The International Spectator
Italian Journal of International Affairs
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States versus Corporations: Rethinking the Power
of Business in International Politics
Milan Babic, Jan Fichtner & Eelke M. Heemskerk
To cite this article: Milan Babic, Jan Fichtner & Eelke M. Heemskerk (2017) States versus
Corporations: Rethinking the Power of Business in International Politics, The International
Spectator, 52:4, 20-43, DOI: 10.1080/03932729.2017.1389151
To link to this article: https://doi.org/10.1080/03932729.2017.1389151
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The InTernaTIonal SpecTaTor, 2017
Vol. 52, no. 4, 20–43
https://doi.org/10.1080/03932729.2017.1389151
OPEN ACCESS
States versus Corporations: Rethinking the Power of Business
in International Politics
Milan Babic
, Jan Fichtner
and Eelke M. Heemskerk
University of amsterdam
ABSTRACT
KEYWORDS
Over 25 years ago, Susan Strange urged IR scholars to include
multinational corporations in their analysis. Within IR and IPE
discussions, this was either mostly ignored or reflected in an empirically
and methodologically unsatisfactory way. We reiterate Strange’s call
by sketching a fine-grained theoretical and empirical approach that
includes both states and corporations as juxtaposed actors that
interact in transnational networks inherent to the contemporary
international political economy. This realistic, juxtaposed, actorand relations-centred perspective on state and corporate power in
the global system is empirically illustrated by the example of the
transnationalisation of state ownership.
International relations;
international political
economy; multinational
corporations; states; power
[I]t seems to me that so many writers and teachers in conventional international relations are
like the orthodox theologians in Galileo’s time. They are like Flat Earthers who refuse utterly
to recognise that the earth is round and revolves around the sun. Similarly, they refuse to
see that the relations between states is but one aspect of the international political economy,
and that in that international political economy, the producers of wealth – the transnational
corporations – play a key role.1
In her criticism of the state of International Relations (IR) over 25 years ago, Susan Strange
directly addressed the discipline’s core questions: “What is power in the world system /
international political economy? And who has it?”.2 She compellingly argued that if IR is
serious about developing an answer to these fundamental questions, the discipline necessarily needs to integrate international business and its growing power into the investigation
of international politics. Failure to do so not only leads to a partial and incomplete understanding of global power relations, it also gravely diminishes our ability to develop valid
explanations of why we see particular outcomes of this global power play: who wins and
who loses. Writing in the closing decade of the 20th century, Strange registered that the
ongoing rise of big multinational corporations (MNCs) as well as similar developments,
CONTACT Milan Babic
m.babic@uva.nl
1
Strange, “Big Business and the State”, 246.
2
Ibid.
@mbabic_1
© 2017 The author(s). published by Informa UK limited, trading as Taylor & Francis Group.
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THE INTERNATIONAL SPECTATOR
21
such as the emergence of a global and highly concentrated professional corporate service
industry, fundamentally altered the power balance in the international political economy.
Yet, Strange’s cri de coeur has left the discipline largely unaffected; the role of business as
a transnational actor has remained a side phenomenon in the study of international politics.
Every now and then a disturbing study underscores the ongoing importance of Strange’s
critique, ranging from Naomi Klein’s No Logo, to the study by Stefania Vitali et al. showing
that nearly 40 percent of the control over the economic value of MNCs in the world is held,
via a complicated web of ownership relations, by a group of only 147 MNCs.3 But besides
these revealing yet piecemeal contributions, the corporation has yet to emerge as a broadly
accepted and systematically analysed object of research in international politics. This bias is
problematic, given the sizable increase in significance and power of internationally operating
corporations vis-à-vis nation states in the course of globalisation,4 as well as the fundamental
role of big corporations in shaping neoliberal capitalism since the 1980s.5 The transnationalisation, or de-nationalisation, of production and finance has created new and growing
opportunities for firms to shift production, participate in complex global value chains that
are difficult to regulate, and circumvent state attempts to regulate and tax corporate activities.
As a result, big business has developed a profound structural power position on the global
scale.6 This implies a permanent transformation of the relations between state and capital,7
especially in international politics. State and corporate power are no longer exclusively exercised in the iron cage of the nation state, but in the overarching sphere of global capitalism.
These recent developments in global politics are at odds with the persistent shadowy
existence of the study of corporations in the disciplines of IR and International Political
Economy (IPE). We therefore seek to contribute to the systematic study of corporations and
corporate power in international politics by providing researchers with an updated view on
global power relations research, in which corporations are taken seriously. To be clear, we
do not argue that corporations are not taken seriously at all in the extant literature. In it,
we see two major opposing perspectives in IR and IPE regarding the role of multinational
corporations in the global system. Neither account, however, conforms to Strange’s call in
a satisfactory way as both study corporate and state power as one predominating over the
other. On the one hand, there is substantive work on the role of MNCs in the international
state system pioneered by scholars such as Raymond Vernon or Robert Gilpin.8 This ‘classical’ IR perspective understands multinationals as subordinated to state power: at most,
they influence the relations between states, but are not perceived as juxtaposed actors in
the system. We see this as a dominantly state-centric view. On the other hand, scholars of
transnational capitalism9 or global governance10 theorise corporate power beyond the nation
state. Especially the transnational capitalism perspective considers corporate power and,
with it, transnationally organized power as the primary factor in the era of globalisation.11
3
Klein, No Logo; Vitali et al., “The network of corporate control”.
Brinkmann and Brinkmann, “corporate power and globalization process”.
5
crouch, The Strange Non-death of Neoliberalism, 49; carroll, Making a Transnational Capitalist Class; Van apeldoorn,
Transnational Capitalism and European Integration.
6
Van apeldoorn and De Graaff, “The corporation in political Science”; Winecoff, “Structural power and the crisis”; Fuchs,
Business power in global governance; Marsh and lewis, “The political power of Business”.
7
Van apeldoorn et al., “reconfiguration of the State-capital nexus”.
8
Vernon, Sovereignty at Bay; Gilpin, “pe of the Multinational corporation” and, Political Economy of International Relations.
9
For instance robinson, A Theory of Transnational Capitalism.
10
For instance May, “corporations as global governance institutions”.
11
Sklair, The Transnational Capitalist Class.
4
22
M. BABIC ET AL.
State power here is limited and constrained vis-à-vis the mobility and agility of transnational
capital that is detached from the old world of nation states. While state-centrism runs the
risk of understating corporate power in contemporary international politics, transnational
capitalism’s convincing observation that the “nation state phase of capitalism”12 is over
implies that the role of states in global capitalism has ceased to be relevant to understanding
global power relations.
