State-market Relationship Research Articles

The Circular Economy, the SMEs, and the State: How to Govern a Circular Institutional Change Process?

The linear economic (LE) system is increasingly becoming unsustainable as its take-make-use-dispose logic mercilessly exploits the environment. As an alternative to this, the circular economy (CE) has recently gained popularity. The CE promises a more sustainable system through decreasing resource leakage from the economic system via circulating economic activities from production to consumption. However, there is not a clear blueprint on the institutionalization of the CE. To provide an answer to this problem, this research focused on the Small and Medium Entrepreneurs (the SMEs). The research was designed as a qualitative case study benefiting from the secondary data derived from the literature and found that the structural dependence of the SMEs on the existing LE system prevents them from performing proper CE actions. As a solution, the state emerges as a macro-level rule-breaker, which can play a catalyst role in the SMEs’ transition to the CE. Particularly, it could provide necessary regulative frameworks, financial sources, technological infrastructures, and a circular change in consumers’ attitudes, which are strategically important to drive the SMEs towards the CE system. Therefore, this paper suggests that the re-conceptualization of state-market relationship is an initial need to successfully govern an institutional change towards the CE. Additionally, a successful CE centred transition also needs a differentiated institutionalization perspective due to the uniqueness of different cases.

A recent regulatory storm in China: theoretical interpretation and applicability

While the recent “regulatory storm” in China has attracted attention from media, academia, and policy makers both in China and overseas, there lacks theoretical interpretation of Chinese central government’s major regulatory practices. Based on the review on global reflection of the shortcomings of the current market economy system and China’s own market economy practices, this article argues that China’s strengthening of market regulation is based on a people-centered paradigm of the state-market relationship that takes into account both efficient market and effective government and that is consistent with the international framework to improve the market economy system, in particular the stakeholder economy. To support the argument, this article illustrates China’s “regulatory storm” in terms of corporate governance, environmental goals, social impacts, adverse consequences, and employee rights with reference to cases from sectors affected by the “regulatory storm”. Moreover, China’s recent regulatory measures reflect the effectiveness of the “strong government” in rapidly rectifying market order and are in line with the global trend of building a new market system, which is worthy of reference for other Asian countries with similar political and economic contexts.

Continuity and Change in the World Trade Organization: Pluralism Past, Present, and Future

AbstractThe World Trade Organization is at an important institutional crossroads, buffeted by critique and with its once-heralded dispute system in doubt. Despite some achievements at the 2022 MC12 Ministerial Conference, the WTO appears in crisis, without a strong institutional mandate. In this Article, we offer a vision for its future, rooted in a particular interpretation of its past. The WTO's legal architecture is characterized by a resilient pluralism, which seeks to preserve diversity of governance models and regulatory approaches, both economic and political, in the domestic orders of member states. Despite strong pressures to impose a neoliberal vision of the state-market relationship on states, this pluralism has persevered; it offers a response to the WTO's critics and a mandate for the WTO's future.

Health systems in the European Union and policy responses to Covid-19: A comparative analysis between Germany, Sweden, and Greece.

Background:Existing health systems are a product of, and are influenced by, specific political, historical, cultural, and socio-economic traditions. Consequently, they may differ considerably across countries. The pandemic has become a turning point for our healthcare systems and at the same time has also highlighted the need to strengthen the EU’s role in coordinating health care. This paper analyzes the characteristics of the health care systems in three EU countries—Germany, Sweden, and Greece—that represent three different health care system types in Europe as well as their health policy response, to the COVID-19 pandemic.Design and methods:More analytically, the paper attempts to identify indications of interaction between heath care system types and national responses in the health crisis, using data collected from the COVID-19 Health Systems Response Monitor, the European Observatory on Health Systems and Politics as well as the OECD health system characteristics database and national health legislation.Results:The investigation revealed some common responses in all three systems. During the pandemic, in all three health care systems a new model is revealed where the private and the public sector coexist and is characterized by the dynamic state-market relationship. As a result a multilevel approach in health policy, combining national, sub-national, and supranational action is again in the foreground.Conclusions:The paper concludes by articulating some remarks regarding health policy during the pandemic, as well as the European health systems transformation and the importance of maintaining a strong welfare state in Europe.

