Policy is invariably embedded in and produced out of the systems of thought and knowledge in specific societies. There exists a fundamental relationship between power and knowledge; material power creates ‘regimes of truth’, the ‘regimes of truth’ reproduce and solidify that same power. Policies are therefore rarely, if ever, neutral. But, is that which falls outside of ‘truth’ really untrue? Is this rigidity of knowledge and politics hampering possible policy alternatives to what is today regarded as true? In this article I will be briefly outlining an alternative to the orthodox development model: the developmental state.
The Anglo-American development paradigm which nowadays is dominant in policy-making circles, employs a rather universal, acontextual model of development. Nations which failed to develop were urged to employ the neo-classical model of development since this was purportedly already proven to be successful. Yet its main shortcoming was that it failed to comprehend that each and every region is bearer of various contingencies and exigencies which are contextual to that same region. Employing a universal method to cure socio-economic backwardness is arguably not as effective as studying the particularities of that same region prior to prescribing and antidotal policy. However, specific alternatives to these theories are not lacking; one of which being ‘the developmental state theory’.
The Developmental State
Frustrated with this ideologically-imperialist, almost postcolonial manner of the U.S, some countries opted to diverge from this prescribed medicine. One type of such alternative can be located in what some might conceptualise as ‘the developmental state’. One of the first proponents of developmental state theory was Chalmers Johnson in his book ‘MITI and the Japanese Miracle: The Growth of Industrial Policy, 1925 – 1975’ which thoroughly analysed Japan as a successful, yet unorthodox case of development. Subsequently, other countries were identified as developmental states, as in the experiences of South Korea, Taiwan, Singapore and Hong Kong – the East Asian tigers. Other cases or similarities with developmental states which may be found beyond Asia are Finland and Austria, as Virtiaien argues (in Woo Cummings).
Developmental states are born out of the specific exigencies of the country; they act on basis of economic nationalism. As Gerschenkron argues, late development is not a spontaneous process, it is very different from early developmental processes. In developmental states, the state becomes a catalyst or an actor with the single, if complex, goal of development. They frequently enjoy state autonomy, a strong bureaucracy, as well as a determined developmental cadre which drives the process forward.
Alternative modes of development to that of the neo-classical Western model do not necessarily work on the outright rejection of capitalist development (i.e. development driven by capital free from state interference). What this means is that even if they are alternative to the more accepted approach (which happens to be the liberal, non-interventionist one), it does not necessarily propel them to the other extreme pole (i.e as socialism or communism). One should be careful not to conceptualise roads to development through the compartmentalisation of specific models into dichotomies. This reductionist approach could potentially bypass any ‘alternative’ model which does not fit neatly into the two dichotomous models. The experiences of development are rather quite complex and multiple; they do not fall under two opposite, dichotomous categories: ‘capitalist’ or ‘communist’. The developmental states, in this case, fall under neither. They, in fact, pursue a capitalist mode of development, even an open economy rather than a closed one. However, the invisible hand of the market is taken by its horns and driven by state aptitude.
Often these states simultaneously employ different regimes of trade, meaning both an inward and outward-looking economy. They may therefore substitute imports in certain areas and pursue an import-strategy in another, while being export-oriented in some while domestically-focused in others, as were the cases of South Korea and Taiwan. Their test lies in finding the right balance between the two regimes of trade according to the needs of the country. In fact this might be one major reason by which they diverge from protectionist-based development (as tried in some Latin American countries). Many developmental states are much more selective over which industry to promote as opposed to what the experiences of some South American countries show us.
Having a strong state bureaucracy does not necessarily imply authoritarianism or the suffocation of democracy. There are, of course, multiple cases which are/were authoritarian, yet there are other cases which worked within the parameters of democratic rule too (as was the case of Malta, for instance). These try to keep the equilibrium through institutional mergers and compromises among the various interests (which is why the developmental state theory and regulation theory of the regulation school can be perfectly complementary in particular cases). Such cases often lead to particular varieties of capitalism where the state tries to maintain partial equilibrium through spatio-temporal institutional fixes, while filling the gaps which are usually filled by the forces of the market in liberal market economies (LMEs), or by coordination in coordinated market economies (CMEs). However, research dealing with the links of developmental states and the level of democracy enjoyed in the country thereof is yet to be carried out.
Late development is an altogether different phenomenon than early development. The growth achieved by these developmental states was significant, managing to do in ten years what others did in a century. The context of one country is so fundamentally different than another that it becomes impossible to prescribe the same universal medicine to different cases. Ideologically driven methods can have their own advantages, but pragmatist approaches – such as that of the developmental state – can be equally successful in the field of development.
Image source: Takashi Hososhima