We believe that in order to advance our understanding of the role of business in international politics, we must establish a dialogue between these two perspectives. We aim
to contribute to this dialogue with a set of theoretical and methodological interventions
and suggestions. The three theoretical interventions we make are, first, that the study of
international politics needs to be made more realistic by integrating corporate power into
its analyses; second, that corporations should not be studied as subordinate, but rather as
juxtaposed to states in the global system; and third, that these analyses need to be actorand relation-focused, that is, they have to incorporate agency and structural features of the
global system. Our main methodological intervention is to depict these three characteristics
with a network-analytical approach that can be applied to the study of large sets of different
relations between state and corporate power in the global system. Our approach thus consists
of three theoretical extensions and their respective empirical implementations, which can
be summarized as realistic, juxtaposed, actor- and relations-centred perspectives on state
and corporate power in the global system. It helps us to understand power in international
politics in a specific and at the same time systematic way.
We proceed as follows. The next section positions our approach as advancing and bridging the literature on corporate power in international politics. The subsequent section provides an empirical illustration of our suggested approach, highlighting a typically overlooked
phenomenon in international politics: how states can potentially use state-owned enterprises
not only in their domestic policies, but also (and perhaps increasingly so) as a tool of international politics. This illustrates the specific power relations arising out of the networks in
which states and corporations are tied together in global capitalism, relations that are not
one-dimensional but multi-faceted: states and corporations are not subordinate to each
other, but juxtaposed and intertwined; they use each other to increase their respective
power positions. As such, we sketch a starting point for further research on the power of
business in international politics, which will hopefully lead to a better understanding of the
complex power structures that shape the contemporary international political economy.
State power, corporate power and international politics revisited
It goes largely undisputed that states and corporations are interdependent. Corporations
rely on the state for the provision of security and the enforcement of property rights in
order to be able to engage in business transactions. At the same time, states also depend on
corporations for the employment of their citizens and as a basis for taxation. But the role
of corporations in international politics remains a neglected issue. We distinguish between
two major positions that theorise and investigate the role of corporate power in the analysis
of international politics: on the one hand, the state-centric view pioneered especially by
Robert Gilpin and, on the other, the transnational capitalism perspective exemplified by the
12
robinson and harris, “Towards a global ruling class?”, 17.
THE INTERNATIONAL SPECTATOR
23
work of William I. Robinson.13 While the state-centrists emphasize the analytical priority
of the nation state, the transnational capitalism approach downgrades its relevance for the
analysis of globalisation. In this sense, both positions take different stands towards Strange’s
core question of who holds power in the international system. Both are of course idealtypical summaries of more differentiated accounts, but they represent the main alteration
of thinking that occurred with the breakthrough of globalisation in the 1980s.
We acknowledge that there are more variations and relevant positions than our idealised two:
approaches like James H. Nolt’s “corporatist” re-calibration of business power within the history
of IR stand somewhere between the aforementioned positions.14 But, as will become clear in
the following, our primary focus is not to renew IR theory, but to bring back the relevance of
MNCs in international politics. To achieve this, we provide arguments for a dialogue between
two positions that analyse this phenomenon from their specific angle. Nolt – and others, like
Jeffry Frieden15 – analyse the translation of business power from domestic into international
politics. We, however, narrow our focus down to the core question of understanding the role
of corporations as actors within global power relations from a pragmatic and constructive angle.
State-centrism and the challenge of multinational corporations
Exponents of the state-centric perspective provided some of the first comprehensive analyses
of the role of multinationals in international politics. Coming from the postwar period of
“embedded liberalism”,16 Raymond Vernon’s seminal study laid out the multifold challenges
for the nation state system arising from the growth of MNCs.17 In the very state-centric
postwar world, shaped by capital controls, fixed exchange rates and limited free trade agreements, the nation state was able to regulate the national economy often via corporatist
arrangements as in Western Europe. This changed with the end of Bretton Woods in 1971
and major advances in information and communication technologies; the transformations
in international patterns of production led to the breakup of obstacles for cross-border
financial flows.18 This profound structural change enabled corporations to internationalise:
the flow of foreign direct investment (FDI) doubled from 1972 to 197519 and rose to unprecedented levels in the coming decades; the transnationalisation of production accelerated
and MNCs became a major force in the new era of financialised capitalism.
With this change in power relations away from the nation state, Vernon proposed to
understand the realm of nation states and the realm of multinationals as “two systems
[...], each potentially useful to the other, yet each containing features antagonistic to
the other”.20 The aim of his approach was to outline the tensions and possible solutions
that accompany the relations between these “systems”. But, although they were named
multinationals, the companies Vernon and other scholars theorised about were mostly a
North Atlantic phenomenon: until the late 1970s, the global FDI stock was largely split
13
Gilpin, “pe of the Multinational corporation”; Gilpin, Political Economy of International Relations; robinson, Theory of
Transnational Capitalism.
14
nolt, International Political Economy.
15
Frieden, “Sectoral conflict and economic policy”.
16
ruggie, ”International regimes, Transactions, and change”.
17
Vernon, Sovereignty at Bay.
18
cox, “corporate power and democracy”, 3.
19
World Bank open Data, see https://data.worldbank.org.
20
Vernon, Sovereignty at Bay, 191.
24
M. BABIC ET AL.
Figure 1. State-centric perspective on state and corporate power in the international system.
Sx represent states, cx corporations. The relation between states can be conflicting (as between S2 and S3), cooperative (as
between S1 and S2) or neutral (as between S1 and S3). corporations can play different roles, such as being shared by S1 and
S2 (c2), used by S3 against S2 (c3) or used as an asset (“national champion”) of S1 (c1).
between the US, UK and the Netherlands.21 Furthermore, it was the American state that
successfully managed to transform the Bretton Woods order into the subsequent structure
of neoliberal globalisation.22 Consequently, IR scholars at that time pointed out that “the
MNC exists as a transnational actor today because it reflects perceived national interests
of the world’s dominant power, the United States”.23 The “two systems” perspective was
thus nuanced by a more state-centric view of the role of the MNC, which emphasized
American hegemony in combination with corporate power as the main driver of globalisation. Gilpin summarized the development as “a complex pattern of relationships among
corporations, home governments, and host countries that has increasingly politicized
foreign investment both at home and abroad”.24 Although recognising the potential power
of the MNC, this perspective can be evaluated as redefining national sovereignty in early
times of globalisation. Thus, although redefined, sovereign states remain the main actors
in the international system.