The Fourth Branch: Reconstructing the Administrative State for the Commercial Republic

The relationship between the state and the market has been an important area of scholarly inquiry in many academic disciplines. In The Fourth Branch, Brian J. Cook examines state-market interaction through the role of the administrative state in the United States' commercial republic. Cook defines a commercial republic as a political regime that “conjoins popular, limited, and active government… and a market system anchored in a broad domain of private property rights and centered on business enterprise” (p. 13). Since administration is one of the main points of contact between the government and the various interests within the polity, Cook posits, the structure of the administrative state is crucial for the proper functioning of the American commercial republic. In the first half of The Fourth Branch, Cook reviews the evolution of the state-market relationship in the United States. The changing social basis of the regime is of particular importance for Cook's discussion as he documents how it evolved from the Madisonian preference for a landed economic class to the Hamiltonian belief that it should revolve around a new capital-holding class. The primary consequence of this development is that business interests now dominate the administrative state, which, Cook argues, undermines the aims of a commercial republic.

Proto-institutional work: the “special treatments for special matters” in institutional transition

PurposeThis study aims to examine an important mechanism in the policy-led institutional transitions in China, namely, Te Shi Te Ban (Special Treatments for Special Matters) – an institutional device that facilitates policy implementation. The discussions are contextualized based on the latest chapter of China’s institutional transition, known as the reform initiative of Fang Guan Fu (i.e. the FGF reform: delegate power, streamline administration and optimize government services), which is a policy regime introduced in 2018 to improve the state-market relationship for better socioeconomic development.Design/methodology/approachBased on the theoretical lens of proto-institutions and institutional work and using real-life examples from mass media, this perspective paper examines the effects of the Special Treatments in the institutional transition under the FGF Reform.FindingsThe Special Treatments are the proto-institutions purposively adopted by the regulators in China to innovate, supervise and renovate the rules and norms during policy implementation. They produce both incremental and radical institutional effects which allow for a more efficient and effective policy-led institutional transition.Originality/valueThis study contributes to institutional theory in the Chinese management context. Foremost, this study introduces the concept of proto-institutional work and shows how proto-institutions can serve as a mechanism to support and manage the process of institutional transition. In addition, to the best of the authors’ knowledge, this paper is the first to study the FGF Reform – the latest reform initiative in China and theorize an under-researched but important mechanism in its institutional environment – the Special Treatments for Special Matters.

Views of Joseph E. Stiglitz on the role and scope of the state’s influence on the economy against the background of previous views

Motivation: In the history of economic thought up to now, one of the topics causing the fiercest disputes was the role of the state and the market in economic life. The creators of the oldest concepts suggested that the state should steer the economy. Since the beginning of the 18 th century, the supporters of laissez-faire, the invisible hand of the market, and the auctioneer have been getting more and more respect. Their creators argued that the free market works efficiently and effectively. These views were undermined by the Great Depression. In response to the deep recession, Keynesianism was created, which led to the radicalization of supporters of a strong state on the one hand, and an unhampered market on the other. Aim: The aim of this article is to present in a synthetic way the evolution of views on the resource allocation mechanism in the economy. The research problem can be contained in three questions: How have theoretical views on the role of the state and the market in the economy evolved? Which views remain relevant? What is Joseph E. Stiglitz’s contribution to the discussion on the state-market relationship? Result: An innovative solution was proposed by Joseph E. Stiglitz. He pointed out that the state and the market should not be opposed as mechanisms for coordinating economic activity. He was in favour of developing ways of cooperation between the state and the market in order to ensure the effective functioning of modern economies that are mixed economies. This solution has rendered out of date the existing dispute between supporters of interventionism and laissez-faire.

