Studying Development since the Sixties

Studying Development since the Sixties: The Emergence of a New Comparative Political Economy Author(s): Peter Evans and John D. Stephens Source: Theory and Society, Vol. 17, No. 5, Special Issue on Breaking Boundaries: Social Theory and the Sixties (Sep., 1988), pp. 713-745 Published by: Springer Stable URL: http://www.jstor.org/stable/657637 . Accessed: 26/01/2015 07:20 Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp

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Studying development since the sixties

Theemergenceof a new comparativepolitical economy PETER EVANS AND JOHN D. STEPHENS University of California, San Diego and University of New Mexico; Kellogg Institute, Universityof Notre Dame and Northwestern University

Nowhere in the social sciences did the intellectualtumultof the sixties have more profoundeffects than in the study of development.The sixties saw dominant theoreticalapproachesto the analysis of development successfully challenged by dependency and world-system approaches,frameworksdrawingon Marxistclass analysisand on the work of ThirdWorldScholars.By the mid-seventies,after a decade of sharp conflicts, the shifting content of citations and publications in major journals suggested that these new approaches had reached at least co-equal status with the traditional approaches. The field appeareddivided theoreticallywith little promise of dialogue between contendingapproaches.In fact, whathad happenedwas more complex. Graduallyin the course of the conflict,a body of studieshad grownup that combined the comparativehistoricalmethod with certain of the insightsof dependencyand world-systemthinkingand even recovered some of the hypothesesof the modernizationapproachin alteredform. We havelabeled this work"thenew comparativepoliticaleconomy." As work has accumulatedover the past ten to fifteen years, the new comparativepolitical economy has emerged as a productiveresearch program.'Its practitionersconstitute a community of scholars who share importantheuristicassumptions.Their agreementon substance and approach has allowed them not only to engage fruitfully each other'sworkbut also to generatea cumulativegrowthin both the range of developmental cases explained and in the degree of fit between expectations and outcomes. The new work composing this tradition includes a diverse set of studies on Latin America, Asia, Africa, and Europe. They attacka varietyof substantiveissues and are eclectic in their methodologybut sharea numberof characteristicsthat in combination serve to distinguishthem from earlierwork.Like the classic traTheory and Society 17: 713- 745, 1988 ? 1988 Kluwer Academic Publishers. Printed in the Netherlands

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714 dition of politicaleconomy,the contemporarywork on whichwe focus begins with the conviction that economic and political development cannot fruitfullybe examined in isolation from each other. It has absorbedthe lessons that grew out of work on dependencyand worldsystem perspectives and is therefore much more sensitive to internationalfactors than classic political economy, but it has rejectedthe idea that externalfactorsdeterminethe dynamicsof domesticdevelopment. More generally,it rejects models that posit "necessary"outcomes, assuminginsteadthat developmentalpaths are historicallycontingent. Multiple cases are preferredand when single cases are used they are set in a comparativeframework.Quantitativeand other crosssectionaldataare located in the contextof more historicalevidence. Our aim here is to chronicle the emergence of the new comparative political economy, tracingits roots in comparativehistoricalwork on Europe, the writings of the Latin American dependencistas,the thinkingof world-systemtheorists,and in the modernizationapproach itself. Throughthe discussionof specific examplesof the way in which the new comparativepolitical economy uses the theoreticaland conceptual buildingblocks it inheritedfrom its predecessorsin new ways, we show why this is a fruitfulpath for those attemptingto contributeto the study of development. We also consider the challenge to the approach posed by "the new utilitarianism,"which attempts to construct explanations of macrostructuralchange by modeling the "rationalchoices"of individualactors.Finally,we suggestways practitioners of the new comparativepolitical economy might enhance the futuregrowthof the researchprogramon whichthey haveembarked. The studyof developmentin 1968 The politicalturmoilof the sixties was a world-widephenomenonand the internationalcharacterof the impact of the decade on intellectual life is perhapsclearerin the case of developmenttheorythanany other area. Intellectualcurrents originatingin the Third World challenged accepted approaches to development issues. These new streams of thought found a receptive audience in the developed world among youngerscholars and studentsradicalizedby the events of the sixties. The tack taken by younger American scholars trying to forge a new approachto developmentwas, however,fundamentallyshaped by the theoriesthey were attemptingto supersede.2

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715 As American social science began to shake off its parochialismin the late fifties and earlysixties attemptsto understanddevelopmentsin the Third Worldunderstandablydrew heavily on the dominantparadigm of the period, Parsonsianstructuralfunctionalism.Built on Parsons's synthesis of Durkheim'sfunctionalismand Weber'sanalysisof values and culture,"modernizationtheory"played a salutaryrole in bringing back to the fore questions of industrializationand the sociopolitical changes accompanyingit, questions that had been at the center of the nineteenth-centuryclassics. There was, of course, one crucial difference between the focus of modernizationtheory and the concerns of the nineteenth-centuryfounders. This time it was not the origins or consequencesof "our"industrializationthat was considered problematic, it was "their"industrialization,the progressor lack of progressof the people of the Third World. Our industrializationwas taken as a model, both normativelyand theoretically,and the principalissue was how the model might be extended to others with different histories, social structures, and cultural traditions. "Pre-modern"(ascriptive, particularistic,etc.) values were held to be the principal barriers to development.The modernizationapproachprojected a trajectoryfor developing countries that replicated the experience of the advanced capitalistcountries.Variationsfrom this track were theorized as aberrations,deviationsto be corrected.This left proponents of the theory open to charges of ethnocentrism and created problems for those tryingto explicatethe apparentlydeviantpathsof particularcases. For those familiarwith the conflict-riddencharacterof Third World societies and the ferocity with which existing social groups defended establishedpositions of power and privilege,the consensual,actorless vision of the process of development as portrayedby modernization theory was irritating.Scholars in developing countries were acutely awareof how centralnationaliststruggleshad been to social change in Third World countries yet found no place in the modernization approach for the idea that there might be real conflicts of interest betweendevelopingand developed countries. An alternativewas needed. Constructingone involvedrecoveringparts of the nineteenth-centuryheritagethat had been lost in the Parsonsian synthesis.The "historicalmaterialist"side of Weber,with its preoccupationwith classes, the state, and the historicalevolutionof the institutions of capitalism,needed to be put togetherwith Marxistideas about the role of conflictingclasses in the promotion of economic progress. Both had to be used in a way that was sensitiveto the distinctivenessof

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716 ThirdWorldcapitalismand avoidedthe simplisticapplicationof Eurocentric models. Fortunately,the foundationsof this sort of approach were being constructed,even while the modernizationapproachwas most thoroughlydominant. While the modernizationapproachdominated work on Third World countries, it did not play the same role in researchon the historical developmentof advancedindustrialcountries.This role was filled by a series of comparative historical studies that began in the interwar period. Unlike practitioners of the modernization approach, the authorsof these studies did not draw on a common theoreticalparadigm. They did not even form a school of thought in the sense that differentauthorsconsistentlyaddressedone another'swork.Nonetheless, work in this tradition had a powerful influence on subsequent patternsof researchand thinkingin the field, not just amongthose who workedon Europe,but amongstudentsof the ThirdWorldas well. Gerschenkron'sstudies of European historicaldevelopmentprovided the earliest and most convincingargumentsthat, even within Europe, economic development took quite different paths depending on the Equallyimportantwas the workof Polanyi, timingof industrialization.3 which forcefully propounded the crucial proposition that economic relationsmust alwaysbe seen as embedded in a matrixof social ties and foreshadowedmany of the themes that would be emphasizedby the new comparativepoliticaleconomy.4Perhapsmost influentialof all was BarringtonMoore's TheSocial Originsof Dictatorshipand Democracy,which pioneered the use of the comparativehistoricalmethod on a set of cases that spanned both first and thirdworlds.5Although one may criticize Moore for his failure to integrate systematicallystate capacity and an intersocietal perspective in his analysis,6his work foreshadowssubsequentwork in comparativepolitical economy more clearly than that of any of the other early practitionersof the comparativehistoricalapproach.The link between economic models and political forms, classes of varyingstrengthscoming together in coalitions and compromises or opposing each other in struggle in given historicalcontexts, the historicalspecificityof economic development models due to the historical development of the world economic system,state strengthas a variable,and the state/crownas a historical actorare all centralthemesin Moore. The new generationof scholarswho startedto work on development issues in the late sixties found valuable resourcesin comparativehis-

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717 toricaltreatmentsof Europeandevelopment.Their immediateinspiration, however,came not fromEuropebut from the ThirdWorld. Theoreticaldepartures The myriadconflicts that pitted Third World countriesagainstdeveloped ones presented an anomaly that could not be accounted for within the modernizationparadigm.In response, scholarsworkingon Third Worlddevelopmentduringthe sixties constructedan approach in which the effect of the internationalpolitical economy took center stage. Strugglesamong local classes and interestgroups were seen as shaped and conditionedby the local society'srelationto the advanced industrial societies of the "core,""metropole,"or "center."Foreign actors were viewed as inextricablyinvolved in class struggles and Instead of assuming allianceswithin the countries on the "periphery." that increasedcontact between core and peripherywould foster more rapiddevelopmentas modernizationtheoristsand traditionalMarxists had, the "dependencyschool"made the opposite assumption. The strongeststatementof this position is found in the work of Andre Gunder Frank, who argues for the "developmentof underdevelopment,"that is, that increasedexternallinkageactuallyproduces retrogressionon the periphery.7Althoughthis assertionis almostimpossible to sustain as initiallyput forward,8Frank'swork, in combinationwith the earlier work of Paul Baran,9had a profound effect on the field. They reintroducedMarxist themes into the debate on development while at the same time focusing on the dynamics of change in the periphery.They also provided a clearcut substantive anti-thesis to prevailingmodernizationviews. Because ties with developed countrieswere the problem,not the solution, the path forged by the developed countriescould not be followed by currently developing countries. Having climbed the ladder of industrialdevelopment and built strong state apparatuses,the developed countries were now in a position to exploit other regions and preventtheir ascension along a similarroad.The principalobstacle to change at the local level was not irrationalattachmentsto traditional values,it was the very rationalattemptsof local elites and theirforeign allies to defend theirown power and privilege. Less obvious, but perhaps more influentialin the long run than the

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718 substantiveanti-thesis was the method of approach that Baran and Frank suggested by their example. Both works built their arguments aroundhistoricalcase studies that included an integratedexamination of local and internationalactors.At both local and internationallevels, they emphasizedinterestsratherthannormsand values,economic and politicalstructuresratherthanculturalpatterns.Theirmaterialismmay have been overstated and their class analysis insufficientlysophisticated,but they helped move studiesof the ThirdWorldin the direction thatcomparativehistoricalstudiesof Europehad alreadytaken. Followingthe lead of the dependencytheorists,ImmanuelWallerstein's "world-system"approach,provided an even more innovativemethod of tracingthe connectionsbetween the evolutionof core countriesand developmental sequences on the periphery.10The world-system approachprovides a vision in which the logic of capital accumulation dictates not just relationsamong classes but also those among states and geographicallydefinedzones of production."The position of individual states and societies within the world system may shift, but the structureof the system as a whole defines the patternof development both globally and within individualsocieties. Wallerstein'swork was also pathbreakingin that it combined a theoreticalstructurethat grew out of studiesof the ThirdWorldwith a heavilyEuro-centricsubstantive content. His particular vision of the dependency argument requiredthat he groundhis argumentsin an analysisof early modern Europeanhistory.In doing so, he thrustan entiretraditionof historical literature,European in origins as well as content, into the middle of American sociological discourse. Historical researchthat might have seemed marginalto sociological studies of development was given a new legitimacyby the prominenceof Wallerstein'sportrayalof the sixteenthcentury. Most criticalof all in the transformationof the studyof developmentin the sixtiesand seventieswas the role of ThirdWorldscholars,especialThe principaldirectionof the diffusionof depenly LatinAmericans.12 dency theorywas from Southto North ratherthanthe reverse.'3Building on the work of Latin American historians and economists,'4 FernandoHenriqueCardosoand Enzo Falettoproducedthe essay that most would consider the founding statement of the dependency approach, Dependence and Development in Latin America.'s Cardoso

and Faletto'sapproachwas a "historicalstructural"one, that is, they tried to analyze the historicalevolution of the major Latin American countriesin a way thatwould revealthe centralstructuraldeterminants

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719 of thatevolution.Like Baranand Frank,Cardosoand Falettofocus on the interactionof local classes and social groupswith externallybased social actors. Concretely,they focus first on the class coalitions that enabled majorLatinAmericancountriesto shift from export-oriented to more domestically-orientedgrowth strategies and then on the growthof the alliancebetweenforeignindustrialcapitaland local elites in the post-WorldWar II period. Their approachparalleledthe comparativehistoricalwork being done on Europe, but with much greater sensitivity to the importance of class alliances and conflicts that crossed national boundariesand to the influence of the international context in shaping alliances and conflicts inside national boundaries. This internationalizationof the comparativehistoricalapproachwas fundamentalin the emergenceof the new comparativepolitical economy. The new comparativepoliticaleconomy The "historical-structural" approach to the analysis of situations of in the Third World and the revivalof Marxistclass analdependency ysis, both productsof the sixties,combinedwith the older Europeanist traditionof comparativehistoricalanalysisto produce a rich varietyof descendantsover the course of the seventies and eighties. The result was a new comparativepoliticaleconomy thatdealt similarlyand often simultaneouslywith both first and thirdworld problems.This is not to say that work evolved smoothly.The literaturewas filled with critiques and countercritiquesand various kinds of internecinewarfare,but by the mid-eightiesthere was a large body of work on developmentand the worldeconomy thatwas variegatedbut surprisinglycoherent. The new comparativepoliticaleconomy has not aimed at chartingprogress along a presumed unilinear path of societal development but ratherat uncovering,interpreting,and explainingdistinctivepatternsof development.Why do differentcountries exhibit differentpatternsof distributionand accumulationover the course of their development? Why is industrializationassociated with strikinglydisparatepolitical regimesin differentperiods and regions?Associated with the concern with distinctiveness is the refusal to take for granted the relative strengthof different classes or the characterof the relations among them. The strength of dominant and subordinate classes, like the strengthand autonomyof the state, is taken as a variable.Possibilities for conflict or compromisebetween classes are seen as arisingout of

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720 domesticpoliticalhistoriesbut also as powerfullyconditionedby internationaleconomic and politicalconjunctures. The diversityof the new comparativepoliticaleconomy makes it hard to characterizein abstractterms.We tryfirstto characterizeit by example, looking, albeit in a regrettablyschematicand elliptic way,at some majorsubstantiveissues and how those workingwithin this approach have attackedthem.'6We examine the way in which class analysishas been handledby the new comparativepoliticaleconomy,how the interaction of state and society is treated, and how relationsbetween the internationalpolitical economy and nationaldevelopmenttrajectories are conceptualized.Then, we providea generalcharacterizationof the approachby reiteratingthe theoretical and methodological assumptions most commonlysharedby its practitioners. Thehistoricalcomplexitiesof classanalysis One of the hallmarksof the new comparativepolitical economy is its focus on the way processes of historicalchangeare shaped by the patterns of conflict and alliance among classes or fractions of classes. Recent work on politicaldevelopmentprovidesa good example.Longstandingcross-nationalfindings of a positive relationbetween democracy and development17have been reinterpretedin a class analytic framework.In this view,economic developmentis associatedwith political democracynot becauseof some amorphousconnectionbetweena more differentiatedoccupationalstructureand a penchantfor parliamentarianism,but as a result of historical patterns of conflict and alliance among differentclasses.'8This analysis differs from its more orthodoxpredecessorsin dependencyand Marxisttheory in emphasizing the abilityof subordinateclasses to influencehistoricaloutcomes through class action,19but, following Moore, it also emphasizes the variabilityof class alliancesand the importanceof legaciesof past class alliancesfor currentoutcomes. In Europe, for example,the successful maintenanceof democracy depended on the ability of the working class to find allies both urbanand rural;failurewas predicatedon the emergenceof an anti-democraticcoalitionwith agrarianroots.20 A very similartype of class analysishas been used to explainthe development of the European welfare state. Those who use this approach argue that working-classpolitical and economic power are the main determinantsof cross-nationaldifferencesin the politicaleconomies of

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721 the advancedcapitalistsocietiesand presentempiricalevidencethatit is stronglyrelatedto the level of welfare-statespendingand its distributive impact,social control of the economy,level of employment,and strike As is typicalof comparativepoliticaleconomy,the argument activity.21 of this "working-classpower approach"is a historicaland contingent one. It is not thatindustrializationproducesthe workingclass, whichin turnproducesthe welfarestate, ratherit is that the variablestrengthof working-classorganizations,whichis in turndependenton other political, economic, and historicalfactors,is responsiblefor variationsin the distributiveimpactand expenditurepatternsof the welfarestate. Havingemphasizedso heavilythe importanceof cross-nationaldifferences in working-classorganizationand ideology,the new comparative political economy has, not surprisingly,also been concerned with exploring explanations for these differences. Stimulated by E.P. Thompson's The Making of the English WorkingClass,22historians and

historicalsociologists studied the developmentof the workingclass in various countries, resultingin a rich body of literature,which by the early eightieswas ripe for the developmentof comparativegeneralizations about the causes of differences in working-class formation, degree of organization,and political expression. In a recent volume buildingon this work, Katznelsonand Zolberg suggestthat two broad sets of factorsaccountfor these cross-nationaldifferenceson the eve of WorldWarI: variationsin capitalistindustrialstructure(the pace and timing of industrializationand the structureof the economy) and the characterof the political regime (legacies of absolutismand extent of political rights for the working class).23This analysis represents an interestingcase of work on different time periods and, to a certain extent, carriedout with differentresearchstrategiesconvergingon the same result since the factors emphasized are essentially the same as those used by working-classpower theoriststo account for variations in union organizationand union structurein the post World War II period.24

Studiesof the interactionof class and politics in the ThirdWorldhave had a slightlydifferentflavor,since they began, most prominentlywith the work of GuillermoO'Donnell,25with the problematicof tryingto explain the absence of political democracy despite substantialeconomic development.As in Europeandiscussions of democracy,arguments focused on the relative strength of the working class and its potentialurbanallies and ruraladversaries.In this debate,however,the questionof externallybased class-actors,specificallyforeigninvestors,

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722 and their abilityto shape the behaviorof the state apparatusplayed a key role. This literatureprovidesa good example,not only of the complexitiesof class analysis,but also of how the new comparativepolitical economy has functionedas a communityof scholars,buildingon each other'swork in a cumulativeway.O'Donnell'swork was first critiqued Laterworkused comand reformulatedby other LatinAmericanists.26 of the arguand to increase the with generality power Europe parisons ments.27Currentwork on the political consequences of industrialization in East Asia has assimilatedearly Latin Americanargumentsand addednew ones.28 To capturethe full flavorof the wayin whichthe historicalcomplexities of class conflict and alliancehave been analyzedby the new comparative political economy would require a wider range of illustrative examplesthan are possible here. A growingbody of literatureon the workingclass in the ThirdWorldtakes up manyof the issues raisedin debates on Europe and a distinctive problematic drawn from the dependency and world-systemapproaches.29An impressivebody of work on Europe shows how subordinategroups have managed to shape political developmentby acting outside establishedinstitutions in the form of riots, strikes, and demonstrations.30The origins and dynamicsof similarlydisruptive,anti-establishmentclass actions have been examinedin the ThirdWorldas well, particularlyin the agrarian sector.31The developmentalconsequences of conflicts and alliances withinand among dominantclasses have been a majorfocus of recent work.32In this last set of work, even more clearlythan in the work on subordinateclasses, class analysisis joined by a second centraltheme of the new comparativepoliticaleconomy.The state is broughtinto the pictureas an actorin its own right. States as actors

A hallmarkof the new comparativepolitical economy has been its generalacceptanceof the dictum,nicely expressedby Cardosothatthe state is "an organizationwhich, since it cannot be otherwise than a social networkof people, exists in its own rightand possesses interests of its own."33In parallelcritiquesof Marxistexplanationsof history, Skocpol and Mann have arguedthat the state (its structure,capacity, and strengthvis-a-viscivil society) cannotbe reducedto a reflectionof class forces and must be broughtback in as an independentforce and actor in historical developments.34Skocpol demonstrateshow state

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723 structures and international competition among states influenced the development and outcome of the three great social revolutions.35 In his more recent work, Mann argues that the social cohesion and organization of pre-industrial societies was provided by overlapping networks of state power, military organization, and religious communities, as well as by social-class relations.36 The role of the state apparatus must be considered along with the interaction of social classes if the politics of development is to be explained. For example, O'Donnell's later iterations of the bureaucratic authoritarianism thesis place much heavier emphasis on the role of the state.37 Similarly, in Europe, understanding authoritarianism requires complementing class analysis with consideration of the evolution of the state apparatus. In the countries that turned to authoritarianism, extensive economic intervention combined with geopolitical ambitions to produce strongly authoritarian tendencies within the state apparatus. The military projects of the state tied the bourgeoisie, especially the coal and steel entrepreneurs, to the state.38The authoritarian tendencies internal to the state expressed themselves at critical points in support for the development of or seizure of power by authoritarian movements.39 The state is as central to the economics of development as to its politics. Recent work on the Third World has extended Gerschenkron's argument that the degree of state intervention required to promote development increases in proportion to relative backwardness and suggested further that higher levels of state entrepreneurship may have a symbiotic rather than oppositional relation to the development of markets. Studies of the evolution of the state's role in extractive industries illustrate how dependence on external markets controlled by foreign corporations may stimulate increased state capacity to intervene. In Chile, for example, Moran shows how modest state attempts to gather information about the industry beginning in the fifties resulted in the construction of bureaucratic capacity and the training of technocrats within the state apparatus who were eventually able to run the mines as state-owned enterprises.4"Becker's study of Peru goes further. Becker argues convincingly that the expansion of the state's role in Peruvian mining brought to power a highly market-oriented group of professional managers working within the state apparatus to increase local output and value-added accruing from the industry.4' A similar symbiosis between state intervention and market success

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724 prevails in cases of successful industrialdevelopment. Japan is the archetypalcase42 and the NICs provide equally apt illustrations.In Korea,concerted and aggressiveaction by the state apparatushelped create the conglomerates(chaebol),which are now among the largest privateeconomic actorsin the ThirdWorld.In Brazil,an authoritarian militarystate fosteredverticalintegrationof the country'seconomy by subsidizing local private capital goods firms, creating state-owned enterprisesto produceintermediategoods, and sponsoringthe alliance of both types of firmswith multinationalcorporationsin technologicalEconomic rationality ly more difficultareas such as petrochemicals.43 cannot be separatedfrom politicalrationalityin these economies. The predictionof futurestate policies is as importantas predictingmarket reactions.They are, in Michael Barzelay'swords, "politicizedmarket economies."44 A focus on the combinationof active state involvementand market orientation has also characterized comparative political economy approachesto industrialdevelopmentin Europe. Senghaas'shistorical analysis of industrializationand Katzenstein'swork on their contemporaryindustrialpolicy reveala variantof this combinationin the smaller European states.45Historically these states protected their home marketsuntil domestic industrydeveloped. Having successfully industrialized,they turned to more open, free trade policies but depended on an active state role in promoting "flexible industrial adjustment."Equally central to their economic policies, accordingto Katzenstein,were policies of "domesticcompensation"that entailed a high degree of state interventionin the form of welfareprovisionsand an activelabor-marketpolicy.46 This focus on the state as an actor does not, of course, precludepaying attentionto the negative developmentalconsequences that may flow from parasiticbureaucraciesor coalitions of state officials and private "rent-seekers."The assumption of the new comparative political economy is not that state interventionis necessarilya developmental plus but ratherthat"carefulanalysesof the causes and consequencesof state actions in various circumstancesare more likely to provide the analyticaltools necessary to avoid misguided attempts at expanding state interventionsthan ritualisticreaffirmationsof the notion that 'he governsbest who governsleast.'"47Recognizingthe state as an actorin its own rightis, of course, a firststep toward"carefulanalysisof causes and consequences."New perspectiveson the interactionof states and the internationalsystemare a crucialsecond step.

