Two Paradigms of the Developmental State Approach

Kanlin Hsu Department of Public Health, National Cheng-Kung University

Wh i l e t h e s t a t e s r o l e i n E a s t A s i a n d e v e l o p m e n t h a s a l r e a d y a t t r a c t e dscholarly attention, few efforts have bee n m a d e t o t h e o r i s e t h e s t a t e a s s u c h . I t w a s i n J o h n s o n s ( 1 9 8 2 ) s e m i n a l w o r k t h a t t h e p h r a s e d e v e l o p m e n t a l s t a t e m a d e i t s academic debut in 1 English (Leftwich 1994:376). Nowadays, t h e d e v e l o p m e n t a l s t a t e h a s b e c o m ea n open password authorising entry into the literature of developmental studies and even an amulet for precarious late industrialisation. Yet authors differ widely in their conceptualizations of the term.I tc a nr e f e rt ot h es t a t e smanifest interest in development (e.g. Dutkiewicz and Williams 1987), its successful achievement of development (e.g. Evans 1995), structural characteristics of its economic intervention (e.g. Wade 1990), or its decision to base legitimacy on promoting and sustaining development (e.g. Castells 1992). Thus to some degree the diagnosis and prognosis of the developmental state are inscribed in its definition. Recently, the developmental state , even the post-developmental state , seems to fall from academic grace. This might due largely to the exhaustion of analytical potential of the approach. To rescue analytical potential from this concept, this paper presents a two-stage conceptual odyssey to reconsider the broad approach in term of the developmental state . I first identify the proto-developmental state ideas in the works of List, Weber, and Gerschenkron. The Listian policy paradigm as an alternative to the Smithian free trade and Ricardian comparative advantage paradigms as well as G e r s c h e n k r o n s i d e a of the state as surrogate entrepreneur are widely recognized as constituent parts of the developmental state. However, divergent inheritance from Weber results in different lines of theorization. Thus I distinguish two paradigms among the developmental state

Cardoso and Faletto (1979:143-8 ) f i r s t c o i n e dt h et e r m un desarrollista e s t a d o , which was

translated into Englis ha s t h ed e v e l o p me n t a l ist s t a t e . 1

theorists according to their respective Weberian inheritance. After one by one scrutiny of theorists representative of each paradigm, the author concludes that the voluntarist paradigm might possesses more analytical potential since it leaves more room for understanding the role of national-specific historicity, and the state as its embodiment and bearer, in late development.

1. The Proto-Developmental State The idea of the developmental state is a continental European construct; Friedrich List laid the foundation, Max Weber designed the architecture, and Alexander Gerschenkron erected the scaffolding. The work of Friedrich List (1789-1846) has been widely accepted as the source of thoughts on late industrialization. In National System of Political Economy (1856/1966), he compared two types of science. Cosmopolitical economy teaches how the entire human race may attain prosperity, while political economy limits its teaching to the inquiry how a given nation can obtain prosperity, civilisation, and c o m m e r c e( L i s t 1 9 6 6 : 1 1 9 ) . I nL i s t sv i e w , t h eR i c a r d i a nf o r m u l ao fcomparative a d v a n t a g er e p r e s e n t e dE n g l a n d s i n t e r e s t r a t h e r t h a n o b j e c t i v e e c o n o m i c s . B r i t a i n had gained its competitive advantage through protectionism and free trade had been anathema to British industries (Weiss and Hobson 1995:127). List suggested that, through protection, state support and state guidance of the economy, a nation state could develop infant industries that are not based on abundant factors of production. T h u sL i s t sc e n t r a l t h r u s t r e s t e do nh i sf o r m u l a t i o no fa na l t e r n a t i v eb o t ht ot h e Smithian free trade and the Ricardian comparative advantage. Hence successful late industrialisation should first be understood in terms of the Listian, rather than Smithian and/or Ricardian, political economy. Secondly, the works of Max Weber also inspire the field of development studies. For most developmental state theorists, Weber's name is synonymous with the merits of modern bureaucracy. However, as shown below, it is from the viewpoint of the German Historical School that Weber offers the best insight to late industrialisation. The problem of the late and extraordinarily rapid industrialisation of a recently united Germany put questions about the nature of the capitalist economy at the centre of c o n c e r n f o r We b e r s g e n e r a t i o n . I n h i s 1 8 9 5 i n a u g u r a l l ecture, National Economy and Economic Policy (Der Nationalstaat und die Volkswirtschaftspolitik), Germany was p o r t r a y e da s a n a t i o ns t a t e f a c e db yo t h e r n a t i o ns t a t e s i na n e c o n o m i c s t r u g g l ef o r l i f e i nw h i c h t h e r e i s n op e a c e t ob e h a d . We b e r a c c e p t e dthat there was no other
2