Placing China’s land marketization: The state, market, and the changing geography of land use in Chinese cities

Existing theorization of the processes of urban transformation in different world regions has been based upon diverse interpretations of the interplay between the state and market forces. Studies of the growth and transformation of Chinese cities are characterized by continuing debates between those who insisted on the pivotal role played by the Chinese Party-state and others who envisioned urban China as moving decisively toward capitalism. This research examines the pattern and process of land marketization in urban China as a case to understand the interaction between the state and market forces in China’s ongoing urban transformation. Statistical analysis of the data for the Chinese cities at and above the prefectural level for the years of 2003–2017 has identified an uneven geography of land marketization effectively shaped by a localization of state-market interplay. A significant and positive correlation is found between the degree of land finance and extent of land marketization. The uneven geography of land marketization is significantly influenced by the legacy of the socialist planned economy as measured by the dominance of state-owned enterprises. However, the strength and direction of the correlation between the state and market are found to be contingent upon the level of urban economic growth. Spatial variation in land marketization is also shaped by the degree of openness, local state policies toward industrial vis-à-vis commercial and residential land supply, population density, and the size of the city. Findings of this research call for a theoretical reconsideration of the state-market relationship in urban transformation more attentive to local conditions.

Visible and invisible hands intertwined: State-market symbiotic interactions and changing income inequality in urban China

Analyzing the restructured political economy in 21st-century urban China, this project develops a “symbiotic interaction” model and reconceptualizes the state-market relationship to appreciate the changing inequality patterns. As the state and market have formed a long-term, intimate relationship, dynamic state policies interact with the fragmented labor market to redefine a set of socioeconomic capitals and statuses in affecting income inequality. Drawing empirical evidence from the Chinese General Social Survey 2003 and 2013 data, this paper employs linear and unconditional quantile regressions to compare income disparity patterns along both temporal and socio-spatial dimensions. The findings show that multiple key factors, including human capital (e.g., college education), political capital (e.g., party membership), occupational status (e.g., self-employment), and organizational type (e.g., state-owned enterprise), have all changed their economic returns over time and also played different roles for various earning groups. These findings suggest that we should conduct substantive institutional analyses of the evolving state-market relationship and their interplay to achieve a deeper understanding of the reshuffled stratification order in contemporary China. The proposed analytical framework also has broad implications in the research of other transitional economies.

Universal health coverage and capital accumulation: a relationship unveiled by the critical political economy approach.

To analyze the fundamentals of the global health agenda from 1944 to 2018, especially regarding Universal Health Coverage, in order to unveil its relations with capital accumulation in health services and to contribute to world social mobilization to change this tendency. A historical study was carried out based on a purposeful selection of primary sources on the global health agenda from multilateral organizations and secondary sources about the changes of capitalism from the study period. The global health agenda changed from the state responsibility for health to an insurance healthcare system based on markets. The medical-industrial complex pressured national economies, broke postwar pacts, and urged economic globalization. The neoliberal, neoclassical, and neo-institutional discourse that promoted a new state-market relationship eased the new capital accumulation in healthcare into financial and cognitive capitalism. Understanding these relationships allows us to provide elements for social mobilization geared to transform the healthcare sector toward a new vision of health with a nature-society relationship that contributes to socially constructing human and environmental health, rather than gaining profits based on illness and chronic suffering.

Beyond the state/market dichotomy: Institutional innovations in China's electricity industry reform

China's electricity industry has gone through three decades of market-oriented reform, and this process is often interpreted as a tug of war between marketization and state control. However, this paper argues that a dichotomous conception of the state-market relationship cannot explain the evolution and complexity of China's electricity governance. By systematically analyzing the institutions of China's electricity reform, this paper identifies a sequence of innovations that align well with both the history of China's economic transition and the institutional underpinnings of China's economic governance. Also, by interpreting the respective roles of state and market in China's reformed electricity industry, this paper shows that state control and marketization are complementary rather than contradictory, and that their complementarity is best exercised in addressing issues like market fragmentation and renewable energy curtailment. Moreover, this paper presents two case studies – both on China's most recent electricity market experimentation – to elaborate how state and market jointly serve sectoral functions as well as broader economic and political goals.