Figure 1 represents the state-centric idea of the international environment as dominated
by the nation state. In this realist and state-centric perspective, the role that corporations play
is, at the most, one that influences the relevant relations between states, which can be, broadly
speaking, cooperative, conflictive or neutral. Corporations can, for instance, be used to enhance
relations between two countries (S1 and S2 in Figure 1) or to promote the geopolitical interests
of state S2 against state S3. Although the contributions of scholars like Gilpin and Vernon, as
realist international political economists interested in the subject of rising corporate power,
were early works, the state-centrism in this perspective has not changed substantially since
then. “The role of actors other than states” is described by Robert Keohane in 2009 as one
21
Jones, “Multinationals from 1930s to 1980s”, 88; see also Van der pijl, An Atlantic ruling class.
panitch and Gindin, The Making of Global Capitalism, 147.
23
Gilpin, “pe of the Multinational corporation”, 190.
24
Gilpin, Political Economy of International Relations, 262.
22
THE INTERNATIONAL SPECTATOR
25
of the major challenges that “IPE should come to grips with”.25 While posed as a task for the
future of the discipline, there is ample evidence that this future is already here.
Transnational capitalism perspective: only corporate power counts?
Scholars of transnational capitalism started to reject this state-centrism in critical accounts of
the changing international environment in the 1980s and 1990s. In particular, they pointed
at the growing size and overall dominance of corporate actors in the global political economy. As the global FDI stocks (as a percentage of world GDP) grew exponentially after the
end of the Cold War (and more than doubled by the end of the decade)26 and transnational
business communities started growing closer together, the emerging new world economic
order was dubbed “transnational” or “global” capitalism.27
A key driver behind this accelerated corporate internationalisation is the growing number
of cross-border mergers and acquisitions (M&A). Figure 2 shows how worldwide M&A has
skyrocketed from around USD 500 billion per annum in the early 1990s to peaks of nearly
USD 5,000 billion in 2007 and 2015. Concomitant to the persistent trend of growing overall
worldwide M&A, the share of cross-border deals has continued to increase steadily since
the 1980s and is, for the first time, approaching 50 percent in 2017. This surge in M&A has
Figure 2. Global mergers & acquisitions 1985-2017 (bn USD).
note: Data for 2017 is for the first quarter. Source: calculations by the authors based on Institute of Mergers, acquisitions
and alliances, “M&a Statistics”, https://imaa-institute.org/mergers-and-acquisitions-statistics/.
25
Keohane, “The old Ipe and new”, 34.
Subramanian and Kessler, The Hyperglobalization of Trade, 40.
27
Van apeldoorn, Transnational Capitalism and European Integration ; Sklair, The Transnational Capitalist Class; robinson
and harris, “Towards a global ruling class?”; robinson, A Theory of Transnational Capitalism; carroll and Fennema, “a
Transnational Business community?”; carroll, Making a Transnational Capitalist Class.
26
26
M. BABIC ET AL.
contributed to the development that large MNCs have become bigger than most states in
terms of revenue.
The transnational capitalism literature looks at this growing transnationalisation from a
perspective of transnationally integrating (and contested) hegemony, which also includes
transnational elites.28 The “new constitutionalism” is advanced by these transnational elites,
institutionalised global governance and legal practices that are often separate from the direct
influence of nation states and their electorates on a global level.29 Hence, the comparatively
high mobility of capital and organisational capacity of transnational elites changes global
power relations in such a way that states can no longer be seen as the only relevant actors
within this structure. In addition, more governance-oriented scholars point out the role of
production and wealth networks in which corporations are embedded and which define
the space required for exercising corporate power.30 These views of a new power position
of corporations within the historical structure of transnational capitalism emphasize the
relative autonomy of the firm vis-à-vis other social forces, especially the state. Thus “much
of the time, within their own networks [firms] are the primary agent of governance and not
necessarily dependent on other actors or social institutions for their legitimacy”.31
Fig. 3 describes the transnational capitalism perspective. Under this umbrella, we summarize all accounts that in one way or another understand corporate power as dominating
the global environment today. Besides the seminal work of Robinson,32 this also includes
other critical IPE perspectives like those of Stephen Gill and A. Claire Cutler,33 class-analytical analyses like those of Leslie Sklair34 and network-oriented accounts of global corporate power.35 These perspectives emphasize the dominance of corporate power within
transnational capitalism. The relevant corporate actors are more or less detached from the
Figure 3. Transnational capitalism perspective on state and corporate power in the international system.
Sx represent states, cx corporations. corporate power is mostly detached from the realm of international politics and is
exercised upon states. relations between states (e.g. conflicting between S1 and S3) and corporations (e.g. neutral between
c2 and c2, cooperative between c1 and c2) exist separately.
28
Gill and law, “hegemony and power of capital”.
Gill and cutler, “new constitutionalism and world order”.
30
May, “corporations as global governance institutions”; Seabrooke and Wigan, “Governance of global wealth chains”.
31
May, Ibid., 9.
32
robinson, A Theory of Transnational Capitalism.
33
Gill and cutler, “new constitutionalism and world order”.
34
Sklair, The Transnational Capitalist Class.
35
May, “corporations as global governance institutions”; carroll, Making a Transnational Capitalist Class; Dreiling and Darves,
Agents of Neoliberal Globalization; Winecoff, “Structural power and the crisis”.
29
THE INTERNATIONAL SPECTATOR
27
Table A1. The global top 100 countries and corporations.