p a t hf o r G e r m a n y sf u t u r ed e v e l o p m e n t t h a ni n d u s t r i a l i s a t i o na n de m p h a s i z e dt h e blatant contradiction between the economic class interests of the Junker and the political interests of the German nation state. Regarding the path of industrialisation, Weber attacked those political economists who had navely given prominence to alternation between the technical problem of production and the problem of distributive justice (1994:14-5). For Weber, As an explanatory and analytic science, political economy is international, but as soon as it makes value judgements it is tied to the particular strain of h u m a n k i n dw ef i n dw i t h i no u ro w nn a t u r e T h ee c o n o m i cp o l i c yo fa German state, and equally, the criterion of value used by a German economist, c a nt h e r e f o r eo n l yb eaG e r m a np o l i c yo r c r i t e r i o n I nt h ef i n a l a n a l y s i s , processes of economic development are power struggles too, and the ultimate and decisive interests which economic policy must serve are the interest of national power, whether these interests are in question. The science of political economy is a political s c i e n c e . I t i sas e r v a n t o fp o l i t i c s t h e politics of the enduring power-political interests of the nation (ibid.16-7, original italics). Then, what should be the German criterion for Volkswirtschaftspolitik? In this nation state the ultimate criterion for economic policy, as for all others, i s i n o u r v i e w reason of state I nu s i n gt h i s s l o g a no f r e a s o n o f s t a t e w e wish to present the demand that the economic and political power-interests of our nation and their bearer, the German nation-state, should have the final and decisive say in all questions of German economic policy, including the questions of whether, and how far, the state should intervene in economic life, or of whether and when it is better for it to free the economic forces of the nation from their fetters and to tear down the barriers in the way of their autonomous development (ibid. 17, original italics). G i v e n t h e f a c t t h a t economic power and the vocation for political leadership of the nation do not always coincide ,t h ek e yq u e s t i o nf o rWe b e rw a sp o l i t i c a l leadership. Weeconomic nationalists measure the classes who lead the nation or aspire to do so with the one political criterion we regard as sovereign ( i b i d . 2 0 ) . B y this criterion, which class or stratum could assume the national leadership? What concerns us is their political maturity, which is to say their grasp of the n a t i o n s e n d u r i n ge c o n o m i c a n dp o l i t i c a l power interests and their ability, in a n yg i v e ns i t u a t i o n ,t op l a c et h e s ei n t e r e s t sa b o v ea l lo t h e ri n t e r e s t s [However], throughout history it has been the attainment of economic power
3

which has led any given class to believe it is a candidate for political leadership. It is dangerous, and in the long-term incompatible with the interests of nation, for an economically declining class to exercise political rule (Herrschaft). But it is more dangerous still when classes which are moving towards economic power, and therefore expect to take over political rule, do not yet have the political maturity to assume the direction of the state (ibid. 20-21, original italic). Weber concluded that Germany is currently threatened by both of these things, and this is the key to understand the current dangers o f G e r m a n y s s i t u a t i o n ( i b i d . 2 8 ) . These quotations suffice to identify a Weberian developmental state. Successful l a t e i n d u s t r i a l i s a t i o n l i e s i n t h e p o l i t i c a l l e a d e r s h i po f t h e s t a t e s l e a d i n g s t r a t a , a s t h e bearer, with political maturity and in pursuit of industrialisation through interventionist measures under the command of reason of state.2 If both the declining Junker and rising brgerliche Klasse, not to mention the working class, are ineligible candidates for political leadership, who else could be ? We b e r s a n s w e r c o u l do n l y b e the modern substantive-rational state bureaucracy. Finally, Gerschenkron's work is also a major source on late development. In his celebrated Economic Backwardness in Historical Perspective (1962), Gerschenkron argued that late developers such as Germany and Russia in the nineteenth century required strong state intervention in order to catch up with the early developers such as Britain. In the Russian case, the state undertook various policies to initiate a forced industrialisation (1892-1 9 0 3 ) . F o r c e di n d u s t r i a l i s a t i o n i n v o l v e dt h ec r e a t i o no f a vast railway network that would enable the development of markets as well as iron and steel industries. Besides, heavy industries would also be stimulated by tariff protectionism, as well as by the provision of subsidies and guaranteed supply contracts established by the state. Moreover, the base of this interventionist structure w a st h ep o l i c yo f forced savings . T h a t i s , t h es t a t ee x t r a c t e di n c o m ef r o mt h e peasantry and proletariat t h r o u g ht a x a t i o na n dr e a l l o c a t e di t i n t o g r o w t h -i n d u c i n g p r o j e c t s s u c h a s t h e r a i l w a y s . B y s o d o i n g t h e s t a t e b e c a m e a surrogate entrepreneur insofar as it substitutes for the deficient internal market (Gerschenkron 1962: 17-20, 124-5; Weiss and Hobson 1995:96-7). Thus the central thrust of Gerschenkron lies in his argument that the state in late developing societies must serve as a surrogate entrepreneur in channelling financial resources into growth-inducing projects so as to

Reason of the state (r a i s o nd t a t ) : t h es t a t e s r i g h t t or e j e c t e x t r a -political limits on its actions

in so far as such actions accord with the general interest of the people-nation (Jessop 1985:65). 4

initiate a forced industrialisation. These three features provide the basis for identifying the quintessence of a proto-developmental state. First, the characteristic policy paradigm is Listian insofar as its emphasis on infant industry protection contrasts with the Smithian free trade and the Ricardian comparative advantage as roads to national propensity. Second, the political leadership of late development should be in the hands of the substantive-rational state bureaucracy and the criterion of economic policy for industrialisa t i o n s h o u l d b e t h e reason of state . T h i r d , t h e s t a t e s h o u l d p l a y t h e r o l e o f surrogate entrepreneur in channelling financial resources into growth-inducing sectors so as to carry out a forced industrialisation.

2. Two Paradigms of the Developmental State Approach Developmental state theorists generally inherit the Listian ideas of policy alternative to Smithian and Ricardian formulae and the Gerschenkronian ideas of the state as a surrogate entrepreneur but they diverge in their inheritance from Weber. On the one hand, the pragmatic paradigm understands the developmental state as a corporate actor with certain structural characteristics, which formulates and implements particular economic policies to promote industrialisation.3 Thus, efforts are made to sort out essentials for the developmental state and how these constituents bring about economic achievements. Moreover, by considering the political in its narrow sense, this paradigm tends to be positivistic in theoretical elaboration and nomothetic in causal explanation. Among the chief theorists of this paradigm are Johnson (1982), White (1984), Amsden (1989), Wade (1990), Evans (1995), Leftwich (1994), and Weiss and Hobson (1995).4 On the other hand, the voluntarist paradigm understands the developmental state as an embodiment of the collective will to develop.5 Thus, in addition to exploring its various characteristic institutional elements, analytical focus falls on national-specific

For example, s i x ma j o rc o mp o n e n t sd e f i n et h ed e v e l o p me n t a lmo d e l :a d e t e r mi n e d

developmental elite; relative autonomy; a powerful, competent and insulated economic bureaucracy; a weak and subordinated civil society; the effective management of non-state economic inter e s t s ; a n d , r e p r e s s i o n , l e g i t i ma c y a n dp e r f o r ma n c e ( L e f t w i c h1 9 9 5 : 4 0 5 ) .
4

Johnson and Evans are considered as both pragmatic and voluntarist theorists with regard

to their respective ambiguity of theorisation, see below.