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725 Nationaldevelopmentand the structureof the internationalsystem Despite its debt to the dependencyapproach,recentwork on the interaction of national development and the world political economy has constructeda perspectivethat is quite differentfrom the one traditionally associated with the idea of "dependency."It has moved toward a synthesisof the modernizationand dependency positions on the consequences of internationalties for developing countries, emphasizing the contingentcharacterof these consequences.Instead of seeing the internationalsystemas determiningthe possibilitiesfor nationaldevelopment the new comparativepoliticaleconomy takes a more recursive view in which the world political economy both shapes and is shaped by the historicaltrajectoriesof developmentwithin individualnation states. Furthercomplexity is introducedby bringinggeopolitics back into the traditionallyeconomisticanalysisof core-peripheryrelations. Versionsof the dependencyperspectivein which the interestsof internationalcapital are implacablyopposed to Third World interests and cutting ties with the internationaleconomy is the best development strategycan no longer be sustained.This has not, however, led to a returnto the position associatedwith the modernizationapproachthat sees links between developed and developing countries as simply channelsfor the infusionof modern culturaltraitsor opportunitiesto benefit from the workings of comparative advantage. The contemporarysynthesisof these two positions views positive effects of internationalties as possible but contingenton the ability of Third World statesto renegotiatethe natureof theirlinks to the industrialnorth. The idea that internationalties must be negotiatedis a centralpremise of the literatureon states and marketsthat has alreadybeen discussed. Stateinvolvementin the miningindustryin Chile and Peruwas not just involvementin the domestic economy.Takingover the mines, like the simultaneousmoves on the part of the OPEC states in the petroleum industry,was above all else an attemptto transformrelationswith the internationaleconomy.Studiesof a wide rangeof manufacturingindustries reinforcethe view that north-southeconomic ties are not simply given in the structureof the internationaleconomy but also depend on the politicalwill and skill of Third World states, which in turn depend on patternsof alliance and conflict among local classes and economic groups,as well as on the natureof the state apparatusitself.48 Work on the attemptsof Third World countries to change their rela-

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726 tionship to internationalmineralmarketsprovides a good illustration of the development of a view that integrates an appreciationof the politically contingent character of internationalties with a realistic sense of the difficulties of escaping the constraints of international markets. It also shows how those working within the comparative politicaleconomy traditionhave succeeded in buildingon each other's work.In his original1974 study,Moranexplicatedthe politicaldynamics that mightallow a ThirdWorldcountrysuccessfullyto nationalizea TNC but pointed out at the same time the difficultiesthat state-owned copper companies would face given the structureof the international copper industry.Later the optimistic possibilities for transformation were explored in Becker's study of Peru while Shafer'swork on the decliningreturnsto African states developed the negativeimplications of the constraint side.49Finally, E. Stephens's comparative analysis began to lay out the conditions,both domestic and international,that shaped the balance of opportunities for transformationand constraint.50

The general thrust of current work on development and the world economy is neither to decry the developmentalcosts of engagement with the internationalsystem nor to extol the benefits of openness. Instead the aim is to analyze the consequences of internationalflows and ties for domestic institutionswithoutignoringthe extent to which position in the world system is powerfullyaffected by the outcome of domestic struggles. Zeitlin's analysis of nineteeth-century Chilean politics is a prime example.51Rather than seeing Chilean politics as determinedby its peripheralstatus,Zeitlin arguesthat the outcome of nineteenth-centurystruggleswithin and between classes and the state determined Chile's subsequent position in the internationalpolitical economy as well as the shape of its political institutions,creatingthe basis for the establishmentof a democratictraditionbut at the same time makinginviablestrategiesthat mighthave moved the countryout of the periphery.52 Just as the new comparativepolitical economy has refused to accept versions of the dependency approach that would reduce domestic developmentto being the consequence of the evolution of the world system,so has it refusedto reducegeopoliticsto the implementationof economic interests.Work done from a more "internationalrelations" perspective, such as Schurmann'sand Krasner's,has raised serious general questions as to whether U.S. policy towarddeveloping countriescan be explainedin strictlyeconomic terms.53

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Cross-regionalcomparisons have suggested that the "economistic" quality of previous writing on internationalinfluences on domestic development may representa Latin Americanistbias.54As Cumings points out, the entireregionalpoliticaleconomy of NortheastAsia cannot be understoodwithoutreferenceto the uniquecombinationof geopolitical and economic ties that unite Japan and the United States.55 U.S. policy towardKorea and Taiwan,which has been fundamentalto the course of developmentin those countries,was clearly driven by a geopoliticalvision of the world in which containmentof Communism was the driving force. Possibilitiesfor economic gain may well have been taken into considerationbut they were not paramount.Evidence fromother regionsreinforcesthe point.S. Basu,for example,points out that India'sabilityto define itself as "nonaligned"relativeto the United States and the Soviet Union contributedsignificantlyto enablingit to pursue an inward and public-sector oriented strategy of development.56Even in Latin America, Stephens and Stephens note that the U.S. pressure that helped undermine the Manley government'sdevelopmentstrategywas stimulatedless by the government'streatment of North AmericanaluminumTNCs than by its friendlyrelationswith Cuba.57

From the way in which it treats questions of "dependency"to its attemptto includegeopolitics in the analysisof North-Southrelations, the approachof the new comparativepolitical economy to the internationalsystem is clearlyconsistentwith its approachto class analysis and the state. A more interactiveview of the dynamics connecting domestic and internationalfactorsthat gives greaterweightto geopolitical motivationscomplicates the analysisof development,just as the approach taken to class analysis and the state complicates earlier perspectiveson domesticdynamics. The nature of the research program Most work in the new comparative political economy is motivated by the desire to answer analytical questions of substantive interest rather than the attempt to validate general theoretical perspectives.58 There is, nonetheless, a shared core of general ideas about how social structures work and how they should be investigated, which are derived in turn from a shared theoretical heritage. The most important elements in this heritage are Marxist and Weberian. The perspectives of Marx and

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728 Weber continue to orient the formulation of research questions even if, in each case, the use of the theoretical frame has been selective. In the case of Marx, what might be called the "capital logic Marx" has for all practical purposes been left aside. It is increasingly difficult to find references in the new comparative political economy to universalistic evolutionary schemas based on the inexorable economic logic of capitalist accumulation and competition. Economistic Marxist arguments that assume that political interests and preferences can be read simply from a group's position in the economic structure are becoming equally rare. What has been retained is essentially the "political class analysis Marx." Class, defined by economic position, remains central but the impact of class membership on political behavior is assumed to be contingent on a variety of social-structural and historical factors, as in Marx's analysis of the revolution of 1848 in France or the struggle for reduction of the working day in England.59 Important "grand theoretical" interpretations of Weber have also been rejected. "Value determinist" readings of Weber in which shifts in the internal logic of cultural systems emerge independently of social structural change and provide the key stimulus to developmental progress are clearly not compatible with a comparative political economy approach. Equally alien is a reading of Weber that defines development in terms of a teleological impetus toward ever more pervasive rationality. What is retained is the historical and institutional side of Weber with its sensitivity to the way in which rational social and organizational structures are reshaped by considerations of power and conflicting interests and its careful portrayal of the interaction of cultural and social-structural features. The appropriation of the theoretical perspectives of the world-system and dependency approaches has taken a similar direction. Cardoso's admonitions to avoid the mechanistic and unreflective "consumption" of dependency propositions have been heeded and mechanistic versions of the world-system approach that attempt to predict national development simply by categorizing a country's position in the world system are eschewed.60 What is retained in both cases is the conviction that history must be written internationally and that the national developmental trajectories must always be understood as shaped by the context of the international system. Both because of its diverse theoretical heritage and because of the

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729 selective way in which this heritage has been incorporated, the new comparative political economy has avoided the straight-jacket of theoretical orthodoxy. Such avoidance has been essential to its growth. For this research program to move forward, dialogue among variant interpretations of its shared heritage are crucial. Defenders of historical-structural dependency explanations of a particular change in the position of a Third World labor movement must confront state-centric neo-Weberian explanations without losing their sense that divergent theoretical predilections are less important than common commitment to explanations that take serious account of the institutional contexts of other times and places. The openness of the approach is also reflected in the range of methodological tactics that have been used by its practitioners. Most studies are conceptualized at the level of the nation state, but the research design itself may take a variety of forms including historical case studies of particular countries6' or of small sets of selected countries,62 cross-national quantitative studies using selected statistical information on samples of countries,63 or combinations of country case studies and analysis of aggregate data.64 Even when research involves extensive fieldwork in a single country, the results are not usually presented as pure case studies. Instead they attempt to explain developmental outcomes by looking for Stinchcombe's "causally significant analogies" among a set of comparable cases.65 Thus, Stepan's66 study of inclusionary corporatist politics in Peru is framed by extensive comparisons to inclusionary and exclusionary regimes in other Latin American countries and Korpi's67 study of Swedish social democracy relies on extensive comparisons with other advanced capitalist democracies. Country case studies start with a general characterization of the national political economy and its international context, relying on the existing secondary literature and, in the case of more contemporary cases, descriptive statistical evidence. Specific primary data provide an essential complement to this general characterization. For example, Zeitlin and Ratcliff collected data on ownership, occupational position, and kin ties for a large sample of the Chilean elite, in order to decipher the patterns of conflict and alliance within the Chilean upper class.68 Stephens and Stephens interviewed elites and analyzed the content of elite media to probe the role of capitalist attitudes in the rise and fall of the Manley regime.69 Korpi and Esping-Andersen used survey data to evaluate the political position of the working class, while Tilly and Paige coded events of protest and rebellion based on media reports.70

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730 Despite the importanceof contemporaneousempiricaldata in comparativepoliticaleconomy arguments,it is assumedthat currentsocial structure,social relations,and social consciousness cannot be simply "readoff" from the underlyingeconomic structureof society no matter how finely grained an analysis of that structureone carries out. In Stinchcombe'sterms, the persistence of currentinstitutionalarrangements cannot be explainedpurelyin terms of "constantcauses,"rather it is also a product of "historiccauses."71Events and institutionalarrangements of the past are an essential part of the explanation of currentarrangementsand dynamics.For example, the contrastin the political consciousness of the Germanand English bourgeoisiein the interwarperiod cannot be explainedentirelyby the differencein their respectivepositions in their domestic economies and the international system.Rather,the legacies of past social arrangements,such as class coalitions,relationsto the state, etc., are essentialto the understanding of the differencesin the politicalexpressionsof the capitalistclasses in these two countriesin this era. Both researchpractice and assumptionsconcerning the characterof causality have strong implicationsfor the analysis of data. Concern with multiple paths leading to the same end point and conjunctural causation(interactioneffects in the languageof statisticalanalysis)has meant reluctance to build interpretations on statistical evidence alone.72 Using nation states as units exacerbates the problem by reducingthe numberof relevantcases. For example,if income inequality is hypothesized to depend on working-classstrength, historical legacies of agrarian-classrelations,currentlandholdingpatterns,and state strength,with the effects of each being contingenton their interaction with one anotherand with position in the world system and the timing of industrialization,there is no possibilityof testing the hypothesis statistically.The set of nation states available simply cannot provide a sufficientnumberof cases to supportappropriatestatistical specificationof a model of this complexity.73 Fortunately,such limitationshave not been used as excuse for failingto expand the range of cases on which the ideas of the new comparative political economy are tested. To the contrary,one of the most important thrusts of the new comparativepolitical economy has been the attemptto expand the range of cases compared.Comparisonswithin regions have been increasinglyjoined by cross-regionalcomparisons. We have already noted how analysts of democratizationlook for models that account for patternsin both Europe and Latin America74

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731 while those interestedin the state and industrializationtry to integrate the experienceof LatinAmericanand East Asian NICs.75Considering new sets of cases has been an importantstimulusfor the progress of theoreticaldebates,as, for example,when the dependencyapproachis challengedto take into account the East Asian NICs.76At the same time, considerationof a wideningscope of cases has provided important confirmationof the heuristicvalue of the approach.Thus, when Gold uses Cardoso and Faletto's approach to frame his analysis of Taiwanor Cumingsuses O'Donnell as a startingpoint for his analysis of authoritarianismin East Asia, it is clear that these earlierconceptualizationsare more thanad hoc descriptionsof particularsettings.77 As these examples of the transportationof concepts and hypotheses across regions illustrate, the variegated character of the research programof the new comparativepoliticaleconomy should not be taken to suggestthatit consists simplyof an aggregationof studies concerned with macro-structuralsocio-economic change.Despite the openness of this researchprogram,there is a real communityof scholarsinvolved. They read each other's work, cite it, and build on it. Whether one is interested in the prerequisitesof democracy or the consequences of nationalizingmineral exports, a gradual, cumulative increase in the sophistication and scope of the analysis offered is evident in any chronologicalreviewof the literature. New challenges The willingnessof the new comparativepolitical economy to include the ideographicfacts of specific historicalcontexts as legitimatecomponents of structuralexplanations is one of its strengths. So is its willingnessto tolerate complex causal explanationsthat include political and ideologicalfactors along with economic ones. Yet, engagement with history and acceptance of complexityare also sources of vulnerability. They undercut the ability of the new comparative political economy to transformresearchinto the kind of unambiguous"puzzlesolving"that characterizes"normalscience"and therebyrob it of one of the key features that allow researchparadigmsto attract new adherents.78"Messy"research programs such as the new comparative political economy will always be vulnerable to competitors that propose single-factorexplanations,more sharply defined theoretical orthodoxies,or more easily replicablemodels of investigation.Currently,the most powerfulchallengefrom this quartertakes the form of what

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732 might be called the "new utilitarianism,"the growing body of work that generally goes under the label of "rational choice" or "public choice." The new utilitarianism explains large-scale, long-term change by aggregating the choices of individuals. The choices themselves are explained by assuming that the individuals involved are "rational,"which is to say that their decisions are aimed at maximizing a set of utilities that can be imputed by the analyst. In addition to the analysis of individual decisions, these "rational choice" analyses usually involve game-theoretic consideration of the outcomes produced when joint decisions are required to achieve a particular result. The approach lends itself to formal modeling and the rational reader usually has no trouble identifying subjectively with the rational actors of the model. The models are portable because the rules of rationality are not historically contingent, remaining the same whether one is analyzing peasant insurgents or nuclear statesmen. Elegance requires simplification and the elegance of rational-choice models is no exception. Simplification is achieved along two dimensions. The first involves assuming a known locus of decision-making. To apply the apparatus of rational choice to a process of social change, the relevant decisions and the social actors who have the power to effect them must already have been identified. In a fixed, transparent institutional structure, this may not be problematic. Tracing the course of a bill through the U.S. Congress, for example, involves a known distribution of decision-making prerogatives and allows relatively easy identification of the decision-makers whose rationality must be modeled. In other cases, however, identifying the decision-makers cannot be reduced to a preliminary procedure. Before we can apply a "rational choice" analysis to Korean democratization, we must know what combination of government and opposition politicians, business people and military leaders was involved in the attempt to move toward elections. Even more important we must be able to identify those social groups outside of the halls of power who decided to risk repression by public expressions of opposition to the status quo and thereby forced those with political power to make a decision. Figuring out where and by whom decisions are made, not validating their "rationality,"this is the primary challenge. The second dimension of simplification involved in a rational-choice analysis is equally fundamental. Once the relevant decision-maker is identified, the structure of his or her preferences must be specified. In

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733 principle, rational actors may be trying to maximize any set of utilities: material needs, power, or "affective utilities" such as social prestige. Shiite martyrs who die charging machine guns are no less rational than Wall Street stockbrokers; they just have different utilities. Taking this tack, however, runs the risk of reducing rational choice "explanations" to post-hoc tautologies which boil down to "People do what they want to do." In other words, rather than the utilities explaining the action, the action is used to demonstrate that the actor had a given set of utilities (e.g. valued prestige over money, etc.). Breaking out of the tautology through prior empirical specification of preferences would lead the new utilitarians down precisely the road they would like to avoid, into the analysis of values, culture, and norms. The approach preferred by the new utilitarians is to make preference structures "exogenous." The task of explaining where preferences come from is disavowed in principle, while in practice, a plausible lowest common denominator set of preferences, usually power or the satisfaction of immediate material needs, is postulated. Short-circuiting the derivation of preferences allows the rational-choice model to regain its logical elegance, but much is lost. What is lost is not only the ability to deal with behavior that seems to contradict canons of individual selfinterest,79 lost as well is the fundamental sociological premise that "interests" or "preference structures" must be derived in the first instance from an analysis of the society and culture in which the individual actor is embedded. In the question of preferences as in the question of decision-making structures, the issues short-circuited by utilitarian modeling are of central concern to the new comparative political economy. Before one can understand whether the choices of eighteenth-century Prussian landowners were rational, one must make a judgment as to whether they were more interested in preserving their power or increasing their incomes. Likewise, in any explanation of the contrasting behavior of the Brazilian and Chilean military regimes one must decide what goals (beyond regime survival) each regime was trying to realize. In summary, preferences cannot be taken for granted but must remain endogenous. The extent to which the research program of the new utilitarianism short circuits both the task of locating decisions within complex, ambiguous social-structural contexts and the task of accurately specifying the preferences of social actors will depend on the intellectual environment within which the approach evolves. The internal logic of the

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734 approachitself will exaggeratethese tendencies.The strengthsof the approachare its logical elegance and ability to translatesocial issues into formal models. Thus, within the rational-choice community, rewardswill accrue to imaginativeformal modelers not to those who muddy the waters by raisingquestions of historicalcontingency and variantpreferencestructures.Faithin the universalexplanatorypower of the models focuses attentionon refiningtheirinternallogic and discourages exploration of problems for which the data necessary for testingthe latest refinementis likely to be hardto come by. Faced with the choice between investigatinga problem that requiresonerous investigationof the locus of decision-makingbefore a model can be applied and one in which refinementof the model is possible with a minimumof empiricalcomplication,the rational new utilitarianwill naturallychoose the latter.Likewise,cases in which behaviorappears consistent with the immediatematerialself-interestsof the decisionmaker will be investigated while those seeming to involve more ambiguouspreference structureswill be left aside. If such a reward structureprevails,the rational-choiceagendawill become increasingly sterileas far as any contributionto our understandingof development is concerned. The problemgoes beyond questionsof theoreticalprogress.Development policy is currentlydominated by models that privilege market rationality.They suggest that institutionsor policies claimingto serve the common good through non-marketmeans are "covers"behind which individuals enhance their own power and pursue their own materialself-interests.Efficiencyin generaland developmentin particular requireaggressiveexpansion of the arenas governed openly and explicitlyby marketprinciples.Attempts to modify marketoutcomes in order to increase equity or generate a new distributionof factor endowmentsare viewed not just in practicebut in principleas attempts at "rent-seeking." The workof new utilitarianssuch as JamesBuchanan and Gordon Tullock has provided important theoretical legitimacy for this currentpolicy and the unrestrainedhegemonyof the new utilitarianismis verylikelyto impede the emergenceof futurecompetitors. The challenge of the new utilitarianismmight, of course, have other quite differentoutcomes, both in terms of future researchand policy. There are complementaritiesbetween the new utilitarianismand the new comparativepoliticaleconomy as well as conflicts.Insofaras new utilitarianscan be induced to take into account the perspectivesof the new comparative political economy, the tendency to short circuit

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735 analysisof the locus of decision-makingand the natureof preference structureswill be mitigated.In the same way,dialogue with advocates of rationalchoice may have the salutaryeffect of pushingcomparative politicaleconomiststo specify more closely the characterof the social and historicalactors used in their own explanations.The "collective action problem,"which is a focus of a large proportion of rational choice modeling,providesa good example.Because they refuseto take for granted the idea that people will act together when they share interests,the new utilitariansforce others not to leap too quicklyfrom the observationof shared social structuralposition to the assumption that goals will be pursued in common. Dialogue with rational-choice theoristsover questionsof when a set of individualswho sharea socialstructurallydefined position can be legitimatelytreated as a class or some other kind of historicallyimportantsocial actor could be provocativeand usefulin the developmentof the agendaof the new comparative politicaleconomy. Utilitarianmodels may also play a useful role as elements in a broader explanation.The work of Michael Barzelay illustratesthe point. In explainingthe vicissitudesof Brazil'salcohol policy, he makes ample use of a "strategicuncertainty"model, quite similarto those used by rational-choicetheorists,to explain the behavior of private investors. Yet at the same time, he makes it clear that expected profitability depends above all on futurestate policy,whichin turnis generatedby a complex set of interactionswithin the state apparatusand between it and important political constituencies. By admitting freely that, "payoffsfor the state cannotbe definedeven at the conceptuallevel"(p. 58) and by combininghis modelingexercisewith a very carefulhistorical analysisof the politicaland social structureswithinwhichthe policy evolved, Barzelay is able to use some of the machineryof rationalchoice analysis to strengthen his comparative political economy analysisratherthan deflectingfrom it. Conversely,there are numerous examplesof recent analysesof developmentissues that are couched in utilitarianterms but carry with them significantelements of the new comparativepolitical economy agenda.The work of Robert Bates on the interactionof class politics and state policies in African development is a prime example, as is the work of BarbaraGeddes on Latin America, Adam Przeworskiand Michael Wallersteinon Europe, and SamualPopkinon Asia.8' The natureof the challengeis clear.As long as the new utilitarianism operates in the context of a lively, historicallyand institutionallyori-

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736 ented new comparative political economy, its internal tendency to short circuit important cultural, political, and social structural arguments will be counter-balanced. The tension between the two will be heuristically productive just as the tension between modernization theory and the dependency approach was in the sixties and early seventies. In the absence of such tension, the possibility of rational-choice theorizing degenerating into sterile exercises in formal logic that distract attention from the historical realities of development increases.

The future of the new comparative political economy What should practitioners or would-be practitioners of the new comparative political economy do in order to strengthen their contribution to the study of development? Most obviously, they should keep on doing what they have been doing: Turning out solid, broad-gauged comparative studies that bring new evidence to bear on interesting theoretical questions. At the same time, they should focus on new challenges, like the new utilitarianism, and not allow themselves to be distracted by past struggles that have already been won. Most important, they should work more explicitly to strengthen the new comparative political economy as a research program, a shared project dependent on interaction and mutual support within a broad community of scholars. Fighting old battles is often comfortable but rarely productive. The battle against "value-determinist"varieties of modernization theory has been won. Fighting it over again simply stands in the way of acknowledging the importance of socially constituted normative frameworks in the study of comparative political economy. The growing preeminence of radically individualist and interest-based perspectives such as the new utilitarianism makes Durkheim's biting polemics against Spencer and the old utilitarians increasingly relevant. Without acknowledging that individual choices depend on norms and values created by the communities and groups in which the individuals live, it is very difficult to respond to the challenge of the new utilitarianism at the microlevel.8l This does not imply a retreat to models that make exaggerated assumptions of consensus and ignore conflicting interests. The recent work of Giddens, Habermas, and Rueschemeyer, not to mention the work of Gramsci, demonstrates the possibility for combining concern with norms and values with a focus on problems of domination and

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737 conflict and an appreciation of the normative systems themselves.82 Most work in the comparative political economy tradition already includes implicit recognition of the importance of historical and socialstructurally rooted norms and values; it is time to be open about it. Strengthening the new comparative political economy as a research program means above all communicating the methodological and theoretical choices more explicitly. Too many exemplary studies provide their readers with only the most cursory mention of the theoretical and methodological asssumptions that underlie the research, a few pages or even a few paragraphs.83This reticence would be fine if the new comparative political economy were defined simply as a fortuitous collection of exemplary individual efforts, but it is a grave detriment to its prospects as a research program. Most obviously, it significantly increases the difficulties faced by those who might want to use it as a model for their own future research. Monographs built on years of fieldwork or historical research are intimidating enough to would-be emulators as it is. Conscious attempts to facilitate apprenticeship are needed to compensate for the difficulties inherent in research of this genre. Instead of being miserly in the elucidation of their roots, practitioners need to work harder at making the theoretical ideas and assumptions on which they are building explicit. The methods of investigation need to be presented in ways that highlight their replicability rather than leaving the impression that an amorphous accumulation of scholarly wisdom is the most important prerequisite for the production of a successful study. Active pursuit of these concerns will nurture a research agenda that serves many needs. An agenda that rejects reductionism is essential to preserving the historical side of the study of development. One that challenges the increasingly prevalent ideological assumption that markets are universally efficient allocators is essential if a modicum of pluralism is to be retained in the formulation of development policy. One that defines the study of development as the study of long-term, large-scale, socioeconomic, and political change, irrespective of the region or epoch in which it occurs, and that addresses the classic concerns of the nineteeth-century theorists who first confronted the issue of industrialization is essential, if the study of development is not to become marginalized, as it was prior to the sixties. This is precisely the sort of research program that the new comparative political economy has constructed over the course of the past ten to fifteen years. If it can

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738 be effectivelypushed forward,the study of developmentshould arrive at the year 2000 with the same heuristicvigor and lively dialoguethat havecharacterizedit since the sixties.