Country/Corporation
1
United States
2
china
3
Japan
4
Germany
5
France
6
United Kingdom
7
Italy
8
Brazil
9
canada
10 Walmart (US)
11 Spain
12 australia
13 State Grid (cn)
14 netherlands
15 South Korea
16 china nat. petroleum (cn)
17 Sinopec Group (cn)
18 royal Dutch Shell (nl/GB)
19 Sweden
20 exxon Mobil (US)
21 Volkswagen (De)
22 Toyota Motor (Jp)
23 apple (US)
24 Belgium
25 Bp (GB)
26 Mexico
27 Switzerland
28 Berkshire hathaway (US)
29 India
30 norway
31 McKesson (US)
32 russia
33 austria
34 Turkey
35 Samsung electronics (Kr)
36 Glencore (ch/Je)
37 IcBc (cn)
38 Daimler (De)
39 Unitedhealth Group (US)
40 Denmark
41 eXor Group (IT/nl)
42 cVS health (US)
43 General Motors (US)
44 Vitol (nl/ch)
45 Ford Motor (US)
46 china constr. Bank (cn)
47 Saudi arabia
48 aT&T (US)
49 Total (Fr)
50 hon hai precision Ind. (TW)
Revenue
(USD bn)
3363
2465
1696
1507
1288
996
843
632
595
482
461
421
330
323
304
299
294
272
248
246
237
237
234
232
226
224
216
211
200
200
192
187
187
184
177
170
167
166
157
157
154
153
152
152
151
150
150
147
143
141
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
Country/Corporation
General electric (US)
cScec (cn)
amerisourceBergen (US)
agricultural Bank of china (cn)
Verizon (US)
chevron (US)
e.on (De)
aXa (Fr)
Indonesia
Finland
allianz (De)
Bank of china (cn)
honda Motor (Jp)
cargill (US)
Japan post holdings (Jp)
costco (US)
argentina
Bnp paribas (Fr)
Fannie Mae (US)
ping an Insurance (cn)
Kroger (US)
Société Générale (Fr)
amazon.com (US)
china Mobile comm. (cn)
SaIc Motor (cn)
Walgreens Boots alliance (US)
hp (US)
assicurazioni Generali (IT)
cardinal health (US)
BMW (De)
express Scripts holding (US)
nissan Motor (Jp)
china life Insurance (cn)
J.p. Morgan chase (US)
Koch Industries (US)
Gazprom (rU)
china railway eng. (cn)
petrobras (Br)
Schwarz Group (De)
Trafigura Group (nl/SG)
nippon Telegraph and Tel. (Jp)
Boeing (US)
Venezuela
china railway constr. (cn)
Microsoft (US)
Bank of america corp. (US)
enI (IT)
Greece
nestlé (ch)
Wells Fargo (US)
Revenue
(USD bn)
140
139
136
133
132
131
130
129
129
128
123
122
121
120
119
116
116
112
111
110
109
108
107
106
105
104
103
103
103
102
102
102
101
101
100
99
99
97
97
97
96
96
96
95
94
93
93
93
92
90
Source: calculations by the authors based on Forbes, “Fortune Global 500 list 2017”, http://fortune.com/global500/; and
cIa, “The World Factbook 2017”, https://www.cia.gov/library/publications/the-world-factbook/.
28
M. BABIC ET AL.
The global top 100 countries and corporations
The increasing dimensions of the largest corporations as well as their ongoing internationalisation
beg the question whether large MNCs have already equalled or maybe even surpassed the size
of states. For this purpose, we compare the revenues of states (mainly taxes collected) with the
revenues of corporations, as suggested by Jeffrey Harrod, who argued that we should see revenues
(minus profits) as a “budget” of firms in analogy to governments.67 Admittedly, this is a crude
proxy for power or influence, nonetheless it is instructive to juxtapose the financial scale of states
and corporations directly. Note that we do not compare the GDP of countries with the revenues
of corporations, as frequently done, because using this metric would entail a significant double
counting. Moreover, GDP is a very broad measure and thus only partly influenced or controlled
by the state, and the measurement of GDP is quite problematic and influenced by politics.68
Therefore, it is much more cogent to compare the revenues of states and corporations.
Table A.1 shows that in 2016 the global top 100 comprised 29 countries and 71 corporations. Even
though corporations clearly outnumber states in this ranking, states dominate the very apex. The
top nine countries all have revenues of over USD 500 billion, a magnitude which will be difficult
to reach for corporations in the foreseeable future. On the other hand, it is remarkable that a
company like Walmart has higher revenues than Spain or Australia, and that Apple already has
greater revenues than Belgium, Mexico and Switzerland. On balance, this ranking of states and
corporations shows that MNCs have become very large socio-economic organisations in their own
right. This rudimentary overview and comparison of the scale on which modern corporations and
states operate underscores that in many ways, states have met their equals in the largest MNCs of
today.
respective nation states and dominate international politics as their owners and managers
are tightly interwoven with state elites. The centres of power are moved to the transnational
level, where national regulations and controls are suspended or at least limited.
Towards a realistic understanding of corporate and state power
Proponents of both the state-centric and the transnational capital perspective have good
arguments to support their particular view of contemporary power relations in the global
political economy. From a state-centric view, the transnationalisation of production does not
imply the end of the nation state: there is substantial evidence that (some) states, as a specific
form of political organisation, can translate their power into the new era of global capitalism.
Sean Starrs36 and Jan Fichtner,37 for instance, have shown how transnational capitalism led
to the globalisation of American economic power rather than to its decline. And arguably,
the most relevant challenge to US hegemony is not a multinational, but the Chinese state.
States also remain dominant players vis-à-vis corporate actors in certain strategic sectors
through sovereign wealth funds (SWFs) and state-owned enterprises (SOEs). At the same
time, the arguments for the transnational capitalism perspective are that the new global
constellation structurally favours corporations over states. This shift has enabled the much
more flexible and agile MNCs to influence global power relations in ways that increasingly
67
harrod, “The century of the corporation”.
Mügge, “Studying macroeconomic indicators as ideas”.
36
Starrs, “american economic power hasn’t Declined”.
37
Fichtner, “perpetual decline or persistent dominance?”.
68
THE INTERNATIONAL SPECTATOR
29
diminish the agency of states in international politics.38 The resulting transnational space
is occupied by corporate elites, professional corporate services and transnational patterns
of production, trade and ownership that exclude (nation) state power to a great extent. In
sum, the globalisation process has restricted the nation state’s space for agency and increased
that of the MNC.
Given this, there can be no serious empirical or theoretical doubt about the change in
power relations between corporate and state power in the last decades. Our approach hence
acknowledges the changed, but still relevant role of nation states on the one hand, and the
profound structural transformation into transnational capitalism on the other. Our basic
argument is that the specific dynamics playing out within these power relations need to
be understood and explained in their actual context: even though we live in a world of
transnational capitalism, state power has not disappeared, but merely been transformed.
Contemporary phenomena in international politics are in this sense never determined
by either state or corporate power, but need to be examined as shaped by power relations
between the two of them.
To prove this, first, we state the theoretical considerations that propose answers to the
questions of who holds power in the global system, how these actors are to be framed analytically and how they are related to each other. Second, we outline an empirical strategy
to identify and analyse the power relations between these actors in different situations
with regard to international politics. This results in four core elements of our approach, of
which three are theoretical and one the empirical consequence of these. They are meant to
bridge the discussion between the two positions and lead to our realistic, juxtaposed and
actor-relations focused approach to international power politics.
First, regarding the realistic element of our approach, we understand the underlying
realism of state-centrist accounts as a necessary element of corporate and state power in
international politics. Power, interests and hegemony are for us the prevailing motives for
(structural) change in the international environment. In this sense, we adopt parts of the
realists’ assumption about the nature of (international) politics. At the same time, we connect
this realism to transnational capitalism’s major contribution: the delineation of corporate
power. We do not assume that the reasons corporations and states are engaging in the global
system are identical, but that they are both driven by motives of interest enforcement and
power extension. Where these interests meet or collide is where we can analyse them as
phenomena of international politics. We thus extend the realist framework to the corporation as an actor in the international environment and consequently frame our approach
as a realistic perspective.