5

T h eq u a l i f i e r v o l u n t a r i s t i s b orrowed from Touraine (1988). 5

historicity and/or an empathic understanding of the state elites. Likewise, by understanding the political in its inclusive sense, this approach tends to an interpretative approach and to be ideographic in causal explanation. Among the chief theorists here are Johnson (1982), Woo (1991), Evans (1995), and Cumings (1999). In the following, I sketch the substance of major theorists of each paradigm, and conclude with summary and critique.

2.1 The Pragmatic Developmental State

Johnson: the Japanese Model The pragmatic version of Chalmers Johnson (1982) identifies essential elements of the Japanese developmental state. During the period of investigation (1925-75), J o h n s o no b s e r v e s s t r i k i n g c o n t i n u i t i e s a m o n g t h e s t a t e s v a r i o u s p o l i c y -tools over the prewar and postwar years. He argues that the issue is the predominant orientation c h a r a c t e r i s t i c o f t h e s t a t e s i n t e r v e n t i o nr a t h e r t h a nt h e f a c t o f i t s i n t e r v e n t i o ni nt h e economy. According to Johnson, a regulatory or market-rational state concerns itself with the forms and procedures of economic competition, but it does not concern itself with substantive matters. By contrast, Japan well exemplifies the developmental or plan-rational state (ibid. 17-19, 305-8). In the final chapter of his MITI,6 Johnson e s t i m a t e s f o u r e s s e n t i a l e l e m e n t s o f t h e J a p a n e s e m o d e l o f d e v e l o p m e n t a l s t a t e : (1) The existence of a small, inexpensive, but elite state bureaucracy staffed by the best managerial talent available in the system. Its duty would be, first, to identify and choose the industries to be developed; second, to identify and choose the best means of rapidly developing the chosen industries; and, third, to supervise competition in the designated strategic sectors in order to guarantee their economic health and effectiveness. These duties would be performed using market-conforming methods of state intervention. (2) A political system in which bureaucracy is given sufficient scope to take initiative and operate effectively. This means that the legislative and juridical b r a n c h e s o f g o v e r n m e n t m u s t b e r e s t r i c t e d t o s a f e t y v a l v e f u n c t i o n s . (3) The perfection of market-conforming methods of state intervention in the economy. The most important of these methods is administrative guidance. Johnson argued that it is necessary to avoid overly detailed laws that put a

MI T I i s J a p a n s Mi n i s t r y o f I n t e r n a t i o n a l T r a d ea n dI n d u s t r y f o r s h o r t . 6

straitjacket on creative administration. (4) A pilot organisation l i k e MI T I . MI T I s e x p e r i e n c e s u g g e s t s t h a t t h e a g e n c y t h a t controls industrial policy needs to combine at least planning, energy, domestic production, international trade, and a share of finance. The key characteristics of MITI, Johnson argues, is its small size, its indirect control of government funds, i t s t h i n kt a n k f u n c t i o n s ,i t sv e r t i c a lb u r e a u sf o rt h ei m p l e m e n t a t i o no f industrial policy at the micro-l e v e l , a n d i t s i n t e r n a l d e m o c r a c y ( i b i d . 3 1 4 -20). Johnson concludes that a state that attempts to match the economic achievements of Japan must adopt the same priority as Japan. It must first of all be a developmental state and only then adopt other goals in line with a society's wishes. Furthermore, Johnson stresses the centrality of the gakubatsu , t i e sa m o n g classmates at the elite universities from which officials are recruited, and particularly t h e batsu of all batsu , w h i c hb r i n g s t o g e t h e r t h ea l u m n i o f T o k y oU n i v e r s i t yL a w School. Such informal networks give the bureaucracy an identity that meritocracy alone could not provide. On the other hand, external networks connecting the state and civil society are even more important. Japanese industrial policy depends fundamentally on the maze of ties that connect ministries and major industrialists. Besides, ties between the bureaucracy and private power-holders are reinforced by the pervasive role of MITI alumni, who through amakudari ( t h e d e s c e n tf r o mt h e h e a v e n o fe a r l yr e t i r e m e n t )e n du pi nk e yp o s i t i o n si ni n d i v i d u a lc o r p o r a t i o n s , industrial associations, and/or quasi-governmental organisations (ibid. 57-9, 306-10). J o h n s o n s J a p a n e s e model tends to be understood in institutional terms.7 Not surprisingly, therefore, a positivistic r e a d i n go f J o h n s o n s f o r m u l a t i o no f t e nl e a d s t o identification of institutional forms similar with that of the Japanese model.

Amsden: Getting Relative Prices Wrong A l i c e H . A m s d e n( 1 9 8 9 ) s e e s J o h n s o n s p l a n - vs. market-rational distinction as concerned with the character of the state. By contrast she distinguishes between market-conforming and market-augmenting paradigms to highlight their respective overarching policies. In the context of late industrialisation, she claims, market conformance refers to the minimum amount of government intervention needed to get r e l a t i v e p r i c e s right . T h i s p a r a d i g mb e l i e v e s t h a t i nb a c k w a r dc o u n t r i e s s o m e s t a t e

