Concept Of Developmental State Research Articles

Nickel Downstreaming in Indonesia: Reinventing Sustainable Industrial Policy and Developmental State in Building the EV Industry in ASEAN

The developmental state concept, which entails proactive government support for economic structural transformation, remains contentious today. Some scholars vigorously argue that government intervention in the economy was indispensable to the success of East Asian countries, whereas others are critical of the practice, arguing that it tends to neglect sustainability dimensions and contending that government intervention in the market is often unwarranted. In this study, the authors analyse how Indonesia’s nickel ‘downstreaming’ strategy represents a new developmental state model that considers the aforementioned discourse on the merit of industrial policy. The new model aligns the classical developmental state concept with the need to address pressing environmental and social concerns, which are widely recognized as being of paramount importance. Through an integrative literature review and secondary data analysis, the study reveals that Indonesia’s downstreaming strategy does exemplify a new developmental state model, as the government does not aim just to stimulate economic growth but also to contribute to the energy transition with EV battery manufacturing and to invigorate social inclusion by ameliorating inequality particularly in Eastern Indonesia. Nevertheless, the application of the new developmental state model through the downstreaming strategy uncovers some areas where improvement is necessary. The policy needs to be continuously refined so that its negative environmental and social externalities can be mitigated, and it can serve as a better example of a new developmental state model.

Africanization of Developmental State Model: On Rwanda’s Industrial Policy and Institutional Arrangements

ABSTRACT We examine whether the Rwandan state’s choices emulate the East Asian model of developmental state. Our study unveils that Rwanda possesses a central developmental state feature—industrial policy with institutional arrangements—with an Africanization of the developmental state concept. We challenge opinions that oppose the replicability of this model outside East Asia by highlighting the importance of the cross-cutting feature of adaptation. Rwanda followed a flexible approach that allowed adjusting to its own context instead of sticking to a strict economic plan. The unique policy independence case of Rwanda raises questions about the possibility for other African nations to imitate its developmental experience.

The Black Industrialist Programme’s prospects to the advancement of developmental state in South Africa

Background: South Africa has made considerable progress in terms of economic development since the dawn of democracy in 1994. However, the pace and distribution of that progress have not been equitably reflected across all demographics, especially between black and white people. With a decline of manufacturing, the ‘developmental state’ has featured as a strong theme to try and reignite industrialisation in the country. Under this framework, one of the policies driven by the South African government is the Black Industrialist Programme, which aims to increase the manufacturing output while empowering black people.Aim: To investigate the appropriateness of the Black Industrialist Programme as a policy to advance the developmental state framework in South Africa.Setting: Experience in East Asia regarding developmental states led countries like South Africa to believe that they can also implement such policies to enable the country to industrialise.Methods: The study employed qualitative research methods using open-ended interviews for primary data and documents collected from various sources for secondary data. The study’s qualitative description of the findings derives from the themes that emerged from the research and which employed open-ended questions and research techniques in line with such research techniques.Results: Findings show that the Black Industrialist Programme policy will have an impact, as its funding model is a significant shift from past practices by assisting aspiring industrialists through grants and preferential procurement measures. However, the study argues that the shift from focusing on general industrialisation to narrowing it to black industrialisation brings with it new constraints in advancing a developmental state.Conclusions: The research concludes that the programme will contribute to the developmental state concept’s progress but will be limited in praxis because the state does not possess a holistic overarching economic developmental plan.Contribution: The study contributes to the analytical discourse of developmental states by offering context-specific analysis of industrialisation paths for societies addressing racial and economic inequality.

O conceito do Estado Desenvolvimentista revisitado

ABSTRACT The article lists as a hypothesis that the concept of Developmental State has recently undergone variations and needs to be revisited and updated, but not discarded; on the contrary, it remains extremely important nowadays. In order to test its hypothesis, the article adopted as a technical-methodological procedure a systematic approach of bibliographic sources, intending to conduct a State-of-the-Art Study about the Theory and the concept of the Developmental State. The results obtained were that the concept of Developmental State remains elementary, but it has become more complex, intricate, aggregated and dynamic. The article dares, therefore, to present a new concept of Developmental State.

