The logic and pathologies of local and regional economic development strategies

State and local economic development programs are often loaded with tax incentive and promises of deregulation designed to attract new businesses, encourage expansions, and cultivate new firms. There is little evidence that tax relief and deregulation are effective tools for economic development, however. This article examines the logic of public sector participation in economic development, questions the effectives of typical development policies, and suggests alternatives, including tax-base sharing, greater regional cooperation, and human capital development.     

Securing Internet Society: Toward an International Regime for Information Assurance

The Internet is rapidly changing how states and international businesses operate and deliver services and goods to citizens and customers. This global information medium, however, has also become the vehicle for a new set of malicious activities carried out by hackers, terrorists, and rogue states. This article discusses a possible course of action to counter this growing international security threat: the development of an international regime for information assurance. Still, this regime cannot arise exclusively from the cooperative efforts of national government, but requires the active involvement of international businesses. This article, therefore, postulates that this regime can arise only if states and international businesses fully appreciate their respective interests in the areas of information security and assurance.     

Global Capitalism and the Transformation of State Socialism

The article outlines the footprint of international economic interests under state socialism, and considers in more detail the economic integration of the postcommunist countries into the world system in the post-1989 period of the building of capitalism. The focus of the article is on the extent of economic globalization of countries and their economic corporations. It is contended that the globalization of capitalist companies and the direct role of global economic forces had little importance under state socialism. Since 1989, policy in the former state socialist countries has been geared to “joining” the world system, optimistically its core. Important differences have developed between the postsocialist states with respect to economic penetration and exposure to the world market. The outcomes have not fulfilled the expectations of early advocates of transformation and entry to the world economy. Although the new member states of the European Union have entered the world economy as formal members of the “core,” they are not economically equal to the dominant “old” members of the EU. In all the postcommunist countries, there is an absence of large scale global companies, of comparable levels of innovation, research and development. Russia is a resources rich country, a “hybrid” social formation containing elements of state economic control, national capitalism, and global capitalism. I conclude that the semi periphery is not a transient category in the world economy; it has potential for persistence and renewal.     

Active resistance to democratic diffusion

Recent research on the international diffusion of democracy has focused on demonstrating how diffusion can change regime outcomes. Although there is still debate within the field of democratization over how important democratic diffusion is relative to domestic factors, autocratic leaders believe that democratic diffusion can be a threat to their rule. It is clear that some countries, such as North Korea, prevent diffusion by severely restricting interactions with foreigners and forbidding access to external sources of information. The more intriguing question is how the states that have economic, diplomatic, and social linkages with democratic states prevent democratic diffusion. In other words, what methods do globally-engaged, autocratic governments use to limit exposure to and reduce receptivity to democratic diffusion?In addition to using coercion and economic patronage, autocratic states utilize two non-material mechanisms to prevent democratic diffusion: 1) restricting exposure to democratic ideas and 2) developing alternative narratives about democracy to reduce local receptivity to democratic diffusion. Sophisticated autocratic leaders can limit receptivity to democratic diffusion if they convince citizens that those ideas are “foreign,” will cause “chaos,” or if they believe they already have their own form of democracy. I explore these methods of establishing firewalls to prevent diffusion by examining the cases of China and Kazakhstan, two countries where a high level of economic linkage coincides with a successful continuation of autocratic rule, despite the global spread of democratic norms. China has developed extensive methods to restrict access to foreign ideas about democracy while Kazakhstan has mainly focused on developing an alternative narrative about democracy. This article contributes to the literature on authoritarian persistence and democratic diffusion by investigating the internal methods autocratic leaders adopt to ensure that democratic diffusion does not threaten their rule.     