Johnson blames his being misunderstood on the chief editor of Stanford University for the

l a t t e r s i n s i s t e n c eo nt h ef o u r -element model (Johnson 1999:39-42). 7

intervention is necessary to correct existing market distortions and attributes s u c c e s s f u l t a k e o f f o f N I C s t o s u c h m a r k e t -conforming policies (ibid. 38, 141-8). However, Amsden observes that in South Korea the government offered generous subsidies to stimulate exports, including subsidised long-term loans and an e f f e c t i v e e x c h a n g e r a t e . T h e subsidy serves as a symbol of late industrialisation, not just in South Korea and Taiwan but also in Japan and Latin American countries. She argues that the First Industrial Revolution was built on laissez-faire, the Second on infant industry protection, while in late industrialisation the foundation is subsidy, which includes both protection and financial incentives. The allocation of subsidies renders the government not merely a banker but an entrepreneur, using the subsidy to decide what, when, and how much to produce. Thus, the government established multiple prices for loans and the most critical price that of long-term credit was w i d e l y w r o n g i na c a p i t a l -scarce country. Amsden eloquently argues that the art of the state is to get something done by deliberately getting relative prices wrong (ibid. 145-9). Amsden inquires into the competitive behaviour of oligopolists by identifying a distinctive firm structure (i.e. the diversified business group) and growth dynamic (i.e. the cumulative causality between productivity and output). She briefly summarises the market-augmenting mechanisms as follows. The government initiates growth by using the subsidy to distort relative prices, and then big business implements state policy. Oligopoly at the industry level and high aggregate economic concentration enable leading firms to survive the hardships of late entry. Two behavioural patterns are associated with high concentration in the learning context. First, once growth gets underway, big business groups compete in a wide array of industries in order to maintain parity with one another in their overall size. Therefore, competition tends to be a consequence of growth, not a cause of it. Second, high concentration permits high rates of investment embodying foreign technology, the realisation of scale economies, and the cumulation of output in a small subset of firms, thereby facilitating learning-by-doing. Thus, growth contains the seeds to increase productivity, and increased productivity raises output further in an upward spiral (ibid. 150). To understand variations in growth rates among late-industrialising countries, Amsden suggests that one must explore two key institutions: the reciprocity between big business and the state, and the internal and external behaviour of diversified business groups. The first institution refers to the disciplinary mechanism. In the case of the market-conforming paradigm, the invisible hand dispenses discipline. However, the premise of late industrialisation is a reciprocal relation between the state and the
8

firm. In direct exchange for subsidies, the state exacts certain performance standards from firms. T h e r e a s o nf o r K o r e a s f a s t e r g r o w t hi s b e c a u s e t h e s u b s i d i s a t i o np r o c e s s has been qualitatively superior: reciprocal in Korea, unidirectional in most other cases. The second institution refers to the diversified business group. On the one hand, continuity in ownership and control contributed to a uniform group culture and a centralised knowledge of group resources. Both facilitated the intra-group transfer of money and personnel. An economy of scope thus arose in the form of the capacity to diversify. Entering new industries at minimum cost and, at lightning speed, raised the f i r m sa b i l i t yt oc o m p e t ei nm a n ym a r k e t s . Wi t hs t a t es u b s i d i e sa n dad i v e r s i f i e d structure, the chaebol became willing and able to undertake risk. On the other hand, government controls in domestic commodity markets largely precluded the chaebol from competing against one another on price. Like other oligopolists, they tend to compete on those specific non-price variables. By building a meritocratic element into its system of awarding subsidies, the state extracted from the chaebol a growth rate of output and productivity that may also have been unprecedented (ibid. 145-6, 150-2).

Wade: Governing the Market In his case study of Taiwan, Robert Wade (1990) also identifies several elements s i m i l a r t oJ o h n s o n s J a p a n e s em o d e l , i n c l u d i n gt h es t a t e s t o pp r i o r i t yo f e c o n o m i c development, the existence of an elite economic bureaucracy and so forth. However, Wade also finds several elem e n t s i n c o n t r a s t t o J o h n s o n s J a p a n e s e m o d e l . F i r s t , c i v i l society in Taiwan is kept weak by more authoritarian measures. The state shows resemblance to a Leninist party-state for it lacks the element of class struggle [sic] and it explicitly sanctions private property and markets. Nonetheless, it also shares with the Leninist party-state a need to limit commitments to existing groups, a sense of urgency to development, a comprehensive perspective on the development problem, and a tutelary notion of government. These conditions have helped to produce e x c e p t i o n a l p o l i t i c a l s t a b i l i t y i n s h a p i n g t h e d i r e c t i o n o f p o l i c y . S e c o n d , T a i w a n s c a s e m e e t st h e b u r e a u c r a t i ca u t o n o m y c o n d i t i o nb u t f a i l st om e e t t h e p u b l i c -private c o o p e r a t i o n c o n d i t i o n . I nt h i sr e g a r d , Taiwan is an extreme example of economic corporatism that only those state-sanctioned economic interest groups get access to t h e s t a t e . C o r p o r a t i s t a r r a n g e m e n t s h a v e f a c i l i t a t e d t h e g o v e r n m e n t s e f f o r t s t o p u r s u e a leadership in important industries rather than simply being a follower (Wade 1990: 253-4, 294-5; cf. Johnson 1982: 314-20, 1999: 38-9). Wade further distinguishes three theoretical approaches to the relationship between state and market in the East Asian NICs. Free market (FM) theory attributes
9

the success of the East Asian NICs to their reliance on free markets, while the stimulated free market (SM) theory claims that governments also intervened more actively to offset other distortions. By contrast, the governed market (GM) theory, to which Wade adheres, demonstrates a three-level account. At the first level of explanation, the superiority of East Asian economic performance is due largely to a combination of a very high level of productive investment, more investment in certain key industries, and exposure of many industries to international competition. At a second level of causation, these conditions are themselves seen as the result of specific government economic policies. These policies enable the government to guide resource allocation to produce different production and investment outcomes than would have occurred with either FM or SM policies. At the third level of explanation, these market-governing policies are held to have been permitted or supported by the corporatist and authoritarian arrangements (ibid. 25-9).