Acknowledgments This articleis based, in part,on the ideas developed in a longer review article publishedin The Handbook of Sociology,Neil Smelser,editor, (Newbury Park, Ca: Sage, 1988). Our thanks to Robert Bates, Ken Bollen, Christopher Chase-Dunn, David Collier, Barbara Geddes, Ronald Herring, Alexander Hicks, Timothy McDaniels, Farrokh Moshiri,CharlesRagin, DietrichRueschemeyer,Mary Ruggie,Theda Skocpol, Neil Smelser, David Smith, Evelyne Huber Stephens, and MichaelTimberlakefor commentson all or partsof earlierdrafts. Notes 1. Imre Lakatos, The Methodology of Scientific Research Programmes, Philosophical Papers, Vol. 1 edited by J. Worral and Gregory Currie (Cambridge: Cambridge University Press, 1978). While a certain license must be taken in applying Lakatos's concept of a "research program" to the social sciences, it does convey the idea of an ongoing body of work through which a community of scholars build cumulatively on each other's investigations. 2. For some cogent comparisons of modernization theory and its sixties challengers see Alejandro Portes, "The Sociology of National Development," American Journal of Sociology 82, no. 1, (1976), 55-85; or Arturo Valenzuela and J. Samuel Valenzuela, "Modernization and Dependency: Alternative Perspectives in the Study of Latin American Underdevelopment," Comparative Politics 10, no. 4, (1978), 535-557. 3. Alexander Gerschenkron, Economic Backwardness in Historical Perspective (Cambridge: Harvard University Press, 1962). 4. Karl Polanyi, The Great Transformation (Boston: Beacon Press, 1944). 5. Barrington Moore, Jr., The Social Origins of Dictatorship and Democracy (Boston: Beacon Press, 1966). 6. See Theda Skocpol, "A Critical Review of Barrington Moore's Social Origins of Dictatorship and Democracy," Politics and Society, vol. 4, no. 1 (1973), 1-34. 7. Andre Gunder Frank, Capitalism and Underdevelopment in Latin America (New York: Monthly Review Press, 1967). 8. The critiques of Frank and this particular hypothesis, most of which have come from Marxists and neo-Marxists, form a literature in themselves. Ernesto LeClau, "Feudalism and Capitalism in Latin America," New Left Review 67 (May-June, 1971), and Bill Warren, "Imperialism and Capitalist Industrialization," New Left Review 81 (Sept.-Oct., 1973); Bill Warren, Imperialism: Pioneer of Capitalism (London: New Left Books, 1980) are among the best known. See also Ivar Oxaal,

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739 Tony Barnett, and David Booth, editors, Beyond the Sociology of Development: Economy and Society in Latin America and Africa (London: Routledge and Kegan Paul, 1975) and David Booth, "Marxism and Development Sociology: Interpreting the Impasse," World Development 13, no. 7 (1985), 761-787. As Leonard Binder, "The Natural History of Development Theory," Comparative Studies in Society and History 28, no. 1, (1986), 3-33, puts it Frank has "been treated by more sophisticate Marxist theorists like some sort of country bumpkin who has marched into the living room without removing his muddy galoshes." 9. Paul Baran, The Political Economy of Growth (New York: Monthly Review Press, 1957). 10. Immanuel Wallerstein, The Modern World-SystemI: Capitalist Agriculture and the Origins of the European World Economy (New York: Academic Press, 1974). Immanuel Wallerstein, The Capitalist World Economy (Cambridge: Cambridge University Press, 1979). 11. The Sage Publication series of Political Economy of the World-systemAnnuals, now in its ninth year, provides one means of keeping up with work in the world-system tradition. The most comprehensive recent statement of the perspective is ChaseDunn's forthcoming Structures of the World Economy. Charles Ragin and Daniel Chirot, "The World System of Immanuel Wallerstein: Sociology and Politics as History," in Theda Skocpol, editor, Vision and Method in Historical Sociology (Cambridge: Cambridge University Press, 1984) provide a review of Wallerstein's work along with some bibliography. Among the more influential critiques of Wallerstein's approach are Robert Brenner, "The Origins of Capitalist Development: A Critique of Neo-Smithian Marxism," New Left Review 104 (1977), 2492; Theda Skocpol, "Wallerstein's World Capitalist System: A Theoretical and Historical Critique," American Journal of Sociology 82 (1977), 1075-1090; Aristide Zolberg, "Origins of the Modern World System: A Missing Link," World Politics 33 (1981), 253-281; and Maurice Zeitlin, The Civil Wars in Chile (or the bourgeois revolutions that never were) (Princeton: Princeton University Press, 1984), chapter 5. 12. Gabriel Palma, "Dependency: A Formal Theory of Underdevelopment or a Methodology for the Analysis of Concrete Situations of Underdevelopment," World Development 6 (1978), 881-894, provides one of the best reviews of the major theorists whose work may be loosely considered part of the dependency tradition. Third World contributors include, in addition to Latin Americans, scholars from the English speaking Caribbean, such as Norman Girvan, 'The Development of Dependency Economics in the Caribbean and Latin America: Review and Comparison," Social and Economic Studies 22, no. 1, (1973), 1-33, and Norman Girvan, Corporate Imperialism: Conflict and Expropriation (New York: Monthly Review Press, 1976) as well as scholars from other areas of the Third World with European training, most prominently Samir Amin and Arghiri Emmanuel. As Girvan's essay makes clear, the Caribbean dependency school was a direct outgrowth of sixties radicalism, in this case the international black power movement and an indigenous intellectual movement known as the New World Group. 13. Some Third World scholars had been involved in the development of the modernization approach, most notably Gino Germani, but their role was much less central. See Joseph Kahl, Modernization, Exploitation and Dependency in Latin America (New Brunswick, Transaction Books, 1976). 14. Most important among the latter were the members of the "ECLA" or CEPAL

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740

15.

16.

17.

18.

19. 20. 21.

22. 23.

24.

school that grew out of the work of Raul Prebisch and later included a variety of "structuralist"economists such as Celso Furtado and Oswaldo Sunkel. First written in the late sixties in Santiago and published in 1969 in Spanish, F. H. Cardoso and E. Faletto, Dependency and Development in Latin America (Berkeley: University of California Press, 1979) was not available to English readers until 1979. For a general review of Cardoso's work see Kahl, Modernization. For Cardoso's own critique of how his work has been interpreted in North America, see F. H. Cardoso, "The Consumption of Dependency Theory in the United States," Latin American Research Review 12, no. 3, (1977), 7-25. For a more extensive, though still incomplete, review of major contributions to the new comparative political economy see Peter Evans and John D. Stephens, "Development and the World Economy," in Neil Smelser, editor, Handbook of Sociology (Newbury Park: Sage, 1988). For example, see Seymour Martin Lipset, "Some Social Requisites of Democracy," American Political Science Review 52 (1959), 69-105; Phillips Cutright, "National Political Development," American Sociological Review 28 (1963), 253-264; Robert W. Jackman, "On the Relation of Economic Development to Democratic Performance," American Journal of Political Science 17 (1973), 611-621; Kenneth Bollen, "World System Position, Dependency, and Democracy," American Sociological Review 48, no. 4 (1983), 468-479. Dietrich Rueschemeyer, "Uber Sozialokonomische Entwicklung und Demokratie," in G. Hirschier et al., Weltgesellschaft und Sozialstruktur (Diessenhofen: Ruegger, 1980), 211-230. See Goran Therborn, "The Rule of Capital and the Rise of Democracy," New Left Review 103 (1977). See John D. Stephens, "Democratic Transition and Breakdown in Europe, 18701939: A Test of the Moore Thesis," forthcoming, American Journal of Sociology. For theoretical presentations of this view, see Andrew Martin, "Is Democratic Control of Capitalism Possible? Some Notes Towards An Answer," in Leon Lindberg et al., editors, Stress and Contradiction in Modern Capitalism (Lexington, Ma: D.C. Heath, 1975), 13-56; Walter Korpi, The Working Class in Welfare Capitalism (London: Routledge and Kegan Paul, 1978) and Walter Korpi, The Democratic Class Struggle (London: Routledge and Kegan Paul, 1982); John D. Stephens, The Transition from Capitalism to Socialism (Urbana: University of Illinois Press, 1979); Gosta Esping-Andersen, "Social Class, Social Democracy, and the State," Comparative Politics 11 (1978) and Gosta Esping-Andersen, Politics Against Markets: The Social Democratic Road to Power (Princeton: Princeton University Press, 1985); Ulf Himmelstrand et al., Beyond Welfare Capitalism: Issues, Actors, and Forces in Societal Change (London: Heineman, 1981); and Gosta Esping-Andersen and Roger Friedland, "Class Coalitions in the Making of West European Economies," Political Power and Social Theory 3 (1982), 1-52. For the empirical results referred to in the text as well as a brief summary of both statistical and qualitative work on the welfare state, see Evans and Stephens, "Development." E. P. Thompson, The Making of the English Working Class (New York: Vintage Books, 1963). Ira Katznelson and Aristide R. Zolberg, editors, Working Class Formation. Nineteenth Century Patterns in Western Europe and the United States (Princeton: Princeton University Press, 1986). Anders Kjellberg, Facklig Organisering i Tolv Lander (Lund: Arkiv, 1983) and

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741 John D. Stephens, The Transitionfrom Capitalismto Socialism;Geoffery Ingham, Strikes and Industrial Conflict: Britain and Scandinavia (London: Macmillan, 1974); and R. BerkeleyMiller,"IndustrialStructure,Political Power, and Unionization:The United Statesin ComparativePerspective,"(Ph.D.Dissertation,Brown University,1987). MichaelWallerstein,"UnionGrowthfrom the Union's Perspective:Why SmallerCountriesAre More HighlyOrganized,"paper deliveredat the meetings of the American Political Science Association, Chicago, September, 1987. presents a contrastingtheoretical interpretation,emphasizing size of the populationper se ratherthan the industrialstructure(whichis partlydependenton the size of the domestic economy and thus on the size of the population),of essentiallythe sameempiricalresultsas presentedin Stephensand Kjellberg. 25. GuillermoO'Donnell, Modernizationand BureaucraticAuthoritarianism(Berkeley. Instituteof InternationalStudies,Universityof California,1973). 26. See David Collier,editor, TheNew Authoritarianismin LatinAmerica (Princeton: PrincetonUniversityPress, 1979). 27. Juan Linz and Alfred Stepan, editors, The Breakdownof Democratic Regimes (Baltimore:Johns Hopkins UniversityPress, 1978); G. O'Donnell, P. Schmitter, and L. Whitehead,Transitions from AuthoritarianRule (Baltimore:Johns Hopkins UniversityPress, 1986); Nicos Mouzelis, Politicsin the Semi-Periphery: EarlyParliamentarianismand Late Industrialisationin the Balkans and Latin America (London:Macmillan,1986). 28. See Tun-jenCheng,"ThePolitics of IndustrialTransformation- The Case of the East Asian Nics," (Ph.D. Dissertation, Dept. of Political Science, University of California,Berkeley,1987). 29. For example, Alejandro Portes and John Walton, Labor, Class and the InternationalSystem(New York:Academic Press, 1981); CharlesW. Bergquist,Labor In Latin America: ComparativeEssays on Chile, Argentina, Venezuela, and Colombia(Stanford:StanfordUniversityPress, 1986); Fred Deyo, Labor Movementsin the EastAsian NICs:StructuralDemobilizationand Pre-emptoryDevelopmentalSequences(unpublishedmanuscript,1986); Ruth Berins Collier and David Collier,Shapingthe PoliticalArena:CriticalJunctures,TradeUnions,and the State in LatinAmerica(forthcoming). 30. Edward Shorter and Charles Tilly, Strikes in France 1830-1968 (Cambridge: CambridgeUniversityPress, 1974); CharlesTilly, Louise Tilly, and RichardTilly, TheRebelliousCentury,1830--1930(Cambridge:HarvardUniversityPress, 1975); Charles Tilly, From Mobilizationto Revolution(Reading, Ma: Addison-Wesley, 1978). 31. For example, Eric R. Wolf, Peasant Warsof the TwentiethCentury(New York: Harper, 1969); Jeffery M. Paige, AgrarianRevolution (New York: Free Press, 1975). 32. See for example,MauriceZeitlin, The Civil Warsin Chile (or the bourgeoisrevolutions that never were), Maurice Zeitlin and Richard E. Ratcliff, Landlordsand Capitalists(Princeton:PrincetonUniversityPress,forthcoming). 33. F. H. Cardoso,"Onthe Characterizationof AuthoritarianRegimesin LatinAmerica," in David Collier, editor, The New Authoritarianismin Latin America (Princeton:PrincetonUniversityPress, 1979), 51. 34. Skocpol, "A CriticalReview of BarringtonMoore's Social Originsof Dictatorship and Democracy;Theda Skocpol, States and Social Revolutions (Cambridge: CambridgeUniversityPress, 1979). MichaelMann,"States,Ancient and Modern," ArchivesEuropeennesde Sociologie 18 (1977), 262-298; Michael Mann, "The

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742 Autonomous Power of the State:Its Origins,Mechanisms,and Results,"Archives Europeennes de Sociologie 25 (1984) 185-213; Michael Mann, The Sources of Social Power. Volume I: A History of Power in Agrarian Societies (Cambridge:

CambridgeUniversityPress, 1986); Michael Mann, TheSourcesof Social Power. Volume II: A History of Power in Industrial Societies (Cambridge; Cambridge

UniversityPress,forthcoming). 35. Skocpol, States and Social Revolutions. 36. Mann, The Sources of Social Power. Volume I: A History of Power in Agrarian Societies.

37. Guillermo O'Donnell, "Reflectionson Patterns of Change in the Bureaucratic Authoritarian State," Latin American Research Review 13 no. 1 (1978), 3-38;

State and the GuillermoO'Donnell, 'Tensions in the Bureaucratic-Authoritarian Questionof Democracy,"in David Collier,editor,285-318. 38. James Kurth,"IndustrialChange and Political Change,"in David Collier, editor, 319-362. 39. Stephens,"DemocraticTransitionand Breakdownin Europe, 1870-1939: A Test of the Moore Thesis." 40. T. H. Moran, Multinational Corporations and the Politics of Dependence: Copper in

Chile(Princeton:PrincetonUniversityPress, 1974). 41. David Becker, The New Bourgeoisie and the Limits of Dependency: Mining, Class and Power in 'Revolutionary' Peru (Princeton: Princeton University Press, 1983). 42. See Chalmers Johnson, MITI and the Japanese Miracle: The Growth of Industrial

Policy1925-1975 (Stanford:StanfordUniversityPress, 1982). 43. P. B. Evans, Dependent Development: The Alliance of Multinational, State and

Local Capitalin Brazil(Princeton:PrincetonUniversityPress, 1979). 44. Michael Barzelay, The Politicized Market Economy: Alcohol in Brazil's Energy

Strategy(Berkeley:Universityof CaliforniaPress, 1986). 45. Dieter Senghaas, The European Experience: A Historical Critique of Development Theory (Berg, 1985). Peter Katzenstein, Small States in World Markets: Industrial

Policyin Europe(Ithaca:CornellUniversityPress, 1985). 46. We are not suggestinghere that there is no opposition between state and market allocation.For instance,there is no questionthat the dominanttrend since World War II in advancedcapitalistsocieties as evidenced in the growth of the welfare state has been towardreplacingmarketallocationwith state allocation.And much of the conflict between the Third World and the capitalistcore has been around this issue.Our point here is thatthereis no one-to-one trade-offbetweenthe two. 47. Peter Evans, Dietrich Rueschemeyer,and Theda Skocpol, editors, Bringingthe StateBackIn (Cambridge:CambridgeUniversityPress, 1985), 364. 48. See for exampleDouglasBennettand KennethSharpe,TransnationalCorporations versus the State: The Political Economy of the Mexican Auto Industry (Princeton:

Princeton University Press, 1985) and Richard Kronish and Ken Mericle, The Political Economy of the Latin American Motor Vehicle Industry (Cambridge: MIT

Press, 1984) on the auto industry,P. B. Evans,"State,Capitaland the Transformation of Dependence:The BrazilianComputerCase," WorldDevelopment14, no. 7, (1986), 791-808 and EmanuelAdler, "IdeologicalGuerrillasand the Quest for Technological Autonomy: Development of a Domestic Computer Industry in Brazil,"InternationalOrganization40, no. 3, (1986) on the computer industry, Gary Gereffi, The Pharmaceutical Industry and Dependency in the Third World

(Princeton:PrincetonUniversityPress, 1983) on pharmaceuticals,and the studies

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743

49.

50.

51. 52.

53.

54.

55.

56.

57.

58. 59.

60. 61. 62. 63.

in RichardNewfarmer,editor, Profits,Progressand Poverty:Case Studiesof International Industriesin Latin America (Notre Dame: University of Notre Dame Press, 1985). Becker, The New Bourgeoisie, Michael Shafer, "Capturing the Mineral Multinationals:Advantageor Disadvantage,"InternationalOrganization37, no. 1, (1983) 93-119. Evelyne Huber Stephens, "MineralStrategies and Development: International Political Economy, State, Class and the Role of Bauxite/Aluminumand Copper Industriesin Jamaicaand Peru,"Studiesin ComparativeInternationalDevelopment 22, no. 3, (1987) 60-102. Zeitlin, TheCivil Warsin Chile(or the bourgeoisrevolutionsthatneverwere). Examining the domestic origins of internationalposition is obviously equally importantin the case of core countries.A nicely craftedrecentcontributionon this side is BarbaraStallings,Bankerto the Third World:U.S. PortfolioInvestmentin LatinAmerica,1900-1986 (Berkeley:Universityof CaliforniaPress, 1987) which shows how, in the case of the United States, the transitionto becoming a capital exporterwas rooted in changesin domesticfinancialinstitutionsand domesticclass structures. Franz Schurmann, The Logic of WorldPower (New York: Pantheon, 1973). Stephen Krasner,Defendingthe NationalInterest:Raw MaterialsInvestmentsand U.S.ForeignPolicy(Princeton:PrincetonUniversityPress, 1978). See P. B. Evans, "Class,State and Inequalityin Dependent Development:Some Comparisonsof East Asia and LatinAmerica,"in Fred Deyo, editor, The Political Economyof theNewAsian Industrialism(Ithaca:CornellUniversityPress, 1987). Bruce Cumings, "The Origins of Development of the Northeast Asian Political Economy:IndustrialSectors, ProductCycles, and PoliticalConsequences,"InternationalOrganization38, no. 1, (1984) 1-40. SanjibBasu, "Nonalignmentand Economic Development:IndianState Strategies, 1947-1962," in Peter Evans et al., editors, States versusMarketsin the World System(BeverlyHills:Sage, 1985) 193-216. Evelyne Huber Stephensand John D. Stephens,DemocraticSocialismin Jamaica: The Political Movement and Social Transformationin Dependent Capitalism (Princeton:PrincetonUniversityPress, 1986). Cf. Theda Skocpol, Visionand Methodin HistoricalSociology(Cambridge:CambridgeUniversityPress, 1984), 356-391 for a discussionof this distinction. See Karl Marx, Class Strugglesin France (New York: InternationalPublishers, 1850, 1964), KarlMarx, The 18thBrumaireof Louis Bonaparte(New York:International Publishers, 1852, 1963), and Karl Marx, Capital vol I. (New York: InternationalPublishers,1867, 1967). F. H. Cardoso,"TheConsumptionof DependencyTheoryin the United States." For example, Nora Hamilton, The Limits of StateAutonomy:Post-Revolutionary Mexico(Princeton:PrincetonUniversityPress, 1983). For example, BarringtonMoore, Jr., Social Origins;Skocpol, States and Social Revolutions;Mouzelis,Politics. For example ChristopherChase-Dunn,"TheEffect of InternationalDependence on Developmentand Inequality:A Cross-NationalStudy,"AmericanSociological Review40, no. 6, (1975) 720-738; PeterEvansand MichaelTimberlake,"Dependence, Inequality,and the Growthof the Tertiary:A ComparativeAnalysisof Less Developed Countries,"AmericanSociologicalReview45, no. 3, (1980) 531-551.

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744 64. For example,Paige,AgrarianRevolution. 65. Arthur L. Stinchcombe, TheoreticalMethods in Social History (New York: AcademicPress, 1978), 7. 66. Alfred Stepan, The State and Society:Peru in ComparativePerspective(Princeton: PrincetonUniversityPress, 1978). 67. WalterKorpi, The WorkingClassin WelfareCapitalism. 68. Zeitlinand Ratcliff,Landlordsand Capitalists. 69. Stephensand Stephens,DemocraticSocialism. 70. Korpi, The WorkingClass in WelfareCapitalism;Gosta Esping-Andersen,Politics AgainstMarkets:TheSocial DemocraticRoad to Power,Tilly, FromMobilizationto Revolution;Paige,AgrarianRevolution. 71. ArthurL. Stinchcombe,ConstructingSocial Theories(New York:Harcourt,Brace, and World, 1968), 101. 72. CharlesRagin, BetweenComplexityand Generality:the Logic of QualitativeComparison(Berkeley:Universityof CaliforniaPress, 1987) underlinesthese and other problemsin statisticalstudies in his insightfuldiscussion of the relativemerits of using statisticaland comparativehistoricalevidence in comparativecross-national work.See also CharlesRaginand David Zaret, "Theoryand Method in Comparative Research:Two Strategies,"Social Forces 61, no. 3, (1983), 731-754, and Theda Skocpol and Margaret Somers, "The Uses of ComparativeHistory in MacrosocialInquiry,"ComparativeStudiesin Societyand History22, no. 2, (1980), 174-197 on comparativemethods. 73. This is not to say that quantitativeevidence has not found a place in the new comparativepolitical economy. As is obvious from the examples already mentioned (e.g. Tilly, Zeitlin and Ratcliff, Chase-Dunn,et al.), the analysis of quantitative evidence plays a centralpart in the new researchtradition.In each case, however, the "blackbox"quality that would otherwise make findings based on statistical associationunsatisfyingis mitigatedby a complementof historicaland theoretical arguments. 74. For example,Linz and Stepan, Breakdown;O'Donnell,Schmitterand Whitehead, Mouzelis,Politics. Transitions; 75. For example, Fred Deyo, editor, The Political Economyof the New Asian Industrialism(Ithaca:Cornell UniversityPress, 1987); Gary Gereffi and Don Wyman, DevelopmentStrategiesin LatinAmericaand EastAsia (forthcoming). 76. See Evans, "Class,State and Inequalityin Dependent Development:Some Comparisonsof East Asia and LatinAmerica." 77. Tom Gold, State and Society in the TaiwanMiracle(Armonk, New York: M. E. Sharpe,1986). Cumings,"Origins." 78. See Thomas Kuhn, The Structureof ScientificRevolutions(Princeton:Princeton UniversityPress, 1962). 79. On this point, Douglas North, Structureand Changein Economic History(New York: W. W. Norton, 1981), 46, has put it nicely, "Largegroups do act when no evident benefitscounterthe substantialcosts to individualparticipation;people do vote and they do donate blood anonymously.... Withouta broadenedtheory we cannot account for a great deal of secularchangeinitiatedand carriedthroughby largegroupactions." 80. Robert H. Bates, Marketsand States in TropicalAfrica (Berkeley:Universityof CaliforniaPress, 1981). BarbaraGeddes, "A Game TheoreticModel of Administrative Reform in Developing Countries,"paper presented at the meetingof the American Political Science Association (September, 1987). Adam Przeworski,

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745 Capitalism and Social Democracy (Cambridge: Cambridge University Press, 1985). Michael Wallerstein, "The Micro-Foundations of Corporatism," paper delivered at the meetings of the American Political Science Association, New Orleans, (September, 1985); and Michael Wallerstein, "Union Growth from the Union's Perspective: Why Smaller Countries Are More Highly Organized." Samuel Popkin, The Rational Peasant (Berkeley: University of California Press, 1979). 81. For a wide-ranging discussion of this problem see Roger Friedland and Robert Alford, "Bringing Society Back In: Symbols, Structures and Institutional Contradiction," paper presented at Conference on Institutional Change, Center for Advanced Study (April, 1987). 82. Anthony Giddens, The Constitution of Society (Berkeley: University of California Press, 1984). Jurgen Habermas, The Theory of Communicative Action, Vol 2: Lifeworld and System: A Critique of Functionalist Reason (Boston: Beacon Press, 1987). Dietrich Rueschemeyer, Power and the Division of Labor (Stanford: Stanford University Press, 1986), especially 46-53, 186-187. 83. One reason for this lacuna can be found in the very nature of the approach, because the focus is on understanding the developmental trajectory of a case or cases rather than testing a theory as in statistical studies. See Ragin, Between Complexity and Generality: The Logic of Qualitative Comparison, for an illuminating discussion of this point.

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Third World Quarterly, Vol 25, No 1, pp 41-53, 2004

Using

Third

*

and

the concept abusing World: Geopolitics and

comparative development

political and

study

Carfax Publishing

Group filP,Taylor& Francis

of

the

the of

underdevelopment

VICKY RANDALL ABSTRACT This article argues that, while the notion of a 'ThirdWorld' retains

relevance and usefulness in the context of geopolitical analysis, generalisations about Third World politics are no longer helpful or justifiable. It begins by reviewing the historic rationalesfor the notion of the Third Worldtogether with criticisms made of these arguments.It then considers reasons why the term may retain some value at a geopolitical level: in signalling a major axis of inequality, providing a symbolic basis for collective action and, possibly, as an alternative to less attractiveperspectives. The article then turnsmore specifically to thefield of comparativepolitics, suggesting that in the past the notion of a Third World could be justified pragmatically as a response to the insularity of Western political science and because there was, up to a point, a commonparadigm of Third Worldpolitics. Suchjustifications have been underminedby the growth in specialist knowledge of individual Third World countries or regions together with increasing differentiationamong them.

