Essay: Is the East Asian developmentalist state replicable for late development in other
developing regions? Answer the question by engaging with theories and critiques of the
developmental state.
Grade: 71
INTRODUCTION
If one lesion can be drawn from development theories, it is that no one case of success can be
directly and entirely transposed upon another time or place. The performance of the East
Asian developmental state, albeit astonishing, is the result of policies and institutions that
were as much planned as they were churned out of interacting local, regional and global
factors at a specific time and therefore cannot be replicated as it is. However, lessons can be
drawn (Chang, 1999) from their experience and some of their practises can be followed after
adapting them to the contexts of different regions around the world.
EAST-ASIAN DEVELOPMENTALIST STATE: IS THERE ONE TO REPLICATE?
In the background of the failure of the state-led, domestic consumption-oriented attempts at
industrialisation in many developing countries, first Japan, and later South Korea, Taiwan,
and Singapore succeeded in sustaining economic growth with a different kind of state-led
industrialisation, one that was export-oriented and closely connected with market economy,
which came to be known as the development model of ‘East Asian Developmental State.’
It has been argued that the East Asian states didn’t follow the same formula of success and
have had significant differences in their developmental practise. Bernard (1996, p 649-651)
rejects the perception of one model being replicated; he argues that these countries didn’t
follow the same pattern of economic change one after another, but each experienced different
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processes. The network theory views these countries participating, from their own positions
at the same time, in a region-wide and even world-wide network of production (Bernard,
1996, p 653-654). This puts into question the suitability for replication or even the presence
of a monolithic ‘developmental state.’
However, it may be possible to make some generalized observations from the East Asian
cases (Johnson, 1999, p 43), which would be applicable in other regions. Beeson (2009, P 12)
is of the opinion that the East Asian states share sufficient ‘commonality’ to be viewed as a
model, albeit loose, and may serve as a ‘template’ for countries attempting to industrialise in
their own turn (2009, p 38).
WHAT MAKES A DEVELOPMENTAL STATE
The developmental state is one that fosters the industrialization process through an optimum
combination of ‘market orientation and government intervention’ (Onis, 1991, p 110). The
intervention aims to encourage growth by purposefully controlling price signals and
competition to meet the need of development, thereby essentially ‘governing’ the market
(Wade 1990, cited in Onis, p 111), while allowing the private sector to profit and the market
flourish (Onis, 1991, p 110). Therefore, the developmental state is not a central-planning state
with no place for market, or a ‘regulatory’ state concerned with only the rules and procedure
of competition in it (Johnson, 1999, p 37).
State intervention in East Asian countries came in the form of financial and industrial policies
which had a clear developmental goal (Onis, 1991, p 110). For example, South Korea chose
industries based on productivity potential and heavily subsidized their build-up before
allowing them to compete in the market (Amsden, 1989 in Onis, 1991, p 112). Japan’s central
planning agency ensured that foreign trade went in a favourable direction by discouraging
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import of finished commodities, especially those in domestic competition, while encouraging
foreign investment that would bring in technology and machinery (Johnson, 1982, p 127,
cited in Johnson, 1999, p 37).
The intervention is possible as state institutions are more or less autonomous, autonomy
being the ability of the state to set and pursue goals that may not be shared by the larger
population or groups they control (Skopol, 1985, p 9). The autonomous state is prevented
from becoming predatory due to the active and reciprocal connection with the society (Fine,
2006, 104), which Evans (1989) terms ‘embeddedness.’
State personnel and agencies implemented policies. Although not free from corruption, the
bureaucracy was capable of carrying out the task without being derailed by narrow private
interests (Beeson, 2009, p 20, 25). Despite internal friction (Leftwich, 2007, p 406), an elite
status, which kept bureaucrats insulated from societal pressure, along with their small size
and common educational background, forged a sense of unity and cohesion (Evans, 1989,
573). One or a handful of government bodies oversaw and coordinated the developmental
project and the power was in many cases shared between agencies and ministries (Chang,
2010, p 89) or limited to specific sectors (Onis, 1991, p 115) which helped maintain a the
check and balance.