The state market relationship as a real estate technology: FHA multifamily development and preservation, 1934 – present

ABSTRACT Between the 1930s and the 1950s the United States Federal Housing Administration (FHA) developed a set of programs to spur the private development of hundreds of thousands of multifamily rental and cooperative units. To do so, the government crafted real estate technologies, working through iterative processes that weigh the social need for housing with what makes developers and investors engage. This technology generated units as well as a public-private approach to housing production. We use archival, government and journalistic sources to investigate these technologies in practice in early FHA multifamily programs, locate the housing stock it generated in New York City, and explore how real estate technologies changed over time. The discourse of state market relations transforms what is legally a mortgage insurance program into proto-neoliberalism. The FHA multifamily programs provide a lens to view one way in which the negotiation of effective real estate technologies shape state market relations.

Rethinking the state-market relations in the New Age of development

Abstract This paper discusses, from a conceptual and theoretical perspective, the recent debates on the relation between the state and the market as drivers of national development. Since the end of the Cold War, three periods are distinguishable according to the way in which development is discussed, envisaged, and designed through state policies. The first one starts from the end of the Cold War and leads to the 2008-2009 crisis, the second includes the ten years of recovery, while the last is unfolding at the moment. The argument takes globalization into account as the background for development, during the three decades observed. The paper analyses the way in which the state-market relationship was envisaged during each period, both in the developed and emerging economies. The paper identifies the factors that ensure steady development, with an emphasis on current challenges. Lastly, the paper presents the particular experience of Central and Eastern Europe during its transition from the communist regime to democracy. The conclusion is that the better understanding of the relationship between globalization and development, the faster their evolution for a given country.

La innovación social en la UE

Aunque la innovación social se plantea como una alternativa a los modelos de protección social y productivismo social imperantes desde los años 50s a nuestros días, no está del todo claro qué es la innovación social, cuáles son sus principales potencialidades y cuales sus limitaciones más aparentes. Tampoco está claro si hay una única definición de innovación social, o varias en función de cómo esta se posiciona respecto a elementos clave de la relación Estado-Mercado. En este artículo nos proponemos aportar luz a este debate ofreciendo una definición más integral de innovación social basada en el concepto de eficiencracia.

A Crisis Beyond Law, or a Crisis of Law?

This paper attempts to locate the place of law in debates on the economic crisis. It suggests that law is the meeting point of politics and economics, not simply the background to market operations. It is suggested therefore that the law should be seen as the conduit of popular will through political decision making onto economic systems and processes. The paper argues that the crisis can be seen as being the consequence of the dis-embedding of the political from the economic, and it is this distance that causes legal frameworks to operate in unsatisfactory ways. With this theoretical basis the paper examines the sovereign debt crisis in Europe. The European debt crisis in general and the plight of Greece in particular show why plasticity in policy making is necessary, and also reveal why current orthodox solutions to economic calamities fail. The inflexibility of the neoclassical understanding of the state-market relationship does not allow for avenues out of crisis that are both theoretically coherent and politically welcome. Such realizations form the basis of the examination of the rules framing the Eurozone. This paper after conducting an investigation of exit points from the Eurozone condemns the current institutional framework of the EU, and especially the EMU as inflexible and inadequate to deal with the stress being placed on Europe by the crisis.

A Crisis Beyond Law, or a Crisis of Law? Reflections on the European Economic Crisis

This paper attempts to locate the place of law in debates on the economic crisis. It suggests that law is the meeting point of politics and economics, not simply the background to market operations. It is suggested therefore that the law should be seen as the conduit of popular will through political decision making onto economic systems and processes. The paper argues that the crisis can be seen as being the consequence of the dis-embedding of the political from the economic, and it is this distance that causes legal frameworks to operate in unsatisfactory ways. With this theoretical basis the paper examines the sovereign debt crisis in Europe. The European debt crisis in general and the plight of Greece in particular show why plasticity in policy making is necessary, and also reveal why current orthodox solutions to economic calamities fail. The inflexibility of the neoclassical understanding of the state-market relationship does not allow for avenues out of crisis that are both theoretically coherent and politically welcome. Such realizations form the basis of the examination of the rules framing the Eurozone. This paper after conducting an investigation of exit points from the Eurozone condemns the current institutional framework of the EU, and especially the EMU as inflexible and inadequate to deal with the stress being placed on Europe by the crisis.