The concept of a 'ThirdWorld' has clearly proved useful in a range of political contexts over the years. But its ideological significance was always ambiguous. As deployed in the West it tended to carry pejorative connotations of otherness and backwardness,althoughthere was an alternative,more radical construction, reflectedin the rise and fall of ThirdWorldismbetween the 1950s and the 1980s. Persuasive arguments remain for retaining some version of the notion for purposes of geopolitical analysis. However, in the field of comparativepolitics, it is more than time that we moved beyond ThirdWorld-type generalisationsto consider the (former) Third World's constituent regions and countries in their own right. This article begins by looking at the old rationalesfor using the term and the reasons why these have been undermined.It then considers whether there are still any argumentsfor retainingthe concept-or something like it-for political analysis in general. Turning more specifically to the field of comparative politics, it first revisits previous justifications offered for combining such a Vicky Randall is in the Department of Government, University of Essex, Wivenhoe Park, Colchester C04 3SQ, UK. Email: [email protected]. ISSN 0143-6597 printISSN 1360-2241 online/04/010041-13 ? 2004 Third World Quarterly DOI: 10.1080/0143659042000185327

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41

VICKY RANDALL

great number of political systems or states into a single category and then considers how far these justifications are still valid. The undermining of the old rationales The etymology and history of the concept of a Third World have been much discussed and are reviewed again elsewhere in this special issue.' It would be tedious to relate them at length here. However, it is necessary briefly to indicate what I see as having been the principaland most persuasive argumentsfor this conceptualisationin the past in order to consider why and to what extent they no longer hold. Successive rationalesfor markingout a distinct ThirdWorld have associated it with nonalignment, with the experience and consequences of colonisation, with economic dependence,and with poverty and economic 'backwardness'.The nonalignment argument, in the context of which by some accounts the term Third World originated, was never very convincing even in the early Bandung days and was underminedby the collapse of the Soviet bloc, since this removed one of the two camps between which a non-aligned position could be adopted. The so-called Nonalignment Movement itself has persisted and still meets roughly every three years; at its meeting in February2003 in Kuala Lumpur representativesfrom 114 member states were expected, but the actual meeting received minimal press coverage.2 There were always problems with the argument about shared postcolonial status. The nature of the colonial experience varied widely. A few of the countries conventionally included in the Third World were never directly colonised, while most countries of Latin America had gained formal independence from Spain or Portugalby the 1830s, leading Cammacket al to suggest that their relationship with the USA had long since become much more importantthan any Iberianconnection.3Certainlyby the 1990s it was far from clear that, for most countries, the impact of colonisation continued to play a major determiningrole. Arguments seeking to extend or replace the significance attributedto colonisation by reference to neocolonialism or economic dependencyhave also become increasingly difficult to sustain. Empirically they have been challenged by examples of countries seemingly breaking free of dependency's iron logicthe oil-exporting countries, the Newly IndustrialisingCountries (NIcs)-and theoretically they have been challenged by the new paradigm,or paradigms,of 'globalisation'. By the same token, the various statistical indicators that have been used to produce world league tables of poverty and developmentreveal by now that the countries of the former Third World are scatteredright across the categories from misery to affluence. Geopolitics: uses of 'the Third World' So has the time come to abandon 'the Third World' as an organising concept? That is the central question posed in this special issue but, for me, the answer is far from straightforward.It depends on the context. Although I shall be 42

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USING AND ABUSING THE CONCEPT OF THE THIRD WORLD

arguing that the category is problematic as a basis for understanding and comparing the politics of different countries, it remains both relevant and illuminating when the focus is on geopolitical processes and relationships. In the first place, we should not be too preoccupiedwith semantics. Obviously the specific phrase 'Third World' is largely anachronisticin the wake of the collapse of what, in the original schema, was held to be the Second World, that is the Soviet Union and its satellites, althougha case could possibly be made for continuingto distinguishfor the moment between the (former) Second and First Worlds because of the enduring consequences of their very different histories. As Theriennotes with the end of the Cold War, the tendency has been to replace the First-Second-ThirdWorld categories with a simple North-South dichotomy, or some variant thereof.4 Nor does the fact that some former Third World countries no longer seem to fit its defining criteriafatally undermineits coherence. It is possible to draw the belt tighter, to exclude in particularthe wealthy oil-exporting countries and the NICS, althoughthere will always be disagreementsabout which specific countries should be in and which out. To the extent that the old category of a Second World has been dissolved, some of its former members should probablyalso be brought into the Third World fold. The old category, as far as it was specified, spanned both 'developed' and industrialisedcountries of Eastern Europe and 'developing', predominantlyagriculturalcountriessuch as Vietnam, Cuba and of course China. These latter countries would need to be included in a revamped Third World,-together with the five Central Asian former Soviet RepublicsKazakhstan,Kyrgyzstan,Tajikistan,Turkmenistanand Uzbekistan. A Third World-typecategory, first, draws attentionto what continues to be a major axis of economic and political inequality. It is an understatementto say that access to the benefits and opportunitiesof globalisationhave been unevenly distributedbetween nations. And while it may be true, as Berger, Weber and other globalisationtheoristshave arguedin this special issue and elsewhere, that increasingly the Third World or the South, is becoming a world-wide social category ratherthan a geographicallydefined one, this is only a trend;it is not a completed process. In 1995, as reportedin Thomas, the 23% of the world's population living in the North still enjoyed 85% of its income, while the 77% in the South made do with 15 %.5 In 1996 UNDP reportedthat between 1960 and 1993 the gap in annual per capita income between developing and developed countrieshad increased from $5700 to $15 400.6 Such starkmaterialdifferences do have substantial social and political consequences. For instance, Collier's recent study for the World Bank of the factors giving rise to civil war, reported in the Economist, finds that 'the most strikingcommon factor among war-prone countries is their poverty ... the poorest one-sixth of humanity endures fourfifths of the world's civil wars'.7 Second, and given this continuing political and economic inequality among nations, Third Worldist 'discourse' potentially provides a powerful rhetoric and rallying-point.Just as the signifiers, 'woman', and more obviously 'black', have been political constructs obscuring or transcendingthe actual complexities of experience and identity formation,but nonetheless with a strategicusefulness in particularpolitical contexts, so the terms South or ThirdWorld can help to create 43

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VICKY RANDALL

as much as to reflect political alignmentsand solidarities.How far this happens in practice is less clear. Although media reports on the World Summit on Environmentand Developmentheld in Johannesburgin August 2002 referredto the differing interests and perceptionsof the developing and developed worlds, or the richerand poorercountries,it does not appearthatthe nationaldelegations adoptedthis language themselves in any sustainedway, still less that it provided the basis for a co-ordinatedstrategy.8 A thirdpossible argumentis still more contingentor tactical than the previous two and is actually a consequence or response to recent developments in Western analysis of global politics. Beginning with his article in Foreign Affairs in 1993 and then in his book The Clash of Civilisationsand the Makingof World Order, Samuel Huntingtonhas played a leading intellectual role in articulating the 'clash of civilisations' thesis. In his book Huntingtondraws on an extensive scholarly literature to develop his theme, providing a more complex and open-ended account than in his original 'call to arms'.9Some of the issues he raises are serious ones to which I return in presenting my own reservations concerning the utility of Third World-type generalisations for comparative politics purposes. Nonetheless there are manifest dangers, made clearer in the wake of 11 September,in this kind of perspective, or its cruderversions, which give a sort of intellectual respectabilityto culturaldeterminismand the politics of mutual deafness and intransigencethat goes with it. Faced with this culturallypolarising discourse and most pressingly with the opposition drawn between a Judao-Christianand a Muslim 'civilisation', it becomes importantto (re)introducean alternative,political-economy, viewpoint that emphasises both the historic impact of Westernimperialismand contemporary dimensions of economic inequality. A Third World perspective provides a vital corrective,cutting across a civilisation-basedmappingof world regions and bringingback into the picturethe context of global economic relations and local economic conditions from which apparently culturally driven politics has emerged. So far then I have been suggesting that, despite all the difficulties in deciding exactly where boundaries should be drawn and in establishing some kind of scientifically respectable, underlying or structurallogic, for the distinction, a division-if only a rhetoricaldivision-of the world into first and third worlds remains useful, even essential in some global political contexts. Indeed, I have become more convinced of this in the process of writing this article. Comparative politics: the uses of the Third World What about the Third World's value for comparativepolitics? First, I need to justify a focus on comparativepolitics at this point. Nowadays, more than ever, we should beware of too rigid a separationbetween the field of international relations and the study of politics within individual countries. The two spheres are increasinglyinterdependentand our scholarlyperspectivesshould reflect this. It has also been argued that the same globalising trends that underpin this growing interdependencecall into question the traditional focus, in political studies, on the country, or nation-state,as the unit of analysis. While this is not 44

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USING AND ABUSING THE CONCEPT OF THE THIRD WORLD

the place to pursue these debates, I am much less persuaded by this second argument:for a host of reasons including its symbolic, historic, geo-juridicaland institutionalresources and importance,it seems at best prematureto write off the nation-stateas a key determininglevel of political interaction.The point of these observationsis to explain why the sub-field of comparativepolitics, centred on, though not confined to, understandingand comparinginternalpolitical processes of the world's different countries, remains a necessary and valuable part of political studies. Is the category of 'ThirdWorld' useful for purposesof this kind of comparativepolitical analysis? As someone who has written textbooks and taught courses whose intellectual coherence to an extent relies on making such a distinction, it seems to me that in the past there have been two main justifications, one pragmaticand the other more substantive, for doing so. The pragmatic considerationwas that political science, and even comparative politics, as they developed from the 1950s remained decidedly provincial for a long time. In the UK comparison-or paralleldescription-was typically restrictedto the USA and one or two Western Europeancountries. The field did open up over time, of course, with the cold war-driven focus on the Soviet Union leading the way. But even then, if you wanted to get beyond a continuing parochialism that largely ignored threequartersof the world's population,the best, sometimes the only, way to get this huge swathe of countries onto the syllabus was to bring them in under some plausible unifying rubric, such as that offered by the concept of a Third World. It is doubtful whether such a rationalisationstill holds. Even if the notion of a Third World supplied a useful vehicle, or legitimating device, through which to broadenthe scope of comparativepolitics, this Trojanhorse kind of argument could only be justified in the short to medium term. In the longer run the inclusion of an undifferentiatedThird World should help to give rise to a more substantive and systematic interest in a whole range of regions or countries beyond the Western fringe. In practice, certainly in the UK, the traditional provincialism of comparativepolitics has not entirely disappeared-in fact my impression is that over the past 10 or so years, in a climate of educational funding constraints,it has been reassertingitself. Nonetheless (and as discussed furtherbelow) there has been growing interest and specialisation in the politics of particularregions-notably Latin America, South Asia, China and East Asia, and the Middle East. But in additionto this pragmaticjustification,it was also possible to argue that countriesin the ThirdWorld, with some partialexceptions, the most noted being India, had many importantpolitical features in common. In the first place they shared what Robin Theobald and I have described elsewhere as a 'predicament of economic dependency and backwardness'that constrainedpolitics even while it strongly shaped its imperatives.10Hawthorne similarly talks about the two problems,the political problem of building legitimate authoritybased on a sense of nationhoodand the economic problemof development,facing all ThirdWorld (and also some Second World) countries.11But beyond this, there was, one could argue, a common patternor 'syndrome' of Third World politics which included instability and conflict, authoritarianismand military intervention, pervasive clientelism and corruption, and which was evident whether you focused on 45

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Africa, the Middle East, Latin America or Asia. While such features were not unknown in the First World, their extent, convergence and degree in the Third World offered a stark apparentcontrast,helping to justify studying the politics of Third World countries together as a separategroup. The question is how far this still remainsthe case. I don't want to suggest that the situationhas been transformed,that the countries of the (formeror restyled) Third World no longer have enough in common politically and in contrastwith those of the First World to warrant seeking to generalise about them as a category in some comparativecontexts. But changes over the past two or more decades, both in the natureof politics in these countriesand,just as importantly, in what we know about it, make this kind of approachappearincreasinglycrude and arrogant. Political diversity in the Third World There was always something disquieting about lumping together such a vast range of societies-covering around75% (by the turn of the century more like 80%) of the world's population and 70% of its landmass-for purposes of comparativepolitical analysis. It meant subsuming what were recognised to be very different cultural traditions,pre-colonial and also colonial histories. But arguably the expansion and development of relevant scholarship in the 'First World' and in those countriesthemselves has made such differencesincreasingly difficult to avoid. Even if we simply focus on broad analytical approaches to Third World politics and how they have changed over time, we can see that the political 'development' or modernisationparadigm that was influential from the late 1950s was soon under attack from a social anthropology perspective for its cavalier generalisationsabout 'tradition',and that the 'modernisationrevisionism' which succeeded it was much more sensitive to and indeed interestedin the interactionof political processes like elections with the particularitiesof local culture and social structure.12 There was to some extent a parallel move subsequently in the Marxist camp to modify dependency theory's sweeping generalisationsabout the impact of metropolitancapital on satellite economies and their societies by much more careful examinationof capital's 'articulation' with specific local 'modes of production'.13 So, from early on, attempts to impose general theories or analytic frameworks through which to understand Third World politics or political economy came up against arguments from 'reality' as mediated in particularby experts working in the 'field' and employing a more anthropologicalor ethnographicperspective. At the same time, and presumablyreinforcing this scepticism, there was a marked expansion in specialised 'area studies' focused on different regions of the Third World. In the UK, while there had been isolated centres such as the School of Oriental and African Studies founded in 1912, this expansion really originated in postwar government policy concerns about the country's future. Two reports to the Universities Grants Committee played a key role, that of the 1961 'Hayter'Committeeon Area Studies (covering Africa and the 'Orient') and the 1962 Parry Committee on Latin American Studies.'4 Following their 46

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recommendationsa series of centres were set up or enlargedfor African studies, SoutheastAsian studies, Middle Easternand Islamic studies and Latin American studies. The field of Caribbeanstudies seems to have taken longer to separateout from Latin American studies: its first Centre was established at Warwick University in 1984. Along with these university centres went the creation of area-studies-based professional associations such as the Society of Latin American Studies (SLAS) founded in 1964, the British Association of South Asian Studies (BASAS) founded in 1986 and the African Studies Association. To the ranksof existing area-based journals like African Affairs, founded in 1901, and the Middle Eastern Joumrnal, founded in 1946, were added new publicationssuch as China Quarterly,founded in 1959, the Journal of Modern African Studies, founded in 1962, and the Bulletin of Latin American Research (linked to SLAS) founded in 1981. And these processes were of course mirroredby the growth of area studies in other 'developed' countries including France, the Netherlands,Australia (with a particularinterestin the Pacific), Canadaand above all the USA. There has been an African Studies Association in North America since 1957, which, despite internalrows and recent funding constraints,continues to draw well over 1000 participants to its annual conferences, while the US-based Latin American Studies Association (LASA) presently claims over 5000 members.15 If there have been localised phases of contraction, there has been expansion elsewhere; for example, the African Studies Association of Ireland was established in 2000. Finally, to admittedly quite varying degrees, within the countries of the former Third World there has been increasingly systematic study and analysis by indigenous scholars of their own society and politics. India, for instance, has a large and highly respected community of social scientists who play a leading role in interpretingIndian political developments, much of the time in Indian English-language journals, including the esteemed (Bombay) Economic and Political Weekly. The point I may risk labouringhere is that collectively at least we now know so much more about the process and ingredients of politics in different Third World countries than in the 1950s. And with this enhancedknowledge has come confirmationof an earlier more intuitive sense that Third World thinking, the kinds of analytic containers it employed, might be obscuring key differences, whether regional or even country by country, in what politics meant, what determined it and how it worked. This is not to condone the romantic or historicistclaim that each country-or indeed province-is unique, 'exceptional' and not to be bracketed with any other. Rather the contention here is that all along there have been such major differences within the Third World as to seriously limit the scope for meaningful political generalisation. What kinds of differences are being referredto here and what has given rise to them? One answer might be to point to longstanding cultural differences among Third World countries, or regions, to some degree rooted in wider divisions between 'civilisations'. Huntington,we have seen, has recently taken up this approach. He follows the historian Fernand Braudel and others in understandingcivilisations to be totalities: 'none of their constituentunits can be fully understood without reference to the encompassing civilization'.16 At the 47

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same time he emphasises their cultural dimensions-their 'values, beliefs, institutions and social structures'-and especially their historic foundations in the world's great religions. The civilisation constitutes the broadestculturalunit within which are grouped culturally differentiatedregions, nationalities and so on. Civilisations are not eternal or immutablebut evolve and decline; nonetheless by definition they are long lasting and far-reaching.Huntington identifies five definite contemporary civilisations: Sinic, Japanese, Hindu, Islamic, and Western,the latterhaving significantlyoutgrownits historicalroots in 'Christendom'. Then there is Latin America, which may merit its own civilisation, and Russia and Israel as further possible candidates. Africa is confined to a 'possibly'. Huntington sees these civilisational differences as having always been there, although they were to some extent muffled or obscuredby ideological divisions of the Cold War; subsequently,they have acquirednew visibility and resonance, especially in a global political context, and as anchors of identity. 17

As alreadynoted, there are serious problemswith this kind of thinkingnot just because of the political ends it can be made to serve but because of the element of arbitrarinessin the selection of categories and because of cultural determinism. It tends to present culture as consisting of a single block of meaning rather than as 'polysemic', subject to reinvention, contestation and so on. It can be deployed in a highly-sometimes ridiculously-judgemental way; for instance in the edited volume Culture Matters, many of the contributorsmore or less explicitly rate the cultures under review according to how far they promote And Huntington's human progress-for which read capitalistentrepreneurship.18 relegation of Africa to little more than a footnote is scarcely helpful. Even so this perspective does draw attention to major cultural traditions, beyond any simple First/ThirdWorld dichotomy. With the inclusion of Japanese civilisation in the First World it cannot be said that any of these civilisations actually straddles the First/Third World divide but the deep-seated cultural heterogeneityof the ThirdWorld is underlined.Just to cite one context in which the relevance of such traditions has been asserted, consider the debate about 'Asian values', particularlyas they explain, even justify, distinctive attitudesto humanrights. There are argumentsabout whether,logically, such values need to clash with conceptions of human rights; there is also awareness that the Asian values argument has been articulatedby and provided useful political ammunition for autocraticleaders such as Singapore's Lee Kuan Yew and Malaysia's Mahathir.19Even so Michael Barr has recently concluded that it is possible to discern Asian values, or at least East and Southeast Asian values, 'that are basically communitarian, consensual and hierarchical', whether associated with Islam, Buddhism or Confucianism, and that each of these worldviews has 'fundamentaldifficulties in establishing an interface with the liberal and Christianhuman rights agenda'.20 Even if we are reluctantto accept the degree of culturaldeterminismimplied in these kinds of arguments,the notion of an extended political trajectory,in which culturalelements play a part,is more difficult to resist. This idea has been developed in particularby Bayart, an eloquent advocate of the need to recognise the political diversity of the Third World.21 He focuses in the first instance on 48

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'the historicalirreducibility'of the ThirdWorld state. In orderto analyse modem ThirdWorld states, he argues that we should view them throughthe perspective of the extended political trajectoryor, in Braudel's phrase, the longue duree, going back as far as pre-colonialtimes. It is not just that a great numberof future Third World states had their own developed and distinctive political systems, especially in Asia-India, China, Korea, Japan, Vietnam, Siam/Thailandand Cambodia-but elsewhere, notably Ethiopia and Egypt. Even where such political systems were absent, when the colonial powers 'effectively created' states, like Iraq and Jordanor most of those in tropicalAfrica, they did not create them out of nothing and these 'colonial creationswere also subject to multiple acts of reappropriationby indigenous social groups'. And while these Third World countries faced common or similar 'ruptures' and challenges, in the form of colonisation and subsequentexogenously derived developments, their responses were markedly different and set off in consequence chains of furtherdifferentiation. This leaves open to some degree the question of what it is that provides identity or continuity-what endures over the longue dure'e?We could conceive of it in terms of culture, even civilisation, of systems of economic production and the social power relations associated with them, or of discourses, or what Bayart calls the 'culturalconstructionsof politics'. The point being made here is that there have always been importantpolitical differences between ThirdWorld countries.These differences can be understood in terms of the varying political trajectoriestraced by different Third World societies from pre-colonial times, however we understandthe distinctive elements that have shaped these trajectories.Such differences have become clearer with the passage of time and growth of specialist knowledge. Increasing diversity? Not only have we become more aware of diversity; that diversity has itself increasedover time. There have been many and changing meanings or rationales of the idea of a ThirdWorld. Its brief association with 'nonalignment'suggested that Third World countries would find their own paths forward rather than emulatingthe capitalistor socialist West. But in other conceptions the opposition has been between the Third World and a more advanced, powerful First (and even Second) World, which, in some sense, represented what Third World countries should want to become. To that extent there has been an assumption if not that ThirdWorld countrieshad in common their gradualapproximationto the West, then-in more left-wing accounts-that the West provided a common unifying measure of what it was they could not become. Either way one could suggest that contributingto the readinessto group so many countriestogetherfor analytical purposes in a single Third World category was a belief either that as they developed they would converge towards a Western model or that they were effectively frozen in their inability to do so. Perhaps what was less anticipated was that different regions and in many cases countries would develop or modernise-or possibly regress-in different directions. The paradigmof globalisationwhich has come to the fore from the late 1980s 49

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takes many different ideological forms and has many dimensions, but to the extent that globalisation itself is understoodas a process of progressive global economic integration,it could be seen as a common externally derived pressure and/or opportunityall Third World (and all other) states must respond to. But globalisationdoes not presentthe same pressuresand opportunitiesto each state. While some, most notably those of East Asia, have been able to harness it and adapt their economies to make the most of it, for much of tropical Africa opportunities for increased trade and Foreign Direct Investment have been severely limited and globalisationhas meant ratherthe imposition of neoliberal structuraladjustmentregimes by debt-regulatingInternationalFinancial Institu-

tions (IFIS). Even when we focus more specifically on patternsof politics, it is now much more difficult to demonstratea shared 'political syndrome'. Common political featuresare still observed, most obviously, and in differentforms, the politics of clientelism and corruption,not confined to the former Third World but seemingly particularlyconcentrated and endemic there with very few exceptions, including perhapsSingapore,Botswana, Chile and Costa Rica. In Africa there is little suggestion that patrimonial or neo-patrimonialpolitics are in decline; rather, according to Chabal and Daloz, what all states in Africa share is: a generalized system of patrimonialismand acute degree of apparentdisorder, as evidenced by a high level of governmentaland administrativeinefficiency, a lack of institutionalization,a general disregardfor the rules of the formal political and economic sectors and a universal resort to personal(ized) and vertical solutions to societal problems.22

But in Latin America too, O'Donnell suggests that the by now widespread institutionalisationof elections and a relatively free press coexist with a second extremely importantinstitution which is 'informal, pervasive and permanent', that of particularismor clientelism, meaning: nonuniversalisticrelationships,ranging from hierarchicalparticularisticexchanges, patronage, nepotism and favours to actions that, under the formal rules of the institutionalpackage of polyarchy, would be considered corrupt.23

Even in many, perhapsmost, of the economically dynamic countriesof East and SoutheastAsia, personalisticties, based on family-type relationshipsand linking business and government,have featuredprominently.While the factors underlying the financialcrisis of 1997 have been much debated,accordingto Perkins, there is by now a consensus that the nature of government-businessrelations, sometimes referred to pejoratively as 'cronyism', played a significant contributory role in Thailand, South Korea and even more so in Malaysia and Indonesia.24

However, these few examples already suggest variations in the forms that these 'nonuniversalistic' relationships take and in their implications for the political and economic system. Why, asks O'Donnell, who is interested in democratictransition,have they not proved an insuperableobstacle to consolidation in India (or Italy or Japan)?Insteadof being explored,he says, this anomaly 50

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has been shunted off into a 'theoreticallimbo'. Rather than talking about such relationshipsunderbroadand homogenising labels like neo-patrimonialismthen, we now need to produce more discriminating taxonomies that distinguish between their forms and consider how these interact with the wider political context. The 'thirdwave' of democratisationcould be seen, along with, or even as part of, globalisation, as anothercommonly experienced and at least partially externally driven pressure or influence on Third World states but its effect has been to furtherdisruptthe old 'syndrome' of Third World politics and to accentuate and make clearer the political differences within the Third World. At a superficiallevel the wave's spreadhas been rapid and dramatic;already by the early 1990s there were no remaining military regimes in South America-as distinct from central America-and there were strong pressures on Mexico to democratise its one-party system. In tropical Africa by 1995 a plurality of the 40-odd regimes had multiparty systems and in 13 of these there had been a change of governmentthroughthe ballot box. But some governments,including the substantialcase of China, have barely made any concessions to democratic norms, in other countries such as Pakistan fragile multiparty regimes have succumbed to military coups (1999), while in the search for the holy grail of 'democratic consolidation' the relevant literature has coined any number of terms to describe regimes falling short-'delegative', 'illiberal', 'low intensity', 'facade', and so forth. While there are inter-regionalvariations, there are also regional contrasts,most strikinglybetween Latin America, where democracy in some shape or form, and despite wobbly moments in Peru and most recently Venezuela, prevails everywhere, and the Middle East where only the most tentative steps have been taken. The Islamic Revolution in Iran in 1979 brought home to many Western observers the growing salience of religion in Third World politics.25Political conflict based on or articulatedthrough religious differences has been on the increase in South Asia, the Middle East and North Africa and Nigeria. The events of 11 September 2001 have made Islamic 'fundamentalism'almost the number one issue associated with Third World politics, eclipsing debt and democratisation.The (re)politicisationof religious difference has been associated with the end of the Cold War and with responses to economic and cultural globalisation on the one hand and with mobilisation strategies of those engaged in domestic power struggles on the other. Yet, leaving aside problems abouthow and why religion emerges as a political issue, one basic requirement,as Nikki Keddie has emphasised, is that there exists a mainspring of deep religious sentiment and identification to tap into.26It is clear that this kind of politics really does not figure to any significantdegree in large parts of the ThirdWorld. In Latin America, 'liberationtheology' played an interesting,if debated, role in nourishingpopularsocial movements, (re)buildingcivil society and contributing to pressures for democraticreforms throughthe 1970s and 1980s, but this was not about religious conflict, it was about bringing greater social and political awareness into what was then overwhelmingly the dominantform of Christianity, Roman Catholicism. Observers may argue about the role Confucianismmore a moral outlook than a religion anyway-has played in shaping the 51

