Neo Developmental State
ABSTRACT
Why is the role of the state so crucial for the process of development? What is the developmental state? Why is there so much hype about the notion of developmental state? What led to it’s evolution? What are its characteristics? Is the model transferable? What is Neo-Developmental state? I have tried to answer all of them in this assignment according to the order of these questions. Although the nature of answering these questions is by itself a critical analysis but I have also tried give to give my opinion at the end in form of a conclusion.
INTRODUCTION
The state should play a central role in economic development. The fact that there was a noticeable congruence among the early economists that economic development needs an effective state was clearly visible in their writings. Simon Kuznets (1955) believed that the ‘political system’ governing a state might turn out to be an economic variable while explaining economic growth. According to him the state should allow for trickle down of the benefits from rapid growth which would increase per head income. Paul Rosenstein Rodan while laying down ‘The Big Push Theory’ identified that the role of the state is crucial for large scale investments, especially in social overhead capital as private investors would not do so as they are driven by profit motives. While Paul Baran emphasized that the reason behind the underdevelopment of most countries was inexistence of a nationalistic developmental state. On similar grounds Myrdal argued that absence of a ‘hard state’ leads to economic stagnation. Gerschenkron has argued that latecomers need a ‘centralized’ approach to advance towards industrialization and economic growth. (Chang, 1999). Also there has been an idea related to ‘structuralist’ development theory that market failure in underdeveloped countries can be rectified through state intervention and with other policies such as the Import Substitutions Industrialization during late 50’s and earl
Why is the role of the state so crucial for the process of development? What is the developmental state? Why is there so much hype about the notion of developmental state? What led to it’s evolution? What are its characteristics? Is the model transferable? What is Neo-Developmental state? I have tried to answer all of them in this assignment according to the order of these questions. Although the nature of answering these questions is by itself a critical analysis but I have also tried give to give my opinion at the end in form of a conclusion.
INTRODUCTION
The state should play a central role in economic development. The fact that there was a noticeable congruence among the early economists that economic development needs an effective state was clearly visible in their writings. Simon Kuznets (1955) believed that the ‘political system’ governing a state might turn out to be an economic variable while explaining economic growth. According to him the state should allow for trickle down of the benefits from rapid growth which would increase per head income. Paul Rosenstein Rodan while laying down ‘The Big Push Theory’ identified that the role of the state is crucial for large scale investments, especially in social overhead capital as private investors would not do so as they are driven by profit motives. While Paul Baran emphasized that the reason behind the underdevelopment of most countries was inexistence of a nationalistic developmental state. On similar grounds Myrdal argued that absence of a ‘hard state’ leads to economic stagnation. Gerschenkron has argued that latecomers need a ‘centralized’ approach to advance towards industrialization and economic growth. (Chang, 1999). Also there has been an idea related to ‘structuralist’ development theory that market failure in underdeveloped countries can be rectified through state intervention and with other policies such as the Import Substitutions Industrialization during late 50’s and earl
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