State Capitalism

Since the 2008 financial crisis China, Russia and Saudi Arabia have been among the best-performing economies in the world. All three countries practice so-called state capitalism, in which the government plays a dominant role in the economy and owns a large share of the nation's companies. As economic growth in the United States and Japan remains tepid, and parts of the European Union are mired in a double-dip recession, many developing world governments are questioning whether Western market capitalism is the best path for growth. Many also blame the excesses of unfettered Western-style capitalism for the recent global financial crisis and the ensuing worldwide recession. China, on the other hand, has lifted 600 million people out of poverty in three decades, and Russia's economy has doubled in size since Vladimir Putin began rolling back post-Soviet free-market reforms. Some economists see trouble ahead, however, because when governments manipulate markets for political purposes it can lead to inefficiencies, corruption and political tensions over time.