These are the basic instruments of East Asian states described by the ‘institutionalist’ school
in explaining their economic success (Onis, 1991, p 110), which nullifies the neoliberal claim
that it was primarily due to the reliance on market and open trade. However, it would be
difficult to transpose these effectively without placing them on an enabling political and
institutional environment (Onis, 1991, p 110).
THE PROSPECTS OF REPLICATING DEVELOPMENTAL STATE
IS IT TOO SPECIFIC?
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There are conflicting views on the question of replication stemming from the same
ideological divide that led to widely opposing views on the reason behind their economic
success. Neoliberal economists point out that this successful state-mediated industrialisation
has taken place in a specific geo-political juncture and claim that it wouldn’t be possible
elsewhere without surrendering to corruption and rent-seeking (Bernard, 1996, p 649).
Ben Fine (2006, 114) contends that whether rent-seeking is bad for economic growth depends
of the nature of the benefit and beneficiaries. However, the efficacy of the state and its agents
seem to be grounded on a complex web of relations cultivated on historical backdrop. The
superiority of the state in East Asia is owed greatly to its ability to control the flow of capital
- mostly US aid that poured into this geo-strategically important region during the Cold War
(Deyo on South Korea, 1989, p 46). Influential groups in the society which could challenge
the state were weakened also due to historical events. In Japan, strong business groups were
dismantled in the aftermath of the Second World War and occupation (Johnson, 1982, p 41,
44, cited in Johnson, 1999 P 38). Land reform under US auspices disempowered rural elites
in Korea (Cummings, 1989, p 12) and Taiwan had an unchallenged field after the elimination
of the political opponents of its ruling elites. This position of the state allowed it to dictate the
private sector. Korea had strong system involving reward and penalty for ensuring good
performance from the selected sectors (Amsden, 1982 cited in Onis, 1991, p 112). Japan’s
bureaucracy also had the policy instruments to ensure to compliance with the national goal
(Johnson, 1999, p 48). In contrast, the existing influential oligarchies in Latin America
(Cummings, 1989, p 12) circumscribed the state’s developmental initiatives that contradicted
their interest.
Onis (1991, 114) argues that the coexistence of autonomy and private-public co-operation
was also crucial for development in East Asian. Without bureaucratic autonomy, private
interest becomes state interest, like in Latin America. Without close touch with the private
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sector, bureaucracy fails to understand which industries to prioritize or which policies will be
effective (Evans, 1989, 573). Again, the right rapport with executives allowed the officials to
formulate and implement policies as they saw fit (Johnson, 1999, p 39). This ‘intimacy’ of
between the public and private sector as well as bureaucracy and its executives (Leftwich,
2007, pp. 403, 405) may be impossible to create by design or without leading to corruption.
In East Asia, retired bureaucrats comprised a high proportion of businesses and organisations,
which facilitated communication; the common educational background also contributed. At
the same time, selective and competitive recruitment ensured that competence and
performance was the basis of membership in the bureaucracy. The possibility for state agents
to later move on to the private sector from their official position also gave them a stake in the
national economic growth (Evans, 1989, 573).
It would appear that attempts to import state agencies and policy arrangement to a different
place will fail without the corresponding set of relationships. Brazil, for example, suffered
from the disconnectedness of its employees from the private sector and its dependence on the
co-operation of business elites and had to advance through fragile ‘islands of efficiency’ for
the lack of bureaucratic coherence (Evans, 1989, p 577). However, Chang refutes the
argument that the East Asian model cannot be emulated to countries which do not have
skilled bureaucracy, by pointing out that the personnel in these countries, except for Japan,
were not as skilled as generally assumed (Chang, 2010, 90). Haley (2005, cited in Boyd and
Ngo, 2005, p 11) argues that the Japanese state did not succeed due to its strength vis a vis
the private sector, but because it is able to wheedle, despite its many weaknesses, various
interests into coming to the necessary consensus. Taiwan, too, according to this account, isn’t
the picture of organisational coherence, but is plagued by rivalries and dissent. The idea that a
state must be exceptionally strong and capable to adopt developmental strategies may not be
entirely valid.