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political culture of East Asian states but no one would claim that religion is a major political issue in these societies. Ethnic conflict and ethno-nationalismhave likewise been on the rise in the former Third (and Second) World and, indeed, religiously identified political movements, such as that for hindutva in India, are often best understoodas a kind of religious nationalism.But similarly the salience of ethnic conflict, and indeed of ethnicity as a basis of political identities, varies greatly within the Third World. While the characterof ethnic politics has changed from its more 'primitive' tribal form in the 1960s, 'ethnicity is more central than ever to the politics of many Africa countries'.27 In differentforms it featuresprominentlyin a range of Middle Eastern and Asian contexts, but notwithstanding ethnic dimensions of guerrillamovementsin Peru or the Chiapasmovement in Mexico, much less so in LatinAmerica.This may be partlybecause ethnic differences are 'ranked' to use Horowitz's term, corresponding to rather than cross-cutting social stratification,so that ethnic conflict is subsumed in broaderclass-based conflict, and it may also be that the future will see ethnicity featuring more explicitly. For the moment this marks one furtherimportantrespect in which meaningful generalisationacross the former Third World is constrained.28 Conclusion: using and abusing the concept of the Third World There are still compelling argumentsfor retainingthe notion of the ThirdWorld in the context of geopolitical analysis. The actual term used doesn't really matter-South would probably be better than Third World, or possibly some other term such as developing countries/world or 'emerging areas'.29 The boundaries of the Third World can also be re-specified to exclude some old members and include some new ones. The term is needed to denote the continuing imbalance of economic and political power between (and not only within) the world's nations. Given this axis of inequality, it also provides an importantrallying point as a focus of symbolic identification.In additionit may be desirableto hold onto the idea of a North and South as a correctiveto current clash of civilisation arguments. But in the field of comparativepolitics, Third World-typegeneralisationsare no longer helpful. It must be recognised that there is a basic tension in the idea of a Third World. It can be understoodas a response to global inequality but it is also a symptom of First World thinking, a category imposed as part of a specific First World way of seeing things. In the past the readinessto generalise about a Third World type of political system was at least partly the result both of the need to get the Third World onto the syllabus at all and of the degree of ignorance about the substantialhistorically shaped differences in the political trajectories of the countries that composed it. The growth of specialist area studies has generated increasingly systematic knowledge of these differences while the passage of time has revealed them more fully and reinforced their extent. We no longer have excuses for failing to do justice to the political diversity of the (former) Third World. 52

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Notes I should like to thank Mark Berger and Joe Foweraker for their helpful comments on an earlier draft of this article. 1

See for instance V Randall & R Theobald, Political Change and Underdevelopment,Basingstoke: Macmillan, 1998; MT Berger, 'The end of the "ThirdWorld"?', Third World Quarterly, 15 (2), 1994, pp 257-275; and B Smith, UnderstandingThird World Politics, London: Macmillan, 1996. 2 Details provided at http.//www.namkl.org.my. P Cammack, D Pool & W Tordoff, Third World Politics: A Comparative Introduction, Basingstoke: Macmillan, 1993. 4 J-P Therien, 'Beyond the North-South divide: the two tales of world poverty,' Third World Quarterly, 20 (4), 1999, pp723-742. C Thomas, 'Globalization and the South' in C Thomas & P Wilkin (eds), Globalization and the South, London: Macmillan, 1997. 6 Therien, 'Beyond the North-South divide'. 7 See The Economist, Special Report-Civil Wars, 24 May 2003, pp 23-25. 8 See reports in the Guardian during August 2002. 9 S Huntington, 'The clash of civilizations?', Foreign Affairs, 72 (3), 1993, pp 22-49; and S Huntington, The Clash of Civilizations and the Remaking of World Order, New York: Simon and Schuster, 1996. 1 Randall & Theobald, Political Change and Underdevelopment,p 11. G Hawthorne, "'Waitingfor a text?" ComparingThird World politics', in James Manor (ed), Rethinking Third World Politics, London: Longman, 1991. 12 As described in Randall & Theobald, Political Change and Underdevelopment,ch 2. The classic example of this revisionist approachis the Rudolphs' analysis of the interaction of the caste system and modern forms of political participationin India. L Rudolph & S Rudolph, The Modernity of Tradition:Political Development in India, Chicago, IL: Chicago University Press, 1967. 13 For an overview, see A Foster-Carter,'The modes of production controversy', New Left Review, 107, 1978, pp47-77. 14 For a valuable account of the development of African studies in the UK, see the collection of essays edited by D Rimmer & A Kirk-Greene,The British Intellectual Engagement with Africa in the Twentieth Century,London:Macmillan, 2000, especially the essays by Kirk-Greene.I am grateful to Chris Clapham for bringing this to my attention.For a shorterbut useful review of the development of Latin American studies in the UK, see L Bethell, 'The British contributionto the study of Brazil', Centre for Brazilian Studies, Working paper no. 37, 2003, at www.brazil.ox.ac.uk/papers.html. On Latin American studies in the USA see MT Berger, Under Northern Eyes: Latin American Studies and US Hegemony in the Americas, 1898-1990, Bloomington, IN: Indiana University Press, 1995. 16 Huntington, The Clash of Civilizations, p42. 17 Ibid, pp 40-48. LE Harrison & SP Huntington (eds), Culture Matters, New York: Basic Books, 2000. 1 19 MT Berger, 'The new Asian renaissance and its discontents: national narratives,pan-Asian visions and the changing post-cold war order', International Politics, 40 (2), 2003, pp 195-221. 20 MD Barr, Cultural Politics and Asian Values: The Tepid War, London: Routledge, 2002. 21 J-F Bayart, 'Finishing with the idea of the Third World: the concept of the political trajectory',in Manor, Rethinking Third World Politics. 22 P Chabal & J-P Daloz, Africa Works, London: James Currey, 1999, p xix. 23 G O'Donnell, 'Illusions about consolidation', Journal of Democracy, 7 (2), 1996, pp 151-159. 24 DH Perkins, 'Law, family ties and the East Asian way of business', in Harrison & Huntington, Culture Matters. 25 J Haynes, Religion in Third World Politics, Milton Keynes: Open University Press, 1993. 26 N Keddie, 'The new religious politics: where, when and why do fundamentalismsappear?', Comparative Studies in Society and History, October 1998, pp 696-723. 27 M Ottaway, 'Ethnic politics in Africa: change and continuity', in R Joseph (ed), State, Conflict and Democracy in Africa, Boulder, CO: Lynne Rienner, 1999, p 300. 28 D Horowitz, Ethnic Groups in Conflict, Berkeley, CA: University of California Press, 1985. 29 'Emerging areas' has been part of the sub-title of this journal-Third World Quarterly: Journal of Emerging Areas-since it was first launched in 1978.

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The Logic of the Developmental State Asia's Next Giant: South Korea and Late Industrialization by Alice H. Amsden; The Political Economy of the New Asian Industrialism by Frederic C. Deyo; MITI and the Japanese Miracle by Chalmers Johnson; Governing the Market: Economic Theory and the Role of Government in East Asian Industrialization by Robert Wade Review by: Ziya Öniş Comparative Politics, Vol. 24, No. 1 (Oct., 1991), pp. 109-126 Published by: Ph.D. Program in Political Science of the City University of New York Stable URL: http://www.jstor.org/stable/422204 . Accessed: 26/01/2015 07:36 Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp

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Review Article

The Logic of the Developmental State Ziya Oni?

Alice H. Amsden, Asia's Next Giant: South Korea and Late Industrialization,New York, Oxford University Press, 1989. Frederic C. Deyo, ed., The Political Economy of the New Asian Industrialism, Ithaca, Cornell University Press, 1987. Chalmers Johnson, MITI and the Japanese Miracle, Stanford, StanfordUniversity Press, 1982. RobertWade, Governingthe Market:Economic Theoryand the Role of Governmentin East Asian Industrialization,Princeton, PrincetonUniversity Press, 1990.

Development theory and policy during the last decade have been thoroughlydominatedby the neoclassical paradigmand the neoliberaleconomic measuresclosely identified with this paradigm."Structuralist"developmenttheoryhad been the prevailingorthodoxyduringthe 1950s and early 1960s. A central idea associated with structuralismwas the belief that marketfailure is a pervasive featureof the underdevelopedeconomy with the corollarythat the state has an importantrole to play in correctingit. The neoclassical resurgence, which can be tracedback to the late 1960s and early 1970s, attackedstructuralismon threeseparate grounds. First, extensive state interventionto promote import-substitutingindustrialization had generatedinefficient industries,requiringpermanentsubsidizationfor their survivalwith little prospect of achieving internationalcompetitiveness. Second, extensive government interventiontended to generate "rent seeking" on a substantialscale, which detractedthe attention of economic agents from productive activities into lobbying for increased allocations of government subsidies and protection. Third, and most significant in the present context, empirical evidence on the experience of the most successful countries to emerge from the ThirdWorld, namely the four East Asian countries, Taiwan, South Korea, Hong Kong, and Singapore, showed that these countries achieved extraordinaryrates of economic growth, which moreover had been consistent with a relatively egalitarian distributionof income. The unique performanceof these economies had been generatedby using an outward-orientedmodel driven by marketincentives and a strong private sector.' What we are now witnessing is the emergence of a countercritiqueof the neoclassical

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ComparativePolitics October 1991 paradigmbased on a reinterpretationof the East Asian development experience. The four books under review in this essay are outstandingexamples of a growing literaturewhich seeks to refute the neoliberalvision of East Asian growth in terms of the economic benefits of trade liberalization,private enterprise, and a restrictedrole for the state.2 The central thesis associated with the newly emerging countercritique,which we might classify as broadly "institutionalist," is that the phenomenon of "late development" should be understoodas a process in which states have played a strategicrole in taming domestic and internationalmarketforces and harnessingthem to nationalends. Fundamentalto East Asian developmenthas been the focus on industrializationas opposed to considerationsinvolving maximizing profitabilityon the basis of currentcomparative advantage. In other words, marketrationalityhas been constrainedby the prioritiesof industrialization.Key to rapid industrializationis a strong and autonomous state, providing directional thrust to the operation of the market mechanism. The market is guided by a conception of long-term national rationalityof investment formulatedby governmentofficials. It is the "synergy" between the state and the market which provides the basis for outstanding development experience. The institutionalist perspective attempts to transcend the structuralist development economics which downplayed the key role of markets in the industrializationprocess. Similarly, it attempts to transcend the subsequent neoclassical resurgence which rapidly moved to the opposite extremeand interpretedall successful industrializationepisodes as the outcome of free markets,with the necessary corollarythat the domain of state intervention in the economy had to be restrictedas far as possible. The broad institutionalistperspective elaborated,albeit with somewhatdifferentemphases, in the four studies underconsideration aims to move beyond what appears to be an increasingly sterile neoclassical-structuralist controversy in a number of fundamental respects. At a very crude level, to propose market-oriented and state-led development as alternatives is simply ahistorical and misleading. All successful cases of "late industrialization"have been associated with a significant degree of state intervention.The problem, therefore, is to find the appropriate mixture of market orientation and government intervention consistent with rapid and efficient industrialization.Equally central is the issue of which set of institutional and political arrangementsis compatible with the appropriatemix of state intervention and market orientation in the economy. Hence what we observe in the context of the institutionalist countercritique is a fundamental shift of the problem from the state-versus-marketdichotomy towards differences in the ways that market-orientedor capitalist economies are organized and towards how these organizational differences contribute to the contrasts in both policies implemented and the subsequent economic performance.3 In the presentessay, the focal point of our interestis on the institutionaland sociopolitical bases underlyingthe capacity of the East Asian states to implementeffective and coherent developmentstrategies. In particular,we identify and synthesize the contributionsmade by the four volumes in the following set of issues. Is there a prototype"developmentstate," or are there fundamentallydifferentvariantsof the developmentalstate, even in the East Asian context? Is the East Asian developmentalstate a productof specific culturaland historical circumstances? Does the developmental state require a particularregime type? Is the developmentalstate fundamentallyincompatiblewith pluralisticforms of democracy?What

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Ziya Oni? is the future of the developmental state, and is it inherently unstable? What are the challenges posed by the model of the developmental state for neoclassical development theory and neoclassical political economy in general. From a comparativeperspective, what are the specific constraints on the transferabilityor the replicability of the East Asian developmentalstate in otherinstitutionalcontexts or environments?Finally, what are the key problemsthatthe second generationnewly industrializingcountriesare likely to encounterin their attemptsto borrowor emulate Japaneseor East Asian style institutionsand policies?

The Developmental State and Strategic Industrial Policy ChalmersJohnsonis the pioneerof the concept of the "capitalistdevelopmentalstate."4His model of the developmental state, based on institutional arrangementscommon to high growth East Asian economies, embodies the following set of characteristics.Economic development, defined in terms of growth, productivity,and competitiveness,constitutesthe foremost and single-minded priority of state action. Conflict of goals is avoided by the absence of any commitmentto equality and social welfare. Goals formulatedspecifically in terms of growth and competitiveness are renderedconcrete by comparison with external reference economies which provide the state elites with models for emulation. There is an underlying commitment to private property and market, and state intervention is firmly circumscribed by this commitment. The market, however, is guided with instruments formulatedby a small-scale, elite economic bureaucracy,recruitedfrom the best managerial talent available in the system. Within the bureaucracy,a pilot agency plays a key role in policy formulationand implementation.Close institutionalizedlinks are establishedbetween the elite bureaucracy and private business for consultation and cooperation. The organizationaland institutionallinks between the bureaucraticelites and majorprivatesector firms are crucial in generatinga consensus on goals, as well as in exchanging information, both of which constitute essential components of the process of policy formulation and implementation. Yet another crucial component is a political system in which the bureaucracy is given sufficient scope to take initiatives and operate effectively. The politicians "reign" while the bureaucrats"rule." The objective of the political elite is to legitimize the actions of the elite bureaucraticagencies and make space for the latter's actions. Strategic industrialpolicy forms a central component of the developmentalstate model. Both Amsden and Wade build upon the original formulationof Johnson with respect to Japanese industrialpolicy and make significant contributionstowards understandingthe natureof strategicindustrialpolicy and its impacton industrialperformance.Wade proposes a governedmarkettheoryof East Asian industrializationas an alternativeto the neoclassical "free market" or "simulated markets" explanations. The governed market theory is an attemptto specify Johnson's model of the developmentalstate in a testable form againstthe alternative neoclassical explanations of East Asian development. The essence of the governed market(GM) theory may be capturedby the following set of propositions. The superioreconomic performanceof East Asian economies is to a large extent the consequence of very high levels of investment,more investmentin certainkey industriesthan would have occurred in the absence of government intervention, and exposure of many industries to 111

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ComparativePolitics October 1991 internationalcompetitionin foreign markets,thoughnot in domestic markets.These are the proximatecauses. At a more fundamentallevel, these outcomes themselves are the causes of a specific set of policies which enable the governmentto "guide" or "govern" the process of resource allocation so as to produce a different productionand investment profile than would resultundera free marketsystem. The set of incentives, controls, and mechanismsto spreadrisk, which may all be gatheredunderthe bannerof strategicindustrialpolicy, are in turnsupportedby specific political, institutional,and organizationalarrangementspertaining to both the state apparatusand privatebusiness as well as their mutual interaction. Amsden's account of South Korea provides an outstanding illustration of the developmentalstate in action. The picture which emerges from Amsden's analysis of the Korean case contains a number of strong parallels with Johnson's account of MITI and Japanese industrialpolicy and to a lesser extent with Wade's account of the Taiwanese experience. The essence of Amsden's argumentmay be elaboratedas follows: Koreamay be characterizedas a prototypecase of a guided marketeconomy in which marketrationality has been constrainedby the prioritiesof industrialization.The governmenthas performeda strategic role in taming domestic and internationalforces and harnessingthem to national economic interests. Rapid industrializationper se has been the overridingconsideration,as opposed to maximizingprofitabilityon the basis of currentcomparativeadvantage.The state has heavily subsidizedand directeda selected group of industriesand subsequentlyexposed them to internationalcompetition. What is interesting,however, is that the industriesapart from the priority sectors experienced policy intervention only intermittently,while the remainingindustrieshave been exposed unaidedto the rigors of marketcompetition. Hence a high degree of selectivity has been the centerpiece of industrialpolicy. The state has retained sufficient instrumentsof control so that, whatever happened in the rest of the economy, sufficient investment would be forthcoming in the strategic sectors. Thus, the marketwas guided by a conception of the longer-termrationalityof investmentformulated by the state elites. Furthermore,the state has provideda stable and predictableenvironment within which the corporationscould undertakelong-term risks. The basic criteria for the choice of strategicindustriesinvolved high incomes elasticities of demandin world markets plus the potentialfor rapid technological progressand labor productivitygrowth. State interventioninvolved the creationof price distortionsso that economic activity was directedtowardsgreaterinvestment. Hence, in strikingcontrastto the logic of neoclassical development theory, a high degree of government intervention has occurred to distort relative prices so that the desired levels of investment could materialize in the strategic sectors. Yet the discipline imposed by the governmenton business behavior constituteda crucial component of the industrial strategy. The government has specified stringent performancerequirementsin returnfor the subsidies it has provided. As a result of the discipline exercised over the performance of firms located in strategic sectors, price distortionssuch as heavily subsidizedrates of intereston long-termcredits did not lead to a waste of resources as in the case of many other middle income economies. The discipline exercised over privatefirms involved both rewardinggood ones as well as penalizing poor performers.The governmenthas deliberatelyrefrainedfrom bailing out firms which were badly managedin otherwise profitableindustries.Hence the way in which industrialpolicy has been implementeddiffered decisively from the negative forms of industrialpolicy that 112

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Ziya Oni4 are characteristic of a number of West European countries, which have involved subsidizationof declining firms or industriesexperiencingfinancial difficulties. The discipline exercised over privatebusiness has assumed a multitudeof forms. Through its industriallicensing policies the state has managedto limit the numberof firms allowed to enter an industry.The policy has facilitatedthe realizationof economies of scale but at the same time encouragedintense competitionfor marketsharesamong the existing firms in the industry. Hence the mixture of competition and cooperationwas central to the success of industrial policy. The state has deliberately accelerated the process of industrial concentrationas a basis for successful competition in internationalmarkets. It is clear, therefore,that East Asian style industrialpolicy does not make sense without the associated East Asian style competitionpolicy. The large diversified business groups, Chaebols, have developed under direct state influence and guidance. Nonetheless, the state has attempted explicitly to prevent the abuse of monopoly power by imposing stringent price controls, negotiatedon an annualbasis. Furthermore,extensive restrictionshave been placed on the capitalaccount. Investorshave been subjectedto controlson capital flight and remittanceof liquid capital overseas. Regulation of the financial system representeda central pillar of Korea's industrial policy. Until very recently all commercial banks were owned and controlledby the government.The government'sstrictcontrol over the financial system has helped to divert the attentionof Chaebols towards capital accumulationby closing off the options available for rent seeking. A well-defined technology policy has been an integral component of the government'sbroaderindustrialstrategy. Technology has been acquired throughinvesting in foreign licensing and technical assistance. Massive imports of foreign licenses have been conceived of as the principal means of attaining technological independence.Direct foreign investmenthas played a comparativelylimited role as avenues of capital inflow and technology transferin the Koreaneconomy. Finally, the government's fiscal policies have complementedits highly interventionistindustrialpolicies. Expenditures from the budget have been directed almost exclusively to long-term investment. The state has invested heavily in education and human capital formation. Yet the welfare state function has been virtually absent. The state has assumed no responsibilities outside the domains of productionand capital accumulation. The central insight to emerge from Amsden's study is that the government not only subsidized industries to stimulate growth, but also set stringent performancecriteria in exchange for these subsidies. Hence governmentdiscipline over business was crucial, and this dual policy of supportand discipline constitutes the core component of a Japaneseor Koreanstyle industrialpolicy. Here we have a strongcontrastbetween East Asia and many middle income economies which have made extensive use of subsidies to industry.Precisely because of the latter's failure to integrate subsidization with discipline over business performance,these subsidies have proved to be counterproductiveand emerged as a major avenue for rent seeking.

Institutional and Political Bases of the Developmental State The formulationand implementationof strategic industrialpolicy have been facilitated by specific political and institutionalarrangements.Interestingcontributionsby Deyo and by 113

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ComparativePolitics October 1991 Koo and Johnsonin the same volume make importantcontributionstowardsunderstanding the two differentfacets of the developmentalstate.5A key distinctionis introducedbetween the political basis for strong, autonomousdevelopmentaliststates and the institutionalbasis for state interventionand effective policy implementation.The formeraspectdrawsattention to the broadersociopolitical context which facilitated strategy formulation. The strategic power of the East Asian developmental state has depended on the formation of political coalitions with domestic industryand on the destructionof the left and curtailmentof the power of organizedlaborplus otherpopulargroups. State intervention,in turn, has relied on organizationaland institutionallinks between politically insulatedstate agencies and major private sector firms. The effectiveness of state interventionhas been amplified throughthe fosteringof state-linkedprivatesector conglomerates,banks, and generaltradingcompanies thatdominatestrategicsectors of the economy. The distinctionbetween the coalitionbasis of strategychoice and the institutionsand structuresthroughwhich policies are implemented refers to the two separate,yet fundamental,aspects of developmentcapacity. Underlyingthese political and institutionalrequirementsfor effective state interventionin the form of strategic industrial policy are the two central features associated with the developmental state, namely, the unusual degrees of bureaucratic autonomy and public-privatecooperation.The coexistence of these two conditions allows the state and the bureaucraticelites to develop independentnational goals and, in the subsequent state, to translatethese broadnationalgoals into effective policy action. The coexistence of these two conditions is critical. In fact, in the absence of bureaucraticautonomy public-private cooperationeasily degeneratesinto situationsin which state goals are directly reducible to private interests. Countries such as Mexico and some of the other "bureaucraticauthoritarian"states in Latin America are strikingexamples of such political economies, in which close government-businesscooperation has materialized in the context of "weak states" which lack autonomyfrom powerful groups in society. From a comparativeperspective, among the most puzzling and intriguingaspects of the East Asian developmental state are how bureaucraticautonomy was acquired in the first place and why it was subsequently directed to developmental goals as opposed to the self-maximizingor predatoryforms of behaviorso common in othercontexts. An extremely meritocratic form of recruitment constitutes the starting point in understanding the extraordinarydegree of bureaucraticautonomy associated with the developmental states. The system was designed in such a way as to attractthe best managerialtalent available to the ranksof the bureaucraticelite, which in numericalterms was quite small by international standards. Rigorous standardsof entry not only ensured a high degree of bureaucratic capability, but also generated a sense of unity and common identity on the part of the bureaucraticelite. Hence the bureaucratswere imbuedwith a sense of mission and identified themselves with nationalgoals which derived from a position of leadershipin society. The early retirementof the elite bureaucratsand theirsubsequentmove to top positions in politics and business also helped to enhance their power and legitimacy. The common educational backgroundsplus the high degree of intraelitecirculationwere instrumentalin generatingan unusualdegree of cooperationamong the bureaucrats,the executive, and the entrepreneurial elites. All bureaucraticsystems are confrontedwith an inherenttension between autonomyand accountability.Autonomy from both societal interest groups and other layers within the

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Ziya Oni? state is a necessaryconditionfor effective action. Yet the powers grantedto the bureaucratic elites may easily be misused in the absence of externalchecks and balances on bureaucratic power. In the context of the developmentalstate, several mechanismswere institutedwith the purpose of resolving the tension between bureaucraticautonomy and accountability. First, the size of the bureaucraticapparatuswas kept extremely small by international standards.The limited size of the bureaucracyhelped to consolidatethe elite position of the bureaucratsin society and also to contain the problems involving lack of control and accountability associated with massive bureaucracies. The second element designed to achieve an equilibriumbetween autonomyand accountabilityconcernedthe powers granted to pilot agencies such as MITI in Japanand EPB in Korea, which emerged as the principal institutionsresponsiblefor the implementationof industrialpolicy. The problemhere was to find the mix of powers needed by the pilot agency without giving it control over so many sectors as to make it all-powerful or so few as to make it ineffective. The dilemma was resolved by confining the powers of MITIto a limited numberof selected strategicsectors of the economy. Hence the pattern of MITI's (or its Korean and Taiwanese counterparts') involvement in the economy was consistent with both the economic logic of selective industrialpolicy, based on infantindustryprotection,and the logic of finding an equilibrium between bureaucraticautonomyand effectiveness, on the one hand, and bureaucraticpower and accountability,on the other. The thirdmechanismwherebyautonomyand accountability were reconciled involved the unusual division of labor within the state, among the executive, bureaucrats, and military. The relationship between the executive and the bureaucracyis particularlyinteresting. Johnson draws attention to a striking structural characteristicof the developmental state, the implicit division of labor within the polity between the tasks of ruling and the tasks of reigning. Politicians reign while bureaucrats rule. The politicians provide the space for the bureaucratsto rule by holding off special interestclaimantswho might deflect the state from its main developmentalpriorityand also legitimateand ratify the decisions takenby the bureaucrats.The existence of an independent executive is crucial for the operationof the system in the sense that it allows the bureaucrats the freedom of action necessary for effective policy interventionbut at the same time constitutesan importantbarrierto the misuse of this freedom of action. The task performed by the militaryin Korea and Taiwan has been similar to the role performedby the executive or the political elites in the context of postwarJapan.The commitmentby the militaryelites to developmentalgoals as a means of securing nationalsurvivaland independencehas been a key factor in ensuring the effective deployment of bureaucraticpower. As a fourth element, in spite of the inherentweakness of civil society in the East Asian context, certain elements within civil society have nevertheless contributedto the process of increased accountability.Amsden singles out the hyperactivestudent movement in the Korean case, which has helped to check the abuse of bureaucraticand governmentalpowers. The logic of the developmentalstate rests precisely on the combinationof bureaucratic autonomy with an unusual degree of public-private cooperation. Common educational backgrounds of the bureaucraticand business elites, as well as their significant cross penetration,have played a key role in generatingextraordinarydegrees of elite unity. Yet it would be rather misleading to attribute public-privatecooperation exclusively to these forces. Public-privatecooperationhas also been directly and deliberatelyengineeredby the state elites. In both Japanand the otherEast Asian states which have evolved along the lines

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ComparativePolitics October 1991 of the Japanese model, the state elites have consciously sought to create cooperative relationshipswith private business via the creation of a series of unusual institutions. For instance, the state has played a leading role in nurturingthe peak organizationsof private business. The huge business conglomerates,the Keiretsuof postwarJapanand the Chaebols in Korea, owed theirphenomenalgrowthto the special incentivesprovidedby the state. The fact that they have been nurturedby the state in the first place has, in turn, renderedthem extraordinarilydependenton the state for their future survival. Hence the extremely tight policy networks which characterizeEast Asia have been largely engineered by the state elites. It would be misleading, therefore, to conceive public-privatecooperation as an outcome of voluntary compliance by the business elites. The significant element of compulsionexercised by the bureaucratsin securingpublic-privatecooperationconstitutesa centralcharacteristicof the developmentalstate. The extraordinarydegrees of monopoly and control exercised by the state over the financial system plus the extreme dependence of individual conglomerates on bank finance have also been instrumental in eliciting compliance with the requirementsof strategicindustrialpolicy. The central insight is that the degree of government-businesscooperationand consensus on national goals, unique to the developmentalstate, is not purely the productof a given culturalenvironmentbut has been largely engineeredby the state elites themselves through the creationof a special set of institutionsrelying on a significant element of compulsion.

