State Capitalism as Economic Strategy in the Age of Geo-economic Fragmentation

This journal discusses the resurgence of state capitalism amidst geoeconomic fragmentation, industrial policy, and the green transition. The article aims to explain state capitalism not as a deviation from capitalism, but as a spectrum of economic governance strategies through state-owned enterprises, development banks, sovereign funds, mixed ownership, and cross-border investments. Using a qualitative literature review method on studies from 2020–2026, this study finds that the effectiveness of state capitalism heavily depends on institutional quality, mandate clarity, governance discipline, and accountability. State instruments can drive structural transformation, innovation, and long-term investment, but also risk triggering political capital allocation, opaque governance, and geopolitical tensions if oversight is weak. The implication is that the role of the state needs to be institutionalized transparently and measurably to support sustainable development.