Guanxi and guanxi capitalism are much-debated terms in the context of China's evolving political economy. This article explores the changing nature of China's guanxi capitalism. It analyzes first various aspects of guanxi capitalism, a unique conceptual blend infused with seemingly incongruous cultural and historical meanings drawn from both Chinese and Western roots. It then introduces three case studies of private firms, illustrating empirically how Chinese entrepreneurs' relationship with the political system is evolving. The article ends by assessing the ways in which political factors, guanxi practices and capitalist accumulation are interacting and changing. I hold that guanxi capitalism is playing a crucial role in realigning the interests of state and capital in China. It yields idiosyncratic benefits to certain Chinese private firms, while also bridging the logics of freewheeling capital accumulation and authoritarian control in a state-dominated economy. In this view, guanxi capitalism encompasses both contradictory and complementary institutional logics. Since the persistence of Leninist control generates “deliberate ambiguity” in how China's private sector is governed, the penetration of guanxi networks into government-business relations creates institutional space that enables both Leninist control and relentless capital accumulation to proceed, in turn lending China's emergent capitalism a unique quality.

Investments by Asian Sovereign Wealth Funds (SWFs) continue to be of concern in the global economy. A common perception is that they are managed by state-affiliated entities with geostrategic motives that could somehow prove detrimental to host countries. This paper demonstrates, however, that even the definition, let alone the establishment and investment targets, of Asian SWFs are embroiled in ambiguity within home country politics. Plainly put, ambiguity refers to the absence of clear-cut policy processes, means, and goals. How do we explain the ambiguity surrounding SWFs? Ambiguity is not a cover for deliberate, cohesive, and strategic actions, because SWFs are not under the control of any one set of actors. Rather, perhaps to the discomfort even of home country sovereigns, ambiguity is a messy domestic product of contending political forces that do not allow a marked trend toward any one single policy equilibrium on sovereign investments, whether domestic or foreign. While this reality is perhaps understandable in a democratic polity, it is also equally true of authoritarian ones in the region. In both types of cases, ambiguity is constructed inadvertently by the interactions of state, interstate, and intrastate actors, each with their own interests and expectations about the role of SWFs. Analyzing the cases in Singapore, China, Japan, and other Asian countries, from this unifying perspective suggests that while ambiguity may fuel external anxiety concerning home country intentions, it actually reflects far more domestically salient controversies about SWF activities than is typically appreciated.

Business is often assumed to resist increased social and environmental regulation, preferring voluntary or soft-law approaches to global governance. This article analyzes the dynamics between CSR, soft law, and hard law by exploring corporate attitudes in the Nordic area towards CSR and regulation'an area reputed to be a forerunner in both CSR and social and environmental regulation. The analysis, based on a survey of the Nordic companies with the strongest CSR performance, reveals skepticism towards relying on CSR and voluntary approaches, combined with a very strong preference for increased international regulation of social and environmental issues. Drawing on insights from recent analyses in the governance literature, the article discusses the conditions under which business favors increased social and environmental regulation, concluding that corporate self-interest and increased international regulation can indeed coincide.

Executive pay regulation is widely discussed as a measure to reduce financial mismanagement in corporations. We show that the professional team sports industry, the only industry with substantial experience in the regulation of compensation arrangements, provides valuable insights for the regulation of executive pay. Based on the experience from professional sports leagues, we develop implications for the corporate sector regarding the establishment and enforcement of executive pay regulation as well as the level, structure, and rigidity of such regulatory measures.

How does the internal organization of a foreign aid donor affect its aid allocation decisions? Despite the voluminous literature on the political economy of foreign aid, little systematic scholarship exists on this topic. This paper analyzes the allocations of the International Development Association (IDA), the World Bank's lending arm for the poorest countries, to all eligible countries between 1977 and 2005. While factors such as a country's need and its policy environment have consistently impacted IDA's allocation decisions, other factors have changed in important ways. For example, IDA disbursements do not follow US aid disbursements in the post–Cold War period the way they did during the Cold War. And most strikingly, IDA's allocations have become tightly linked to debt owed to IDA's sister organization, the International Bank for Reconstruction and Development (IBRD). While IDA used to shy away from countries with higher debt to the IBRD, the last two decades have seen IDA engage in apparently defensive lending for the IBRD, lending more to countries with outstanding balances to that institution. The results suggest greater focus on the internal structures of donors would yield insight into their allocation decisions.

Firms operate in a capital market, a product market, and a market for social pressure directed at them by social activists, NGOs, and governments. An equilibrium in these three markets yields a three-equation structural model that relates corporate financial performance (CFP), corporate social performance (CSP), and social pressure. This paper estimates the simultaneous equation model for a panel of over 1,600 firms and finds that CFP is uncorrelated with CSP and negatively correlated with social pressure. CSP is decreasing in CFP and increasing in social pressure. Social pressure is increasing in CSP and decreasing in CFP, which is consistent with social pressure being directed to soft targets. Disaggregating the panel indicates that CFP is positively correlated with CSP for firms in consumer markets and negatively correlated for industrial markets. For consumer markets, CSP is increasing in CFP, which is consistent with a perquisites hypothesis that managers spend on CSR when they can afford it. For industrial markets CSP is decreasing in CFP, which is consistent with a moral management hypothesis. For both consumer and industrial markets, CSP is responsive to social pressure.