The Historical Origins and Specificity of the East Asian Developmental States To an externalobserver, one of the centralpuzzles posed by the East Asian industrialization experience is how to explain the single-mindedcommitmentof the state elites to growth, productivity,and internationalcompetitiveness. One possible line of explanation tends to focus on regime type, namely, the authoritarianpolitical structuresassociated with the East Asian states. It is a well-known fact, however, that authoritarianregimes, like their democraticcounterparts,are confrontedwith the problemsof legitimacy and typically fail to generate the consistency and commitment to national goals characteristicof East Asian developmental states. Hence we need to search for more penetratingexplanations of the intractablecommitmentto long-termgrowth. Two factors, both of which are the productsof specific historicalcircumstances,deserve special emphasis. The first element involves the unusual degree of external threat confrontedby the East Asian states in the postwarperiod. The securitythreathas been aggravatedby the extremely weak resourcebase and shortageof raw materialsin the economies concerned. The security threathas been particularlypronouncedin the case of Taiwan, which faced an immediate threatfrom mainlandChina. The fact that these nationswere underdirect Communistthreat implied thatthey had to justify theirvery existence againstcompetitionfrom the Communist regimes and associated ideology. Hence the extraordinarysecurity threatfaced by the East Asian states helped to bolster the nationalisticvision inherentin these states and the unique commitmentto the long-termtransformationof the economy, which enabled the state elites to ignore considerationsrelatingto income distributionand social welfare. Geopoliticalinfluences, however, constituteonly one element of the legitimationprocess. The second element concerns the fact that the major East Asian economies under

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Ziya Oni? considerationall experienced a majorredistributionof income and wealth from the outset, with the corollary that the industrializationdrive in the postwar period has been initiated from a relatively egalitarianbase. In the Japanesecase, the devastatingimpact of the war was such that all Japanese were made equally poor. In the cases of Korea and Taiwan, extensive land reformsduringthe process of colonial rule performeda similarfunction. The impact of the land reforms was such that, not only was the distributionalprofile equalized, but also competitionfrom potentiallytroublesomesocial groups such as large landlordswas eliminated. Precisely in this respect we observe a strong contrastwith the Latin American experience. Hence we should locate the unusual and exclusive attachmentto economic growth and competitivenessin the combinationof extraordinaryexternal threatscombined with a relatively egalitarian distribution of income prior to the process of rapid industrialization. Cumings' contributionis particularlyimportantin accountingfor the origins of the East Asian developmental states.6 Cumings locates the historical origins of East Asian industrializationin the broaderregional context of Japaneseand then Americanhegemony. Under Japaneserule, extensive industrialand infrastructuralinvestmentprovideda base for subsequentindustrialgrowth in Korea. The build-up of the bureaucraticapparatusand the associated administrativecapacity were also to a large extent productsof Japaneserule. In the postwar period, Korea and Taiwan assumed a key geostrategic significance, and as a result of their newly acquiredgeostrategicadvantagethey have benefited disproportionately in terms of trade, capital, and technology from the core countries. Hence any analysis of the East Asian developmental state has to take into account the internationalcontext within which East Asian growthmaterializedin the postwarperiod. Unlike the experience of many Third World states, Korea and Taiwan benefited from heavy interactionwith the strongest and most dynamic countrieswithin the cores, the United States and Japan. Yet, as Haggard and Cheng demonstrate,it was not only the special natureof their interactionwith the core which explains their superior success, but also the way that they have managed their interactionwith the externalenvironmentwith respectto both tradeand capital inflows.7 The strength of the East Asian states enabled them to direct and limit the impact of foreign capital in local economies. Here again we locate a strong contrast with Latin America, whose dependent relationshipvis-a-vis the core has been attributedto the interactionof powerful foreign firms with relatively weak states, amply demonstratedin Peter Evans' comparative analysis.8 The key point made by Koo is that the internationalcontext, combined with the domestic structuralcharacteristicsdescribed,enabled strongauthoritarian states to emerge in East Asia priorto reintegrationinto the U.S.-dominated capitalistworld economy in the postwar period. Hence, in retrospect, the timing of incorporationinto the world economy appearsto be crucial for the subsequentsuccess of the East Asian states. Anotherstrikingcontrastwhich explains why the East Asian states did not experience the states in Latin America legitimationproblems confrontedby the bureaucratic-authoritarian can be traced to the exclusion of labor from the political process from the outset.9 The corporatistregimes in Latin American newly industrializingcountries (NICs) incorporated labor into a populist coalition and emphasized increased wages and public services in the early stages of industrialization.The subsequent bureaucratic-authoritarian regimes in Argentina,Brazil, Chile, and Uruguayaimed to promoteindustrializationby excluding from power the previously mobilized economic groups and by developing collaborative

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ComparativePolitics October 1991 relationshipswith the multinationalcorporations.The fact that such regimes have been built on the exclusion of previously mobilized groupshas generatedsevere legitimationproblems for them. Ourdiscussion has hithertofocused on the essential unity of the East Asian developmental states. Yet a closer analysis suggests the presence of striking differences among the individual variants of the developmental state. The Japanese developmental state in the postwar period, for example, has differed from its Korean and Taiwanese counterpartsin that it has been able to coexist with democraticpolitical institutions.Importantcontrastsmay also be identified between the Korean and Taiwanese models. Wade demonstrates, for example, that Taiwan satisfied Johnson's "bureaucraticautonomy"condition but failed to conform to the "public-private cooperation" condition and in this respect differed significantly from both Japan and Korea. Close cooperation and interaction among politicians, bureaucrats, and business elites have been the foundation stone of the developmentalstate. Yet, comparedto Japanand Korea, Taiwan has been characterizedby more of a cleavage between the government and the private sector. Given the weak institutionalizedlinks between government and business, industrialpolicy in Taiwan has been implementedthrougha rigorousbut very different type of policy network linking the centraleconomic bureauswith public enterprises,public banks, public researchand service organizations, universities, foreign multinationalswith operations in Taiwan, consulting firms, and some "special status" private manufacturingcompanies linked to the party, military,and economic ministries. Hence the public sector has been a centralcomponentof the policy networkin Taiwan. The differentpolicy networkwhich prevailedin Taiwan may also be explained by the relative absence of a limited number of extremely large conglomerates, characteristic of Japan and Korea. This also explains why the "public-privatecooperation"conditioncould not be fulfilled in the Taiwanese case. What is quite critical in the presentcontext is that the vision of a uniformEast Asian developmental state is misleading. In fact, in spite of substantialsimilaritiesamong the Korean,Taiwanese, and Japanese cases, the presence of importantdifferences should not be underestimated, particularlyin trying to generalize from the East Asian experience.

The Developmental State and Corporatism At a very broad and general level of analysis, it is possible to formulatea correspondence between the East Asian model of the developmental state and corporatist political arrangements.At one extreme, both Korea and Taiwan appearto conform ratherclosely to the pattern of "authoritariancorporatism," which involves institutionalizedcollaboration between the state and business elites in the policy formulationand implementationprocess, accompanied(at least until very recently) by severe repression of populargroups and the exclusion of labor from the political arena. In contrast to Taiwan's and Korea's "authoritarian"or "exclusionary"corporatism,the political arrangementsunderlying the Japanesedevelopmentalstate in the postwar period have been much closer to the western Europeanor Scandinavianmodel of "societal" or "democratic"corporatism.' In the case of Japan,close, institutionalizedcooperationbetween the state elites and business groupsfor the realizationof strategicgoals has coexisted with democraticpolitical institutions.Clearly, 118

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Ziya Oni? the common denominator in both the "authoritarian"and "democratic" forms of corporatism is institutionalized public-private cooperation in the process of policy formulationand implementation. Attention drawn to the corporatistnatureof the developmental state serves at least one importantpurpose. It is unambiguouslythe case that the model of the developmentalstate explored in the present essay is inconsistent with the vision of a pluralistic form of democracy, in which a multitude of small-scale interest groups enjoy broadly equal and unrestrictedaccess to the state. By definition, restrictedand preferentialaccess to the state by organizedgroups in civil society is an inherentand integralfeatureof the developmental state. Moreover, the developmental state by its very nature involves an unusual concentrationof public and privatepower which would be extremely hardto justify by the standards of pluralistic democracy. The emphasis on the corporatist nature of the developmentalstate also helps to draw a broad parallel between the two major groups of countries which constitute the major success stories of outward-orienteddevelopment, namely the small Europeancountries, on the one hand, and the East Asian group, on the other. The common element in what originally appearsto be exceptionally dissimilarcases is that both sets of countries have managed to build over time institutionaland political arrangements which have facilitated highly effective forms of integration into the internationaleconomy. The natureof the internalpolitical arrangementswas crucial to the ability of these groups of countriesto successfully manage their association with the world economy and their subsequentability to benefit from this interaction." Beyond this level of abstract comparison, however, the emphasis on the corporatist characterof the developmentalstate might be more misleading than illuminating.Consider the parallel drawn by Johnson between the postwar Japanese developmentalstate and the Europeantype democraticcorporatism.The fundamentaldistinguishingcharacteristicof the latter is that policy is formulatedand implementedthroughinstitutionalizedinteractionand cooperationbetween the politicians and business, on the one hand, and peak associationsof labor and business, on the other. Centralto the idea of democraticcorporatismis the notion that relatively autonomous state elites bargain with autonomous peak associations within civil society. Yet it is quite obvious that this vision of democraticcorporatismdeviates from the postwarJapanesemodel in a numberof criticalrespects. First, in spite of the presenceof democratic institutions, labor has been systematically excluded from the policy process. Second, it could be incorrect to characterize the policy formation and implementation process in Japanas the outcome of bargainingbetween equal, yet independent,partners.The studies reviewed in this essay suggest that in Japan, and perhapseven more so in Koreaand Taiwan, the state has possessed considerable leverage over private business in terms of securingcompliancewith its strategicchoices. The state elites have unambiguouslybeen the senior partnerin their relations with business groups. Hence the degree of autonomy and strengthassociatedwith the East Asian models has been considerablygreaterthan the degree of state autonomy associated with the Europeantype democratic corporatism. It is quite self-evident thatJapanconformsto a model of an extremelylimited form of corporatism.At a more general level, the concept of corporatismmakes sense as a means of identifying, as an ideal case, the characteristics associated with the Scandinavian or Austrian type democraticcorporatismplus the contributionsthat such institutionalarrangementscan make in termsof political stabilityand improvedeconomic performance.The "ideal case" may, in

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ComparativePolitics October 1991 turn, be utilized for the purposeof broad, macro-level comparisonswith the other political arrangementsand systems. However, to extend the limits of corporatismbeyond this ideal case and to search for the presence and strength of corporatistarrangementin highly dissimilar contexts reduces the usefulness of corporatism as an analytical concept for macro-comparativeanalysis. The concept of "authoritariancorporatism"constitutes a loose category and is less satisfactory than "democratic corporatism" in defining an ideal type. Hence, in our judgment, the characterizationof Korea and Taiwan as variantsof authoritariancorporatism is meaningfulonly at a descriptivelevel. Wade makes the importantpoint that one can not deduce the degree of state strengthor specific policy choices from the underlyingcorporatist political arrangements.Mexico, for example, is consideredto be a prototypecase of "state" or "authoritarian"corporatismin the context of a single party regime.'2 Arguably, as a consequence of its corporatistarrangements,Mexico has enjoyed a high degree of political stabilitywhich is unusualby Latin Americanstandards.Yet the "authoritarian corporatism" model associated with the Mexican case has been consistent with a very different set of strategicchoices and policy outcomes as comparedwith the Koreanand Taiwanese models. Moreover, in spite of its authoritariancorporatistcharacteristics,Mexico has hardly been a case of economic success. The general point emerging from the discussion is that the East Asian developmental state, in a very loose sense of the term, may be classified as a corporatiststate, in the sense that institutionalizedgovernment-businesscooperation is an underlyingfeature of such a state. Yet, at a deeper level, the characterizationof the East Asian developmentalstates as corporatiststates is ahistorical and misleading. Corporatist arrangementsby themselves, withoutrecourseto a full range of conditions specified earlier, can not explain why the East Asian states have elected to pursuestrategicindustrialpolicies and why such policies have proved to be so effective in practice. Furthermore,corporatist arrangementscan be consistent with and have in fact facilitated the achievement of quite distinct objectives such as macroeconomic stability plus income redistributionand the build-up of the welfare state, hardly the objectives associated with the logic of the developmentalstate.

Is the Developmental State Model Transferable? To a practicallyminded scholar, the immediate question concerns the lesson to be drawn from the East Asian developmentexperience which can subsequentlybe generalizedto and applied in other newly industrializingcountries. In our judgment, such an approach is extremely ahistorical. In fact, the studies under review demonstratequite conclusively that the East Asian model of the developmental state is the product of unique historical circumstances with the logical corollary that there exist major constraints on its transferabilityto or replicabilityin alternativenationalcontexts. Three key elements of the developmentalstate are extremely difficult to emulate. They are the single-minded adherence to growth and competitiveness at the expense of other objectives, the unusual degree of bureaucraticautonomy and capacity, and the equally unique and unusual degree of public-private cooperation. As emphasized earlier, the single-mindedpursuitof growth and productivitywas clearly relatedto the severe external 120

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Ziya Oni? threats that these countries were confronted with. While external threats have helped to legitimize the long-termgrowth strategy,the geostrategicposition of these states in the cold war context enabled them to extract importantadvantages vis-a-vis the core, the United States in the case of Japanand both the United States and Japanin the case of Korea and Taiwan, which have made a significant contributiontowards the consolidation of state autonomy as well as the formation of state capacity. In the domestic sphere, Korea and Taiwan benefited from the unusualcombinationof an authoritarianregime and a relatively egalitariandistribution,which itself was the productof particularhistoricalcircumstances. Consequently,the East Asian states have been able to withdrawfrom the distributionalrealm and concentrate exclusively on providing strategic guidance for production and capital accumulation. A fundamentalquestion centers around the compatibilityof the "developmentalstate" with political liberalizationand democraticforms of governance. This also raises the key questionwhetherthe transferor replicabilityof the East Asian state forms is desirablein the first place, in environmentswhere democraticvalues and institutionsas well as widespread political participationemerge as centralobjectives in theirown right. It is self-evident that in countrieswhich have experienced a long trajectoryof democraticdevelopmentit would be inconceivable for the state to withdraw entirely from the distributionalrealm and focus exclusively on growth and productivityobjectives. At a deeper level, the extremedegrees of concentrationof private and public power associated with the East Asian developmental states could also be incompatiblewith widespread political participation.Although such concentrationof private and public power has been consistent with a democraticpolitical system in Japanin the postwarperiod, this coexistence was more due to the unique features and structural imperatives of Japan as distinct from an inherent compatibility of the developmental state with democratic institutions. As Korea and Taiwan currently find themselves in the process of democratic transition, it would be extremely interesting to observe whether and to what extent the institutionsof the developmentalstate will survive under conditions of popularparticipationand democraticgovernance. Hence the question whetherEast Asian type political economies can coexist with a liberalwestern type political system emerges as a central problem for comparativepolitical economy during the next decade. Another critical issue in this context revolves around the long-term stability of the developmentalstate. Several scholars, includingAlice Amsden, have drawnattentionto the fact that the East Asian developmentalstate is inherentlyunstable. There exists an inherent tension within the developmental state between the "bureaucraticautonomy" and the "public-privatecooperation"conditions. The Koreanexample, for instance, clearly testifies that the developmentalstate creates the seeds of its own destruction.As arguedearlier, the Koreanstate has been instrumentalin the creationof privatebusiness groups, Chaebols, as a basis for securing cooperation for its industrialpolicy and enhancing its autonomy in implementingits strategic goals. The recent evidence suggests, however, that the Korean state has been increasinglyunable to control or monitor the activities of the Chaebols. In fact, the relative power and autonomyof the Chaebols have increased dramaticallyin the course of the liberalizationdrive during the 1980s, which in turnhas progressivelylimited the capacity of the state to control the actions of these groups and to direct them towards strategic goals. The Korean example illustrates quite conclusively that it is extremely

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ComparativePolitics October 1991 difficult to engineer an equilibriumbetween the two apparentlycontradictoryconditions "bureaucraticautonomy"and "public-privatecooperation"and to sustain it over time. The knife-edge equilibriumcan easily be disturbeddue to the more rapid growth of private vis-h-vis public power. It is quite obvious that, unless the "autonomy" and "cooperation"requirementsare satisfied, attemptsto implementJapaneseand Koreanstyle industrialpolicies will prove to be counterproductive.In such an environment,bureaucraticelites will lack the capabilityto identify dynamic industriesto be targetedin the first place and will be in a weak position in terms of monitoringand regulatingthe activities of firms located in the strategicindustries. The inabilityof the state elites to discipline private business in exchange for subsidies may lead to a situationwhere selective subsidies can easily degenerateinto a majorinstrumentof rent seeking by individual groups. A central lesson that emerges from the institutionalist literatureon East Asian developmentis that the transferof specific strategiesor policies to new environmentswill be self-defeating in the absence of the political and institutional conditionsrequiredfor theireffective implementation.We also need to take into accountthe fact that the East Asian style developmental state and associated industrialpolicies have provedto be successful in a global environmentcharacterizedby rapidgrowthof production and world tradeand also by the absenceof similarinstitutionsand strategiesin the rest of the internationalsystem. The obvious questionto pose is whethersuch institutionsand strategies are likely to be effective in a less favorableenvironmenttypified by growing protectionism and declining growth in world trade. Moreover, are such institutionsand policies likely to work in an environment in which other nations are trying to adopt similar types of institutionsand policies? On a more optimistic note, however, some important, yet qualified, lessons can be extracted from the East Asian model of the developmental state with a view to its applicability in alternative national settings. A key lesson is that there is no obvious correspondencebetween effective market-augmentingstate intervention,on the one hand, and the size of the bureaucraticapparatusor the public sector, on the other. The East Asian model of the developmentalstate testifies that highly effective forms of market-augmenting intervention can be consistent with relatively small bureaucraticstructures and public sectors. Yet, contraryto popularbelief, small public sectors have nevertheless embodied highly productiveand profitable public enterprisesectors. Another key message is that a small but powerful pilot agency such as MITI or EPB can provide importantstrategic guidance in the selection of key industriesto be encouragedand also in the provision of a stable and predictable environment for private investors to undertake risky, long-term investmentprojects. Hence sector-specific forms of indicative planningcan be an essential complement of market-orientedgrowth. Effective market-augmentingforms of state interventionrequireboth bureaucraticautonomyand close public-privatecooperation.These institutionalconditions are not easily transferable,but they are not the unique productof a particularcultural environment either. Factors such as traditions of social and political hierarchyand group solidarityhave played an importantrole in East Asian industrialization, but it would be wrong to associate the degree of social consensusand cooperationassociated with the East Asian developmental state purely with cultural explanations.'3 Chalmers Johnson's account is particularlycrucial in this respect. Johnsondemonstratesthat the key institutions underlying rapid economic growth in Japan are of relatively recent origin.

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Ziya Oni? Similarly, the consensus and cooperation which constitute the central pillar of the developmental state are a specific postwar phenomenon. The rejection of the purely culturalistexplanationhas an importantramification,namely,thatbureaucraticcapabilityand public-privatecooperationare not culturalgivens but can be built up over time througha process of institutionalreform. Hence bureaucraticreform as well as attemptsto institute organized forms of bargaining and cooperation between the public and private spheres assume critical importanceas a basis for improvingthe effectiveness of state interventionin a market-orientedsetting. The challenge for the political economist is to devise forms of industrialpolicy which are consistent with the norms of democraticaccountabilityand with more limited concentrationof public and private power than has been the case in the East Asian context.

Towards a New Paradigm Institutionalistaccounts of the East Asian developmentalstates embody importantramifications for more general debates in comparativepolitical economy concerningstate autonomy and state capacity.'4 A central insight concerns the precise meaning to be attachedto the notion of a "strong state." The developmental state thesis suggests that strong states are typically characterizednot only by a high degree of bureaucraticautonomyand capacity, but also by the existence of a significant degree of institutionalizedinteractionand dialogue between the state elites and autonomouscentersof power within civil society. Centralto our understandingof the strong developmentalstate is the distinction between "despotic" and "infrastructural" state power. "Despotic power" or what we could preferto call "coercive autonomy"may be associated with highly centralizedand authoritarianstates in which the state elites extensively regulateeconomic and political activity but at the same take decisions without routine, institutionalizednegotiationswith groups in civil society. "Infrastructural power," in contrast, signifies the ability of the state to penetratesociety, organize social relations,andimplementpolicies througha processof negotiationandcooperationin society.15 The crucial point to emphasize is that highly centralizedand authoritarianstates which possess "despoticpower" will not necessarilyhave the "infrastructural power" which would allow them to elicit consent for their policies, organize and coordinatesociety, and mobilize resourcesfor long-termdevelopment. Some degree of autonomyfrom societal pressuresis a precondition for effective state intervention. Yet the distinction between despotic and infrastructuralpower implies that there exists no direct, linear correspondencebetween "state autonomy" and "state capacity." From the perspective of long-term economic transformation,the most successful states are typically those which are able to work through and in cooperationwith autonomouscentersof power.16 The autonomyof the developmental state is "of a completely differentcharacterfrom the aimless, absolutistdominationof the predatorystate... It is an autonomyembeddedin the concrete set of social ties which bind state and society and provide institutionalchannels for the continuous negotiation and renegotiationof goals and policies. The specific natureof this 'embeddedautonomy' must be seen as the productof a historicalconjunctureof domestic and internationalfactors.""17 The notion of "embedded autonomy," which Peter Evans uses to characterizestrong developmental states in the Third World, also has a direct counterpartin the corporatist 123

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ComparativePolitics October 1991 literatureof a strongstate in the context of advancedindustrialeconomies. In the corporatist literature,the state performsa key role in the creation and the subsequentconsolidationof corporatist arrangements involving peak associations of labor and private business. Corporatistarrangementsfacilitate the implementationof both incomes policies to control inflationand sectoraladjustmentpolicies for smooth industrialtransformation.The ability of the state to establish and consolidate corporatiststructuresdepends on two basic attributes, which are perfectlyconsistentwith the generalthrustof our analysis. First, the state must be autonomous enough in the policy formation and implementation process not to be overwhelmed by special interest groups. Second, the state must be weak enough to recognize that the costs of imposing a policy authoritativelywill exceed its benefits. The state must also be willing to relegate some of its most distinct resource, legitimatecoercion, to organizationswhich it does not control. Selective interventionismconstitutesa fundamentalcharacteristicof the strongstate. Such states seem to be able to focus their attentionalmost exclusively on increasingproductivity and profitabilityand restrict their interventionto the strategic requirementsof long-term economic transformation.Neithera large public sector nor a large public enterprisesector is necessary for the state to undertake its strategic role in the process of economic transformation.Indeed, the very size of the public sector, combinedwith pervasivesubsidies and controls, nurturesthe proliferationof special interest groups, whose "rent seeking" activities may seriously impede state capacity for effective intervention. Similarly, an excessively large public enterprise sector may undermine the strength of the central governmentthroughthe emergence of clientelistic relations. The type of interventionassociated with the developmental state embodies three major components. First, direct ownership and control of industrialproduction is of secondary importanceas compared with the process of building up economic infrastructurethrough education, training,and research. Second, the state performsa key role in the promotionof cooperativelabor-managementrelations. Third, and most significant, the state undertakesa leading role in the creationof comparativeadvantage.The state is involved in creatingthe conditionsfor economic growthand industrialadaptation,yet refrainsfrom exercising direct control. A central feature underlying this process is that the state works with and often promotes the market. The market is employed as an instrumentof industrial policy by exposing particularindustriesto internationalcompetitive pressures. Developmental states systematicallymanage the marketas a means of long-term economic transformation.The ability of the state to undertakeselective, yet strategicinterventionis based on the existence of strong administrativecapacity. Again, what matters is not the size of the bureaucratic apparatus,but its coherence. Developmental states are characterizedby tightly organized, relatively small-scale bureaucraticstructureswith the Weberian characteristicsof highly selective, meritocraticrecruitmentpatternsand long-termcareerrewards,which enhancethe solidarityand the corporateidentity of the bureaucraticelite. Institutional perspectives embodied in the developmental state model make another importantcontributionto the broadercomparativepolitical economy literatureby developing a serious critiqueof the neoclassical and public choice schools of political economy. In fact, both the institutionalistand public choice scholars start from a common base of a high degree of state or bureaucraticautonomy. The idea that the state elites constitute a distinct interestgroup, which we associate with the institutionalistperspective, is closely reflectedin