Evans: Autonomy and Connectedness The pragmatist version of Peter Evans (1995) theorises from the comparative institutional perspective the state-business relations with respect to industrial transformation. In his view, variations in the contradictory combination of autonomy ( o r c o r p o r a t ec o h e r e n c e ) a n de m b e d d e d n e s s , n a m e l y embedded autonomy , c r e a t e differential degrees of developmental capacity. Evans differentiates three ideal-typical states according to their different balances of corporate coherence and connectedness: developmental, intermediate, and predatory states. 8 First, the presence of an amalgam of meritocratic selection, intensive socialisation, and quasi-primordial ties in the ideal-typical developmental state provides critical reinforcement for the compliance to organisational norms and sanctions. By contrast, second, its absence makes it harder to prevent devolution into i n d i v i d u a lm a x i m i s a t i o na n dt h e m a r k e t i s a t i o n o fs t a t eo f f i c e s .T h ei n c o h e r e n t despotism of the ideal-typical predatory state combined undisciplined internal s t r u c t u r e sw i t ha n a r c h i ce x t e r n a l t i e sr u l e db yt h e i n v i s i b l eh a n d o fc l i e n t e l i s t i c exchange relations. Third, the ideal-typical intermediate state has bureaucracies that are not so patrimonial but still lack the corporate coherence of the developmental ideal-type. The intermediate apparatus confronts more complex and divided social

T h ec o n c e p t o f p r e d a t o r ys t a t e u s e db yE v a n si sq u i t ed i f f e r e n t f r o mt h ew a yt h et e r mi s

u s e db y Ma r g a r e tL e v iw h o s e p r e d a t o r y s t a t ei ss i mp l ya r e v e n u e ma x i mi s e r( E v a n s 1995:255n3, cf. Levi 1981, 1988). 10

structures with less well-developed bureaucratic capacity and less well-organised external ties. According to Evans, developmental states played a central role in producing the organised industrial classes they needed as counterparts. The predatory state also helped produce the counterpart that it needed: a disorganised and divided civil society incapable of resisting predation. The case of intermediate states varies with the b a l a n c e o f a u t o n o m y a n de m b e d d e d n e s s . I nB r a z i l s c a s e , t h e s t a t e l a c k e dt h e o v e r a l l coherence and cohesiveness, and thus rendered embeddedness problematic. Tight symbiosis between the state and the traditional oligarchy transformed a modernising p r o j e c t i n t om e a n s o f s u p p o r t f o r t r a d i t i o n a l p o w e r . I nI n d i a sc a s e , t h en o r m s a n d ideology of the bureaucracy were designed to avoid the pitfalls of being too closely tied to a structure full of co n t r a d i c t o r yd e m a n d s . I n v e n t i n g t h e p r i v a t e c o u n t e r p a r t s necessary for dynamic industrialisation was correspondingly difficult (ibid. 58, 70-3). Developmental outcomes depend on what the states do with the capacities they have and what roles they play. Evans further distinguishes four patterns of state i n v o l v e m e n t i nt e r m s o f r o l e s : ( 1 ) t h ecustodian state identifies regulatory efforts that privilege policing over promotion; (2) the demiurge state establishes enterprises that compete in markets for norma l p r i v a t e g o o d s ; ( 3 ) t h emidwifery state tries to assist in the emergence of new entrepreneurial groups or to induce exist existing groups to venture into more challenging kinds of production, and (4) the husbandry state consists of cajoling and assisting private entrepreneurial groups in hopes of meeting changing global challenges. Most states combine several roles in the same sector, and sector outcomes depend on how roles are combined. Evans argues that differences in overall structures were reflected in the roles adopted in the sector. Embedded autonomy made pursuit of the midwifery-husbandry sequence easier; its relative absence made it hard to get from midwifery to husbandry. Lack of embeddedness increased the attractiveness of the demiurge role and exaggerated custodial role. Once adopted, roles were differentially effective. Evans concludes that the key to facilitate the growth of a new sector was midwifery, creating the conditions that led entrepreneurial groups to identify their interests with the growth of the sector and commit the resources to it. Restrictive regulation played a part in midwifery, but when detailed custodial regulation became the dominant form of state involvement, the capacity of state agencies was overwhelmed. To be effective, state involvement had to move from midwifery to husbandry (ibid. 13-16, 58, 70-3, 77-81, 209-10).

11

The Pragmatic Paradigm: Summary and Critiques From the viewpoint of the pragmatists, the East Asian developmental states can be characterised as follows. First, the state is Listian in that its characteristic policy paradigm strongly contrasts with the doctrines of laissez-faire and comparative advantage. The state is not only a banker mediating financial resources but also an entrepreneur initiating investment and growth either in person or by maximising entrepreneurial decision-making. Second, the state is workfarist in that wages are deemed to be costs of production crucial for late industrialisation.9 To maintain its long-term competitive advantage, a workfarist state has to hold down the growth of wages well below that of labour productivity. Third, the state is disciplinary in that it disciplines business groups to exact performance standards from them in exchange for its subsidies, and disciplines other social groups, especially the working class, to downplay their demands in order to maintain national competitiveness. Fourth, the state is disciplined so that it can prevent itself from the abuse of power (Amsden 1989:148). Rent-seeking or predatory behaviours are restricted to such an extent that its disciplinary measures upon broader social groups could produce a net effect in favour of development. Finally, the state is embedded in that industrial policies are formulated and coordinated through informal and formal networks and institutions between the state and business groups. Thus, how to evaluate such a Listian, workfarist, disciplinary, disciplined, and embedded state? First and foremost, the pragmatist paradigm has been criticised for its reification and personification of the state with which the state appears as a strong animator standing above the society. The conflation of the state as an institutional ensemble with officialdom not only reproduces the state-society dichotomy but also celebrates an o m n i p o t e n t s t a t e b u r e a u c r a c y . L e s s o n s f r o ms u c c e s s f u l c a s e s a r e d r a w n to inspire the state elites rather than empower the popular sector excluded from power in the process of development. 10 Second, an institutional ensemble cannot automatically produce corporate coherence and developmental outcomes. Successful late industrialisation requires both solidarity on the part of the state elites and mobilisation on the part of the population. One needs to probe deeper into what animates the animator and what disciplines the disciplinarian? Third, this paradigm t e n d s t oa s s u m e a p r o b l e m a t i c l o w -w a g e h y p o t h e s i s t h a t emphasizes the role of labour repression and low-wage policy (Weiss and Hobson
9

