Taming Crony Capitalism. Diagnoses and Responses to the Business-Politics Linkage

Panel Code: 
Dr. Ramin Dadasov 

World Economic Forum reports that the wealth of the world is divided in two: almost half going to the richest one per cent and the other half to the remaining 99 per cent of the population. This extraordinary inequality was discussed in some recent best-sellers, such as the 2014 Capital in the 21st Century by Thomas Piketty. He argues that growth can be understood as a win for everyone, but capital returns pertain particularly to people at the top who benefit from income that is not derived from labour.
However, given that extreme economic inequality and political capture are too often interdependent, it is surprising that concepts such as corruption, rent-seeking or state capture not feature a single time throughout the new Capital lengthy book. Reports that business-politics linkage has grown to become the major source of wealth in many countries abound however, even from official sources like the European Commission or World Bank. The links between politics and wealth are plainly visible from China, where 60% of the country’s billionaires are members of the ruling party, to Mexico, where 57% of all billionaires’ primary businesses are publicly held.
This panel aims to survey both developed and developing countries using both quantitative and qualitative methods and to discuss some responses to the unprecedented rise of crony capitalism, a variety which has come to dominate the others.

Prof. Claus Offe
Prof. Alina Mungiu-Pippidi