Atul Kohli, State-Directed Development. (2004)

Summary: _ Kohli is building on statist perspectives (that domestic economies can flourish under the direction of the state) in looking at why some states have been more successful than others in promoting industrialization. He formulates a typology of three ideal types: cohesive-capitalist, fragmented-multiclass, neo-patrimonial. These represent different starting points for the nations which embark on development projects. The latter two types suffer at the hands of democracy, as interests besides economic growth are put first – only the cohesive-capitalist state (what Kohli has referred to in other works as ‘neo-fascist’) is able to direct all of its energies towards industrialization and thus growth.  The four cases are examples of the ideal types, and demonstrate the mechanism by which the type of state was able to or was prevented from achieving industrialization.  Starting points are important, and since there have been almost no examples of developing world industrialization without state intervention, the structure of the state and how it interacts with the economy matter.

 

_Methodology:_ Inductive understanding of four case studies (Korea, Brazil, India and Nigeria)

 

_Main Findings:_ Colonial legacy matters, “Fascism is the best way of fostering industrialization in underdeveloped countries” (from a book review)

 

_ Notes:_

Three Ideal types of states established

* Cohesive-Capitalist State

** Reach of government = deep and all encompassing

** Best at achieving economic growth

* Fragmented-multiclass State

** Real modern state that commands authority, but has a larger set of goals and wants to satisfy a broader range of people within the country than the cohesive-capitalist state.

** Ability to control different groups is limited

** Lower rates of growth in manufacturing

* Neo-patrimonial State

** Form, but not the substance of a modern state

** Strong, centralised institutions are lacking

** Low levels of competence among civil servants

** Cannot promote economic growth

 

Observation from Derluguian: “Regrettably, Kohli did not find a way of saying openly what emerges from his long discussion: that democracy is bad for development because it either gets captured by corrupt neopatrimonial politicians or becomes obsessed with legitimacy beyond the meager means of peripheral countries.” (review 1267)

 

 

 

Four Cases

* South Korea (Cohesive-Capitalist State)

** Japanese colonial influence was crucial

** Centralized, bureaucratic style of government was transferred to Korea

** The highly purposive state made increasing production one of its priorities

** post-WW2, and post-Korean War, the sprawling bureaucratic state was maintained by the pro-US political order

** Kohli’s observation is that Korea’s success was not primarily market driven, but rather the “state intervened heavily to promote exports, using both market and non-market tools to achieve its goals.

 

* Brazil (Fragmented-Multiclass State)

** A growth-oriented leadership in a narrow governing coalition facilitated industrialization.

** Importance of the governing revolution of Vargas in the 1930s and early 1940s, centralising political and economic power by co-opting many socio-economic groups and creating a partially successful modern bureaucracy.

** Downward reach of the state was limited

** Granted enormous concessions to foreigners to help promote national development

** Dependence on foreign capital

 

* India (Fragmented-Multiclass State)

** British colonial administration constructed basic infrastructure and organised an army and civil service, which ultimately provided the administrative backbone for an independent India.

** Alliances with local elites limited the state’s downward reach

** At independence, leaders faced a choice: advance the state as an effective agent of political order, or as a successful facilitator of economic development: they chose order. State intervention was regulatory.

** The Indian state lacked the political capacity to translate economic ambitions into outcomes

** Fragmented authority, intra-elite and mass-elite schisms, ruling coalitions that are generally multiclass

** Contrasted with Brazil, which was much less nationalistic and mass-based, which allowed Brazilian leaders to focus more on industrialization and to invite foreigners to lead the way

 

 

* Nigeria (Neo-Patrimonial State)

** British tried to run Nigeria on the cheap – utilized traditional chiefs as agents

** Nigerian military leaders had no independent development goals

 

Kohli observes that scholars of comparative development “…often do not assign significant weight to different starting points when assessing development performance across countries or regions. Instead, there is a tendency to treat all pre-industrial, low-income developing countries… as having been at a more or less similar starting point.  The analytical puzzle for many thus looks to be why some regions have grown so much more rapidly than others. But such a perspective is a-historical and misleading …(as)…Nigeria at the end of …(World War II) … had little in common with Korea, save for their low-income status” (p. 300).

 

Valuable generalization: There are almost no significant examples in the developing world where industrialization occurred without state intervention.

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