Second, this realistic perspective leads to a juxtapositioning of state and corporate actors
as two relevant and empirically specifiable actors for the study of the international political economy. This bridges the state-centric idea of the relevance of identifiable actors and
transnational capitalism’s emphasis on corporate power in international politics. We stress
that this does not imply a complete similarity of state and corporate power (they are not
‘the same’); but that the concrete (empirical) constellations in which they meet, compete
or cooperate for power should be analysed without pre-determining these power relations.
In this sense, this juxtaposition is dynamic: in some cases, states are able to dominate
38
For offshore finance and corporate power, see especially Zucman, The Hidden Wealth of Nations. For the role of corporate
power in the european Integration process, see van apeldoorn, Transnational Capitalism.
30
M. BABIC ET AL.
corporations (as with state ownership) and in others corporate power is able to prevail
over states (as may be the case with offshore finance39). We thus integrate corporate power
in international politics by giving it a relevant place as a juxtaposed actor and do not
subordinate it automatically to state power.
Third, and related to the juxtaposition factor, we draw attention to the relevance of the
relations between the juxtaposed actors as crucial for the analysis. These relations together
constitute networks, reveal systematic patterns of action and strategy and allow for a comprehensive analysis of global relevance. This bridges the actor focus of state-centrism with
the more network oriented analyses of the transnational capitalism perspective. We thus
suggest that recognising the networked character of globalised power relations in which
states and corporations are embedded as actors requires a theoretical and empirical focus
on these relations rather than on the isolated strategies and attributes of the single actors.
Fourth, and related to the third point, we use network analysis as the main tool to analyse these power relations. By framing states and corporations as actors (realistic), using a
bottom-up, data-driven approach (juxtapositioned) and depicting global power relations
in networks (actor-relations focused), we propose a fine-grained, precise and empirically
rich way of understanding the role of states and corporations in contemporary international
politics. Network analysis, as a tool to represent empirical reality, thus comes closest to our
theoretical considerations explained above. In addition, recent advances in network analytic
techniques combined with rapidly emerging new and large relational datasets on state and
corporate behaviour now open up new avenues for systematic, empirical research into global
power relations. This can include various relations such as ownership relations, value chains,
shared elite members, membership in international organisations, policy planning groups
and so on. We utilise the recent coming together of large datasets on corporate ownership
and new analytical methods for large-scale (network) analysis.40
The fine-grained, firm-level large-scale data we are now able to study allows us to understand global power relations systematically and comprehensively. Furthermore, this thorough empirical focus closes a methodological gap that accompanies analyses of global
capitalism, namely the use of aggregated national data to explain transnational trends.
With new large-scale firm-level data, we can now use a bottom-up approach that avoids the
national/transnational divide and analyses the relations directly instead of indirectly using
national statistics.41 With respect to the other two positions described, our approach can
thus be represented as follows and as shown in Figure 4.
MNCs and states are, in this sense, foci of social forces competing for power and enforcement of their interests within global capitalism. They are embedded in relations represented
as networks of power that combine different features, that is, they can be ownership, elite
and/or other networks. This implies breaking with the popular idea of states and ‘markets’
as opposed principles or systems in the international environment. Figure 4 represents
this realistic perspective. We do not frame corporations as subordinate, but juxtaposed to
states in the global system. Likewise, we understand the relations between them as varied: a
39
novel insights on the interplay between (offshore) jurisdictions and Mncs can be found in Garcia-Bernardo et al., “Uncovering
offshore Financial centers”.
heemskerk and Takes, “The corporate elite community Structure”; heemskerk et al., “Big Data in corporate networks”; Vitali
et al., “The network of corporate control”.
41
For a discussion and application of this approach with regard to global elite formation, see heemskerk et al. “Where is the
global corporate elite?”.
40
THE INTERNATIONAL SPECTATOR
31
Figure 4. a realistic perspective on state and corporate power in the international system.
cx and Sx are corporate, respectively state actors that meet each other as juxtaposed in the global system. The resulting
relations can be conflicting (e.g. c1 and c3), cooperative (e.g. c2, S3 and S2) or neutral.
state-owned corporation C1 could be cross-border owned by state S1 and thus support the
geopolitical ambitions of S1 against state S2. Likewise, state S3 could be threatened by the
activities of C1 and decide to join S2 in antagonizing C1. One step further, multinational
C3 could use the jurisdiction of S1 for tax avoidance, which leads to an advantage over its
competitor C1 and so on.
Our theoretical extensions and empirical implementations are summarized in Table 1.
Taken together, the theoretical elements and their empirical implementation bridge rather
separate accounts of international politics and can thus help to lay out a research agenda
that recognises and places corporate power research in the realm of international politics
in a comprehensive, fine-grained and empirically and theoretically powerful way. Within
this framework, states and corporations can both subjugate or dominate each other in specific constellations. In the following section, we exemplify the case of state ownership and
its consequences for global power relations. As we will see, these relations are not merely
one-dimensional, but involve patterns of mutual dependency and domination: states can
own and control firms in order to participate in global capitalism; and firms can create ties
through internationalisation that have a feedback on state power. In this sense, our example
is a site of inquiry, where we can observe this two-way nature of relations between state and
corporate power within global politics.
Table 1. our theoretical and empirical contribution for a dialogue between state centrism and corporate
power research.
Extension
Realistic approach
Juxtaposition of states and corporations
Actor-relations focus
Theoretical Reasoning
Bringing in state-centric realism and
extending it to the role of corporate
power.
Understanding the global environment as agency space for different
actors that are not per se different
in their abilities to exercise power.
International actors are always
related to each other and these
(power) relations are instructive for
the analysis.
Empirical Implementation
Framing both states and corporations
as relevant actors within global
relations.
Bottom-up, data-driven approach:
assumed power capacities are
case-dependent and not to be
determined prior to the analysis.
Using a network approach and
studying these networks in order to
understand global power relations.
32
M. BABIC ET AL.
State capitalism and the global network of transnational state-owned
enterprises
In recent times, different ‘emerging powers’ such as Brazil, China and Russia have been
associated with a development model that embraces high degrees of corporate state ownership. Often framed as anti-free market capitalism alternatives, scholars have labelled these
models as “state capitalism”, “political capitalism” or “state-led market economy”.42 At their
core, these labels suggest a growth model that stands in contrast to ideal-type Western liberal economies; one that is characterised by “a variety of formal and informal cooperative
relationships between various public authorities and individual companies”.43
State capitalism is typically studied from a comparative capitalism (CC) perspective that
analyses particular institutional settings encompassing the formal and informal relationships
between business and the state, such as high levels of state ownership, low labour protection
standards and comparatively lower FDI levels.44 The main interest lies in understanding
the specificities of the institutional arrangements within particular countries, in line with
the varieties of capitalism literature.45 While this is certainly a valid approach, it leaves us
with little understanding of the consequences of state capitalism for international politics.