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Ziya Oni4 the contributionsof the public choice school. Public choice analysts, however, entertain highly deterministicnotions concerning the manner in which state autonomy is utilized in practice. They argue that autonomousaction by self-maximizingbureaucratsand politicians will necessarily result in malevolent state action and misallocationsof resources. Hence a direct correspondenceis postulated between bureaucraticautonomy and the model of a predatorystate, in which the state elites extractlarge investable resourcesbut provide little in the way of "collective goods" in return so that they act as a barrier to economic transformation.The logical corollary of this reasoning is that constitutionalrestrictionsare needed to contain governmentgrowth.18Here lies the centraldifference between the public choice and institutionalistreasoning. The latter does not prejudge the issue regardingthe utilizationof state autonomy.Furthermore,it contends that state action can have a positive developmentaleffect. In general, whetherautonomousstate action will assume a malevolent or benevolent form depends on historical and structuralconditions and can not be deduced from first principles. Furthermore,it treats state autonomy not as a permanentor absolute condition, but as a highly contingent or historically specific phenomenon. The degree of state autonomy may vary significantly from one country to another as well as between differenthistoricalepochs within an individualcountry. To make the argumentconcrete, in the East Asian context the bureaucraticelite has identifieditself with nationalgoals and has displayed an unusual degree of integrity in attempting to realize these national goals. Consequently,bureaucraticautonomyhas been associatedwith extremely effective forms of state interventionin the economy. However, it was not bureaucraticautonomyper se which ensuredeffective state action, but rathera whole set of additionalfactors which collectively guaranteedthat bureaucraticautonomywas translatedinto effective state action. Finally, the institutionalistframeworkunderlyingthe developmentalstate thesis provides a serious critique of the one-dimensional, universalist logic of neoclassical development theory, with its emphasis on a specific set of appropriatepolicies, designed to establish a free market, regardless of the historical, institutional, and political context. The institutionalist logic has also identified a set of policies, namely, market augmenting strategic industrialpolicies, which have been associated with high rates of GNP growth in the East Asian context. Yet the analysis also makes clear that the formulation and implementationof such policies have been facilitatedby specific political and institutional preconditions. The corollary of this proposition is that the same set of policies will be counterproductiveor at least ineffective in the absence of the associated set of institutional and political structuresor contexts. Hence the institutionalistperspectivepoints towardsthe importance of multiple logics in the interaction of governments and markets in the development process and draws attention to the multiple trajectories of economic and political developmentavailable to present-daydeveloping countries. NOTES I wouldliketo thankEzraN. Suleimanforencouraging me to writethisarticle. 1. Leadingexamplesof neoclassical theoryas appliedto theEastAsiancontextincludeBelaBalassa, development "TheLessonsof EastAsianDevelopment: An Overview,"EconomicDevelopment and CulturalChange,36 (April in the NewlyIndustrializing 1988),273-290;WalterGalenson,ed., ForeignTradeand Investment: Development AsianEconomies of WisconsinPress,1985).Onthedemiseof structuralism andresurgence of (Madison: University

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ComparativePolitics October 1991 neoclassical developmenttheory from an orthodox standpoint,see I. M. D. Little, Economic Development: Theory, Policy and InternationalRelations (New York: Basic Books, 1982). 2. See also Gordon White, ed., DevelopmentStates in East Asia (London: Macmillan, 1988); Colin I. Bradford, "East Asian Models: Myths and Relations," in John P. Lewis and ValerianaKallab, eds., DevelopmentalStrategies Reconsidered(Washington,D.C.: OverseasDevelopmentalCouncil, 1986), 115-128; StephanHaggardand Chung-in Moon, "The South KoreanState in the InternationalEconomy:LiberalDependentor Mercantile,"in John G. Ruggie, ed., Antinomiesof Interdependence:National Welfareand the InternationalDivision of Labor (New York: Columbia University Press, 1983), 131-189; StephanHaggardand Chung-inMoon, "Institutionsand Economic Policy: Theory and a Korean Case Study," WorldPolitics, 42 (January1990), 210-237; Alice Amsden, "The State and Taiwan's Economic Development," in Peter Evans, Dietrich Rueschemeyer,and Theda Skocpol, eds., Bringing the State Back In (New York: CambridgeUniversity Press, 1985), 78-106; "The Pacific Region: Challenge to Policy and Theory," special issue of The Annals of the AmericanAcademyof Political and Social Science, 505 (September 1989); Helen Shapiroand Lance Taylor, "The State and IndustrialStrategy," WorldDevelopment, 18 (June 1990), 861-878; Peter Evans, "Predatory,Developmental and Other Apparatuses:A ComparativeAnalysis of the Third World State," Sociological Forum, 4 (1989). 3. In this respect, a close affinity may be established in terms of their conceptual frameworks between the institutionalistinterpretationsof the East Asian experience reviewed in the present essay and the following studies which focus primarilyon westernEurope. PeterA. Hall, Governingthe Economy:The Politics of State Interventionin Britain and France (New York: Oxford University Press, 1986); Peter J. Katzenstein,Small State in WorldMarkets: IndustrialPolicy in Europe(Ithaca:Cornell UniversityPress, 1985);John Zysman, Government,Marketsand Growth: Financial Systemsand the Politics of IndustrialChange (Ithaca:Cornell University Press, 1983). 4. ChalmersJohnson, MITIand the Japanese Miracle (Stanford:StanfordUniversity Press, 1982), and "Political Institutionsand Economic Performance:The Government-BusinessRelationshipin Japan, South Korea, and Taiwan," in FredericC. Deyo, ed., The Political Economyof East Asian Industrialism(Ithaca:Cornell University Press, 1987), 136-164. 5. FredericC. Deyo, "Coalitions, Institutionsand Linkage Sequencing:Towarda StrategicCapacityModel of East Asian Development," Johnson "Political Institutions," and Hagen Koo, "The Interplayof State, Social Class, and World System in East Asian Development:The Cases of South Korea and Taiwan," all in Deyo, ed. 6. Bruce Cumings, "The Origins and Development of the NortheastAsian Political Economy: IndustrialSectors, ProductCycles, and Political Consequences," in Deyo, ed., pp. 44-83. 7. Stephan Haggardand Tun-Jen-Cheng,"State and Foreign Capital in the East Asian NICs," in Deyo, ed., pp. 84-135. 8. Peter Evans, "Class, State and Dependence in East Asia: Lessons for Latin Americanists," in Deyo, ed. 9. StephanHaggard, "The Newly IndustrializingCountriesin the InternationalSystem," WorldPolitics, 38 (1986), 343-370. 10. On "democraticcorporatism,"see Peter J. Katzenstein, Corporatismand Change: Austria, Switzerlandand the Politics of Industry(Ithaca:Cornell UniversityPress, 1984), and Small States in WorldMarkets;John H. Goldthorpe, ed., Orderand Conflict in ContemporaryCapitalism:Studies in the Political Economyof WesternEuropeanNations (Oxford: ClarendonPress, 1984). On the relationshipbetween democratic corporatismand the state, see Philippe Schmitter, "Neo-Corporatismand the State," in Wyn Grant,ed., The Political Economyof Corporatism(New York: St. Martin'sPress, 1985), pp. 32-62. 11. See the collection of essays in Ruggie, ed., Antinomiesof Interdependence. 12. On "state corporatism"in the Latin American context, see Alfred Stepan, The State and Society: Peru in ComparativePerspective (Princeton:PrincetonUniversity Press, 1978). 13. For a culturalistinterpretationof East Asian development, see Peter L. Berger and Hsin-HuangMichael Hsiao, eds., In Search of an East Asian DevelopmentModel (New Brunswick:TransactionBooks, 1988). 14. See Evans, Rueschemeyer,and Skocpol, eds., Bringing the State Back In. 15. Michael Mann, "The AutonomousPower of the State: Its Origins, Mechanismsand Results," in John A. Hall, ed., States in History (Oxford:Basil Blackwell, 1986), pp. 109-136. 16. John A. Hall and John G. Ikenberry,The State (Minneapolis:University of MinnesotaPress, 1989). 17. Evans, "Predatory,Developmentaland Other Apparatuses." 18. On the public choice school of political economy, see William A. Niskanen, Bureaucracyand Representative Government(Chicago: Aldine-AthertonPress, 1971), and James Buchanan,Essays on Political Economy(Honolulu: University of Hawaii Press, 1989).

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Third World Quarterly

After the Third World? History, Destiny and the Fate of Third Worldism Author(s): Mark T. Berger Source: Third World Quarterly, Vol. 25, No. 1, After the Third World? (2004), pp. 9-39 Published by: Taylor & Francis, Ltd. Stable URL: http://www.jstor.org/stable/3993775 . Accessed: 26/01/2015 07:37 Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp

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Third World Quarterly, Vol 25, No 1, pp 9-39, 2004

After

the

destiny

Third and

History,

World? the

fate

of

Third

Woridism MARK T BERGER ABSTRACT The idea of the Third World, which is usually traced to the late

1940s or early 1950s, was increasingly used to try and generate unity and support among an emergent group of nation-states whose governments were reluctant to take sides in the Cold War. These leaders and governmentssought to displace the 'East-West' conflict with the 'North-South' conflict. The rise of Third Worldismin the 1950s and 1960s was closely connected to a range of national liberation projects and specific forms of regionalism in the erstwhile colonies of Asia and Africa, as well as the former mandates and new nationstates of the Middle East, and the 'older' nation-states of Latin America. Exponents of Third Worldismin this period linked it to national liberation and various forms of Pan-Asianism, Pan-Arabism, Pan-Africanism and PanAmericanism.The weakeningor demise of the first generation of Third Worldist regimes in the 1960s and 1970s coincided with or was followed by the emergence of a second generation of Third Worldistregimes that articulated a more radical, explicitly socialist, vision. A moderateform of Third Worldism also became significantat the UnitedNations in the 1970s: it was centred on the call for a New International Economic Order (NIEo). By the 1980s, however, Third Worldismhad entered into a period of dramatic decline. With the end of the Cold War, some movements,governmentsand commentatorshave sought to reorient and revitalise the idea of a Third World,while others have argued that it has lost its relevance. This introductoryarticle provides a critical overview of the history of Third Worldism, while clarifying both its constraints and its appeal. As a world-historical movement, Third Worldism(in both its first and second generation modalities) emerged out of the activities and ideas of anti-colonial nationalists and their efforts to mesh highly romanticisedinterpretations of pre-colonial traditions and cultures with the utopianismembodied by Marxismand socialism specifically, and 'Western'visions of modernisationand developmentmore generally. Apartfrom the problems associated with combining these differentstrands, ThirdWorldismalso went into decline because of the contradictions inherent in the process of decolonisation and in the new international politico-economic order, in the context of the changing character, and eventual end, of the global political economy of the Cold War. Mark T Berger is in the IntermationalStudies Program of the University of New South Wales, Sydney, NSW 2052, Australia. E-mail: [email protected]. ISSN 0143-6597 printISSN 1360-2241 online/04/010009-31 ? 2004 Third World Quarterly DOI: 10.1080/0143659042000185318

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9

MARK T BERGER

In its pure, unadulteratedform, Third Worldism did not suffer approximationor partialresults. It had chosen utopia as its standard,history as its demandingjudge. It would have to live with history's hard and unappealableverdict.'

From the bustling Gambir Railway Station, located on the eastern side of Lapangan Merdeka (Freedom Square) in central Jakarta,one can take a train south and east through the seemingly endless slums, plazas and suburbs of Indonesia's capital. The urban sprawl of Jakartagradually gives way to rice paddies, and eventually the train ascends into the hills. If the trainis an express train, it will take about three hours to arrive at another of the largest cities in Indonesia and the capital of the province of West Java. High in the hills the provincial capital is cool compared with the sweltering humidity of the coast. Leaving the train, the traveller can make his/her way to Jalan Asia-Afrika (Asia-Africa Avenue) and Gedung Merdeka(FreedomBuilding) near the centre of town. Inside this building is a museumcommemoratinga famous meeting that involved, among others, Sukarno,JawaharlalNehru, Ho Chi Minh, GamalAbdel Nasser and Zhou Enlai. The city, of course, is Bandung,and the conference,held from 17 to 24 April 1955 was the Asian-African Conference. More than any other single event, this conferencein a hithertoobscurecity (in an Indonesiathat had only emerged as a sovereign nation-state in the 1940s) symbolised the moment of arrivalfor the Third World.2 Participantsand observers subsequentlyconjured with the 'Bandung Spirit', while others now talk retrospectively of a 'Bandung Era' (1955-75).3 The historic meeting in Bandungbecame the touchstoneof a wide arrayof initiatives associated directly and indirectly with Third Worldism.4The idea of the Third World was increasingly deployed to generate unity and support among a growing number of non-aligned nation-stateswhose leaders sought to displace the 'East-West' (cold war) conflict and foregroundthe 'North-South' conflict.5 The 1970s were the 'golden age' of ThirdWorldism.Some commentatorspoint, for example, to the Declarationand Programmeof Action for the Establishment of a New Economic Order,passed in April 1974 by the Sixth Special Session of the General Assembly of the United Nations, as evidence of the 'triumphof Third Worldism'.6While a numberof governmentscommitted to Third Worldism had appearedand/ordisappearedin the 1950s and 1960s, the 1970s saw the emergence of a number of new rulers who adopted a distinctly revolutionary Third Worldist tone and outlook in Asia, Africa and Latin America. By the 1980s, however, ThirdWorldismas both a revolutionaryand a reformistproject had entered into a period of precipitous decline. With the end of the Cold War, some movements, governmentsand commentators have sought to reorient and revitalise the idea of a Third World, while others have arguedthat it has lost its relevance. The views of the former are not homogeneous, but they all generally agree that the new circumstances of the post-cold war era and the 21st century can still be clarified via the elaboration and reconfigurationof the idea of the Third World and/or that progressive political initiatives can still be pursued under the umbrella of some sort of revised form of Third Worldism.7Critics of Third Worldism, however, often emphasise its profoundshortcomingsduringthe Cold War. They also emphasise 10

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AFTER THE THIRD WORLD?

that the spatial and political divisions of the cold war era between the First, Second and ThirdWorlds, had become so thoroughlyscrambledby the dawn of the post-cold war era that the idea of the Third World now imposes a dubious homogeneity on a large and diverse area of the world at the same time as Third Worldism is groundedin political, economic and territorialdistinctionsthat have become irrelevant.8 This special 25th anniversaryissue of Third WorldQuarterlycontains a wide range of contributions,all of which engage with the idea of the ThirdWorld and with ThirdWorldism.In some cases this involves 'reinventingthe ThirdWorld', while in other cases the authorsmake a case for 'ending with the Third World'. In an effort both to establish an historical frameworkfor the contributionsthat follow and to take a position in the ongoing debate about the idea of the Third World this introductoryarticle provides a critical overview of the history of the rise and demise of ThirdWorldismin its classical form. I attemptto clarify both the constraintson, and the appeals of, ThirdWorldism in the context of its wider emergence and its eventual (and in my view at least, terminal) decline. Movements and governmentsdirectly informedby ThirdWorldismin the cold war era can be divided into first-generation(1950s-60s) and second-generation(1960s70s) Bandung regimes.9 While these generations overlapped and displayed considerableinternaldiversity, second-generationregimes (as alreadysuggested) were generally more explicitly socialist in their overall approach to national liberationand economic development than first-generationregimes. As a worldhistorical movement, Third Worldism (in both its first- and second-generation modalities) emerged out of the activities and ideas of anti-colonial nationalists and their efforts to mesh often highly romanticisedinterpretationsof pre-colonial traditionsand cultures with the utopianismembodied by Marxism and socialism specifically, and 'Western' visions of modernisation and development more generally. Apart from the problems associated with combining these different culturaland politico-intellectualstrands,ThirdWorldism eventually came crashing down because of the contradictionsbetween its utopian vision on the one hand and the ungainly scaffolding for a rising Third World provided by the emergentnew nation-statesand the internationalpolitical-economic order of the Cold War on the other.10 Third World rising: first-generation Bandung regimes, 1950s-60s Challenging neocolonialism I: the dawn of Third Worldism The first stirrings of Third Worldism can be traced to the complex milieux of colonialism and anti-colonialnationalismin the early 20th century.11At the same time, of course, the overall consolidation of Third Worldism is groundedin the post-1945 conjunctureof decolonisation,national liberationand the Cold War.12 For example, the BandungConferenceflowed from the slow pace of decolonisation and the way in which the United Nations had become enmeshed in the rivalry between the two cold war superpowers.More specifically, the organisation of the Bandung Conference by the governments of newly independent Indonesia, Ceylon, India and Pakistan was a result of their frustrationwith the 11

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MARKT BERGER

political logjam surroundingnew membershipin the United Nations. By 195354 no new membershad been inductedinto the organisationsince the acceptance of Indonesia in January1950.'3 The 1955 meeting in Bandung was attendedby delegations from 29, primarilynew, nation-statesor nationalist movements in Asia and Africa. Also included in the proceedingswere membersof the African National Congress, as well as observers from Greek Cypriot and AfricanAmerican organisations.The key figures at the conference, and the main leaders of the first generationof Bandungregimes, were Sukarno,Presidentof Indonesia (1945-65), JawaharlalNehru, Prime Minister of India (1947-64), Gamal Abdel Nasser, President of Egypt (1954-70), Ho Chi Minh, leader of the Democratic Republic of Vietnam (1954-69), Kwame Nkrumah,the futurePrime Minister of Ghana, (1957-66) and Zhou Enlai, Prime Minister (1949-76) and Foreign Minister (1949-58) of the People's Republic of China.'4 At the Bandung meeting, these leaders and the other assembled delegates emphasised their opposition to colonialism, singling out French colonialism in North Africa for particularcriticism. The French war (1954-62) to prevent Algerian independence was underway at this time and representativesof the Front de LiberationNationale (FLN), which would eventually come to power in the 1960s and occupy an importantposition in the Third Worldist pantheon, were in attendancein Bandung. There was also a major debate as to whether Soviet domination of Eastern Europe was equivalent to Western European colonialism in Asia and Africa. The final communique of the conference condemned all 'manifestations'of colonialism and was thus widely viewed as not only an attack on the formal colonialism of the Western Europeanpowers, but also on the Soviet occupation of EasternEurope and the informal colonialism, or neocolonialism of the USA. The proceedings ended with a call for: increased technical and culturalco-operationbetween the governmentsof Asia and Africa; the establishmentof an economic development fund to be operated by the United Nations; increasedsupportfor humanrights and the 'self-determination of peoples and nations', singling out South Africa and Israel for their failure in this regard;and negotiationsto reduce the building and stockpiling of nuclear weapons.'5 Although the Bandung Conference failed to lead directly to any long-term organisational initiatives (a second Asian-African Conference planned for Algiers in 1965 never took place because of the politics of the Sino-Soviet split) it did, as already emphasised, provide the indirect inspirationfor various Third Worldist organisations.A particularlyradical example was the formationof the African-Asian Peoples' SolidarityOrganisation(AAPSo) at a meeting in Cairo in 1957. In contrast to Bandung, which was primarily a meeting of government leaders, AAPSO was set up as an organisationof ruling and non-rulingpolitical parties, including delegates from the USSR and China. Despite a number of meetings in the late 1950s and early 1960s, AApso soon lost its significance in the context of the Sino-Soviet split and the formation of the more moderate Movement of Non-Aligned Countries, which would become known as the Non-Aligned Movement (NAM) by the 1970s.'6 In September 1961 the First Conference of Heads of State or Governmentof Non-Aligned Countries was held in Belgrade, Yugoslavia. Hosted by Josip Broz Tito, President of 12

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AFTER THE THIRD WORLD?

Yugoslavia (1953-80), it was attended by officials from 25 governments and representativesfrom 19 different national liberationmovements.17A numberof governments,such as Pakistan,which had been in attendancein Bandung, were excluded if they were seen to be clearly orientatedtowards the USA or Soviet Union. A numberof formerFrench colonies that were closely tied to Paris were also excluded, but this stipulationdid not lead to the exclusion of representatives from Castro's Cuba from the meeting, even though Havana was becoming an importantclient-ally of Moscow. The Belgrade Conference was followed by Cairo in 1964, then Lusaka (Zambia) in 1970 and Algiers in 1973.18 By the time of the non-aligned meeting in Cairo in 1964, if not before, the complicated and conflicting interests of the new nations in Asia and Africa (against the backdropof the universalisationof a system of sovereign nationstates centred on the United Nations) were increasingly-preventingthe creation of a strong coalition of non-aligned governments. Despite Third Worldist attemptsat non-alignment,most nationalistmovements and ThirdWorld regimes had diplomatic, economic and military relations with one or both of the superpowers.Also, as already noted, Third Worldism was furthercomplicated by the Sino-Soviet split in the early 1960s. After 1949 the People's Republic of China (PRC) had initially aligned itself with Moscow, signing a Treaty of Friendship, Alliance and Mutual Assistance with the USSR in 1950.19 This coincided with the rise and fall of the PRC's commitment to a Soviet-style development model and its increasing efforts in the 1950s to play a leadership role in the emerging Third World. From 1949-53 Mao and the Chinese leadershipfollowed economic policies that included co-operatingwith or allowing the continued commercial activities of those members of the bourgeoisie who had not worked with the Japanese. At the same time in rural areas they focused on land redistribution,the execution and purging of landlords and the consolidation of the power of the Communist Party. In 1954 the Chinese leadershipset up a state planning apparatusand began nationalisingindustryand commerce, while in 1955 they moved to collective agriculturealong Soviet lines. By the second half of the 1950s, however, many members of the Chinese leadershipbecame increasingly critical of the operation of the Soviet model in China. In particular,they were concernedabout low levels of agriculturalgrowth and excessive centralisation.This was the context for the launch of the Great Leap Forward (1958-61).20 The Great Leap Forward was closely connected to China's various foreign policy initiatives towards the emerging Third World generally and towards SoutheastAsia more specifically. The Chinese CommunistParty (ccP) leadership was seeking to increase China's economic significance and its international position dramatically.At the Bandung Conference Zhou Enlai had successfully vied with Nehru for a leading role among the non-aligned nation-statesin Asia. In the wake of BandungChina's relations with Indonesiaincreasingly improved, while Zhou Enlai's personal relationship with U Nu of Burma led to the resolution of concerns about their sharedborder.China's relations with Cambodia, Laos and the Democratic Republic of Vietnam (North Vietnam) were also strengthenedin the late 1950s, while only Thailand and the Philippines had joined the US-sponsored Southeast Asia Treaty Organisation(SEATO), set up in 13

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MARK T BERGER

1954 to support South Vietnam.21 The winding back of the policies associated with the Great Leap Forwardin the early 1960s coincided with the complete ruptureof Beijing's relationship with Moscow, and growing friction with the USA. The USSR and USA signed a nuclear test ban treaty in 1963 which was roundly criticised by Mao. China successfully tested its own nuclear weapon in 1964. As the Chinese leadership's war of words with Moscow and Washington escalated, Beijing sought to position itself as a key nation-statein, if not the leader of, a wider Third Worldist challenge well- beyond Asia. Ultimately, however, the China-led Third Worldist push had limited success-reflected in Beijing's unsuccessful effort to have the USSR excluded from the 'Second BandungConference'that had been scheduledto meet in Algeria in June 1965.22 Beijing's initiative led to the cancellation of the conference when many of the governments involved, such as Egypt and India, saw continued benefits in maintainingtheir connections to Moscow and thus not supportingBeijing. Prime Minister Nehru's opposition to China's manoeuvres also flowed from the fact that the relatively good relationsbetween China and India that had characterised the 1950s had been completely rupturedby the Sino-Indianwar of 1962 fought along the disputed Himalayanfrontier.23 Challenging Neocolonialism II: a tryst with destiny India's credentialsas a leading ThirdWorldist state were also in relative decline more generally by the mid-1960s. Gopal Krishna has characterisedthe Indian diplomatic trajectoryin this period as a 'retreatfrom idealism'.24In the 1950s Nehru's internationalprofile and his commitmentto a combinationof parliamentary democracy, economic planning and socialist principles helped to focus considerableworld attentionon India, while his diplomacy sought to mobilise a Pan-Asian coalition and a broader grouping of non-aligned Third World regimes.25For some observersin the USA, meanwhile, India was regardedas an importantprize: they conjured with the political and ideological benefits for Washington that an alliance with one of the most influential non-aligned governments in Asia would bring. According to this vision, if the USA strengthenedties with Nehru's government,Washingtoncould help ensure that India would serve as an anchor for, and model of, democratic capitalist development in the Third World to counter the explicitly anti-capitalist and state-socialistalternativesexemplified by China and the Soviet Union. However, for other US strategists Pakistan was the most importantnation-state in the region for military-strategicreasons:they emphasisedits proximityto the Soviet Union and its position in relation to the Middle East. By 1954 the emphasis on the relative importanceof Pakistanhad led to the decision to enter into a mutual security agreement between the USA and the government of Pakistan. At the same time Pakistanalso became a founding memberof the US-sponsoredSEATO that was formally established in February 1955.26

In this period the governmentin New Delhi set about balancing its relationship with Washingtonby deepening its economic and militarylinks to Moscow, while also seeking to maintaingood relations with the Chinese government.27In part as a result of these changes, by the end of the 1950s the US approachto 14

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AFTERTHETHIRDWORLD?

