Between development and the state: Recasting South Korean dirigisme

This article offers an alternative understanding and a critique of how South Korea's development has been interpreted by various scholars. The proponents of developmental state overlook the fact that South Korean dirigisme harmed equity, democracy, social cohesion, and thus the people's ability to take the initiative and form a viable civil society. By considering how the state meddled with the economy as a deliberately selected course, an analysis can be made of the dysfunction of developmental statism or “diseased” dirigisme. The inequity between the deprivations suffered by small firm operators and other citizens and the gains reaped by a few business conglomerates (or chaebol), remains symptomatic of South Korea's dirigiste disease. The dominant themes in the current economic discourses are privatisation, marketisation, deregulation and the rolling‐back of the welfare state. However, liberalising the economy without state reform may aggravate the dirigiste disease in South Korea. By linking the state‐led and people‐centred arguments, this article provides a fresh discourse on principles of policy‐making and state‐action to broaden the valuation of development beyond economic efficiency or competitiveness.     

The emergence of new technology enterprises in China: A study of endogenous capability building via restructuring

This article examines the emergence of a vital non‐state sector, consisting of New Technology Enterprises (NTEs) spun off from existing R&D institutions during the economic reforms in China. Most NTEs are engaged in computer and information technology. Based on an outline of the development of the NTEs, this article focuses on an analysis of a few critical aspects of the restructuring process through which the NTEs gained entry to a sphere of innovative economic activity. The analysis shows that, while the newly emerged NTEs have to have international levels of competitiveness, the restructuring process has been highly specific to the local society. The article concludes by stressing the critical importance of the organisational innovation of the economic actors and the creation of institutions to support creative economic activities, if developing countries are to cope with the pressing trends of rapid technological progress and economic globalisation.     

Of miracles and models: The rise and decline of the developmental state in South Korea

This article argues that the South Korean economic 'miracle' was based on the ability of the state to implement a strongly developmental policy. The state was able to do so because, for a time, it was highly insulated from demands from social classes which might have diverted it from the objective of industrialisation. This insulation, or 'relative state autonomy', derived from an historical trajectory which left the state in an unusually dominant position in relation to these classes. Domestic dominance was one factor enabling the state to insert the South Korean economy into world markets in a more advantageous position than would otherwise have been possible. However, its very success in industrialising the country strengthened various class forces, whose demands and intrusion into politics undermined the autonomy of the state. With industrialisation, the state's freedom of manoeuvre was lessened. International influence only reinforced those class pressures inside South Korea. The overall effect was to force a retreat of the state and an end to a developmental policy.     

Balance Between Local Economic Development and Environmental Sustainability: A Multi-level Governance Perspective

This study seeks to explain why U.S. local governments utilize environmental sustainability to promote economic development. Economic development and environmental protection need not be competing objectives, but rather, environmental protection can enhance local economic competitiveness. Using data from the ICMA Economic Development Survey, this study tests an empirical model that includes state sustainability initiatives, participation in climate protection networks, and political attitudes toward economic development as predictors of local policy decisions. The findings reinforce a multi-level governance perspective on explaining the balance cities seek to achieve between environmental protection and economic growth.     

Citizenship-based competitiveness policy in a new economic world

As a result of current economic changes (with the consequent premium placed on citizens’ and countries’ competitiveness in the global economy), democratic countries face a fundamental challenge: How can efforts to enhance economic competitiveness be reconciled with citizenship obligations? This article suggests parameters for debate on how to meet this challenge. It first explores the nature of citizenship obligations in modern democracies. Next, it offers a conceptualization of competitiveness (and the general characteristics of policy choices which may facilitate a reconciliation. It then surveys competitiveness policies in one region of Sweden which were founded on the premise that it is appropriate to pursue simultaneously economic competitiveness and enhancement of human welfare. These policies may provide insights on what citizenship-based policies can look like.     

