The Dark Sides of State-Capitalism as Economic Policy: A Review of Lessons Learned

This article critically examines the negative aspects of state capitalism as an economic policy increasingly adopted in various countries. The research aims to identify the structural weaknesses of this model in terms of economic performance, governance, and social welfare. The method used is a qualitative literature review of the latest scientific publications from the period 2020–2025, with a thematic synthesis approach to the experiences of countries such as China, Russia, Indonesia, and Brazil. The analysis results reveal four main issues: economic inefficiency due to soft budget constraints and misallocation of capital, governance failures that trigger corruption and cronyism, market distortions through the dominance of state-owned enterprises, and increasing wealth inequality. These findings indicate that the contradiction between political control and market efficiency often results in innovation stagnation and weak accountability. This study emphasizes the importance of transparency, strong governance, and limiting state intervention to ensure that economic policies remain efficient, competitive, and sustainable.