By workfarist I mean not that a precondition of welfare support for the able-bodied is to work. Instead, following Jessop (2002), I refer to social policy characteristic of more productivist and cost-saving concerns. (cf. Jessop 2002:258)
10

Wa d e s t e np r e s c r i p t i o n s a r et h eb e s t e x a mp le (see Wade 1990, chapter 10). 12

1995:158-9). Apart from labour repression, however, the East Asian developmental states had rapidly rising living standards and relatively equal income distribution. Amsden is sensitive enough to notice the fact that average wages have risen faster in K o r e a t h a n i n o t h e r N I C s , w h i l e c o n c l u d i n g t h a t w h a t i s a w a i t i n g s y s t e m a tic analysis i s h o wm u c hl a b o u r r e p r e s s i o ni s c r i t i c a l f o r r a p i dg r o w t h ( 1 9 8 9 : 1 4 8 ) . L a s t b u t n o t the least, labour repression from the perspective of this approach implies an attempt at g e t t i n gt h er e l a t i v el a b o u rp r i c e s r i g h t so as to o f f s e t p o s s i b l e p r i c ed i s t o r t i o n caused by the demands of the working class. Therefore, ironically, the market-augmenting paradigm assumes implicitly a market-conforming presumption: in the final analysis, the invisible hand rules all.

2.2 The Voluntarist Developmental State

Johnson: the Will to Develop The voluntarist version of Johnson (1982) offers a historical account of meaning o ra ne m p a t h i c u n d e r s t a n d i n g ( Verstehen) of heterodox meaning behind the actions of Japanese policy-makers: what circumstances and worldviews c o m p e l l e dt h o s em e nt om o u l dt h ei n s t i t u t i o n s t h a t c r e a t e dJ a p a n s f a m e di n d u s t r i a l policy? (Woo-Cumings 1999:2) In this view, the provenance of the Japanese developmental state lay essentially in the urgent political and nationalist objectives of the l a t e d e v e l o p e r , c o n c e r n e d t o p r o t e c t a n d p r o m o t e i t s e l f i n a h o s t i l e w o r l d . I t a r i s e s from a desire to assume full human status by taking part in an industrial civilisation, participation which alone enables a nation or an individual to compel others to treat it a se q u a l ( J o h n s o n1 9 8 2 : 2 5 ,o r i g i n a l italics). The Japanese translations of d e v e l o p m e n t a l s t a t e ( hatten-shiko-kata koka o r t h e d e v e l o p m e n t -minded state) and r e g u l a t o r ys t a t e( kisei-shiko-kata-k o k k a or the regulation-minded state) highlight this voluntarist connotation (Johnson 1999: 44). T h u s , J o h n s o n sMITI accounts for how the Japanese, faced with the harsh reality of a world dominated by the Western powers, devised a system of political e c o n o m yt h a t w a s b o t ha d m i r a b l e a n d d a n g e r o u s . T h e Japanese state was, like the Korean and Chinese states, a clear-headed one that chose economic development as the means to combat Western imperialism and ensure national survival. Like H i r s c h m a n( 1 9 5 8 ) , J o h n s o np l a c e s t h e b i n d i n ga g e n t o f E a s t A s i a nd e velopment in b o t ht h ec o n t e x t o f l a t ed e v e l o p m e n t a n dt h eE a s t A s i a ns e t t i n go f revolutionary nationalism. In his early work (1962), Johnson first articulated his ideas about the nature of nationalism in modern Asia, the importance of war in establishing
13

institutions of social mobilisation, and the role of ideology in revolutionary social transformation. He argues that the Communist rise to power in China should be understood as a species of nationalist movement, and that Chinese peasants became unified and politicised as a result of the drastic restructuring of Chinese life which followed the Japanese conquest of north and east China. The Communist Party was seen as a leader of a war-energised, radical nationalist movement; its ideology was an adjunct to Chinese nationalism. Elsewhere in his work (1964) on comparative c o m m u n i s m , J o h n s o nn o t e dt h e g o a l c u l t u r e o f c o m m u n i s m , w h e r eak e yp r i o r i t y was the maintenance of institutions necessary for achieving national goals (Woo-Cumings 1999:2-10). The analysis of nationalism, wartime social mobilisation, and goal culture in a communist society thus becomes the pillars of the Japanese model. For Johnson, J a p a ni sac a s eo f an economy mobilised for war but never demobilised during peacetime . Wa r i n A s i a w a s t h e critical experience that defined the worldview of the men who dominated MITI through 1975. Born in the middle to late Meiji era, virtually all of them survived the war and continued to work for the government as if they were still uniformed military officers. I t i s i nt h i s s e n s e t h a t t h e d e v e l o p m e n t a l state actually exists in time and space in East Asia and also exists as an abstract generalisation about the essence of the East Asian examples. It is particular and generalisable .F o rJ a p a n ,e c o n o m i cn a t i o nalism is an attempt to correct status inconsistency with the US and the European countries. Thus, the Japanese case is neither unique, exceptional, purely cultural-based, irrational, nor inherently unstable (Johnson 1964:25, 1982:308, 1995:10; Woo-Cumings 1999:2-10). Although Johnson ignores the extent to which participation in industrial civilisation enabled Japan not merely to compel others to treat it as equal but also to compel and treat others as inferior, his voluntarist model of the Japanese developmental state is undoubtedly more penetrating than the foregoing pragmatic one since it takes into account national-specific historicity.

