State Capitalism by Kurlantzick Joshua;

Author:Kurlantzick, Joshua; [Kurlantzick, Joshua;]
Language: eng
Format: epub
ISBN: 9780199385706
Publisher: OxfordUP
Published: 2016-09-15T00:00:00+00:00

HOW DEMOCRACY AND STATE CAPITALISM COULD COEXIST

Although the examples of Thailand, South Africa, and Argentina seem to suggest that state capitalism inevitably erodes democratic freedom, in some countries economic statism coexists with political openness, indicating that state capitalism is not such a threat to democratic freedoms in countries that already have strong democratic institutions and cultures. State capitalism is one factor that may foster democratic regression, but in itself it does not automatically cause political regression; it is not even necessarily correlated with political regression.

Although individual leaders play a role in maintaining democratic politics in a state-driven economy, they are not the only guardians of democracy in countries like Indonesia, Norway, or Brazil; if they were, state capitalism would inevitably undermine every democracy, since the quality of leadership in any country ranges widely. But, if state capitalist countries are also able to create independent institutions insulated from the power of the executive—and thus insulated from the executive’s control of state companies—these institutions can help preserve democracy even as statist economics expand. For example, Indonesia has created a truly independent agency to investigate graft cases; the Corruption Eradication Commission has wide-ranging police powers that, in some ways, exceed those of the regular Indonesian police. The commission, established only a decade ago, has quickly become a powerful check on the use of state economic tools for patronage and self-dealing. Though Indonesia still suffers from serious graft problems, a legacy of the Suharto regime, the Corruption Eradication Commission has pursued some of the most powerful politicians and has notched a 100 percent conviction rate in its cases. Unlike the Directorate of Special Operations, the elite police unit created in post-apartheid South Africa to combat graft and organized crime, Indonesia’s anti-corruption commission is not directly controlled by elected leaders and so cannot be easily manipulated; in recent years the commission has launched high-profile investigations into some of the closest allies of Susilo Bambang Yudhoyono, during Yudhoyono’s time as president. (The Directorate of Special Operations, known in South Africa by its nickname, the “Scorpions,” were defanged and then essentially disbanded at the end of the Mbeki era, just as it was investigating allegations of bribery by political allies of South Africa’s next president, Jacob Zuma.) To Yudhoyono’s credit, he did not block the commission’s investigation into his political allies, and in late 2014 the commission announced it was investigating Yudhoyono’s son on allegations of accepting bribes.

Singapore, though not as democratic as Indonesia, long ago created checks on state power that are relatively insulated from the reach of individual politicians. These checks have remained strong as the city-state has become more open politically, with a real opposition party and a much freer atmosphere for speech and expression than even a decade ago. The Political and Economic Risk Consultancy, a leading Asia-Pacific business analysis firm, has consistently ranked Singapore’s judiciary as the fairest in Asia.18

Norway, perhaps the most successful example of combining state capitalism with vibrant democracy, uses similar strategies as Singapore. Even as Norway’s economy has

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