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It can be argued that the difference in relations between agents and actors in various parts of
the world is not a deterrent to the replication of methods employed by East Asian states, as
these states themselves were subjected to different historical background and formed
different sets of relations, and consequently did not utilize the same set of strategies and
instruments. Japan kept it business groups weakened, whereas Korea facilitated formation of
big groups (Johnson, 1999, p 41). Private sector in Taiwan was also small due to the
antipathy of its migrant political elites towards native capital (Chang, 2010, p 90). Its
industries were small-scale and decentralised, except for some EPZs (Deyo, 1989, p 20).
Taiwan’s large public sector (Onis, 1991 p 113) carried out a large portion of tasks - whereas
Japan didn’t even own its railway (Chang, 2010, p 89) - and therefore, Taiwan’s bureaucracy
didn’t need as deep and wide a relationship with the business elites as is seen elsewhere
(Chang 2010, p 83).
There are many ways in which a state can benefit from an earlier instance of success. The
East Asian countries mended the Japanese ‘model’ it to suit their own internal dynamics
(Johnson, 1999, p 40). Korea established a ‘pilot agency’ like Japan, but allocated to it much
more clout that Japan’s one, whereas Taiwan’s agency was even weaker (Chang, 2010, pp
88-90). Such agencies will not be effective in a country with influential lobby groups, which
will prevent selecting potentially productive industries (Johnson 1991, pp 48-49).
Scandinavian countries, which were developmental to some extent, managed to work without
such an agency due to the inclusive nature of their policymaking (Chang, 2010, p 90). Which
areas of the developmental state are replicable to which part of the world would thus vary.
According to Skopol (1985, p 15), no state is disinterested in its endeavours, even in the
pursuit of development. For East Asian states, economic growth was a means to gain
legitimacy (Castells, 1992, cited in Fine, 2006, p 103). Johnson stresses that this exclusive
prioritization was possible in East Asia because of historical imperatives in the forms of war
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destruction and fear of imperialism, external dependence and communist expansion (Johnson
1991, pp 52-53). What was politically possible in the yet-to-‘demobilize’ post-war Japanese
society may not be possible in a different environment, such as the USA (Johnson, 1999).
However, as Chang (2010) shows, USA did in fact play a developmental role; in a way that
suits its own context. Although compelled to make the developmental endeavours ‘hidden’
(Block 2008 cited in Chang, 2010, p 83), USA played a developmental role by subsidising
research for public health and defence purposes and facilitating a knowledge-sharing network
between public and commercial enterprises, both of which contributed to its competitiveness
in the world market. In fact, successful developemental states have existed outside the
specific historical and regional realm of ‘urgency’ in East Asia, including in France (Chang,
2010) and Botswana (Leftwich, 2007).
IS IT TOO PROBLEMATIC?
In discussing the possibility of replication, it is not possible to overlook some of the negative
elements that seem closely associated with the East Asian states, including varying degrees of
authoritarianism, without which, some argue, it would not be possible to replicate the success
(Chang, 2010, p 86). Authoritarianism has been viewed as a basis of state autonomy and the
de-emphasizing of welfarism a necessity to fully prioritize growth. However, Johnson argues
that the kind of disciplinarian state found in Japan is far from ‘real authoritarianism’ which
has no legitimacy in society (Johnson, 1999, p 52-53), and Chang attributes the lack of
welfarism to the necessity of having a right-wing orientation during the Cold War. This was
not the case for Scandinavian countries, which were able to be broadly developmental as well
as distributional (Chang 2010 p 86-87).
Again, repression of labour and low wage appears to be the source of the competitive
advantage of East Asian states and consequently a ‘cornerstone of economic policy’ (Castells
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on Korea, 1992, p 40). In Korea, the wave of industrialisation turned traditionally selfemploying individuals into wage workers with disproportionally low living standards, but did
not include them in the joint public-private developmental venture (Deyo, 1989, pp 1-4).
