The Developmental State

A developmental state can be defined as a state which has politics system where sufficient power, autonomy and capacity at the centre has been concentrated in order to shape, pursue and encourage the achievement of explicit developmental objectives, either through the establishment of conditions and a direction of economic growth or through directly organising it, or a varying combination of both. It can be considered a state where government plays a large, active and significant role in the economy, but in support of some selected, mostly private industries with the most potential for future growth i.e.: the infant industry argument.(textbook)

Its effectiveness is affected by how well the state performs its duties; the effectiveness of a state can be influenced by factors such as going through significant social upheaval, the existence of strong external threats and the elimination powerful bodies which seek to undermine the state; such as the landlord class in East Asian countries which have gone through the same process. (grabowski)

This kind of state is characterised by seven important characteristics, namely: it places a singular focus on economic growth as the main goal of the economy and society; it also applies a state lead industrial policy aimed at protecting key industries from cheaper imports. It has a highly capable professional bureaucracy which is well connected to industry. The education system and labour market are subject to the singular focus placed on growth which is enforced by an authoritarian regime which focuses on maintaining stability in order to provide the correct platform for economic growth; this is done through the use of an export-led growth model. The final characteristic would be that there a high savings rates which are used for investment and capital development (burger). The ability to develop these characteristics is vital as they are needed in tandem with a good understanding of modern development theory in order to develop a successful development state (Marwala).

There are three strands of modern development theory, all interlinked in some way and are comprised of the New growth theory which is based on helping to reorient theoretical discussions of growth; its main aim is to enhance the importance of ideas and human capital as one of the key ingredients to growth. While the Institutional approach places an emphasis on the key role of continuity, collective normative outlooks which allow for forward looking economic action. Lastly the capability approach bring about the idea that growth of GDP per capita is not an end goal in itself, but rather a stop-gap for improvements in human well-being. Sen characterises capabilities as both means and ends both of which are central to the capability approaches relationship with the other two strands of development theory.  (evans)

The convergence of these strands of development theory in turn produce a clear schema in terms of what a 21st century developmental state should look like in terms of expanding access to the current stock of ideas, while ensuring the effective use of this stock and generating new ideas suited to a countries specific situation; all of which requires expanding human capabilities   (evans). Although it is important to note that there is no guarantee that reforms will be successful and that growth can only be sustained through improving the efficiency of important institutions (burger).

 Before constructing a 21st century developmental state it important to take note of possible lessons to be learnt from the 20th century model, as although it cannot be repeated under current circumstances there are still elements which can be considered applicable. Under successful states common characteristics can be found such as the state being considered an institutional keystone, public servants being employed based on merit rather than their connections within government; one of the main lessons that should be learnt is that the states goal should be embedded in the mind-set of the nation as a whole as it requires sacrifice from current generations in order to allow for greater consumption in the future which will not be possible if the current generation does not buy into the vision which has been put in place for the nation.  This also means that the private sector interests should not be put at the forefront as it would mean greater profits now at the expense building human capabilities over the long term which is detrimental to the growth of a country  

Growth in china is represented by governmental objectives and activities for their implementation in their underlying economy. This in combination with the strange nature of Chinese institutions, which are described as being regionally decentralised authoritarianism in terms of political control being centralised, while economic management is decentralised has changed over the centuries: it is inevitable that many economic responsibilities and powers would be delegated to the better equipped regions. However this does create a classic principal-agent problem which they were able to overcome via incentive structures for the powers that be which were put in place allowed them to turn bureaucrats into innovation activists. Incentivising helped overwhelm bureaucratic disinterest, while reform policies helped to defeat conferred interests and expand the reform alliance. (knight)