country, which, in particular, is determined by the established system of the state — business relations.Aim. To identify the specifics of the model of relations between government and business, which has developed in the PRC during the period of economic reforms and is one of the most important aspects of the “Chinese miracle”.Tasks. To determine the applicability of Western models of state and business relations to Chinese realities, to characterize the main basic principles and approaches to the regulation of relations between the state and business, to identify problems, contradictions and prospects for their resolution in the conditions of modern China.Methods. System and comparative analysis, scientific generalization, expert assessments.Results. The specific characteristics of the state-business relations model in the country are determined, on the one hand, by the polymorphous nature of the Chinese state, on the other — by the formation of business as a hybrid actor. In this regard, it is, in our opinion, incorrect to see the state-business relations in China as uniform or dominated by a specific form of interaction. In reality, these relations are heterogeneous and vary not only depending on regions and sectors, but also “uneven” across different types of business actors within the same sector and/or region, as a result of which different types of businesses have different degrees of closeness to the state and subnational authorities.Conclusion. The system, historically formed under the influence of decisions and actions of the ruling party at various stages of the development of modern Chinese statehood, despite its complexity and often confusion, nevertheless allows the government to maneuver flexibly in the situations of serious economic and financial shocks caused by both economic and socio-political factors.

“Wars without Gun Smoke”: Global Supply Chains, Power Transitions, and Economic Statecraft

Abstract Conventional wisdom holds that conflict is highly likely during a power transition between declining and rising powers. The spread of global supply chains has provided new economic weapons for great powers waging these conflicts, but the businesses that constitute global supply chains can make it harder or easier for them to do so. A structural theory of business-state relations shows how power transitions affect a state's ability to exercise economic statecraft. As a dominant power and a rising power approach parity, they face structural incentives to use economic statecraft to decouple their economies. The resulting threat to businesses’ profits changes business-state relations: high-value businesses within the dominant power tend to oppose their state's use of economic statecraft, whereas low-value businesses within the rising power tend to cooperate with their state's use of economic statecraft. The Anglo-German power transition from 1890 to 1914 and the U.S.-China power transition since 1990 illustrate the theory. The findings shift scholarly debates on the use of economic statecraft in modern great power competition and have policy implications for weaponizing supply chains against rising powers like China.

State-business relations for entrepreneurial takeoff in Africa: institutional analysis

PurposeReports and experiences suggest that several developing African economies are faced with entrepreneurial-impeding forces such as lengthy bureaucratic processes and poor regulatory space. The study examines a general trend in “doing business performance” among selected African countries and uses the case of Ghana to explore how particular indicators or forces affect the development and deployment of small and medium-sized enterprise (SME) policies.Design/methodology/approachComparative analysis of six African economies on their ease of doing business score. This is followed by a critical review of the literature to develop a six-point explanatory framework to explore the relative position of the six countries on the ease of doing business scores. Using Ghana as a critical case study, the authors deploy an in-depth case study analysis via in-depth interviews of relevant stakeholders to validate the information from secondary sources.FindingsThe study observes that the nature of leadership, socio-cultural imperatives, economic structure and policy and the role of domestic institutional players and international players have implications for the extent to which the state creates an enabling environment for SMEs and entrepreneurial activities. The role of supportive cultural software that will help drive SME and entrepreneurial growth has been established. The study contends that different aspects of national culture do have implications for the tendency for people to be business-minded or to have the ability to take risks. The demand and supply sides are crucial in promoting SME growth.Originality/valueThe study develops a framework that helps explore elements to help explain ease of doing business scores and the viability of SMEs in Africa. These elements were validated through qualitative interviews as well.

State-Business Relations and Arenas as a Legitimate Space for State-Corporate Crimes: The Case of Modern Slavery in Brazil

This article aims to explore the genesis of arenas as an interorganizational relation space that can promote, or at least cleave, the path for corporate crimes. Based the scenario in which Brazil eradicated slavery, we argue there has been the creation of dynamic arenas and counter-arenas as spaces for avoiding or promoting corporate crimes, while the state has played the role of facilitator in such crimes. This paper asserts that promotion and prevention of corporate crimes are both legitimate actions by the state in its regime of permission, and every single actor who play in this field through arenas. In order to map the key elements of these arenas, our investigation is based on the techniques of shadowing, in-depth interviews, and field observation. After building our data pool, we analysed the phenomena mostly through open, axial, and selective coding, based on the Grounded Theory approach as a mean for categorization.

Expertise as a Response to Limited Multilateralism: The Case of South Korea's Vaccine Procurement Task Force for COVID-19 Vaccines amid Unequal Access via the COVAX Facility

This study investigates South Korea's trials and errors in procuring COVID-19 vaccines from abroad, amid the limitations of a multilateral scheme for global provision through the COVID-19 Vaccines Global Access (COVAX) program via the World Health Organization (WHO) and the discussions on COVID-19 vaccine patent waivers at the World Trade Organization. Using the framework of “self-help” in the international system and country categorization to explicate country behaviors by state-business relations and expertise to explain South Korea's COVID-19 vaccine procurement process, this study argues that in the absence of a global mechanism that guarantees adequate and timely vaccine provision, countries are left to the sole option of depending on their own capabilities: expertise, budget, and policy planning by consolidating public and private capacities to acquire vaccines for the public. To support the argument, an in-depth case investigation of South Korea's Vaccine Procurement Task Force is presented. The case study focuses on the policy assessment of critical elements in South Korea's vaccine procurement and rollout on facing obstacles to sufficient procurement through COVAX: decision-making impacting the timing and dosage of procurement, diplomatic and business channels to sign bilateral contracts, setup of a smart-factory vaccination hub, and indigenous vaccine development for WHO approval.