Resource powers? Minerals,energy and the rise of the BRICS

The rise of new economic powers has seen increasing attention focused on the international role of the BRICS countries. Importantly, a common feature uniting the BRICS is that they are all resource-rich, and many analysts (and some BRICS governments) have argued that natural resources are one of the key factors propelling the rise of the group. This article explores the BRICS’ emerging status as ‘resource powers’, examining how resource wealth underpins their economic development and foreign policy strategies, and thus contributes to their growing influence in international affairs. It is argued that through the use of nationalistic mining and energy policies, the BRICS governments have exploited natural resources for both domestic economic and international diplomatic objectives. However, there are several challenges and emerging risks facing the BRICS’ resource strategies, which mean that resource wealth is making a positive – though inherently limited – contribution to the growing international status of the group.     

From failed states to fragile cities: redefining spaces of humanitarian practice

It has become commonplace to claim that cities are becoming conflict zones, or ‘war zones’. This article traces some of the discursive and conceptual shifts that made it possible to define the city as a new frontier for international humanitarian action in states of the Global South. In order to represent cities as humanitarian spaces, concepts of ‘failure’ and ‘fragility’ have been problematised and subjected to reinterpretations that legitimised new strategies applied to the urban realm. I argue that this re-scaling of humanitarian practices enables a de-coupling and inclusion of so called new ‘urban conflicts’ in strategies of global liberal governance. Moving from failed states to fragile cites is a key development to understand changes in the practices that redefine humanitarian spaces today. The definition of urban violence as a new type of conflict informs a new cycle of expansion of the humanitarian order focused on the city. The article analyses the problematisation of concepts of failure and fragility as a decisive move to redefine the boundaries of humanitarian spaces.     

Bringing politics back in: Towards a model of the developmental state

The few cases of rapid economic growth in the Third World in the last 30 years have occurred in democratic, quasi‐democratic and non‐democratic polities. They are thus clearly not a function of common regime type. I suggest that they are best explained by the special character of their states, understood ‘as developmental states’. This article outlines some common characteristics of these states. However the forms and features of these states are not simply a function of their administrative structures or principles of governance, but of their politics. The article thus also underlines the importance of political analysis in both development theory and policy, from where it has been extruded for too long.     

Poverty and Inequality in a Rapid Growth Economy: Chile 1990-96

Using parametric and non-parametric methods this article examines the evolution of poverty and inequality in Chile between 1990 and 1996. This period is interesting because of the rapid growth exhibited by the Chilean economy. Using the Datt-Ravallion decomposition economic growth accounts for over 85 per cent of poverty reduction. The evidence suggests that the sustained level of high inequality is not necessarily associated with a lower welfare level. By comparing the evolution of poverty and inequality over time, we observe a continuous decrease in poverty, while inequality remains stable. This pattern has left everyone (both poor and rich individuals) better off.     

Economic ideas and institutional change: Evidence from soviet economic debates 1987–1991

The article analyses the shift in ideas that took place in Soviet economic thought between 1987 and 1991 and its relation to the changes in the real economy. The main focus of the article is on the issue of whether the evolution of Soviet economic thought in the analysed period changed in a gradual, path-dependent manner, or in a discontinuous, revolutionary fashion. Following the approach of Imre Lakatos, I argue that the conviction of being on the road to the ‘wholesome society’ formed the hard core of Soviet ideology, while ‘democratic centralism’ and the centralised economy provided its protective belt. Perestroika was the last attempt to save the hard core of Soviet ideology by adjusting the protective belt. This attempt failed, and the economic debates, which at first had been restricted to the protective belt, more and more approached its hard core, until it finally cracked. In this sense there was certainly a paradigm shift in Soviet economic thought. However, the notion of history as a purposeful process was not given up even by the Soviet adherents of monetarism. The utopian liberalism which became fashionable among Russian economists for a short period of time, it is argued, provides evidence that paradigm shifts and path-dependence in the evolution of economic ideas are not mutually exclusive.     

Chile’s new entrepreneurs and the “economic miracle”: The invisible hand or a hand from the state?

