Book Review Edited by Shahrukh Rafi Khan and Jens Christiansen, Towards New Developmentalism, Market as Means Rather than Master, Routledge, Taylor and Francis Group, London and New York

Abstract

Edited by Shahrukh Rafi Khan and Jens Christiansen, Towards New Developmentalism, Market as Means Rather than Master, Routledge, Taylor and Francis Group, London and New York, 2011, ISBN13: 978-0-415-77984-5, pp 286. Neo-liberalism has virtually seen its day and over the last three decades a significant amount of scholarship has evolved that provides a viable alternative to this paradigm. Further, the global financial and economic crisis plaguing countries the world over from 2007-2009 has led to the exploration of alternatives that are presented in this book by scholars. The focus of this volume which came from a conference at Mount Holyoke College in 2008, is on an economic development strategy that improves on neo-liberalism, terming it vnew developmentalism'. Hence not only is it simply a critique of the neo-liberal strategy, but provides an alternative that is spelt out. In a nutshell, it is a form of as Khan states 'developmental pragmatism', policy-oriented, institutional development and involvement with economic globalization; and equally importantly, the market is viewed as a means to be curbed for this alternative strategy rather than master whose commands are to be succumbed to. Wade in his piece states that there is ample evidence questioning the argument that market liberalization should be the core of development strategy. He says that the global crisis is a wake-up call, and the experience calls for rethinking the proper role of states and markets in developing as well as developed countries. He elucidates that there is a consensus view that it was not enough to move towards free markets because the institutions necessary for free markets to operate well are invariably weak in developing countries. Part II of the book dwells on the overall theme of new developmentalism, while Part III offers a criticism as well as prescriptions. Developmentalism involves an activist state with selective industrial policy. Industrial policy, as Khan explains, is defined as Strategically creating comparative advantage in industries that embody dynamic efficiencies in low- and middle-income countries' (p4). New developmentalism points out that export promotion and import substitution industrialization are complementary rather than mutually exclusive. Yet another difference in new developmentalist thought is the emphasis on governance capacities to render the state effective. Chang in the next chapter highlights the fact that development has now come to imply something quite different from what it originally meant. Development has come to mean poverty reduction, the provision of basic needs, betterment of individuals and the like; that is anything but what the author envisages as development. As he puts it, Hamlet without the Prince of Denmark! This point of view is not in synchrony with the reality of development. In fact, says Chang, development requires 'systematic efforts to acquire and accumulate better productive knowledge through the construction of better organizations, the crossfertilization of ideas within it, and the channeling of individual entrepreneurial energy into collective entrepreneurship' (p 55). The crux of the argument of Reinert et al is that any policy aimed at salvaging nation-states from failing, should not just treat the symptoms and instead the causes, and analyze how to make the productive structure of failing states adopt the structure of developed ones. …