How can we explain global political economic dynamics; what are their forms and effects?
Existing accounts discuss these questions on a rather unsystematic level. Diagnoses like the
“return of statism”46 or the “end of the free market”47 warn that the rise of state capitalism
has severe implications for international politics. But the rather anecdotal evidence and
ambiguous concepts do not capture the specifics of these state-corporate relations and their
consequences for the global political economy.
This is a good example of the hiatus that remains when we do not consider corporations
as a valid subject of research in IR, and when one prioritizes the national in the study of
global politics. In accordance with our actor-relations approach, we suggest that labels like
state capitalism be left aside and that we look at the transnationalisation of state capital in
the form of state ownership of firms. This makes it possible to re-focus away from the specificities of particular national political economies (the domain of CC) to the global sphere,
and hence overcome theoretical and methodological nationalism that does not allow for
the research of systemic consequences. We understand both states and corporations as
actors that enforce and enable the transnationalisation of capital. The translation of the
geopolitical (or financial or other) interest of states in the global system can be advanced
via transnational state-owned enterprises (TSOEs), but then states are dependent on the
ability, performance and will of corporations (or, in fact, their managers) to do so. This is
therefore not a one-way relationship and both actors are therefore juxtaposed.
Utilising the recent wealth of available data on corporate ownership, we can now map
SOEs comprehensively and in particular global TSOEs. With this, we are able to go beyond
anecdotal evidence and develop a systematic empirical analysis of how state capitalism
plays out in the global political economy. Our account serves to illustrate the benefits of
42
respectively Musacchio and lazzarini, Reinventing State Capitalism; Schwartz, “political capitalism and Wealth Funds;
lambin, Rethinking the Market Economy.
43
nölke, “Introduction: Towards State capitalism 3.0”, 4.
44
nölke et al., “Implications of large emerging economies”.
45
hall and Soskice, Varieties of Capitalism; Becker, “Measuring change of capitalist varieties”.
46
Kurlantzick, State Capitalism.
47
Bremmer, The End of the Free Market.
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33
our realistic actor-relations approach. Our findings reflect the potential structural power
positions of states and corporations in the global system. We consequently do not engage
in detailed discussions, whether this is an expression of actual geopolitical strategy by those
actors or not. In fact, the discussion as to what extent TSOEs influence the economy of other
states and are a means toward achieving geopolitical goals creates a lot of controversy.48
In order to answer this, we would need to investigate the details of this phenomenon, for
example, what (sectoral) strategies states apply, which specific corporations are involved,
how they behave strategically and so on. We leave this for future work. The following depiction of outgoing and incoming state investment illustrates how relations between two (or
more) states can potentially be affected by the positioning and agency of the actors involved
(states and corporations) in the international environment.
Outward investment: which states own globally?
Figure 5 presents an original snapshot of the extent of transnational state owned enterprises
across the globe. We trace those corporations that are majority-owned by a state (a state
is the ultimate global owner with 50 percent ownership or more) and have an operating
revenue of more than zero. In this way, we make sure that the TSOEs we include are definitely under state control (which is not always the case for under 50 percent ownership),
actually exist and are relevant firms with an operating revenue. For practical purposes, in
our analysis of TSOEs we disregard the many differentiations between the various state
ownership models. We consider all possible ownership relations, be they direct ownership,
or through investment vehicles, pension funds, one or multiple state agencies, SWFs and
the like. We retrieved data on corporate ownership from Bureau van Dijk’s Orbis database,
which includes information on approximately 200 million firms worldwide.49
Through our approach, we were able to identify 258,215 state-owned enterprises worldwide, of which 77,921 have an operating revenue of more than zero. The large majority of
SOEs operate domestically in typical sectors of public services such as utilities, healthcare
and transportation. However, a sizable group of state-owned enterprises are qualitatively
different as they operate in foreign countries. We were able to identify 5,994 cases of such
TSOEs. A TSOE can be seen to create a direct tie from the state that owns the company to
the state where the SOE is based. Both figures 5 and 6 give a visual representation of this
network of 5,994 TSOE ties.
Figure 5 shows the extent of cross-border state ownership globally. We can clearly identify
the dominant position of China, which owns about 19.5 percent of all TSOEs (Table 2).
This empirically corroborates other accounts of the role of the state in the Chinese economy
and its internationalisation strategy.50 Equally, the central position of Russia (owning 9.5
percent) reflects the Russian model of state-centric economic development, including strong
ownership ties to Ukraine, Turkey and Cyprus. Perhaps more strikingly, we recognise a
central position of core European countries, with France owning 14.5 percent of all TSOEs,
and Germany 7.7 percent. This strong position of the two core countries in Europe echoes
48
Sultan Balbuena, Internationalisation of State-owned Enterprises.
https://www.bvdinfo.com/it-it/our-products/company-information/international-products/orbis. See Garcia-Bernardo and
Takes, “The effects of Data Quality”, on the issue of data quality.
50
Mcnally, “china’s reemergence and the Ipe”.
49
34
M. BABIC ET AL.
Figure 5. The global network of transnational state-owned enterprise by weighted outdegree. a directed edge exists if a state (sender) owns a corporation that is
domiciled in another state’s territory (receiver). edges are weighted by the number of TSoes. node size is proportional to weighted outdegree. node colour (in the printed
version: node layout) reflects community membership based on modularity maximization. edge colour reflects sender’s country community (not in the printed version).
note: The layout is Gephi’s Geolayout, so the position of the nodes represents their geographical location.
THE INTERNATIONAL SPECTATOR
35
Table 2. The top 10 global owners by weighted outdegree.
1
2
3
4
5
6
7
8
9
10
Country
china
France
russia
Germany
arab emirates
austria
Singapore
norway
Finland
Sweden
Outdegree (weighted)
1168
870
564
461
305
197
195
162
161
134
Source: This table is based on the calculations from the analysis in Figure 5.
the traditionally strong role of the state in these coordinated market economies. A closer
look reveals that the majority of French and German TSOEs are focused on the transportation sector (222 ties from Germany, 360 from France). In the German case, these ties are
foremost formed by Deutsche Bahn’s subsidiary, Schenker, which is also the top company
in terms of operating revenue.