The Black Industrialist Programme’s prospects to the advancement of developmental state in South Africa

Background: South Africa has made considerable progress in terms of economic development since the dawn of democracy in 1994. However, the pace and distribution of that progress have not been equitably reflected across all demographics, especially between black and white people. With a decline of manufacturing, the ‘developmental state’ has featured as a strong theme to try and reignite industrialisation in the country. Under this framework, one of the policies driven by the South African government is the Black Industrialist Programme, which aims to increase the manufacturing output while empowering black people. Aim: To investigate the appropriateness of the Black Industrialist Programme as a policy to advance the developmental state framework in South Africa. Setting: Experience in East Asia regarding developmental states led countries like South Africa to believe that they can also implement such policies to enable the country to industrialise. Methods: The study employed qualitative research methods using open-ended interviews for primary data and documents collected from various sources for secondary data. The study’s qualitative description of the findings derives from the themes that emerged from the research and which employed open-ended questions and research techniques in line with such research techniques. Results: Findings show that the Black Industrialist Programme policy will have an impact, as its funding model is a significant shift from past practices by assisting aspiring industrialists through grants and preferential procurement measures. However, the study argues that the shift from focusing on general industrialisation to narrowing it to black industrialisation brings with it new constraints in advancing a developmental state. Conclusions: The research concludes that the programme will contribute to the developmental state concept’s progress but will be limited in praxis because the state does not possess a holistic overarching economic developmental plan. Contribution: The study contributes to the analytical discourse of developmental states by offering context-specific analysis of industrialisation paths for societies addressing racial and economic inequality.

Bringing the developmental state back in: explaining South Korea’s successful management of COVID-19

South Korea had the largest number of confirmed cases of COVID-19 after China by February 2020. This situation changed dramatically in less than two months as it effectively managed the pandemic without imposing a nationwide lockdown. Furthermore, Korean pharmaceutical companies quickly manufactured sufficient test-kits and other COVID-19 essential medical devices to meet domestic demand and exported them to more than one hundred countries, including developed countries, amid global shortages. What explains South Korea’s success story? Drawing on the developmental state concept, I argue that South Korea’s success story can be attributed to 1) the early creation of a health official-led pilot agency; 2) the government’s intervention for rapid production and export of medical equipment; 3) the distinct state-society relations. In doing so, contrary to the declinist literature, this study reveals that the Korean state’s institutional capacity has not declined. It also illustrates that the developmental state seems to be an effective system in dealing with a pandemic and promoting economic activities during the crisis. However, it is yet to be seen how Korea will deal with future challenges arising from the new wave. This study also suggests how the Global South can learn lessons from the South Korean experience.

Developmental State or Economic Statecraft? Where, Why and How the Difference Matters

ABSTRACT A peculiar set of discontinuities and contradictions has recently emerged in the institutions-oriented literature that spans comparative capitalism, developmental states, and strategic techno-industrial governance. Around the globe, developmental states are reported to be both disappearing (chiefly in East Asia) an proliferating (not least in the United States). These depictions, we argue, are indicative of how the developmental state concept has become unmoored from its theoretical and historical grounding, and inadvertently politicised in scholarly debate. The concept has thus become unproductive (even if still of heuristic value). In this paper we offer a fresh way of thinking about the state’s activism in both Korea and the United States. Specifically, we refurbish the idea of statecraft as it plays out in two very different national agendas, and as it is shaped by contrasting state-society relations. By paying attention to the differential international drivers and state ambitions, our analysis delivers a new and improved understanding of the character, purpose and capacities of the state in each national setting and, by implication, of their commitment and ability to confront specific challenges.

The state and the extractive industries in Australia: Growth for whose benefit?

This paper contributes to an understanding of the state as a critical political-institutional structure that impacts the growth of extractive industries and their share in national economic activity as well as the distribution of economic rewards from extractive industry development. The paper draws on frameworks which distinguish between a neo-liberal state and a developmental state incorporating human capability goals. The paper shows that in Australia, the neo-liberal state has been highly interventionist in promoting extractive industry growth by forming strong alliances with key resource firms, subsidising mining exploration and providing key capital-intensive infrastructure which has supported the de-risking of mining investment. However, state activism has not sought to deliver a balanced distribution of benefits and costs from resource industry growth, according to an expanded developmental state concept focused on human capability development.

