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Volume #19, Number #2

Published in December, 2015

This article focuses on state capitalism in Latin America and examines what causes the expropriation of foreign direct investment (FDI) in this region. We argue that leaders’ concerns over their political survival affect FDI expropriation in Latin American countries. Specifically, when leaders sense a higher level of political constraints and political insecurity, they are more likely to take unilateral action, i.e., by expropriating FDI. This argument illustrates one important feature of state capitalism: governments utilize markets to serve political goals. We conduct a data analysis of expropriation in 18 Latin American countries from 1980 to 2008, and the results show that leaders are more likely to expropriate when they confront stronger executive constraints. The results also confirm the findings in the literature that democratic regimes expropriate less and that oil-producing countries expropriate more. The focus on Venezuela and Brazil also supports our main argument.

Chia-yi Lee, Tsung-han Tsai

Since the beginning of the new century, with the implementation of the policy of developing new socialist rural areas, the Chinese peasants' narrow-mindedness, passiveness and reluctance to collaborate have become one of the most often discussed issues in China concerning the backwardness of rural villages. These features, regarded by many Chinese scholars as the syndrome of rural village atomization, have been designated as the major factors contributing to the slow development of peasants' organizations since 2005, as well as the basis for the rationale to strengthen state intervention and promote the further development of rural enterprises in rural areas. The study points out that the atomization of rural villages is closely connected to social capital. In other words, it is about the fragmentation of social ties within the villages, i.e., the alienation of peasants from the society and state. Given that social ties hinge on social interactions and participation, and that the development
of China's rural farms has been for long under state control, this paper starts with an analysis of the institutional changes in which rural villages have been embedded in order to find out which factors have accounted for their atomization. Then, by means of comparative studies on the social interactions within ten of China's inland villages, it assesses the contribution of peasants' organizations to their revitalization.

Juei-chi Wang

Compared to other political-economic systems, state capitalism has been a competitive system in the global market since the global financial crisis in 2008. The relationship between state capitalism and China’s robust economic development has attracted attention from both academics and practitioners. Yet the review of the existing literature indicates that little work has been done to conceptualize related phenomena and provide a theoretical framework. On the one hand, while most scholars acknowledge that the political-economic system in China is not a socialist one, there is no consensus on the current system of Chinese political economy. On the other hand, even though studies characterize the Chinese political-economic system as state capitalism, they are inconsistent in defining and conceptualizing the term ‘Chinese state capitalism’. As such, it is hard to generate meaningful dialogue among researchers and to build a convincing conceptual framework. By exploring whether Chinese state capitalism exists and what constitutes Chinese state capitalism, this article argues that researchers should engage in the study of Chinese state capitalism from the perspective of comparative capitalism, by which the state-market interactions in China can be generalized. In so doing, researchers of Chinese state capitalism will be able to draw meaningful comparisons with other state capitalist systems and contribute to the field of comparative politics.

Chih-shian Liou

Driven by the financial crisis and the rise of China, the discussion on state capitalism has been revived. Nonetheless, it focuses heavily on empirical analysis and lacks theoretical elaboration. It also fails to exhibit the dynamics of theoretical development and the transition of major issues. This article examines the literature on state capitalism ranging from the late nineteenth century to the present time and aims to answer the following question: What is the core concept of state capitalism? It argues that state capitalism indicates that the state participates in the market in order to achieve its own political goals. Three periods can be distinguished in its theoretical development: the late nineteenth century to the early twentieth century, the end of the Second World War to the 1980s, and 2007 to date. This article points out that the analytical approach has shifted from structuralism to functionalism and to institutionalism, while the level of analysis has moved from macro to micro. The abundant and diverse empirical evidence that has emerged in recent years can facilitate our discussion when state intervention is unavoidable in capitalism’s operation.

Chung-min Tsai

This paper adopts the state capitalist approach to explain the development of labor politics, particularly changes in union capacities, since the reform period. In China, state capitalism not only entails the persistence of state intervention in labor markets, but also state fragmentation and the importance of informal institutions. Since the 1990s, the Chinese state’s promotion of state-owned enterprises has created barriers for private enterprises. To achieve profits, private enterprises colluded with local governments to bypass formal institutions and regulations. For labor relations, this led to the lax implementation of labor laws and union marginalization. While the rise of labor disputes and the turn of central policy towards social issues prompted local governments to respond by increasing union capacities, unions were given the role of preventing labor unrest rather than articulating workers’ rights. Based on empirical analyses using a new provincial-level dataset compiled on union capacities and labor dispute settlements and a mini case study, this paper obtains the following findings. By controlling for economic and firm factors, more disputes were resolved when unions had additional capacity to participate in the resolution of labor disputes. The findings also suggest that the growth of union capacities alone did not improve the unions’ representation of workers, and thus the findings not only cast a less optimistic light on the prospect of union autonomy but also have theoretical implications for studies on state capitalism.

Christina Chen