Developmental States

Posted by: | Posted on: February 3, 2009

Developmental States

The issues of developmental states have concentrated on the state intervention in building and rebuilding country economy. It has become an important part of the political economy which is the flagship of nation building in the post-cold war society. The debate in this reaction directly refers to the concept of “Bringing the State Back In” in our modern society. Implicitly, the state-centric analysis in developing the state, the government has still played important roles to build a strong economy. It has pivotally and pragmatically been relying on the state since the peasantry revolution, to industrialized innovation, and modern economic liberalization in trade and commerce. Evans skeptically stated that state is the “guardian of universal interests”. But the controversial debate that Evans made was that how effective state can take action to intervene the economy? And are there viable alternatives for state structure as well as sound policy of good governance to back up this effective intervention? Historically, we can see that each country in the reading articles is state-centered development. They shaped in different manner and policy enhancements.

First issue is the debate on state structure. First chapter, Evans elaborated the different structures that can help state intervention implement effectively. In case of governance, the state structure has been called “vertical structure” and “horizontal structure” or “vertical governance” and “horizontal governance”. Johnson has spent much of his time to articulate the developmental structure of the Military of International Trade and Industry (MITI) of Japan towards its economic miracle. In that phase, the state’s capital accumulation to growth and sustainability pursued in different strategies clearly compared the different between the United States and Japan. Regarding these two different approaches of economic development, Weber began the practice with his distinction between a “market economy” and a “planned economy”. With the same goal in this concept, Dahrendorf made distinction between “market rationality” and “plan rationality”, Dor made distinction between “market oriented systems” and “organization oriented systems”, and Kelly made distinction between a “rule governed state” and a “purpose governed state”. However, Johnson stressed that his comparison of these two economic strategies distinction is not in case of Soviet-type command economy because it is not plan rational, it is plan ideology. Soviet’s developmental economy was owned by the state and the state is the ownership of the means of production, state planning, and bureaucratic goal-setting (Evans, 1985). This is not in his dialogue to challenge the efficiency and effectiveness of plan rational conducted in Japan.

Good governance should be extensively articulated in this developmental state referring to the debate of Chalmers Johnson. Plan rational in Japan is very different from regulatory rational in the United States. Plan rational state or developmental state, according to Johnson, is fully prioritizing in economic development by pay less attention to the cohesion of political bureaucrats. Japan began their development plan by concentrating on finding economic specialists to ascend to the main national posts such as department of economic, commerce and technology. Those economic specialists can have their own decision-making to tackle economic crisis as well as maintain economic growth. The economic activity of less control from the state and the state intervention showcases the concept of horizontal governance which historically became class dominant, elites and business tycoons take over the control of economic mechanism. But in case of Japan, the success of economic-growth, state is more sophisticate than that because state as the central distributor to allocate the resources and capital accumulation has fully aware of abiding in the rule of law to fairly distribute the national capital through strict rule of taxation and subsidy to provide to all members in the society respectively. This economic policy diversification might lead to the success of Japan’s giant technological companies such as Samsung, Toshiba or other vehicles producer companies such as Toyota or Mitsubishi to dominate market entirely world. But Japan government might experience difficulties to control the affects of externalities such as pollution and environment degradation. Furthermore, other factors for Japan’s economic success might rely on Japanese people and culture, tasks-oriented and honest-oriented citizens as well as natural frugality; and empirically the “free ride” of Japan’s economic through huge aids from the United States, a lack of defense expenditures, ready to access to its major export market, and relatively cheap transfer of technology (Johnson, 1982, pp.15). In contrast, the United States which is using its economic development policy through “regulatory rationale, market-oriented systems or regulatory orientation predominates” has been tremendously focusing on political cohesive bureaucrats. Each development policy and economy decision making originated from the local and state representatives, not through economic specialists or business elites. Geographically, political landscape might be suit well to the federalism government of the United Nations. Further more, Johnson quoted Henry Jacoby as said “Once capitalism transformed the traditional way of life, factors such as the effectiveness of competition, freedom of movement, and the absence of any system of social security compelled the state to assume responsibility for the protection and welfare of the individual. Because of each man was responsible for himself, and because that individualism became a social principle, the state remained as almost the only regulatory authority” (Johnson 1982, pp. 19)