The transformation of Saudi Arabia’s rentier state and ‘the international’

ABSTRACTThe Saudi state is conventionally characterized as a neo-patrimonial rentier state that emerged out of a combination of traditional domestic social structures and oil wealth. However, the conceptualization of the rentier state as endogenously generated based on ‘traditional’ society is an example of Eurocentric institutionalism. In this article, I draw on literature that has sought to ‘internationalise’ the East Asian developmental state concept to show that Saudi rentier state formation has historically always been ‘international’. Thus, while Crown Prince Muhammad bin Salman claims that his current economic reforms are opening up Saudi Arabia’s rentier economy to globalization, the restructuring of the rentier state is only the latest episode in this process, which was shaped by the colonial era in the Gulf and the transformation of an American-dominated global economy since World War II. The ‘internationalisation’ of the rentier state concept thereby also holds wider lessons for other neo-Weberian statist concepts such as failed or weak states.

The User Pays's Principle and the Electricity Sector: A South African Case

This paper discusses the user pays's principle (UPP) within the South African developmental state concept. The essence of the paper is to ascertain whether UPP can be implemented in the electricity sector without necessarily harming the developmental state agenda taking into account the challenges of inequality, unemployment and poverty in South Africa. In this paper, we present the arguments in support of the UPP in the electricity supply industry (ESI) and its building blocks. The paper analyses the role of regulatory authority in the implementation and adoption of the UPP. Finally, the paper analyses the role of UPP in the developmental state concept and the challenges of implementing it. The analysis shows that adoption of inclining block tariff (IBTs) was based on the individual's perceived ability to pay and not on UPP while the free basic electricity (FBE) policy is a government-funded initiative meant to provide electricity to poor households. The paper also found that the ESI currently has high levels of inefficiencies in production and use, procurement and operation of utilities, cross-subsidisation, infrastructure and maintenance backlogs which may hinder the full implementation of UPP. Lastly, although the full implementation of UPP could incentivise efficient operation of the ESI and attract the much-needed investment in the sector, the UPP system will pose serious challenges considering the country’s three main problems: inequality, unemployment and poverty.

The Dilemmas of the Developmental State: Democracy and Economic Development in Brazil

Abstract Is it possible to reconcile one of the institutional strategies to promote development, known in the literature as “the developmental state”, with contemporary democratic systems of government? If so, what are the challenges, trade-offs and potential gains that such an effort may entail? The vast literature on “the developmental state” claims that it is more likely to succeed under autocratic regimes. While a “democratic developmental state” seems possible in theory, there is very little empirical evidence to show how it would work in practice. This article tries to contribute to this debate by analyzing the case of Brazil, a country that transitioned from a military dictatorship to a democratic regime in the late 1980s, and has been moving towards increasing state interventionism since 2002. While the policies implemented by the “New Developmental State” in Brazil have been explored in the academic literature, their democratic dimensions remain unchartered. There has not been a detailed analysis about how the autocratic features that characterized the developmental states in Latin America from the 1950s to the end of the 1980s (i. e. political exclusion of the majority of groups, and control of economic policies by an elite) have played out in its renewed version. Understanding the interactions between the New Developmental State and the democratic system not only allows for a better understanding of the Brazilian case, but it also sheds light on one of the most important theoretical questions raised by the development literature: is a democratic developmental state possible? Based on the Brazilian case study, we argue that it is not hard to reconcile “the developmental state” with a thin conception of democracy, i. e. with free and fair elections. In contrast, the picture is more complex if the question is whether it is possible to reconcile developmental policies with a thicker conception of democracy that includes demands for transparency, protection of minority groups, a system of checks and balances, and due process. To develop this argument, this article is divided in three parts. In the first part, we provide an overview of the literature, outlining the concept of developmental state, and the tensions that the developmental state policies may create in a democratic setting. In the second part, we focus on the Brazilian case (the “new developmental state”), exploring how these tensions played out in three concrete settings: industrial policy, infrastructure sectors, and social policies. In the third part, we identify some of the research implications of the challenges identified in the Brazilian case, especially for future law and development scholarship.

