“Remains of the Day” (streaming media— instructions on course website)

“Remains of the Day”

(streaming media—

instructions on

course website)

2

Dependency Theory: Review

Development is “externally conditioned”

Core dominates periphery

3

Dependency Theory

Expected outcomes for periphery economic

results in continued underdevelopment, i.e. poverty

social produces inequality (“transnational

kernel”) and conflict political

reinforces authoritarian government

Statist theory: Introduction

Challenge to dependency theory

Dependency theory failed to explain the rise of the East Asian NICs

Newly industrialized countries

South Korea, Taiwan, Singapore

Why East Asia surged ahead of Latin America (June 2006)

Table 1.

Reversal of fortunes

East Asia has surged ahead while Latin America has lost ground.

(ratio of income per capita to that of the United States, at purchasing

power parity, 1990 dollars)

1950 2001

East Asia1 0.057 0.151

East Asia (excluding China) 0.097 0.215

Latin America 0.263 0.208

Source: Maddison (2003). 1Comprises China, Hong Kong SAR, Korea, Singapore, and Taiwan Province of China, plus

Indonesia, Malaysia, Philippines, and Thailand.



“Increasingly, institutions are seen as accounting for divergent growth patterns across countries. Analysts have identified areas in which government institutions have helped underpin growth in East Asia.” A quarterly magazine of the IMF


“The strength and independence of government bureaucracy has been important to East Asia's economic development and has too often been lacking in Latin America.

“Asian governments have tended to foster the development of a professional, merit-based civil service tradition, insulated from political influence, to implement economic policy in close consultation with business groups.

“To streamline decision making, lead government agencies with strong coordinating authority were created to translate a national strategic vision of economic development into specific actions.”

A quarterly magazine of the IMF

Asia and Africa in the Global Economy (August 1998)

“Government’s administrative competence is the single most important factor explaining the difference in growth among many developing countries.

“Africa comes in the bottom group in cross-regional comparison in terms of an index of ‘bureaucratic efficiency’.”

Asia and Africa in the Global Economy (August 1998)

“The World Bank put it quite starkly: ‘African governments have become employers of last resort and dispensers of political patronage, offering jobs to family, friends and supporters

“The poor economic management capacity and cumbersome administrative and bureaucratic structures of African bureaucracies has limited the successful formulation and implementation of economic policies and become a central obstacle to market oriented reforms.”

Statist Theory

Focus on nature of state institutions Developmental vs.

predatory Institutional level

of analysis Not individual level Not global political

economy structure

Statist Theory

Characteristics of developmental state bureaucracy Merit/skill-based recruitment technocrats Performance-based rewards

With competitive salaries, proper incentives Belief in bureaucratic mission Insulation from societal pressures Power to formulate and implement policy

Statist Theory: Background

Why would states have interests autonomous from society’s in promoting development?

Remember Tilly


Because they are responsible for national security.

States must compete in the international state system Militarily

To compete militarily, states need to develop economically States need $$$ to pay for

military competition


Gerschenkron’s insight Timing of

development matters for how states develop

Early and late players in the game of state survival develop differently


How can latecomers compete militarily & economically?

States must “jump in” to the international system at the global technological frontier

Or be crushed.


Note that the global technological frontier is always moving forward Militarily


Note that the global technological frontier is always moving forward Economically


So, how can latecomers amass the huge investments necessary to develop economically and militarily at the global technological frontier?


Remember Gerschenkron’s insight Timing of

development matters for how states develop

Early and late players in the game of state survival develop differently


How did Britain—the earliest industrializer—do it?

Britain ~1700s Early

Small start-up firms


How can latecomers amass the huge investments?

Germany ~1840s Only a little “late” Only a little

“backward” Investment banks


How can latecomers amass the huge investments?

Russia/Soviet Union ~1880s-1930s Much “later” More “backward”

State itself


Soviet state Asserted control

over entire economy Forcibly extracted

resources To use for military

development Russia/Soviet

Union

Premises of Statist Theory

States have the potential to promote development within their own borders (NOT simply “externally conditioned”)

States have interests autonomous from society’s in promoting development because they are responsible for national security; they must compete militarily and economically in the international state system

Ability of states to promote development depends on the nature of state institutions

Documents

“Remains of the Day” (streaming media— instructions on course website)