Crisis-induced reform, state–market relations, and entrepreneurial urban growth in China

The urban entrepreneurialism literature on China has focused either on macro-level state devolution or on micro-level place-making initiatives. Little has been written on the meso-level question of how the mode of regulation in general or institutional reforms in particular have worked to forge China's state-led urban growth by reshaping the state-market relationship. Through an investigation of China's crisis-induced fiscal and land use reforms since the mid-1990s, this paper argues that piecemeal, gradualist reform has transformed local states from protectionist market actors to investment promoters with monopoly power over land markets. Though this shift has supported entrepreneurial urban growth driven by manufacturing and real estate investment, it also tends to aggravate inter-regional and urban-rural tensions. As a country in transition that faces multiple challenges, China needs more holistic reform framework for sustainable growth.

State-Market Relations in the Perspective of Original Institutionalism*

This article summarises the main arguments of a critical literature that radically questions the neoclassical economic theory of state-market relations and identifies the fundamental methodological weaknesses of this school of thought. As an alternative, it presents an interpretation of the methodology on which Original Institutionalism, the political economy movement launched by Thorstein Veblen, is based. The article proposes an understanding of the economy and markets as emerging institutions, reflecting a metaphysics of social systems that views the latter as complex, self-organised and interactive processes. The state-market relationship is analysed in light of this institutional interactivity. Highlighting the co-evolution of state and market, the article attributes a central role to industrial policy in economic development processes.

Latin America: market mechanisms and supply adequacy in power sector reforms

The process of transformation in government and operations in the power sector leads to interaction between increasing integrated markets and public agen- cies in charge of policy making, regulation and control. This is examined for Latin America where state and marketing power sector planning, contract auctions to as- sure supply adequacy in an uncertain market environment, cross-border contracts, financing challenges for generation investments, and auctions of contracts to secure supply adequacy in the second stage of power sector reform are discussed. First, the state and market in power sector planning reform and state policies in Latin Amer- ica are considered. Here, present concerns; the state-market relationship (the position of regulation, globalisation, internationalisation), and state market in the energy sec- tor (correction and adjustments) are reviewed. Case studies for Argentina and Brazil are briefly outlined. The paper then examines contract auctions to assure supply ad- equacy in an uncertain energy environment that are being explored to face supply

Regulation and the Role of Law in Economic Crisis

This paper contributes to the current debate on responses to the financial crisis and the role of law in paving a way out of recession, by highlighting the persistence of market-centred theories that defined the state-market relationship before the crisis. The paper begins by discussing the concept of regulation itself and discusses the extent to which the ‘credit crunch’ has shaken belief in modern capitalism. The paper then offers a discussion on the relationship of deregulation to financial crisis, arguing that there is a direct link between the receding reach of the state and market instability, drawing analogies with previous instances of market failure, like the Great Depression. On the basis of this connection, a theoretical portrayal of perceptions of the role of law in modern capitalism is attempted, where the main message is that dominant, modern perceptions of the state-market relationship allow a role for regulation but still do not recognise the state as the legitimate author of such regulation, showing a preference for market-led solutions. The paper then tests these findings against state actions in response to the ‘credit crunch’ and concludes by offering the suggestion that while the current financial crisis has shown the limitations of modern capitalism, and while it is possible that a fundamental rethink of the role of the state in the market may take place as a consequence, this rethink has yet to materialise in policy proclamations and government aspirations on a global scale. “This financial system is no more! It has ceased to be! ‘It’s expired and gone to meet its maker! ‘It’s a stiff! Bereft of life, it rests in peace! If you hadn’t nailed ‘it to the tax payer’s perch it’d be pushing up the daisies! ‘Its metabolic processes are now ‘istory! ‘It’s off the twig! It’s kicked the bucket, it’s shuffled off its mortal coil, run down the curtain and joined the bleedin’ choir invisible!! THIS IS AN EX-FINANCIAL SYSTEM!!” (Willem Buiter, 26 November 2008)