The developmental state and social enterprise in South Korea

Purpose– This paper aims to examine the distinctiveness of South Korean social enterprises from a historical institutionalism perspective. From this perspective, the author focuses on the proactive roles played by the government in the process of emergence and formulation of social enterprises in South Korea. The author roots this paper in the concept of the developmental state and examines how this concept applies to newly emerging social enterprises in South Korea.Design/methodology/approach– This paper first introduces the process of South Korean social enterprises’ emergence as an independent phenomenon. The author explains the process with a link to governmental actions, such as the introduction of public programs and government acts. Second, this paper introduces the concept of developmental state which captures the proactive role of the state in social, economic and political development in South Korea. Third, this paper applies the institutional framework proposed by Kerlin (2013) to see how the South Korean social enterprise model can be located from a comparative perspective and how the South Korean model can contribute to the expansion of the existing framework.Findings– This paper finds that the state involvement in South Korea is a reflection of the historical path of the developmental state. The cross-comparison of South Korean social enterprises from a historical institutionalist approach finds that the South Korean case may contribute to the ongoing scholarly debate by suggesting taking a Weberian ideal type of an interventionist state into account for an extension of the proposed framework. This paper also uncovered the strategic approach of the South Korean Government in utilizing this public policy tool by adopting and combining existing social enterprise models.Research limitations/implications– This paper demonstrates the state’s intents to mobilize economic and societal resources as public policy intervention tools, which can be understood from a developmental state context. This role would be distinct when compared to those in Europe and the USA. This paper has a limitation to restrict its analytical scope to formally recognized social enterprises because it focuses on the role of the state in utilizing social enterprises for public policy agenda: social development and social welfare provision.Practical implications– As a practical implication, this study might provide an insightful framework for South Korean public policy makers, outlining the contributions and limitations of state-led public policies associated with social enterprises. As seen in the historical path of governmental interventions, governmental public policies do not necessarily guarantee their sustainable community impacts without the consideration of private or nonprofit actors’ spontaneous involvements. The flip side of state-led interventions requires policy makers to become more cautious, as they address social problems with public policy intents.Originality/value– The majority of current studies on social enterprises in South Korea mainly focus on reporting the quantitative increase in the number of registered social enterprises. Beyond this quantitative description of its achievement, this paper also provides a historical narration and philosophical background of this phenomenon. Additionally, it shows how this artificial government intervention in social enterprises could be accepted from a historical perspective and brought remarkable responses from the private and civil society sectors in South Korea.

Labour Management as Development of the Integrated Developmental State in China

The application of the developmental state concept outside its birthplace in East Asia is generally unsuccessful. The culprit is the ‘laundry list’ method commonly seen in the literature. In this paper a ‘strategic capacity’ conceptualisation is used instead, with emphasis on its diverse institutional underpinnings. The paper demonstrates that the Chinese state's approach to industrial relations is integrated with its national development strategy and that crafting institutions of labour management is part of the state's effort at building up its strategic capacity for political, social and economic management. The study delineates the factors shaping labour management institutions, paying special attention to the communist heritage that sets China apart from other developmental states. As such, the concept of developmental state has much wider application.

Reflections on the Chinese State

This article examines critically the application of the developmental state concept to China. A conjuncture of specific political, socio-economic and institutional processes, both internal and external, undermines the case for China as a developmental state. Against a back-drop of intensifying global economic competition, intense rivalry between local economic actors for markets, resources and foreign investment not only produces contradictory developmental outcomes but also undermines the political and administrative capacity for fundamental social and economic transformation. The Chinese state is best understood as polymorphous, assuming multiple, complex forms and behaviours across time and space, and defying reduction to a unitary actor.