Woo-Cumings: Economic Nationalism I n h e r s t u d y o n S o u t h K o r e a s f i n a n c i a l s t r u c t u r e a n d i n d u s t r i a l i s a t i o n , Me r e d i t h Woo-C u m i n g s ( Wo o ) ( 1 9 9 1 ) l o c a t e s K o r e a s i n d u s t r i a l i s a t i o n i n t h r e e c o n t e x t s . F i r s t , K o r e a se c o n o m i cg r o w t hr e s e m b l e s , b o t hi nt h eambience and substance of its i n d u s t r i a l i s a t i o n , late development i nJ a p a na n dc o n t i n e n t a l E u r o p er a t h e r t h a nt h e late-late development o f L a t i n A m e r i c a . S e c o n d , K o r e a s promontory position in the cold war requires an analyst to mesh domestic with international politics. This means
14

that Korea makes no sense without paying attention to the world system and security structures. Third, financial structure can be used to test the state efficacy because it is the overarching mechanism guiding the flow of savings and investment, delimiting the options of industrial policy, and managing financial flows to different industrial sectors. The South Korean model of the state, Woo-Cumings suggests, will become more apparent when we look at the categories of financial mobilisation and allocation and their social consequences. Mobilisation means the gathering together of foreign and domestic resources by the state, thus enabling its capacity. Allocation means the modalities by which the state directs these resources in terms of its own goals. And s o c i a l c o n s e q u e n c e s r e f e r t o t h e s t a t e s c a p a c i t y t o r e s t r u c t u r e s o c i e t y , a n d t o r e s i s t o r be insulated from domestic social forces (Woo 1991:5-7, 17-8). In the postwar period, a nationalism that so incessantly demanded popular economic sacrifices and compliance was based, in the case of South Korea and Taiwan, on the military standoff with their quondam compatriot states. This insight, Woo-Cumings argues, has long eluded American social scientific work on South Korea and Taiwan, two places born of civil wars that have not ended. The Cold War against their respective enemies continues to define the parameters of state action in these countries, subsuming the development of social and economic institutions to e x i g e n c i e s o f n a t i o n a l s u r v i v a l . Mo r e o v e r , t h e s t a t e s d i s p o s i t i o n o f r e s o u r c e s t h r o u g h non-competitive means, access to loans in a hyperinflationary milieu, import quotas and licenses, and the procurement of non-competitive government contracts is the so-c a l l e d p o l i t i c a le c o n o m yo fr e n t -s e e k i n g . H o w e v e r , t h ed y n a m i c so fK o r e a n political economy were such that economic efficiency lost in rent-seeking was recovered in the political realm, with the state and business sustaining each other like Siamese twins, buttressed by the police and a huge bureaucracy. On the one hand, investment in lumpy projects with a long gestation period, and with an uncertain future market to boot, cannot be undertaken by the private sector, unless accompanied b yt h e s t a t e s w i l l i n g n e s s t os h o u l d e r t h e r i s k , o r t op r o v i d e s i g n i f i c a n t s u b s i d y . T h e credit-based financial structure made possible such industrial sectional upward mobility. In such a structure, firms rely on bank credit for raising finance beyond retained earnings. On the other hand, Korean entrepreneurs were forced to learn that collaboration with political authority was the essential prerequisite for business survival and expansion (Woo 1991:11, 66-9, 187; Woo-Cumings 1999:10, 23-4; cf. Zysman 1983). Although the Cold War imparted urgency to the developmental projects in Northeast Asia, it was not a sine qua non for the rise of the developmental state. What was critical is the role of nationalism. While the Cold War alliance was not the cause
15

of authoritarianism in Korea, it provided the space for authoritarianism to embed itself. B u t , o n c e i n m o t i o n , P a r k s a u t h o r i t a r i a n i s mm o v e d t o t h e b e a t o f a d i f f e r e n t d r u m the beat of nationalism. Koreans had a mindset that found greater virtue in self-reliance than in mere thrift, in nationalism than in individualism. In this sense, the developmental state is an embodiment of a normative and moral ambition to use the interventionist power of the state to guide investment in a way that promotes a certain s o l i d a r i s t i c v i s i o n o f t h e n a t i o n a l e c o n o my ( L o r i a u x 1 9 9 9 : 2 6 9 -71). The rationale for such an industrial strategy was primarily political and security-oriented, an economic nationalism associated with the goal of national self-sufficiency. Such top priority to n a t i o n a l e f f i c a c y w a s t h e c a s e h i s t o r i c a l l y i n E u r o p e a n c o n t i n e n t a l a n d J a p a n e s e l a t e industrialisation. Woo-Cumings suggests that the lack of external security concern may partially explain why the convulsive lan, or the spurt of industrialisation geared toward the production of capital goods did not take place in Latin America with the same intensity and compression (Woo 1991:11, 81, 117; Woo-Cumings 1999:23-4).

Evans: the Virtue of True Bureaucracy The voluntarist version of Evans (1995) highlights the virtue of true bureaucracy. I nh i s v i e w , J o h n s o n s ( 1 9 8 2 ) a c c o u n t f o r t h e s u c c e s s o f t h e J a p a n e s e d e v e l o p m e n t a l s t a t ei s c l e a r l yc o n s i s t e n t w i t ht h e We b e r i a nh y p o t h e s i s , e s p e c i a l l yw i t hr e s p e c t t o the special status of MITI officials that Weber felt was essential to a true bureaucracy. O nt h e o n e h a n d , MI T I i s t h e g r e a t e s t c o n c e n t r a t i o no f b r a i n p o w e r i nJ a p a n . J a p a n s startling postwar economic growth occurred in the presence of a powerful, talented, and prestige-l a d e ne c o n o m i cb u r e a u c r a c y . MI T I so f f i c i a l sf o l l o wl o n g -term career paths within the bureaucracy and operate generally in accordance with rules and e s t a b l i s h e dn o r m s .O nt h eo t h e rh a n d ,J a p a n sc a s eg o e sb e y ond the Weberian assertions with regard to the necessity of a coherent, meritocratic bureaucracy. Highly selective meritocratic recruitment and long-term career rewards create commitment a n das e n s eo f c o r p o r a t ec o h e r e n c e t h a t g i v e s t h e s ea p p a r a t u s e sac ertain kind of a u t o n o m y ( E v a n s 1 9 9 3 : 1 2 -3, 48-9; cf. Johnson 1982: 20, 28). E v a n su s e st h et e r m a u t o n o m y d i f f e r e n t l yf r o mt h eMa r x i a nc o n c e p to f r e l a t i v e a u t o n o m y ( c f . P o u l a n t z a s 1 9 7 3 ) . H o w e v e r , t ot h e e x t e n t t h a t a u t o n o m y i s d e f i n e da s c o r p o r a t ec o h e r e n c e a n d n o n -b u r e a u c r a t i ce l e m e n t s o f b u r e a u c r a c y i n D u r k h e i m i a nt e r m s , E v a n s i a n a u t o n o my s h o u l db eu n d e r s t o o da so r g a n i s a t i o n a l norms, self-discipline and self-sanctions that prevent government officials from