Competitive industrial policy and macro performance: Has South Korea outperformed Taiwan?

Taiwan adopted a competitive industrial policy before South Korea but pursued it more cautiously. According to orthodox theory, Taiwan's less interventionist policy should have increased its initial per capita income lead over South Korea. In fact, the income gap narrowed, and income distribution improved relatively in South Korea, casting doubt on the orthodox criticism of South Korean industrial policy. But some qualification of the South Korean success is in order. The South Korean gains were achieved at the cost of greater consumption fore gone and greater concentration of economic power than in the case of Taiwan. Moreover, the crucial post‐1985 Taiwanese economic slow down was partly due to economic maturation as well as to tardy financial reform and to the opportunities created by the Chinese diaspora for Taiwanese firms to invest abroad.     

From technological catch-up to innovation-based economic growth: South Korea and Taiwan compared

This paper sets out to analyse the divergent models pursued by South Korea and Taiwan in regard to technological catching-up and their ongoing transition towards innovation-based economies. It is found that South Korea's former high-debt and chaebol-dominated model inclined it to pursue a Schumpeterian scale-based technological development, while Taiwan's former pro-stability, small- and medium-sized-enterprise (SME)-based model tended to favour its emphasis on a neo-Marshallian network-based technological development. It will be argued that the state's approach to economic liberalisation and firms' demand for capital for technological upgrading are the major factors that have underpinned the adjustment efforts of these two countries.     

Liberal Democracy in Africa: A Socialist-Revisionist Perspective

South Africa's constitution enshrines the right to adequate housing, and policy since 1994 has attempted to address this issue. However, realities of poverty, rapid urbanization and limited resources for local authorities undermine the state's ability to meet housing needs. This article presents a case study from Msunduzi Municipality (formerly Pietermaritzburg) to evaluate state policy in the urban low-cost housing sector, particularly in terms of the needs of female-headed households. While subsidized housing allocation has successfully reached female-headed households, and recent policy documents acknowledge gendered housing needs, the situation on the ground remains problematic. Gender-based social and economic inequalities persist, and new government-subsidized housing suffers problems including inappropriate location, poor housing quality, and inadequate protection of tenure security. Applying a gender lens to housing highlights shortcomings in South African housing policy, while applying a housing lens to examine gender inequality demonstrates limitations to the transformative potential of gender mainstreaming in this sector.     

Political power in Puerto Rico: bankers,pharmaceuticals and the state

Puerto Rico is characterized by a high degree of structural economic interdependence between state, corporate, and financial actors. This article argues that the structural interdependence was engineered by United States and Puerto Rico government officials to bolster the island’s economy and the government’s creditworthiness, using U.S. corporate investments, both fixed and financial. Following a critique of the relevance of the literature on structural analyses of state, corporate and financial alliances to the Puerto Rican case, the article defines, identifies, and quantifies the major components of this structural economic interdependence in Puerto Rico. The article concludes that the depth of structural economic interdependence of state, corporate and financial actors has seriously constrained the possibilities of economic and political pluralism. The local government has become bound to a relatively limited range of policy options and, thus, a particular development path is forged. In this case, the policies have resulted in the marginalization of local industry, and the privileging of the financial sector to the detriment of domestic capital formation. Sara L. Grusky has taught at Howard University and Catholic University in Washington, D.C. She has recently contributed to21st Century Policy Review andThe Caribbean in the Global Political Economy (Lynne Rienner Publishers). Professor Grusky is currently undertaking two research projects in El Salvador. The first is focused on rural health policy and the second examines the Salvadoran political discourse onel estado de derecho.     

