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• Case | HBS Case Collection | November 2019 (Revised June 2020)

  Russia: A Drama In Three Acts

  Rawi Abdelal, Rafael Di Tella, Galit Goldstein and Sogomon Tarontsi

  The collapse of central authority in the Soviet Union in 1991 ushered in a period of revolutionary transformations for the states that emerged in its wake. The leaders of Russia, the USSR's successor, struggled to reestablish central authority while also seeking to avoid further disintegration, establish a democratic polity, and institute a market economy across the next several years. Russia would navigate further economic crisis and a swiftly evolving geopolitical order as it returned to the world stage. The case examines the different governance approaches adopted by Presidents Boris Yeltsin, Dmitry Medvedev and Vladimir Putin, and concludes with a discussion of Russia’s strategic challenges and opportunities in 2020. The case focuses on problems of state authority; fiscal capacity; institutionalization of political parties; relations between the federal center and provincial governments; relations between the state and big business; economic policy; international relations; and models of economic development.

  Keywords: Business ＆ government relations; developing countries; government policy; policy change; Policy Making; Economic Systems; Economics; Globalization; Emerging Markets; Privatization; Non-Renewable Energy; Governance; Global Strategy; Corporate Governance; Policy; Business History; Lawfulness; Problems and Challenges; Business and Government Relations; Risk and Uncertainty; Strategy; Change Management; Russia; Moscow;

  Citation:

  Abdelal, Rawi, Rafael Di Tella, Galit Goldstein, and Sogomon Tarontsi. "Russia: A Drama In Three Acts." Harvard Business School Case 720-020, November 2019. (Revised June 2020.)  View Details

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• Working Paper | HBS Working Paper Series | 2020

  The Rise of the Investor State: State Capital in the Chinese Economy

  Hao Chen and Meg Rithmire

  The nature and extent of the role of the Chinese state in the economy is fundamental to many empirical and theoretical debates about that country’s political economy. We document and explain the rise of a novel form of intervention on the part of the Chinese state: the expansion of state capital beyond ownership of state firms. We argue that state investment as a mode of state intervention in the economy is conceptually distinct from both “state capitalism” and the “developmental state” in its introduction of new agents to distribute state capital to firms and new mechanisms through which states, especially authoritarian ones, monitor and influence business actors. We document the growth of the investor state in several ways. Case studies of three high-profile shareholding firms in China demonstrate that state capital can be deployed strategically, for example to respond to financial crisis or facilitate industrial upgrading, but also generates moral hazard, resulting in corruption and resource misallocation, and international alarm about the intentions of Chinese firms. We further compare the rise of state shareholding firms in China to similar phenomena in Brazil and Malaysia, concluding that the practice has both economic and political logics.

  Keywords: China's political economy; state shareholding; state-business relations; State capitalism; China's financial system; Economy; Business and Government Relations; Finance; System; China;

  Citation:

  Chen, Hao, and Meg Rithmire. "The Rise of the Investor State: State Capital in the Chinese Economy." Harvard Business School Working Paper, No. 20-120, May 2020.  View Details

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• Case | HBS Case Collection | April 2020 (Revised April 2020)

  Unrest in Chile

  Vincent Pons, William Mullins, John Masko, Annelena Lobb and Rafael Di Tella

  In 2020, Chileans would head to the ballot box to decide their country’s future. Many international observers credited Chile’s decades of neoliberal governance with turning the country into Latin America’s “Tiger,” a prosperous, diversified economy on its way to becoming the continent’s first developed country. But in October of 2019, a mass protest movement ground the country to a halt and shocked its political class, showing the world a different Chile—one defined by inequality, social distrust, and a young generation of political activists. As Chile prepared to vote in the fall of 2020 on whether to adopt a new constitution, could it sculpt a more equitable society while remaining “the exception” on a continent known for its political instability? Or would Chile’s prosperity go the same way as its neoliberal experiment?

  Keywords: Developing Countries and Economies; Macroeconomics; Economy; Political Elections; Public Opinion; Social Issues; Equality and Inequality; System Shocks; Chile; Latin America;

  Citation:

  Pons, Vincent, William Mullins, John Masko, Annelena Lobb, and Rafael Di Tella. "Unrest in Chile." Harvard Business School Case 720-033, April 2020. (Revised April 2020.)  View Details

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