Mechanisms of Coordination and State Permeation: A Comparison of Large Emerging Economies

Different modes of coordination between economic actors have been central aspects of Comparative
Capitalisms (CC) research. However, this question has hitherto been inadequately addressed with
regard to capitalism in large emerging economies and the BRICS. Regularly, state-business relations
are depicted as instances of "crony" or "patrimonial capitalism", based on corruption and clientelism.
Yet, this gives rise to the puzzle why large emerging economies could produce considerable growth
over a decade despite these coordination "failures". Arguing from a Polanyian perspective, we find
much support for a mode of coordination based on reciprocity in emerging Southern capitalisms. This
'soft' or 'social' mode of coordination might help to explain an unexpected degree of institutional
coherence of capitalism in countries such as Brazil, India and China. Moreover, it complements a new
form of coordination by the state that changed from a dirigiste mode of state control towards a more
flexible and selective form of state involvement that permeats (rather than steers) the economy.