Research and Development,Competitiveness and European Integration of South Eastern Europe

This article explores the relationship between research and development (R&D) and competitiveness of South East European (SEE) economies from the perspective of European Union (EU) integration. Specifically, the article addresses the question of whether South East Europe is a potential asset or liability to the enlarged EU. SEE countries are quite diverse in terms of levels of competitiveness, with visible effects on the role of R&D, which is confirmed by analysis of R&D demand and supply factors. Improvements in the national innovation systems of SEE countries have largely taken place through vertical linkages on the supply and demand sides. However, a wider role for R&D will depend increasingly on the strength of horizontal linkages within national systems of innovation and their key agent—the local innovative business enterprise sector. This calls for a rethinking of science and technology policy, traditionally defined as a sectoral activity.     

Policy Relations and Policy Subsystems: Financial Policy in Hong Kong and Singapore

Existing studies of Hong Kong’s and Singapore’s success as leading Asian international financial centers (IFCs) have largely focused on economic structural factors at the neglect of political economic contextual variables. Taking a policy subsystems approach and based on extensive field research, this article attempts to address this shortcoming by conceptualizing the “policy relations” that exist between state, industry, and other non-state actors in the two IFCs and delineating the “division of policy roles” among these actors. In the process, this article contributes toward the existing IFC literature and conceptualizes the sociopolitical relations that exist among financial sector actors.     

The Enemy Within: Intragovernmental Politics and Organizational Failure in Greek Privatization

Mainstream approaches explain privatization policy failure by taking account of the surrounding sociopolitical and economic context. This article examines the unsuccessful Greek privatization over the first half of the 1990s by following an alternative approach. It looks at the obstacles originating from intragovernmental politics and the state organizational structures and resources. Contrary to what the British or French experience would suggest, the adoption of a statist, impositional policy-making strategy in the Greek case failed to achieve policy effectiveness. Indeed, it probably ended up accelerating policy failure. The employment of statism as a policy-making strategy was undermined by the structural weaknesses of the state.     

Privatisation in Developing Countries: A Review of the Evidence and the Policy Lessons

Privatisation is widely promoted as a means of improving economic performance in developing countries. However, the policy remains controversial and the relative roles of ownership and other structural changes, such as competition and regulation, in promoting economic performance remain uncertain. This article reviews the main empirical evidence on the impact of privatisation on economic performance in developing economies. The evidence suggests that if privatisation is to improve performance over the longer term, it needs to be complemented by policies that promote competition and effective state regulation, and that privatisation works best in developing countries when it is integrated into a broader process of structural reform.     

China’s road from socialism to global capitalism

Abstract

China’s engagement with global capitalism is driven by the emergence of a statist and private transnational capitalist class. Nevertheless, aspects of China’s foreign policy from the Maoist period still echo today. Consequently, elements of third world solidarity and opposition to Western domination continue to exist as China’s past is redefined to further its transnational strategies in Latin America and the US. The main Chinese investments in South America have been in energy and infrastructure among the left lead countries of the Pink Tide. In the US, Chinese capital has grown despite heated political rhetoric. This paper will examine how economic ties in South and North America reflect past and present conditions, and if China has initiated a non-Western globalisation.     

The developmental state: Israel, South Korea, and Taiwan compared

The growth performances of the Israeli economy during the years 1948–1973 were excellent by any criteria, and are comparable to the “miraculous” performances of South Korea and Taiwan. Excellent economic performances in the three countries were accompanied by the presence of an autonomous and an interventionist state as well as by strategies of governed development (in the spheres of finance, investment, and international trade). The comparison is used, to shed new light on the Israeli political economy as well as on the replicability of the developmental state model across regions, cultures, and political regimes. First, by comparing the three countries and pointing to the similarities in the role and autonomy of the state, the article offers a different interpretation of the Israeli economy from that offered by both neoclassical and neomarxist interpretations of the Israeli political economy. Second, successful cases of develoment are rare in our world; this should make the study of the Israeli political economy a valuable case-study for the proponents of the developmental state model. By pointing out the similarities in the growth performances and the developmental strategies of Israel, Taiwan, and South Korea, as well as the dissimilarities in their political regimes, their cultural traditions, and their regional settings, this article further strengthens the arguments in favor of state-guided economic development in developing countries. David Levi-Faur is a lecturer of comparative public policy and business and politics at the University of Haifa. He was a visiting scholar at the L.S.E., University of California, Berkeley, the University of Utrecht, and the University of Amsterdam.     

