According to economists such as Branko Milanovic, have argued, state capitalism too has its fundamental flaws. Most importantly, given the hegemony of the state, corruption is a constant threat. Favoritism can play a role in distributing contracts, and the application of the law can become arbitrary, given the lack of checks and balances. When those at the top of the state assess an economic trend wrongly, the vast resources they control risk getting misallocated. It creates an issue that is almost the mirror image of that in shareholder capitalism.