“There is a relative lack of willingness and appetite to invest efforts towards long-term risk absorption and becoming globally competitive. Regulatory arbitrage, protected margins, and firm-specific accommodations often dominate productivity enhancement, scale competition, or learning-by-doing,” the Survey said. “A corporate sector that externalises risk to the state does not exert pressure for higher state capacity; instead, it generates demand for discretion,” the report said. The survey stressed that a well-designed regulatory architecture is not in itself enough to generate higher state capacity, and must thus be helped out by the corporate sector. Comparative experience shows that corporates induce state upgrading only under specific conditions, when productivity is the sole path to survival,” it added.