The Evolving Role of the Africa Scholar in African Studies

This paper explores – through a geo-political perspective – the changes and continuities in South African foreign policy over the period 1990–2010, focusing on the themes of military relations, migration, democratization, and pan-Africanism. The demise of apartheid led to significant changes in South Africa's relations with southern Africa and the rest of Africa, including: transition of South Africa from pariah state to a key leader of the continent; an end to South Africa's destabilization of its immediate neighbours; transition toward more humane treatment of migrants; and transition toward a commitment to democracy promotion in Africa. Yet, continuities among the apartheid and post-apartheid eras persist, including: the persistence of nationalism and realism as guiding principles; ongoing economic and political constraints imposed by neighbouring countries; the persistence of socio-cultural divisions amongst South African and migrant workers; and overall ambivalence about pan-African identity and policies.     

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.     

‘THE GREAT DOCK AND DOLE SWINDLE’: ACCOUNTING FOR THE COSTS AND BENEFITS OF PORT TRANSPORT DEREGULATION AND THE DOCK LABOUR COMPENSATION SCHEME*

Deregulation of the port transport industry was predicted to bring much needed jobs and investment to Britain's ailing dockland areas, lower prices for port users and consumers, and improved international competitiveness. These benefits were anticipated to far exceed any attendant costs. But the benefits have failed to materialize, largely because the government failed to appreciate the non-competitive structure of the industry or the effects of the National Dock Labour Scheme on the economic performance of the ports, while the costs were substantially underestimated. Consequently, the costs of deregulation have exceeded the benefits. As in the past, current industrial policy has been dictated by the apparent‘labour problems’of the docks, but the new system of deregulation, founded on the mass redundancy of exregistered dockers and a re-assertion of managerial prerogative, has exacerbated rather than resolved the underlying structural weaknesses of the industry. In particular, deregulation has ushered in a new era of casual employment on the docks. Unless, or until, public policy addresses these problems the costs of deregulation will continue to accumulate.     

Overcoming apartheid's legacy: The ascendancy of neoliberalism in South Africa's anti-poverty strategy

Poverty in South Africa is intertwined with a host of social and economic issues. The burden of poverty is exacerbated by limited access to basic services, poor housing, limited employment opportunities and inadequate infrastructure, which are an outcome of the terrible legacies of apartheid. During its first year in office, the ANC-dominated government officially endorsed a policy of 'growth from redistribution', whereby a strong state and a strong market were expected to serve as vehicles for generating growth and reducing poverty and inequality. By 1996, however, the government had embraced a standard neoliberal strategy as a central piece of its anti-poverty strategy. This article examines the potential contradictions between what appears to be on the surface progressive social policy on the one hand, and on the other, the implementation of aggressive neoliberal strategies of privatisation, liberalisation and deficit reduction to stimulate the economy and create jobs. This heavy reliance on market-led solutions is a high risk strategy, since there exists no example internationally where neoliberal adjustment of the sort championed by President Thabo Mbeki and Finance Minister Trevor Manual has produced a socially progressive outcome, especially in a country like South Africa, which is marked by extreme disparity and poverty.     

Why aren't countries rich?: Weak states and bad neighbourhoods

This article challenges a common viewpoint that the policy choices made by state leaders are central to explanations of economic growth. It argues that there are two possible flaws in this viewpoint. First, that state leaders have a free choice in policy decisions; second, that it is policies that in large part determine growth rates. Using a set of variables designed to capture the weakness of the policy autonomy of the state and possible non‐policy influences on growth rates, the article concludes that initial conditions are a better determinant of wealth and growth than free policy choice.