16

falling into individual maximisation and the marketisation of state offices.11 Thus e m b e d d e da u t o n o m y i sb e t t e ru n d e r s t o o da s embedded discipline .T h et e r m e m b e d d e d n e s s a l s os e e m st oc o n f l a t et h eu m b i l i c a l t i e sb i n d i n gt h ea u t h o r i t a r i a n regime and chaebol with other forms of ties (Woo-Cumings 1996). Finally, from the Weberian viewpoint of the proto-developmental state, Evans also conflates the substantive rationality of state bureaucracy assuming r a i s o nd t a t as a criterion for economic policy with the formal rationality of state bureaucracy as the best administrative principle for the rational or efficient pursuit of organisational goals, since the operation of official routines cannot automatically produce policy oriented to industrial transformation.

The Voluntarist Paradigm: Summary and Critiques For the voluntarist paradigm, the East Asian developmental state first and foremost resembles the European continental model of late industrialisation rather than the Latin American model of late-late development. This can be shown in three respects. First, the East Asian developmental states are to varying degrees security states. This depends on their postwar geostrategic position in the Cold War order and, at least for South Korea and Taiwan, on the stalemate with their respective compatriot states in an ongoing civil war. This dual war-footing structure enabled a political capitalism in Weberian sense, namely an economy mobilised for war but never demobilised during peacetime (cf. Weber 1946:66-67). Second, the East Asian developmental states are solidaristic states characteristic of the revolutionary nationalism that was born of war and imperialism. The urgency of industrialisation judged by r a i s o n d t a t , rather than economic efficiency, provided the state elites with a solidaristic vision . I nt h i s s e n s e , t h e s t a t e s w i l l t od e v e l o pi s a n o r m a t i v e a m b i t i o n that to some extent symbolises national collective aspiration (cf. Hirschman 1958, 1965). Thus, third, the East Asian developmental states could be considered as embodied nationalism in that their economic development is deemed as the means to restore national status. In economic nationalism, it is state efficacy but not distributive justice that commands the top priority of economic policies. By contrast, in the nationalist populism of La t i nA m e r i c a ,p o p u l a rp r e s s u r e sr e q u e s tt h es t a t e s intervention to maintain wage levels and even to raise them. In this sense, the East Asian developmental state forms a striking contrast to the Latin American

11

C o mp a r eD u r k h e i m s n o n -c o n t r a c t u a l e l e me n t o f c o n t r a c t ( D u r k h e i m1 9 8 3 ) . 17

developmentalist state (un desarrollista estado) (cf. Cardoso and Faletto 1979). In s h o r t , e s s e n t i a l e l e m e n t s a l o n e , a s i d e n t i f i e d b y t h e p r a g m a t i c a p p r o a c h , a r e f a r f r o m sufficient to constitute a successful developmental state. It is the characteristic economic nationalism and political capitalism, among others, that adheres the East Asian developmental states to the continental European model of late industrialisation. How, then, should we evaluate such a security, nationalistic, and solidaristic state? An empathic understanding of the East Asian developmental states undoubtedly embraces more analytical potentials and theoretical richness but also raises some problems. First, a voluntarist interpretation either overestimates the degree of social consensus or obscures the role of state elites. Little attention has been paid to the state e l i t e s r e n t -seeking manners. By this I mean that attention should be paid to the pattern of corruption since the co-existence of rent-seeking behaviours and rent-creating efforts in the East Asian NICs has also been an intricate puzzle. Second, which nationalism, and whose nationalism? Nationalism animates merely those who f e e lt h a tt h e yb e l o n gt o as h a r e d i m a g i n e dc o m m u n i t y .F e ww o u l dd e n yt h e applicability of solidaristic nationalism to Japan and Korea, while it is less so in the case of Taiwan, especially with regard to its contentious nation-statehood. Finally, there is no direct translation of security imperatives or nationalistic lan into the goal of state actions. How these interpretive aspects are articulated in a developmental direction thus call for further explanation.

Concluding Remarks

Although the approach in terms of the d e v e l o p m e n t a ls t a t e has yielded considerable fruits in understanding the dynamic of East Asian development, it has long been considered as a generic emphases upon the role of the state in late industrialization rather than a coherent theoretical approach. This might due to diverse principles of analysis and to the varying scope of its denotation, especially in regard to the interpretive aspects of the state elites and the extent to which national-specific historicity is taken into account. Such conceptual heterogeneity further renders individual theorists a straw-man representative of the w h o l e a p p r o a c h . By discerning with a Weberian razor between two paradigms of the generic approach, the author argues that a voluntarist paradigm seems to be more promising
18

since it stresses the interpretive aspect of the state and thus call for deeper inquiry into the national-specific historicity of particular country. Moreover, by taking the interpretive aspect of the state serious, the voluntarist paradigm offers more penetrating perspective to the analysis, and therefore the desirable possibility, of the post-developmental state.

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