“Authoritarian Capitalism Sovereign Wealth Funds and State―Owned Enterprises in East Asia and Beyond”(Cambridge University Press, 2018)

Richard W. Carney(Assistant Professor of Strategy, China Europe International Business School)

I am very honored to receive the Masayoshi Ohira Memorial Prize. I would like to express my sincere gratitude to the board members of the foundation and to the selection committee. 　n contrast to prominent theories about the global diffusion of liberalizing reforms, Authoritarian Capitalism argues that state-controlled entities, such as sovereign wealth funds and state-owned enterprises, have played an increasingly active role in the global economy over the past two decades. The book begins by documenting the surge in the prevalence and size of these state-owned entities and then asks why they sometimes engage in aggressive investment behavior towards foreign corporations. 　Existing explanations have overlooked an important political phenomenon ? the rise of Dominant Party Authoritarian Regimes (DPARs). DPARs are a hybrid of democracies and authoritarian regimes: they hold elections in which multiple political parties compete, like democracies, but rarely result in the handover of power, as in authoritarian regimes. Notable examples of DPARs include Malaysia and Singapore. DPARs have staged a spectacular rise since the end of the Cold War, and now account for one-third of all regimes in the world. Yet, the existing literature on state intervention in the corporate sector has overlooked this important fact. 　I argue that leaders of DPARs want to maintain regime stability while simultaneously growing the economy. Publicly-listed state-owned enterprises (SOEs) can effectively balance these competing priorities. Publicly listing SOEs forces them to adhere to competitive market forces, thereby enhancing their profitability and reducing their drain on state finances. At the same time, the state maintains an ownership stake in these firms in order to use them for political objectives that preserve the power and stability of the incumbent regime. Because DPARs permit political opponents to compete in elections, but are unwilling to hand over power, DPAR leaders engage in more aggressive corporate intervention as political threats to the regime increase. 　Because DPARs comprise one-third of all countries in the world, the implications are profound. Single Party Authoritarian Regimes (SPAR), such as China, only account for around five percent; Narrow Authoritarian Regimes (NAR), such as Brunei, account for around ten percent. The argument is supported with a wealth of evidence. One chapter examines global patterns; another narrows the focus to Asia with data on ultimate corporate ownership spanning more than 3000 companies. There are also five empirically rich country case studies, including Brunei (Narrow Authoritarian Regime), China (SPAR), Malaysia (DPAR), Singapore (DPAR), and Taiwan (which changes from SPAR to Democracy). 　This award greatly encourages me to engage in further studies regarding varying types of authoritarian regimes and how they interact with other countries in the region. Through this research, I hope that a better understanding of these regimes will reduce misconceptions about them, promote cooperation, and contribute to a stronger sense of community in the Pacific Basin.

Profile
Dr. Richard W. Carney is a faculty member in the Department of Strategy and Entrepreneurship at the China Europe International Business School (CEIBS). His teaching and research interests primarily focus on business-government relations. His most recent book is Authoritarian Capitalism: Sovereign Wealth Funds and State-Owned Enterprises in East Asia and Beyond (Cambridge University Press, 2018). A paper utilizing the framework developed in the book to examine corporate social responsibility won the Best Paper Award on Emerging Economies Research at the 2018 Meeting of the Academy of International Business. He has published numerous articles in journals such as the Journal of Financial Economics, Business and Politics, and the Review of International Political Economy. He is also the author of Contested Capitalism: The Political Origins of Financial Systems (Routledge, 2009) and is the editor of Lessons from the Asian Financial Crisis (Routledge, 2009). Prior to joining CEIBS, he was an associate professor at the Australian National University and assistant professor at the Nanyang Technological University in Singapore. He was also a Jean Monnet Fellow at the European University Institute in Florence, Italy. He received his PhD from the University of California, San Diego.