This technical note describes a methodology for appraising the political economy of business-government relationships in an emerging or frontier market. The note argues that there are not one but four markets in an emerging economy: the market of "rentiers" such as mining companies that make profits by maximizing rents in the export sector, "powerbrokers" that use monopoly power and government relations in controlled businesses to get outsized profits selling domestically, "workhorses" that work in largely competitive (and familiar) sectors serving domestic customers, and "magicians" that rely on state-specific advantages including special treatment and incentives to export in competitive sectors.
Businesses running in every one of these markets require an alternate strategy; moreover, each market requires a different approach for regulation and private sector development. If we consider the mix of business activity across these four markets in a nation, we can better comprehend the nature and trajectory of business-government relations.
PUBLICATION DATE: August 28, 2012 PRODUCT #: 713026-HCB-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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