The Chilean economy has grown by leaps and bounds over the last decade, thanks to a dramatic increase in export activities (and earnings), and the emergence of a more entrepreneurial capitalist class. This article attempts to explain that remarkable phenomenon using original data on entrepreneurs in one of Chile’s most important new export industries, namely, fishing. The central argument of the article is that domestic entre-preneurship flourished during the Pinochet period not because the state “got the economic environment right,” as the neoliberal ideologues are wont to argue, but rather because the Pinochet government behaved, in several important senses, like a “developmental state,”a la the states of East Asia. The analysis also reveals a heretofore ignored role of a developmental state, which is to help produce a new capitalist class culture. In the Chilean case, it was state policy as well as ideology that gave rise to a new generation of entrepreneurs. Rachel A. Schurman is assistant professor in the Energy and Resources Group and the Department of Sociology at the University of California at Berkeley. Her primary interests are in environmental sociology, and the role that natural resource industries play in regional economic development. She is currently working on the changing character of the tuna industry in the Western Pacific afters the Third U.N. Convention on the Law of the Sea. Her next project will be a book on the economic and ecological sustainability of natural resource-based, export-led growth in Chile.     

The changing roles of free economic zones in development: A comparative analysis of capitalist and socialist cases in East Asia

Free economic zones (FEZs) play important roles in industrialization and economic development of both capitalist and socialist countries in various regions of the world, and thus have become a major subject of study in the development literature. Theoretical debate and empirical analysis have focused narrowly on the positive and negative economic effects of export processing zones (EPZs) in capitalist Third World countries, without giving sufficient consideration to why, when, and how different types of FEZs in both capitalist and socialist economies adapt their roles in achieving development objectives under changing international and domestic conditions. In this article, I systematically compare the dynamic development roles of three FEZs in two different systems—the state capitalist economies of Taiwan and South Korea and the reforming socialist economy of China—during 1966–1990. The comparative findings are interpreted from competing and complementary perspectives of major development theories. Finally, I use the comparative evidence to refine a lifecycle model of the evolution and prospect of EPZs in capitalist newly industrializing countries, and suggest an alternative scenario for FEZs in socialist economies. Xiangming Chen is assistant professor of sociology at the University of Illinois at Chicago, affiliated with the Center for East Asian Studies at the University of Chicago, and a research fellow at the IC² Institute at the University of Texas at Austin. His current research focuses on the interface between urban and economic development from a comparative perspective, with a central focus on China. He has recently published several papers on urbanization, urban housing reform, commodity chains, and regional development in China in a number of social science journals and edited books.     

The cyber frontier and digital pitfalls in the Global South

How does digitalisation lead to new kinds of global connections and disconnections in the Global South? And what are the pitfalls that accompany this development? Much of the policy literature on digitalisation and development has focused on the importance of connecting developing countries to digital networks. Good connection to digital networks may have a fundamental impact on societies, changing not only how individuals and businesses navigate, operate and seek opportunities, but also as regards relations between government and the citizenry. However, the rapid pace of this development implies that digital technologies are being put to use before good, functional regulatory mechanisms have been developed and installed. The resultant shortcomings – in state mechanisms, institutions, coordination mechanisms, private mechanisms, general awareness, public knowledge and skills – open the door to new kinds of vulnerabilities. Herein lie dangers, but also opportunities for donor/recipient country exchange. Instead of adding to the already substantial literature on the potential dividends, this article examines a less studied issue: the new societal vulnerabilities emerging from digitalisation in developing countries. While there is wide agreement about the need to bridge the gap between the connected and the disconnected, the pitfalls are many.     

THE DIFFUSION OF PRIVATIZATION IN EUROPE: POLITICAL AFFINITY OR ECONOMIC COMPETITION?

Privatization has spread around the globe. While a number of studies find empirical evidence for the diffusion of privatization, it remains unclear what the relevant linkages between states are. This article analyses whether it is economic competition or political affinity that influences the diffusion of privatizing public utilities. The sample includes telecommunications, postal, and railway providers as the main network‐based utilities operating at the national level in 15 European countries from 1980 until 2007. The results of the spatial regressions clearly show that governments follow each other for economic reasons. Trading partners strategically interact when privatizing their national public‐utility providers to form strategic cross‐border company alliances and to avoid competitive disadvantages in the global market. This applies particularly to economies that are highly integrated in the international market. Surprisingly, political and ideological similarities do not seem to matter for the diffusion of privatization.     

