Client capitalism also crony capitalism

A derogatory term for an economy in which personal relationships essentially determine the course of events, and scarce resources are therefore not allocated to the best host (pejorative expression, denoting a type of free market economy in which business success is heavily dependent upon one’s connections. In such a system, business decisions are significantly influenced by friendships and family ties, rather than by market forces and open competition). The granting of loans by banks in such an economy – currently Indonesia and to some extent also Japan are classified here – is also determined to a large extent by personal connections. Economies characterized by client capitalism show many signs of stagnation and have lower growth than would be possible under CETERIS PARIBUS competition. – See opportunity cost, shadow price, underground banking.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/