However, Koo (2005, cited in Boyd and Ngo, 2005, p 13) argues that the labour repression in
South Korea was motivated not by priorities of growth, but by priorities of national security.
Moreover, due to their shortage of natural and agricultural resources, East Asian states
needed to forcefully maintain industrial peace and labour productivity to stay competitive
(Deyo, 1989, p 35). Other regions with different circumstances may find it possible to
accommodate labour welfare.
Radice (2008, 1168) advocates including class consideration for any meaningful attempt at
replication, as the spread of industrialisation will continue to create further division and scope
of exploitation along that line. The new developmentalist developing state, (the old
themselves remaining a part of capitalist expansion and suffering from the usual
inconsistencies of capitalism), will not interfere in that process. According to Radice (2008,
1169-70), it is not the developed-developing divide that matters, but class divergence, and the
developmental model should not emulated unless reformed to break out of this limitation.
IS IT STILL REPLICABLE?
One argument put forth against the repetition of the East Asian phenomenon that it has lost
relevance in the current world, where, neoliberals argue, free market is the only option
(Radice, 2008, 1176). However, Johnson (1991, p 55) insists that Japan succeeded not just
because of the world context, but because of its ability to reap its benefits with the help of a
developmental orientation and asserts that it would be more beneficial to have such an
orientation in any context. Cummings (1989) too argues that develeopmentalism was
performable in a specific context, when USA needed these states to be strong during the Cold
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War and allowed them to be selectively open; later, when it needed them to liberalize, they
had no other option but to follow suit, to the detriment of their economy. Beeson (2009)
maintained that Japan benefited, as a ‘late’ developer, from the technological advances of
others, which is increasingly difficult to access today. However, as Beeson (2009, 13) points
out, China managed to successfully industrialise despite being on the wrong side of the Cold
War. Singapore, which did not receive as much US aid, industrialized with a careful but
welcoming approach to foreign direct investment (Deyo, 1989, p 22). Moreover, when it
comes to technology, China still manages to secure access for its industries notwithstanding
frequent ‘piracy cries’ from the developed parts, and not by relying on free market (Evans,
2008).
Those with reservation about the role of free market advocate the increasing necessity of
developmentalism in the present context, especially in view of the global financial crisis, and
assert that the policy arrangements employed by the East Asian states and nature of their
institutions provide important pointers for development of other countries (Chang, 1999,
Beeson, 2009). They draw on the early economists such as List, who opposed free trade, and
Gerschenkron, who advocated state’s industrial intervention, for the countries that are
attempting a ‘late development’ (Chang, 1999, 192).
Gerschenkron emphasised on state’s capacity to mobilize larger resources and orchestrate
projects which individuals are unable or apprehensive to undertake (Evans, 1989, p 568).
Based on that argument, Evans (2008) points out that in the present world context
development is hugely dependent on technology and research, something that needs
government coordination and spending. Quoting Sen (1985), he also points out that
development is now understood as capability expansion especially in health and education,
which is something the private sector will not willingly finance.
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Some consider the developmental state as inherently unstable. Its very success results in the
strengthening of the private sector via growth, so the balance in private-public relationship
and the superiority of state, integral to a developmental state, is lost and with the rise of civil
society, its legitimacy questioned (Fine, 2006, 108). However, Evans (1989, 576) argues that
developmental strategies still remain essential for a country as long as it’s developing, and
attention should be given to enable the state to adapt with the consequences of growth.
CONCLUSION
Defined in broad terms, developmentalism has always been vital in the development of
countries (Chang, 1999). Countries in other developing regions cannot and even do not need
to entirely replicate the East Asian model, which has its own shortcomings and context
specificity. However, it’s possible to learn from their experience, and chose, mend or even
device strategies of intervention to promote growth according to varying circumstances,
which is essential for late development.
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