Unarguably, it is a sound statement to conclude that state is the central organ to development economy, to reallocate social capitals and pursue other capital accumulations etc. Evans has inclusively elaborated the effectiveness of the state structure and its capacity to intervene. He concluded that in order to undertake effective intervention, state must constitute a bureaucratic apparatus with sufficiency of corporate coherence and also state should support the autonomy of corporate interests in order to open space for them to have fully competition to better the marketing performance (Rueschemeyer and Evans, 1985, pp.68). Though transformative capacity the modern state displays in contrast to patrimonial rule in agrarian society, the case of developmental state in Taiwan was successfully operated by the reforming of agriculture. Taiwan, under the leadership of Jiang Jie-Shi alas Chiang Kai-Shek mainly focused on the development military capacity to recall back the main China to their control. His leadership ambition collaboratively coincided with the Janap’s colonization in Taiwan and Japan attempted to control entire China as well. The agricultural products for the industrial-oriented inputs and the intention to champion for export-led growth had tremendously successive for military-based development of Taiwan. In the mean time, Taiwan was also successively engaged by the United States to encounter China in the post-cold war politics. These two factors have underscored the sound policy leading to economy supremacy of Taiwan in later decades. But it is perplexing to conclude that economy of export-led growth through military-based orientation is sound, it is surely accompanied by other factors to accomplish the state intervention and the acceleration of economic growth of Taiwan (Amsden, 1985, pp.99). In case of Korea in the 1960 under the leadership of Syngman Rhee has performed the analogue of export-led growth under the provision of bureaucratic structures, agricultural diversification and international supremacy. Korea also experienced the colonialism of Japan and the close alliance to the United States to encounter with the communist bloc. The politics of export-led growth ensured the sound provisions of Korea in both internal readiness to reform and external pressures to achieve autarky or self-sufficiency. Though it took different approaches for development between Japan, Korea’s military-based government had successfully reformed and diversified their economy under the aids from the United States and the domestic restructuring of “the concentration of power in the executive, the rationalization of the economic policy making machinery, and the new development of new instruments for steering industrialization” (Haggard, 1990, pp.62). But Rhee was strongly criticized by opposition leader, Park Chung Hee, to his continuities of corruption.

In conclusion, there are some same approaches to develop the state in case studies of Taiwan, Korea and Japan. These three countries had been involved the same international alliance, the United States. Their economic development was the priority. The export-led growth was their main discourse to accumulate the national capital. State intervention was structured by the effective bureaucrats and valued the elites as well as the corporatists to freely or autonomously innovate their business, but strictly oversaw by the complimentary state’s regulations. There are some different approaches to their economic nexus because Taiwan and Korea were colonized by Japan. Their political economy was assumed and operated by the colonial mechanism. But the sound economy system created by Japan had likely become the cornerstone for their later development of economy strategy. More than this, Taiwan and Korea’s economy had been fully operated by the military-based governance. In contrast, Japan is just a war-lost country and it built their miraculous economy by the civil governance. But its economic-oriented people and culture, and the sound developmental-oriented system have leapfrogged Japan to become the most successful country.

References:

Jon, Pierre and B., Guy Peters. 2000. Governance, Politics and the State. St. Martin’s Press Publishing. New York

Evans, Peter B. et al. 1985. Bringing the State Back In. Cambridge; New York: Cambridge University Press. Chapter 2, 3.

Johnson, Chalmers A. 1992. MITI and the Japanese Miracles: the Growth of Industrial Policy, 1925-1975. Stanford, California: Stanford University Press, Chapter 1, 9

Haggard, Stephan., and Harvard University. Center for International Affairs. 1990. Path-ways from the Periphery: the Politics of Growth in the Newly Industrializing Countries. Ithaca, N.Y.: Cornell University Press, experts.