POL201Y1:PoliticsofDevelopmentLecture11:

Developmentalstates

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niversityofToron

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Recap• State-makinginEurope:

� Warà� Statecapacityà� Representativenessandaccountability+ruleoflawà� ‘Denmark’

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Recap• State-makingelsewhere:

� LatinAmerica:� Warfinancedbyexternalprovisionofdebtà� Noneedtobargainwithpopulations

� PrecolonialAfrica:� Littleinternationalcompetitionà� Nocontrolovertheperiphery

� PostcolonialAfrica:� Internationalprotectionofnegativesovereignty,fewwarsà� Noneedtoestablishstrongstatecapacity

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Asia

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Asia

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AsianTigers

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Asia• WhyareHongKong,Japan,SouthKorea,andTaiwan(and,increasingly,MainlandChina)somuchricherthantherestofthecontinent?

KarolCzuba,U

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Developmentalstates• “Organizationalcomplexesinwhichexpertandcoherentbureaucraticagenciescollaboratewithorganizedprivatesectorstospurnationaleconomictransformation”� Doner,RF,BKRitchie,andDanSlater.2005.“SystemicVulnerabilityandtheOriginsofDevelopmentalStates:Northeastand

SoutheastAsiainComparativePerspective.”InternationalOrganization 59:327–61.

KarolCzuba,U

niversityofToron

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Developmentalstates• Statedevelopmentcapitalism:

� Stateautonomy� Stateinterventionintheeconomy,extensiveregulationandplanning� Collaborationofthestatewiththeprivatesector� Export-orientedindustrialization

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niversityofToron

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WhyhaveEastAsiancountriesbeensosuccessful,whileothershavefailed?

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Export-ledindustrializationvs.ISI

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Export-ledindustrialization• Successfuldevelopmentalstates

• ButalsoPhilippines,PuertoRico,etc.

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Investmentandsavings• Rapidgrowthindomesticsavingsà

• Highratesofinvestment (exceeding20%ofGDPonaveragebetween1960-1990)

• Highratesofprivateinvestment

• Successfulallocationofcapitaltohigh-yieldinginvestments

• Alsohighandrisingendowmentsofhumancapitalduetouniversalprimaryandsecondaryeducation� Page,JohnM.1994.“TheEastAsianMiracle:AnIntroduction.”WorldDevelopment 22(94):615–25.

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Governedmarket• State-corporatistpoliticalarrangements(e.g.controloverfinancialsystems)à

• Statecapacitytoleadtheeconomythroughtheuseofincentives,controloverunions,andmechanismstospreadriskà

• Highlevelsofproductiveinvestments

• Combinationofprotectionismwithexportorientation� Wade,Robert.1990.GoverningtheMarket,Princeton,N.J.:PrincetonUniversityPress.

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Stateautonomy• Concentrationofpowerattheapexanduseofstatepowertodisciplinesociety

• Authoritarianism

• Repressionoflabour

• Controloversociety� Atul Kohli.2004.State-DirectedIndustrialization:PoliticalPowerandIndustrializationintheGlobalPeriphery.Cambridge:

CambridgeUniversityPress.

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niversityofToron

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Embeddedautonomy• “Autonomy isfundamentaltothedefinitionofthedevelopmentalstatebutnotsufficient.Theabilitytoeffecttransformationdependsonstate- societyrelationsaswell.Autonomousstatescompletelyinsulatedfromsocietycouldbeveryeffectivepredators.Developmentalstatesmustbeimmersedinadensenetworkoftiesthatbindthemtosocietalallieswithtransformationalgoals.Embeddedautonomy,notjustautonomy,givesthedevelopmentalstateitsefficacy”

• Necessityofthestate—andhighlydeveloped,coherentbureaucracy—forthemobilizationofcapitalandcoordinationofindustrialdevelopment

• Embededdness ofthebureaucracyininformalnetworks

• Embeddednessprovidessourcesofintelligenceandchannelsofimplementationthatenhancethecompetenceofthestate

• Autonomypreventsstatecapture� PeterEvans.1995.EmbeddedAutonomy:StatesandIndustrialTransformation.Princeton:PrincetonUniversityPress.

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niversityofToron

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Internationalsystem• Contradevelopmentalstatesashighlyautonomousentities

• Politicalelitesonlyinvestindevelopmentalinstitutionalarrangementswhenconfrontedwith‘systemicvulnerability’:� Crediblethreatthatanydeteriorationinthelivingstandardsofpopularsectorscouldtriggerunmanageablemassunrest

� Heightenedneedforforeignexchangeandwarmaterielinducedbynationalinsecurity

� Hardbudgetconstraintsimposedbyascarcityofeasyrevenuesources

• SystemicvulnerabilityinSingapore,SouthKorea,andTaiwan,butnotinIndonesia,Malaysia,thePhilippines,orThailand� Doner,RF,BKRitchie,andDanSlater.2005.“SystemicVulnerabilityandtheOriginsofDevelopmentalStates:Northeastand

SoutheastAsiainComparativePerspective.”InternationalOrganization 59:327–61.

KarolCzuba,U

niversityofToron

to

Historicallegacies—landdistribution• RelativelyequitablelanddistributioninEastAsiaà

• Equitabledistributionofwagesandsalariesà

• Littlesocialconflictandinflationà

• Highsavingsrates� Amsden,AliceH.1991.“DiffusionofDevelopment:TheLate-IndustrializingModelandGreaterEastAsia.”TheAmerican

EconomicReview81(2):282–86.

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niversityofToron

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Historicallegacies—colonialism• Stateinterventioninsupportofinvestorprofitsaspreconditionofindustrializationamonglate-late-developers.

• Stateinstitutionsindevelopingcountriesasaproductofcolonialism:� Cohesive-capitaliststates(developmentalstates):e.g.Korea� Fragmented-multiclassstates:e.g.India� Neopatrimonial states:e.g.Nigeria

• JapanesecolonialismasthesourceofSouthKorea’ssuccess:� Koreanstatewastransformedfromacorruptandineffectiveinstitutionintoahighlyauthoritarian,penetratingorganization,capableofsimultaneouslycontrollingandtransformingKoreansociety.

� Production-orientedalliancesinvolvingthestateanddominantclassesevolved,buttressingthestate’scapacitytobothcontrolandtransform,leadinguptoconsiderableexpansionofmanufacturing.

� Thelowerclassescametobesystematicallycontrolled(andbrutallyrepressed)bythestateanddominantclasses.� Atul Kohli.2004.State-DirectedIndustrialization:PoliticalPowerandIndustrializationintheGlobalPeriphery.Cambridge:

CambridgeUniversityPress. KarolCzuba,U

niversityofToron

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Complexsequencing• Subsidizationofbusinessà

• Impositionofperformancestandardsà

• Growthà

• Statemorecommittedtoeconomicdevelopmentà

• Moreresourcesfordevelopmentà

• Moregrowth� Amsden,AliceH.1991.“DiffusionofDevelopment:TheLate-IndustrializingModelandGreaterEastAsia.”TheAmerican

EconomicReview81(2):282–86.

KarolCzuba,U

niversityofToron

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AredevelopmentalstatesexclusivelyEastAsian?

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niversityofToron

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DevelopmentalstatesinAfrica• ‘Developmentalist’statesinAfricainthe1960sand1970s

• Destructionofstatecapacitythroughstructuraladjustmentpolicies� Mkandawire,T.2001.“ThinkingaboutDevelopmentalStatesinAfrica.”CambridgeJournalofEconomics25(3):289–314.

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niversityofToron

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DevelopmentalstatesinAfrica

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