The nature of Crony capitalism is as follows :
(a) Favours political authorities: Crony capitalism is a system in which close associates of the people in power who enact and *** policies get favours that have large economic value.
(b) Cronies get capital and reward: Cronies are rewarded with the ability to charge higher prices for their output than would prevail in a competitive market. Funneled to the enterprises of cronies through government controlled banks.
(c) Protection of assets: Crony capitalism allows government to guarantee a subset of asset holders that their property rights will he protected. As long as their assets are protected, these asset holders will continue to invest as if there were universal protection of property rights.
(d) Share in the rents generated by the asset holders: The members of the government share the rents generated by the asset holders. This may take the form of jobs, co-investments eleven transfers of stock. Crony capitalism goes hand in hand with **.
(e) Concentration of economic power: A few business groups which are cronies influence state policies and pool their assets in private corporate sectors. Such concentration gives birth to crony capitalism.