Japan's Leadership Shifts: From the East Asian Crisis to the Establishment of an ASEAN + 3 Summit

The East Asian crisis was a catalyst for changing Japan's regional position and leadership role and therefore had significant implications for Japan's geo-political and economic relationship with East Asia. The Japanese government maintained the ‘developmental state’ approach in collaborating with the economic restructuring programmes in major East Asian countries after the crisis. Japanese responses to the crisis had significant implications for East Asian regional integration. They clearly indicated the shift in Japan's behaviour and the emergence of a regional leadership role in promoting regional integration in East Asia. This suggests that Japanese confidence in the validity of the developmental state concept prompted the government to reconsider its pro-active role in the establishment of an ASEAN +3 Summit.

Japanese policy in the Asian economic crises and the developmental state concept

This article examines Japan’s commitments to the developmental state concept after the Asian economic and currency crises. Some aspects of the concept have been regarded as the causes of the crises, and Japan was seen as failing to defend effectively its own developmental model. However, the Japanese government has strengthened policies and institutions for industrial cooperation toward East Asia after the crises, stressing the elements of the developmental state such as close business–government collaboration and effective uses of public corporations as measures to rehabilitate the growth model in East Asia. In its efforts to assist industrial restructuring in Thailand, the Japanese government made its Thai counterpart acknowledge the necessity of state intervention in fostering small and medium-sized enterprises, and sought to transfer experiences and know-how of institution building such as the advisory council system, the policy finance system and industrial development coordinated by trade associations. Thus, the Japanese government maintained and partially intensified the developmental state approach in its cooperation with industrial restructuring programmes in major East Asian countries after the Asian crises.

The Financial Crisis of 1997–98 and the End of the Asian Developmental State

Financial globalization in 1990s effectively dismantled Asian state and forced East Asia to search for a new political economy model. The paradigm shift in world development from state-driven planning to market-driven management has taken place since late 1980s in Northeast Asia, spreading to Southeast Asia in 1990s. The access to global capital markets by Asian corporations, both parastatal and private, has effectively reduced their dependency on state for financial resources. In fact, Asian state and financial globalization are incompatible and often in conflict. By externalizing financial forbearance, Asian corporations and global market have forced state to change. Thus, important political changes have taken place in Northeast Asia and are now also occurring in Southeast Asia. Financial Implosion The contention of this article is that financial globalization effectively dismantled Asian state in 1990s and forced Asia to search for a new political economy model. The paradigm shift in world development from state-driven planning to market-driven management has taken place since late 1980s in Northeast Asia, and by mid-1990s a similar process had spread southwards to ASEAN region. The Asian state was slow in restructuring its private sector economy to forestall oncoming crisis. The state-driven development model spawned a set of paradigmatic practices, such as clientelism, cronyism, cartels and monopolies, official and unofficial favouritism shown to a select number of business firms, and state patronage to certain ethnic groups. [1] In era of globalization, these practices often clash with fast integrating world economy where money flows in and out at whim and fancy of investors. [2] By early 1990s, politics of state began to produce cleavages. As economy grew and advanced further, a more complex division of labour emerged. In Japan and Korea, stock market and chaebol collapses of late 1980s and early 1990s signalled worn-out nature of state model. The nexus of the state leads, market follows broke down. When regional crisis occurred in 1997-98, market -- corporations, banks, individual investors, and chaebol -- remained unable to quickly detach themselves from domineering state to ward off ensuing mayhem. In Japan, financial sector loathed to embrace deep restructuring, and in Korea and rest of Asia, no business elites thought that state would not come to their assistance when in crisis. These lapses compounded Asian crisis further. By early 1990s, as changing of gear in process from state-centric to global capital market-dependent mode intensified, Northeast and Southeast Asia needed to revisit their political economy models, first arrived at in 1960s and 1970s. What had changed was advent of globalization, emergence of new financial institutions and innovative investment practices, and an evergrowing number of countries willing to accept foreign money from anywhere. Consequently, state sped up liberalization and deregulation of domestic markets, as pressure to sustain high growth rates increased throughout region, where legitimacy of quasi-democratic regimes impinged on their economic achievements, and ability of regimes to remain in power depended on allegiance of people. [3] The Asian Developmental State Revisited Chalmers Johnson in United States and Fernando Henrique Cardoso in Brazil were among earliest pioneers of concept of developmental state. Since concept of Asian state and how it has become outdated constitute core of this article, it is necessary to define concept in both historical and functional terms. …