State capture is a common transition dilemma in Emerging Democracies. It is essentially the kidnapping and manipulation of state power by the power of capital and is a high form of corruption. In post-apartheid South Africa, the dilemma of state capture was also encountered in the process of democratic transformation. The case of South Africa is marked by ethnic politics due to its colonial history and the Apartheid system. The entanglement of “capital power” and “ethmic politics" makes the situation of “state capture" in post-colonial countries even more complex. In this paper, we examine the phenomenon of “state capture” in South Africa, and through an in-depth analysis of the Gupta family and Zondo Commission, we attempt to explore the mechanism and solution of “state capture” in post-colonial context. Ultimately, it is hoped that the case study of South Africa will provide a theoretical complement and refinement to "state capture" and attempt to form a dialogue with the larger theory of the “weak state dilemma”. In this way, we hope to reflect on the path of democratization and nation-building in post-colonial countries.

Broadly speaking, state-business relation refers to the patterns of interaction between firms or individuals representing private interests and bureaucracies or officials representing public power. The interaction between politics and business profoundly affects the form of wealth output, the distribution of wealth and power, the sustainable development of state capacity, and the long-term direction of society. Starting from the second half of the 20th century, along with the process of economic globalization, the rapid development of financial markets, multinational corporations, and the rise of international organizations such as the World Bank and the International Monetary Fund, the autonomy of modern national governments to make decisions about economic development has been increasingly impacted by the power of domestic and foreign capital. Compared to traditional societies before industrialization, politics nowadays is in many cases captured and driven by the market, and the impact of globalization on government decisions is obvious. In order to maintain political legitimacy, governments must adapt domestic policies to international market forces. Thus, the evolution of state-business relation actually reflects changes in national economic policy. In a large number of developing countries, the pattern of "strong society and weak state" often leads to a situation where businesses are better able to mobilize and use resources to enhance the economy than the government, and the right government intervention in business is a key factor in the development of a virtuous economy.

 

Because of its importance, state-business relation has been an important topic in area studies. The international development studies literature in the 1980s and 1990s explained the economic success (the Four Asian Dragons) or failure (Latin America and Sub-Saharan Africa) of developing countries through the lens of state-business relation, arguing that specific types of state-business relation contributed to industrialization transition. In the 21st century, most developing countries have come to realize that globalization is a "double-edged sword" for them, with open markets and free trade facilitating the flow of capital and means of production, but not guaranteeing sustainable economic development and a relatively balanced state of well-being for the population. The direct political question that arises is, if the state is considered an independent actor, to what extent is it controlled by capital or, once that situation is created, which forces can sustain the state for developing countries to take into account the welfare of the vast majority of society? Certainly, many studies of state-business relation in developing countries no longer limit themselves to analyzing the successes and failures of the national economy, but instead see capital involvement in politics as the norm, and look more at the mechanisms of interaction between those in power and the private sector to see how the political economy of these countries works.

 

In the same context, we have set up a special issue on “State-Business Relation in Developing Countries” in this series to discuss the new cases that have emerged. In the article, Pengfei Zhu and Chongsheng Yang point out that the phenomenon of “state capture”, characterized by the abduction and control of state power by capital, is widespread in developing countries. They argue that the relationship between politics and business in South Africa cannot be understood simply through the lens of “capital-politics” interaction, but should instead focus on the issue of ethnic identity in local politics. The article takes the Indian Gupta family, which emerged in the post-apartheid era in South Africa, as a typical case, and analyzes the manipulation of the government by capital forces in the new era, as well as the reform of South African society on this issue. Mengqi Yuan’s article, on the other hand, shows us the changes in state-business relation in developing countries after the rise of emerging technologies. The new business forces represented by Internet platforms have become the third political force in addition to the government and traditional private enterprises, taking over many public administration functions and directly contributing to the innovation of the state governance model. The article selects Argentina's largest Internet platform, Mercado Libre, as a typical case study to demonstrate how digital transformation has reengineered power processes and changed power relations in the country.

The emergence of new technologies, economic development, changes in social foundations and corresponding policy support have led to a booming phase of internet platform enterprises. These new norms have affected the traditional government control model and political working regime, and challenged many fundamental concepts and theories of contemporary political science. The internet platform enterprises have changed the original subjects of public governance, affected the traditional mechanisms of power operation, and created new political space. Regarding to these changes, this paper analyzes the case of Argentina's largest internet platform company Mercado Libre, and proposes that the state needs a new spirit of governance in the digital age, encouraging consultation and cooperation, revolutionizing the concept of supervision, and improving political absorption in order to deal with political implications of the new development.