The State and Economic Development in Developing Countries

Abstract

One of the key lessons from developments over the last 50 years or so has been the imperative for a country seeking economic development or transformation to possess an effective state (World Bank 1997; Adelman 2000).¹ While many things may have changed, there is no reason to believe this to be different under conditions where a transformation of global capitalism is underway. On the contrary, it is plausible to envisage a different but possibly enhanced role for the state (see Chapter 1). In the context of the discussion over development prospects and patterns of so-called late-developers, it has often been contended that across different economic paradigms, different economic transformations of capitalism, the role of the state has tended to increase and, simultaneously, to be transformed, that is, undertake new task for late-developers starting with the classical statements of Alexander Gershenkron (1952; Adelman 2000).² Most of the recent debate on the role of the state in economic progress has taken its inspiration from the debate over those late-developed states in East Asia that are regarded as the most recent examples of successful ‘catching-up’ strategies.³ It is to this debate we now turn in order to extract from the debate some of the key insights to be used as guidelines in the discussion of the policies of the states and (as will be apparent soon) the interaction between the state and the wider society, most prominently, the private business sector.