This first mapping of cross-border state ownership already reveals that the TSOE phenomenon clearly goes beyond emerging markets and is prevalent in the industrialised West
as well. Interestingly, the other two BRIC countries show comparatively low numbers. Brazil,
with 0.5 percent, and India, with 0.38 percent, are far from being as dominant international
owners as China and Russia. The BRIC narrative thus does not hold true for the global
picture of internationalised state ownership.
The set of TSOE relations binds these countries together in a global network. Obviously,
some states are more connected to each other than to others and assembled in pockets or
communities in this network. We used a community detection algorithm to identify those
states that are more invested in each other.51 The nodes in Figures 5 and 6 are coloured52 by
their community membership. The community structure again underscores China’s global
dominance: the Chinese-led Asian community (colour: red53) reaches out to South America,
Africa and Australia, so Chinese state ownership is geographically widely spread. As an
example, China owns 5.2 percent of all TSOEs in the Anglo-American sphere of influence,54
and also reaches out to Brazil and central Europe. Another striking feature of the community
structure is the focused North European group (blue55) and the far more extensive West
European/African/Middle Eastern group (purple56) with Germany and France, respectively,
as dominant owners. The blue group is restricted to Germany, Scandinavia, the Baltics and
parts of Eastern Europe, whereas the France-dominated purple group reaches out to Africa,
the Middle East, and North America. Russia (green57) is a big, but locally limited owner
without relevant far-reaching ties. Similarly, the orange group entailing Austria and some
central Eastern European countries forms a regionally focused community. This cluster
51
For related examples of this approach, see heemskerk and Takes, “The corporate elite community Structure”; heemskerk
et al., “corporate elite after the crisis”.
52
In the printed version, the nodes have different layouts instead of colours.
53
In the printed version: grey nodes with slightly dashed border (like cn).
54
We framed the following countries as belonging to anglo-america: australia, Bermudas, canada, United Kingdom, Ireland,
cayman Islands, the US and Virgin Islands. For a deeper discussion see Fichtner, “perpetual decline or persistent dominance?”.
55
In the printed version: grey nodes without border (like De).
56
In the printed version: square, grey nodes without border (like Fr).
57
In the printed version: grey nodes with strongly dashed border (like rU).
36
M. BABIC ET AL.
Figure 6. The global network of transnational state-owned enterprise by weighted indegree. a directed edge exists if a state (sender) owns a corporation that is domiciled
in another state’s territory (receiver). edges are weighted by the number of TSoes. node size is proportional to weighted indegree. node colour (in the printed version:
node layout) reflects community membership based on modularity maximization. edge colour reflects receiver’s country community (not in the printed version).
note: The layout is Gephi’s Geolayout, so the position of the nodes represents their geographical location.
THE INTERNATIONAL SPECTATOR
37
Table 3. The top 10 of global state ownership target states by weighted indegree.
1
2
3
4
5
6
7
8
9
10
Country
United Kingdom
Germany
France
Ukraine
australia
Brazil
Sweden
Italy
netherlands
Spain
Indegree (weighted)
841
476
375
346
296
262
252
235
231
207
Source: This table is based on the calculations from the analysis in Figure 6.
entails the former Yugoslavian republics and thus reflects the still relevant economic ties
between those countries.
Inward investment: where do states own globally?
Since we conceptualised TSOEs as a directed relation from one state via a corporation to
another state, we can also visualise the network to underscore which states are targeted by
other state-owners. In Figure 6, the node size indicates how popular a state is as a target for
TSOE investments by other states. It highlights that, in general, transnational state ownership targets rather ‘safe’ jurisdictions, with European countries making up the majority in
the Top 10 (Table 3), but Anglo-America also popular (the UK and Australia in the top 10,
and the US 13th and Ireland 15th).58
Both Germany and France are preferred destinations of TSOEs. Besides being active transnational owners, the core European countries seem to attract state capital systematically and
thus form “hubs” for transnational state investment. This is in line with recent observations that
German and French policymakers show high interest and support for overseas SWF investments in their economies as a source of patient capital59 (and portfolio investment was not
even included in the analysis, something that would probably have strengthened the tendency).
The case of the Ukraine (5th in indegree) is mostly explained by a high number of Russian
TSOEs, ranging from energy companies to banks. Other non-European countries such as
Brazil also appear as a preferred destination, especially for Chinese TSOEs, which might
have further implications for the BRIC perspective: what does it mean for the power relations
between two members, if one is heavily invested in the other? At the beginning of 2017,
the Chinese TSOE State Grid – the largest utility company worldwide and in 13th place
on the largest states/corporations list (see Table A1) – took over the third largest Brazilian
energy firm, CPFL. Further important Chinese overseas investments in Brazil are food
giant COFCO or Sinochem Brazil. Whether these kinds of activities should be understood
as enhancing economic cohesion or as a leveraged Chinese power position towards Brazil,
needs to be determined in more detailed studies.
58
Fichtner, “perpetual decline or persistent dominance?”.
Thatcher and Vlandas, “new sources of patient capital”.
59
38
M. BABIC ET AL.
What does this mean for international politics?
For the study of international politics, four major points can be derived from this explorative
but systematic inward and outward state ownership analysis. First, the role of the ‘statist’
BRIC countries needs to be put into perspective, since only China and Russia appear to be
seriously involved in transnationalisation through TSOEs. The notion that these countries
represent a major bloc challenging the ‘Washington consensus’ free-market politics is, in
this perspective, possibly overstated. Reasons for this comparatively low involvement of
Brazilian and Indian TSOEs may be that, as in the case of Brazil, a large part of state participation stays under the 50 percent ownership threshold (as in the cases of the mining
multinational Vale or meat producing giant JBS, with lower state stakes). Further research,
incorporating different threshold ownership levels or case studies can shed more light on
state transnationalisation through minority ownership investments.
Second, China dominates the network with its TSOEs that are spread around the world.
This includes subsidiaries of conglomerates such as the mentioned State Grid or Sinochem
Group, but also acquisitions like the Italian tire manufacturer Pirelli. The strategy of stateled transnationalisation has been investigated in the case of National Oil Companies, which
is closely tied to geopolitical ambitions of energy security.60 This explains only one part of
the complete cross-border state ownership picture, however, which needs to be analysed
further.61 Given the widespread ownership profile, we can conclude that Chinese TSOEs
give China a strong base in the global environment.
Third, we see that the phenomena of transnational state ownership (and its hosting)
are not restricted to state capitalist countries, but are to be found in Europe. Germany and
France have a strong focus on the transportation sector in their cross-border state ownership
and also function as hubs for inward and outward state investment as they are the preferred
targets of non-European state ownership investments (especially China and Russia). This
position will be important for future discussions of the geopolitical implications of Chinese
(and possibly Russian) state ownership expansion.
