The reshaping of economic markets and the state: economic crisis and state changes

Despite claims of a move towards a more indirect, steering state, elected politicians and their officials continue to directly (re)shape economic markets. They influence the provision and funding of services, market structures and outcomes, and long-term planning. Although many traditional policy instruments such as public ownership and overt subsidies are in decline, new direct instruments have been layered on top. Such instruments range from internationalized state-owned enterprises and sovereign wealth funds to tax assistance, licensing, state-influenced mergers and acquisitions, reregulation of competition, and long-term state-directed contracts. This chapter looks at explanatory factors that include pressure from large firms and the electorate, the interests of state officials, economic and financial crises, ideational developments, and legacies of past financialization and liberalization.