Friedrich List’s National Political Economy and the Post-War East Asian Development Experiences

Abstract

This paper is to trace the historical origin of the idea that the state (government) can and should adopt a series of industrial policies as well as protective measures to nurture domestic infant industries in order to show how this economic theory sheds new insights into previous debates over the role of East Asian developmental states. Many scholars on the East Asian development experiences have correctly pointed out developmental states’ industrial and trade policies for promoting outward export-led growth. However, least attention was paid to the (historical origin of the) economic theory that justifies this highly unorthodox market intervention by the state. The author claims that the original idea from the history of economic thought is best exemplified by the early 19th century German political economist Friedrich List, and examines how his policy proposals for the infant industry protection have been used by almost all advanced economies since then. This historical investigation of economic thought and actual capitalist economic development process can offer a new angle through which we can critically evaluate some of previous debates over the validity and replicability of the state industrial policies for developing countries nowadays. JEL: B3, B15, O24, O25, O53 Keyword: Friedrich List, infant industry protection, comparative advantage, East Asian development model, developmental state, industrial policy