Contents 1. The Democratic Malaise…1 2. The visible hand…5 3. New masters of the universe…7 4. Something old, something new…10 5. A choice of models…12 6. Pros & Cons: Mixed bag…16 7. Going abroad…19 8. The long view…22 Comparative Public Policy PhD Programme School of Graduate Studies, Department of Management and Policy, College of Management, Information and Economic Sciences, Addis Ababa University Lecture and Seminar Notes BT Costantinos, PhD, costy@costantinos.net Block Five Comparative Ideological basis for State capitalism (PPMP 906) Special report: State capitalism Jan 21st 2012 | from the print edition 1 The crisis of governability has engulfed the world’s most advanced democracies with the US, Europe and Japan are simultaneously experiencing political breakdown; globalization is producing a widening gap between what electorates are asking of their governments and what those governments are able to deliver. The mismatch between the growing demand for good governance and its shrink- ing supply is one of the gravest challenges facing the Western world today. This special report focuses on the new state capitalism of the emerging world rather than the old state capitalism in Europe, because it reflects the future rather than the past. The report will look mainly at China, Russia and Brazil. The recent protests in Russia against the rigging of parliamentary elections have raised questions about the country’s political stability and, by implica- tion, the future of state capitalism there, but for the moment nothing much seems to have changed. Today’s state capitalism represents a significant advance on its predecessors in several respects. First, it is developing on a much wider scale: China alone accounts for a fifth of the world’s population. Second, it is coming together much more quickly: China and Russia have developed their formula for state capitalism only in the past decade. Third, it has far more sophisticated tools at its disposal. The modern state is more powerful than anything that has gone before: for example, the Chinese Communist Party holds files on vast numbers of its citizens. It is also far better at using capitalist tools to achieve its desired ends. Instead of handing industries to bureaucrats or cronies, it turns them into companies run by professional managers. 1 The Economict, 2012, Emerging-market multinationals: The rise of state capitalism - The spread of a new sort of business in the emerging world will cause increasing problems, http:/ / www.economist.com/ node/ 21543160 re- trieved January 30, 2012