Business priorities and the relative importance of state and local economic-development incentives

State and local governments commonly use a variety of incentives to encourage economic development and business retention. Policies which include economic development incentives are commonly criticized as being ineffective and wasteful uses of public funds. This paper addresses the issue of wastefulness through a business community's assessment of the relative value of eighteen incentives commonly used for business retention and development. Results are based on survey responses from nearly 700 businesses located in Wichita, Kansas. This study illuminates differences in value assigned to incentives by different types of business. Findings indicate that state and local governments that offer incentives without consideration of business type are in many cases delivering “windfalls” to the private sector. Even such highly touted incentives as property tax abatements are not valued equally by all types of businesses. This paper provides state and local governments with an improved understanding of business investment motivation and the relative value of different incentives to effective economic development policy.     

Government Policy and Economic Dualism in South Africa

This article offers a critical reflection on the field of Sudan Studies in light of the partition of Sudan into two states in 2011. It charts the emergence of Sudan Studies as a distinct research field, emphasising the temporal gap between the beginning of scholarly writing on Sudan and the moment when the labels “Sudan Studies” and “dirāsāt sūdāniyya” appeared. The current relevance of a “transnational” field of Sudan Studies is questioned, leading the author to suggest various criteria that may legitimise the existence of a distinct -if not unified- “Sudanist” field. Finally, the article envisions the future evolution of the historical scholarship on the two Sudans, both in the new political and ideological context that has been taking shape since 2011, and from a more specifically historiographical perspective.     

The Europeanisation of International Development Policies: The Case of Central and Eastern European States

This article examines the EU's role in the emergence of international development policy in the 10 member states from Central and Eastern Europe (CEE). Development policy provides useful insights into policy making as it is a key way that states operationalise their foreign policy. Thus, development policy gives us insights into the foreign policy priorities of the new member states. This article reviews the emergence and elaboration of policy relating to international development in the new member states and explores how far we have witnessed the Europeanisation of development cooperation in CEE states.     

Playing in the sandbox: state building in the space of non-recognition

For unrecognised states in the international system recognition of sovereign statehood is the ultimate goal. Not being ‘a state’ means being excluded from global networks. However, even in the most basic definitions and criteria for unrecognised states there is a period of relative autonomy accorded due to non-recognition. This is a period when political actors can use isolation to establish the state’s narrative, identity and structure. It is this period that provides the foundations for external interaction. It is in this period that the state is born. This article examines another side to the politics of recognition: the politics of non-recognition. Drawing on the contemporary examples of Somaliland and Kurdistan, the article assesses the benefits as well as the costs of non-recognition.     

Wages,Wage Inequality,and Education: The Case of a Microstate with a “Free Education for All” Policy

Like many developing states, Barbados has historically used education as a means of economic development. Specifically, for over three decades, the Barbados Government has provided free education from the primary to the tertiary level. This article investigates the benefits associated with higher education. Based on a sample of 400 Barbadians, the authors find that education has a positive impact on income and contributes to lower within-group wage inequality.     

Why (most) Indonesian businesses fear the ASEAN Economic Community: struggling with Southeast Asia’s regional corporatism

By the end of 2015 the Association of Southeast Asian Nations (ASEAN) had ushered in a common market, the ASEAN Economic Community (AEC). However, the groups most affected by it – small businesses – were bypassed in the decision-making process. They are the victims of a selectively inclusive state corporatism which member countries have transferred from their domestic political system to the regional level. In this article I argue that the decision to create the AEC was promoted by ASEAN governments together with foreign economic and local corporate interests. This coalition was able to frame the AEC in a way that small businesses perceived it as a win-win scheme. Empirically the article focuses on Indonesia.