Fourth, the preferred targets of state investment remain safe jurisdictions like European
core countries and the Anglo-American sphere. This suggests that state ownership transnationalisation is strongly connected to the structure of transnational capitalism: TSOEs
target the same safe havens as non-state investment. As Robinson argued for the transnationally oriented BRICS elites,62 this integration into already existing structures of global
capitalism can be observed in different segments of ‘statist’ economies. From this, we can
conclude that states use TSOEs to integrate into transnational capitalism, thereby creating
politically relevant ties around the world. With this empirical example, we hope to have
underscored that our realistic, actor-relations oriented framework helps to develop a practical, systematic, and original empirical strategy to study global power relations. States use
corporations and are dependent on them to create geopolitically relevant transnational
ownership ties.
60
See e.g. the contributions by De Graaff, “a global energy network?” as well as amineh and Guang, “Geopolitics of chinese
oil companies”.
61
For this, see also Meunier et al., “hosting chinese investment in europe”.
62
robinson, “Transnational state and the BrIcS”.
THE INTERNATIONAL SPECTATOR
39
Conclusion
Susan Strange boldly condemned conventional International Relations scholars as “Flat
Earthers”, who refuse to acknowledge that next to states, multinational corporations play a
key role in the international political economy and hence are crucial to understanding global
politics. We wholeheartedly agree with Strange’s call for bringing the corporation back to the
centre of scholarly attention in the fields of IR and IPE. During the past decade, we have been
confronted with numerous puzzling and unexpected events that warrant acknowledgement
of the role of corporations in international politics. Obviously, the 2008 financial crisis and
its causes and consequences is the most prominent of these events, but certainly not the only
one. In this contribution, we have highlighted an empirical example that underscores the
need for an actor-relations oriented, realistic analytical framework in which state-corporation
relations are centre stage: the inward and outward movement of TSOE investment.
We have argued that only a proper analytical focus on corporations as actors, embedded in global power relations, can pave the way for a systematic understanding of their
(structural) power in the global system. In the study of international politics, we need to
consider corporations as a social force analytically equivalent to states. We illustrated this
need in our empirical example. With regard to the phenomenon of transnationalisation of
state ownership, we showed how the state as an owner can use firms to build up a power
potential to penetrate other sovereign economies by reaching outside its own borders.
Furthermore, we saw that some insights from the CC literature, such as China’s exceptional
development model and its consequences for the global economic order, can be recognised
in the transnational state ownership network. The scope of this article does not allow us to
delve further into these questions, but it does make it possible to ask them in a systematic
way. It also allows us to show the agency potential of firms: the transnationalisation of
large transnational state owners is achieved via the firms that form the ties we depicted
in the inward and outwards state investment discussion. The fine-grained, actor-oriented
framework that takes corporations into account can help us understand the particularities
of these observations better.
The example of TSOEs is, in many respects, rather arbitrary: our choice was inspired
by our ongoing research agenda and interests. While we hope that some readers may be
inspired to do further work on this particular issue, the aim of this contribution goes
beyond the specificities of the empirical illustration. State ownership of MNCs predominantly represents one side of our argument: how states use corporations for their interests;
the other side is how MNCs use states to advance their interests. Due to space constraints,
we could not elaborate on this complementary perspective here, but one obvious example
is offshore finance.63 This pivotal phenomenon involves both states and corporations as
active and juxtaposed actors: offshore financial centres (or tax havens) have commercialised
their sovereignty in order to attract financial activities from foreign private individuals and
MNCs, mostly at the expense of ‘onshore’ states. MNCs utilise tax havens to minimise their
global tax payments and to avoid regulation and accountability. Recent contributions have
shown that using firm-level network data makes it possible to produce novel insights into
the interplay between (offshore) jurisdictions and MNCs.64
63
palan et al., Tax Havens.
Garcia-Bernardo et al., “Uncovering offshore Financial centers”.
64
40
M. BABIC ET AL.
We see the persistent reluctance to integrate (structural) corporate power into the study
of international politics as part of a broader problem. The structural power of business
“languished for two decades in the less fashionable circles in contemporary political science” and as a consequence arguably developed a “labeling problem, if not a toxic brand
name recognition”.65 Consequently, there is a sizable literature that investigates states versus
markets, but astoundingly little scholarly work in IR and IPE that moves beyond the broad
concept of markets and investigates its actors. This reflects the rather sticky “tendency to
analytically prioritize the actions of policymakers over those of market participants” in
explaining politico-economic phenomena.66 The bias stems, as Benjamin Braun puts it, from
political economists’ limited understanding of the political sphere: ‘market participants’
such as corporations are not perceived as analytically important (or not ‘political’ enough)
for political economy analysis.
In response, we positioned our approach as a concrete and empirically fruitful advancement of two approaches: the state-centric and the transnational capitalism perspectives.
Rather than analytically prioritizing states over corporations and policymakers over market
participants, we need to acknowledge that corporations and states are juxtaposed actors in
an international environment that exercise power over each other in specific spatiotemporal
settings. The example we provided serves to validate this perspective and allows for original
empirical strategies that can help to understand how power in the international sphere plays
out in concrete terms. This initial exploration is already leading to new questions and puzzling
findings. As such, we believe our approach points at a fruitful and urgent field of research.
Acknowledgements
The authors greatly appreciate the excellent assistance of Oumaima Majiti and the comments from
Frank W. Takes and Javier Garcia-Bernardo, as well as from two anonymous reviewers. This research
received funding from the European Research Council (ERC) under the European Union’s Horizon
2020 research and innovation programme (grant no. 638946).
Notes on contributors
Milan Babic is PhD candidate at CORPNET, Amsterdam Institute for Social Science
Research, University of Amsterdam.
Jan Fichtner is postdoctoral researcher at CORPNET, Amsterdam Institute for Social Science
Research, University of Amsterdam. Email: j.f.fichtner@uva.nl Twitter: @fichtner_jan
Eelke M. Heemskerk is Associate Professor at CORPNET, Amsterdam Institute for Social
Science Research, University of Amsterdam. Email: e.m.heemskerk@uva.nl Twitter:
@UvACORPNET
ORCID
Milan Babic
http://orcid.org/0000-0002-9179-8120
http://orcid.org/0000-0001-7675-400X
Jan Fichtner
http://orcid.org/0000-0001-7356-5318
Eelke M. Heemskerk
65
culpepper, “Structural power and political science”, 392, 405.
Braun, “From performativity to political economy”, 258.
66
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