South Asia had shifted away from an emphasis on Pakistan and towards an emphasis on India. Worriedthat the USSR, in particular,was gaining influence in Indian government circles, via its generous trade and aid arrangements,and concerned that if the Indian government failed to achieve its national development plans the strengthof the country's communist movement would increase, PresidentEisenhowerexpandedhis administration'seconomic aid programmeto India in his final years in office. By the end of the 1950s the Eisenhower administrationalso shared the concern, voiced by Senator John F Kennedy and others, that economic decline in India could enhance the Chinese government's prestige in international affairs, undermining the US claim that the democratic-capitalist model was superior to the state-socialist model of national development.28

Nehruvian socialism and Nehru's commitment to Third Worldism reached their peak during the second half of the 1950s. By the time Nehru died in May 1964 the notion that a benevolent technocraticelite could successful guide India to Nehru's distinctive vision of Indian socialism and that India could both be part of a broad ThirdWorld coalition and serve as a model for other parts of the Third World was already in crisis, as were the first generation of Bandung regimes more generally.29Nehru's conception of state-guidednational development is often seen as being shaped by the Soviet model; however, his approach was always temperedby a critiqueof the lack of democracyin the Soviet Union and the human cost of Soviet industrialisation.In fact, for some observers Nehru's views by the 1950s had much more in common with social democracy in post-1945 Western Europe than they did with state-socialism in the Soviet Union, despite the much publicised Soviet supportfor national development in India. Nehru certainly rejected key aspects of the Soviet model and his perspective bore similarities to social democratic currents in Western Europe. However, Nehru's government also drew on China's post-1949 approach to In fact, Nehruvian nationaldevelopment,especially its approachto agriculture.30 socialism exemplifies the way in which Marxism was assimilated to national circumstances in the wider context of decolonisation, the Cold War and the emergence of Third Worldism.31 Within less than two years of Nehru's death, Sukarno,anotherkey exponent of Third Worldism-who sought to synthesise nationalism,Islam and Marxism, a project that was embodied in his famous formulation Nasionalis-AgamaKomunis (NASAKOM)-was overthrown by General Suharto in a bloody and prolonged anti-communistpurge in Indonesia.32While Nehru had earlier, and somewhat patronisingly,regardedSukarnoas one of his 'disciples' in Asia and antagonisedhis host in Bandung in 1955 as a result, the Indonesianleader had also attaineda position in the Third Worldist pantheonthat was as transcendent as, although different from, that occupied by Nehru.33During the 1950s parliamentary democracy in Indonesia had increasingly given way to what Sukarno called 'Guided Democracy'. By the late 1950s Indonesia had embraced an approachto economic development that involved an increasingly high level of state interventionto restructurethe economy in the context of the nationalisation of Dutch owned property. The Indonesian state directed earnings from the commodity export sector into the primarily state-owned and state-operated 15

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manufacturingsector. Export earningswere also directed towardspublic works, health, food production,educationand transportation,not to mention as payment on foreign debts. The Indonesian Army (ABRI) played an ever more important political and economic role under Sukarno,taking over direct control of large sectors of the economy in the late 1950s.34 Apart from the military, Sukarno's 'Guided Democracy', which involved full presidential powers and rule by decree, rested on a complex web of political alliances that revolved aroundthe PartaiNasional Indonesia(NationalistPartyof Indonesia-PNI), the Communist Party (Pm) and a major Muslim party. He played these parties off against each other, at the same time as he pitted the mainly anti-communistmilitary against the PKi. 'Guided Democracy', underpinned by Sukarno's strident anti-Westernnationalism and its synthesis with NASAKOM, bolsteredby the ThirdWorldist vision of which he was an important proponent, representedan explicitly state-led attempt at national development. By the early 1960s, however, stagnation and decline in the sugar and rubber sectors, combined with falling commodity prices, had resulted in a shortage of funds and a serious balance of paymentsproblem.By the first half of the 1960s it was increasinglyapparentthat not only was Indonesia's economy on the brink of collapse, but the political structurecentred on Sukarnowas also in crisis.35 This was taking place against the backdrop of a conflict (Konfrontasi) with Malaysia over the setting of their respective postcolonial borders.36When it came, the end of Sukarno'sregime in Indonesiainvolved a much sharperbreak with first-generationThird Worldism than did the more gradual waning of Nehruvian socialism in India. Following Sukarno's overthrow in 1965-66, Suharto dramatically reorientated Indonesia's military and economic links, bringing Indonesia into close alignment with the USA and Japan, against the backdrop of the effective elimination of the large PKi, which had been an importantsource of supportfor Sukarno.Suhartopresided over an increasingly conservative anti-communistand authoritarianversion of national developmentalism in Indonesia, erected on the foundationsof Sukarno'sfailed state-guided national development project.37 Challenging neocolonialism III: an appointmentwith destiny Anotherpivotal first-generationBandungregime was Egypt underGamal Abdel Nasser. After World War II Egypt emerged at the centre of Pan-Arabismand the wider Third-Worldistpush in the Middle East.38 Of particular geostrategic importancebecause of the Suez Canal, Egypt effectively became a protectorate of Britain in the 1880s (a status that was formalisedin 1914). After World War I the former Ottomanprovince emerged as a nominally independentmonarchy with links to Britainthat were increasinglyperceived by Egyptiannationalistsas neocolonial. But it was not until over 30 years later, on July 23 1952, that Egyptiannationalistsousted the British-backedKing Faroukin a bloodless coup. This initiated a process that led to the departureof all British troops from Egypt and the Egyptian takeover of the Suez Canal in 1956.39 The Suez crisis (which involved an ultimatelyunsuccessfulAnglo-French-Israelieffort to regain control of the Canal) dramatically undermined British prestige and influence in the 16

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AFTER THE THIRD WORLD?

region at the same time as it catapultedNasser to prominenceas a major figure not only in Egyptian nationalism, but also in Pan-Arabism and Third Worldism.40A radicaland secularnationalist,Nasser's ideas became increasingly socialist over the course of his years in office.4' Shortly after coming to power he published Egypt's Liberation: The Philosophy of the Revolution, which held up the Egyptian military as the vanguard of the national struggle against 'feudalism'and 'imperialism'.He conjuredwith the idea of an independentEgypt as the pivot, not only of an expanding group of united and liberated Arab nation-states,but of Africa and the Islamic world as well.42At the same time, like Nehru in India and Sukarnoin Indonesia, Nasser was presiding by the late 1950s over the dramaticdeepening of the state-led national developmentproject in Egypt. The central goal was industrialisation;however, in Nasser's grandiose vision of progress, and his vague conception of socialism, industrialisationand socialism were usually conflated. At the same time the Egyptian leader clearly linked nationalismand import-substitutionindustrialisationto both wider social (or populist-socialist) goals and to the broaderThird Worldist agenda and the struggle against neocolonialism. In a well known speech in late 1958 (at a time when Egypt was part of the United Arab Republic (UAR) with Syria), Nasser said that 'we have an appointmentwith destiny to build up in the UAR a strong nation which feels independent'and in which everyone works for themselves 'not for foreigners' and 'imperialists' .4 From the vantage point of the 1970s, however, the socialism of the first generationof Bandungregimes, such as Nasser's Egypt, seemed increasingly tepid. For example, although the coup in Libya, led by Muammar Qaddafi in 1966, had been directly influenced by Nasser's own trajectory,the regime that emerged in Tripoli was far more radical and far less secular in its approach.44 A key, if not always terribly effective, vehicle for Nasser's influence in the Middle East was the Arab League. Formed in the waning days of World War II at a conference in Alexandria attendedby the governments of Egypt and Iraq, along with Lebanon, Syria, Saudi Arabia,Transjordanand the Yemen, the Arab League was ostensibly aimed at the promotionof economic, technical and cultural interactionbetween the governmentsand people in the Arab world. A representative of the PalestinianArabs also attendedthe initial conference. Libya joined the League in 1951. Sudanjoined in 1956, followed by Tunisia and Morocco in 1958, Kuwait in 1961, Algeria in 1962, South Yemen (formerly Aden) in 1968, then Bahrain, Qatar, Oman and the Trucial States in 1971. A council based in Cairo guided the operationsof the League, but there was no significant central governing body and it operated as a relatively decentralised collection of nation-states.Until the mid-1960s the main foci of activity for the League were supportingthe Palestinians against Israel and attempting to check the French presence in Lebanon and North Africa. While Nasser was presidentof Egypt he dominated the organisation.With his death in 1970 Egyptian influence on the League declined, while that of the Palestine LiberationOrganisation(PLO) rose. After Anwar Sadat became president of Egypt, the headquartersof the League shifted from Cairo to Tunis.4sAt the same time, throughoutthe 1950s and 1960s, Nasser not only sought to link his brandof Egyptiannationalismto Pan-Arabism, going so far as to federate Egypt with Syria to form the United Arab Republic

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(1958-61), but also to Pan-Islamism and Pan-Africanism. His government provided political and material assistance to national liberation movements in Africa. In the late 1950s and early 1960s Egyptiangovernmentradio repeatedly irritatedLondon and Pariswith its enthusiasticsupportfor the Mau Mau rebellion in Kenya in the early 1950s and the FLN in Algeria during its struggle against French colonialism from 1954 to 1962.46 Despite Nasser's support for national liberation in Africa, the key figure in Pan-Africanismand the key African ThirdWorldistin the 1950s and early 1960s was, of course, Kwame Nkrumah.47He was the first prime minister of Ghana, which was, in turn, the first colony in southern Africa to gain independence. Formerly the British colony of the Gold Coast, it became an independent nation-statein 1957. Numerousothertransitionsfrom colony to nation-statesoon followed. In 1960, for example, 16 new Africannation-states,includingthe major new national polities of Nigeria and the Republic of the Congo (formerly the Belgian Congo), were inducted into the United Nations.48Meanwhile, PanAfricanism,which had been discussed as early as the 1860s and had gained some significance in political and cultural terms in the USA between the first and second world wars against the backdropof the HarlemRenaissance,took on an increasingly explicit socialist tone by the 1930s and 1940s, emphasising cooperative agriculture and state-guided industrialisation.However, this vision remainedlinked to the goal of recuperatingAfrica's pre-colonialculturalheritage and the building of regional unity along culturalas well as political lines. While Pan-Africanism underpinned the push by Nkrumah and others for national self-determinationand some form of post-colonial socialism, attemptsto deepen the political structuresof Pan-Africanismin the immediatepost-colonial period were relatively short-lived.For example,Nkrumah(who ruledGhanauntil he was overthrown in a military coup in 1966) and Ahmed Sekou Toure of Guinea formed the Ghana-Guineaunion in 1958. However, this was a relatively brief arrangement,as was the Ghana-Guinea-Maliunion, not to mention the Federation of Mali (Senegal and Mali). The regional vision that informed PanAfricanism increasingly lost momentum as more and more independent nation-statesemerged.49Nevertheless, Pan-Africanismsurvived in an attenuated form with the formationof the Organisationof African Unity (OAU) in 1963.50 Meanwhile, shortly before the Ghanaian military overthrew him in 1966, Nkrumah published Neo-Colonialism: The Last Stage of Imperialism, which argued that, although the erstwhile colonies of Africa had gained political independence, national liberation could not be achieved until they attained economic independencevia a break with neocolonialism, something that could be more effectively carried out on a regional or transnationalbasis.5' In the post-cold war era Nkrumah's concern that independent African nation-states could only progress as part of a wider economic and political grouping is now seen as more prescient than ever. At the same time Muammar Qaddafi has spearheadeda recent attemptto revitalise Pan-Africanismand the OAU, with the latter having been reorganisedand renamed the African Union (AU). With the judicious use of militaryand economic aid Qaddafiensuredthat42 of the member governmentsof what would become the AU showed up for a major conference in Tripoli in 1999.52 18

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Third World reorientated:second-generationBandung regimes, 1960s-70s The golden age of Third Worldism Qaddafistill leads one of the few survivingone-time second-generationBandung regimes. Apart from Qaddafi,the other main survivor from this period is Fidel Castro in Cuba, who has been in power since 1959. Qaddafiand Castro came to power against the backdrop of a wider wave of second-generation-Bandung regimes that included those of Ahmed Ben Bella (1962-65) and Houari Boumedienne (1965-78) in Algeria, Tanzania under Julius Nyerere (1965-85), Chile under Salvador Allende (1970-73), Jamaicaunder Michael Manley (1972-80), Libya under MuammarQaddafi after 1969, the Derg (Committee) in Ethiopia (1974-91), Guinea-Bissau from 1974 under Amilcar Cabral's successors, the People's Republic of Angola under the PopularMovement for the Liberationof Angola (MPLA) after 1975, Mozambique under Samora Moises Machel (197586) and Nicaraguaunderthe Sandinistas(1979-90). This far from exhaustive list could also include the rapid rise and fall of Patrice Lumumba,the leader of the MouvementNational Congolais (MNC) who emerged as the key figure and Prime Minister in the Republic of the Congo at the time of independencein June 1960 until his assassination by the Belgian authorities (with the complicity of Washington)in January1961.53 Like Che Guevaraafter him, Lumumba'searly death quickly elevated him to a position of major significance in the pantheon of Third Worldist leaders. More broadly, the second-generation Bandung regimes (framed by the Cuban Revolution at the beginning and the Nicaraguan Revolution at the end), for which figures like Lumumbaand Guevara became powerful symbols, increasingly intersected with a major revolutionary wave between 1974 and 1980. If the revolutionaryregimes with dubious long-term, if not short-term,progressive credentials that emerged in the second half of the 1970s are counted, the list of 'revolutionary'regimes in this period not already mentioned above includes: Vietnam, Cambodiaand Laos in SoutheastAsia; Iran and Afghanistan in Central Asia; and Zimbabwe, along with Sao Tome e Prnncipeand Cape Verde (which, like Angola, Guinea-Bissauand Mozambique emerged out of the collapse of the Portuguese Empire) in Africa. Meanwhile, Grenadaunder Maurice Bishop in the Caribbeanwas also part of this wave, at the same time as major, albeit unsuccessful revolutionary movements were gaining ground in El Salvador,Guatemala,the Philippines and elsewhere in the late 1970s and early 1980s.54 Second-generationBandung regimes (with the exception of post-1979 Iran, which was, and sometimes still is, positioned as a revolutionaryThird Worldist regime) reflected a more radical, more unambiguouslysocialist, ThirdWorldism than the first-generation Bandung regimes. (Important exceptions were the People's Republic of China and the Democratic Republic of Vietnam, which were both first-generationBandung regimes led by Communistparties committed to Marxism-Leninismand state-socialism.)In fact, some commentators,such as E San Juan Jr, emphasise that the first-generationregimes, led by nationalists such as Sukarno,Nehru and Nasser, were exemplars of the 'bourgeois national project initiated by the Bandung Conference'. He also includes Ghana and the Philippines in the same category as Indonesia, India and Egypt, while juxta19

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posing these 'nationalistbourgeois struggles' with Vietnam under Ho Chi Minh and Cuba under Fidel Castro. San Juan situates the first-generationBandung regimes led by Nasser, Nehru and Sukarnowith newly independentnation-states generally, representingthem all as 'postcolonial states' that were 'modernising on the basis of anticommunismand pragmatic philosophy', while relying on 'Soviet military support' and engaging in a 'cynical playing of the 'American card' 55 However, as outlined in the previous section of this introduction, this characterisationdoes not actually apply to many of the first-generationBandung regimes. Nehru, Sukarno and even Nasser often had a more complicated relationship with 'socialism' and their own national communist parties than is conveyed by San Juan's formulation. At the same time San Juan celebrates leadersof the second generationmovements such as Amilcar Cabral,who led the African Party for the Independenceof Guinea and Cape Verde (PAIGC)from 1956 until his assassinationin 1973.56 San Juan acknowledges that 'we cannot of course returnwholesale to the classic period of nationalliberationstruggles'. He says he is primarilyconcernedwith using Cabral'to refute the argumentthat historical materialistthinking is useless in grasping the complexity of colonialism and its aftermath'.57Ironically,by making such a sharpdistinctionbetween the 'national bourgeois project' of first-generationBandung leaders and the socialism of primarilysecond-generationleaders, he simplifies the 'complexity' of the 'colonialism and its aftermath' he is seeking to understand. FirstgenerationBandung regimes were certainly, by and large, less radical than the second-generationBandung regimes, but to view the former as simply anticommunist national bourgeois projects not only misrepresentstheir intellectual and organisationalrelationshipto Marxism,but also stereotypesthe complexities of their interactions with the cold war superpowers. Furthermore,Cabral's particularly pragmatic brand of socialism makes him an exceedingly poor example of the ostensibly sharpbreak between the bourgeois nationalismof the first-generationof Bandung leaders and the second-generationof which Cabral was a member. While he was widely regarded as progressive, he drew on Marxism ratherthan positioning himself as a Marxist.58 While the representation of the first generation of Bandung regimes as reformist supportersof the national bourgeoisie and the second generation as revolutionary Marxists committed to state-socialism is overdrawn, the latter group was still generally more radical than the former. For example, if the Bandung conference was symbolically the most importantmeeting for the first generationof Bandungregimes, one of the key events for the second generation was the TricontinentalConference of Solidarity of the Peoples of Africa, Asia and Latin America, held in Havana in January 1966. While the Bandung Conference had brought together a relatively small number of leaders from mainly recently independent nation-states in Asia in order to stake out a non-aligned position in the Cold War, the 1966 TricontinentalConference in Havana involved delegates from throughoutAsia, Africa, the Middle East and Latin America. It articulateda far more radical anti-imperialagenda that located the participantsfirmly in the socialist camp at the same time as they formally emphasised their independence from the USSR and Maoist China.59Second20

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generation Bandung Regimes, directly or indirectly linked to the tricontinentalism of the late 1960s and 1970s, representedthe practicalcomplement to the rise and spread of dependency theory (along with other revitalised Marxist theories of development and social and political change).60In this era secondgenerationBandung Regimes and their supportersattemptedto radicalise statemediated national developmentefforts in various ways in the name of socialism and national liberation. The example of the Vietnamese revolution had influenced many of the second-generationBandung regimes. At the same time, revolutionaryregimes were also directly inspired and, in the case of Algeria, for example, supportedby Castro's Cuba. Triumphand tragedy:from exhausted colonialism to exhausted nationalism In Algeria the escalating military struggle against French colonialism that began in 1954, in the context of the expanding Cold War, culminatedin the departure of the exhaustedcolonial rulersand the triumphantemergence of an independent Algeria in July 1962.61The triumphof the FLNin Algeria marked an important turning point for the region and for Third Worldism more generally.62Robert Malley goes so far as to call the FLN's ascension to power in 1962 'a defining moment in the history of ThirdWorldism'. The Algerian Revolution was pivotal to Third Worldism because the struggle had been so lengthy and violent at the same time as the FLN was 'acutely aware' of the struggle's 'international dimension'.63 Following the founding meeting of the OAU in Addis Abba in May 1963, the Algerian leader, Ben Bella, delivered a particularlystirringaddress to those in attendanceas 'one of the leaders of the Third World struggle'. While attractingthe attentionof the USA for his radicalideas and his links with Cuba, Ben Bella was also able to gamer allies in sub-SaharanAfrica during what would be a relatively brief period as presidentof the Algerian republic.64 In 1965 Ben Bella was ousted in a military coup led by Houari Boumedienne, his Defense Minister and also his formercomrade-in-arms.The latter, a charismatic military officer who enjoyed considerable popular support in Algeria and remained more or less committed to the populist socialism and state-guided economics of his predecessor, emerged in the 1960s and 1970s as a key figure in Third Worldism. Boumedienne, as will be discussed below, played a central role in the call for a New InternationalEconomic Order (NIEo) at the United Nations in the mid-1970s.65 Meanwhile, the way in which the Cuban revolution overthrew a regime that had long enjoyed the support of Washington and embarked after 1959 on the creation of a radical socialist state in such close proximity to the USA was also extremely importantto Marxist and Third Worldist intellectuals and revolutionaries.666 Following the Cuban Missile Crisis in 1962, and the replacement of Nikita Khrushchev(1953-64) by Leonid Brezhnev (1964-82), Moscow increasingly urged the Communistpartiesin Latin America to adopt a gradualapproach to social change.67This approachhad the effect of further encouraging many revolutionaries to break completely with Moscow in the 1960s and try to emulate the Cuban revolution. While the new regime in Cuba became highly dependenton the Soviet Union, members of the Cuban leadership continued to 21

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articulatea far more revolutionarystance than their patrons in Moscow in this period-Havana gave considerable encouragement and support to insurgent groups in Nicaragua and Guatemala which had split from the traditional communist movement (or had never been linked to it in the first place). In fact, the early 1960s in particularwere characterisedby a concerted effort to try and spread the Cuban revolution to the rest of Latin America and beyond. This process was reflected in Che Guevara's assertion of the need to create 'two, three, many Vietnams' and it reached its zenith with his death in 1967 in Bolivia.68

Che Guevara personified revolutionaryidealism and Third Worldism in its second-generationform. While Fidel Castro increasingly aligned himself with the Soviet Union and sought to focus on building communism in Cuba as the 1960s progressed, Guevara was increasingly influenced by Trotskyism and by the idea that the success of Cuban communismwas dependenton the spread of revolution to the rest of the Third World. However, Guevara departed from Trotsky's emphasis on a vanguardparty, and found in foco theory the key to initiating action. With foquismo Guevara emphasised that a small nucleus of guerrillas could provide the leadership and revolutionary elan required to establish a successful guerrillainsurgency.In early 1965 Guevararesigned from the Cuban government and led an expedition to the Congo. This effort was a disappointment,however, and he soon shifted his focus back to Latin America, arriving with his small group of foquistas in Bolivia. However, his guerrilla group failed to gain the support of the indigenous inhabitantsof the Bolivian highlands.His efforts to foment revolutionwere also regardedwith suspicion by the Bolivian CommunistParty. He was capturedand executed in October 1967 by counter-insurgency troops of the Bolivian armed forces.69 Following Guevara's death, and the virtual elimination of guerrilla groups in Colombia, Venezuela and Guatemalaby the end of the 1960s, ruralinsurgency and Cuban militancy in Latin America were curtailed.70 As the 1970s began Cubanpolicy in Latin America had come more into line with that of the USSR. At the same time the Cuban governmenthad helped to educate and influence an entire generationof revolutionariesin Latin America and beyond.7' For example, the Frente Sandinista de Liberacion Nacional (SandinistaNational LiberationFront-FSLN)in Nicaragua,and its leader Carlos Fonseca (who was killed in 1976 in a battle with Somoza's nationalguard),was profoundly influenced by the Cuban experience.72And, although Cuba had curtailed its direct involvement in Latin America by the 1970s, Africa was a different matter-Cuban troops played an important,even pivotal, role in the revolution in Angola in the 1970s.73As has already been noted, Africa was a major arena of the revolutionaryresurgence of the late 1970s. In 1974-75 the ongoing, armedstrugglesin Portugal'scolonies, combinedwith the overthrowof dictatorshipin Portugalitself, led to the independenceof Angola, Mozambique, Guinea-Bissauand Sao Tom' e Prnncipeand Cape Verde.74Angola and Mozambique, in particular,continuedto be torn by externallyfunded guerrillainsurgencies seeking to topple the Marxist and Third Worldist leadership,a process that continued into the post-cold war era, only apparentlywinding down in the case of Angola in recent times. Angola representsa particularlystarkexample of the 22

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tragedy that came in the wake of national liberation and the ostensible pursuit of Third Worldist goals.75White-ruledRhodesia also emerged as central to the wider dynamics of national liberation and the Cold War in southernAfrica. In 1965 the white settlers of SouthernRhodesia, underthe leadershipof Ian Smith, launched the famous Unilateral Declaration of Independence (UDI). What followed was a protractedwar of national liberationled by the PatrioticFront, an uneasy coalition of Joshua Nkomo's Zimbabwe African Political Union (zAPu) and Robert Mugabe's Zimbabwe African National Union (ZANU).76In 1980 Zimbabwe achieved full independence and majority rule under the elected governmentof former guerrillaleader, and now President,Mugabe. His increasingly erraticand despotic rule, which is now in its third decade, has become an extreme example of the exhaustion of national liberation as a political project and of the tragedy of Third Worldism more generally.77For example, while millions of Zimbabweanswere facing the prospect of a major famine as a result of Mugabe's government's shortcomings,Mugabe himself sought to burnishhis Third Worldist and nationalist credentials at the latest meeting of the NonAligned Movement in Kuala Lumpur in late February2003, joining the Iraqi delegation, General Than Shwe of Burma and Fidel Castro in their enthusiastic support for the lambasting that their host, and the incoming leader of NAM, Mahathir Mohamad, delivered to Washington and the West at the summit.78 The last avatar of development economics: The NIEO and the global crisis of national development ThirdWorldistregimes such as Mugabe's in Zimbabwehad come to power with the intentionof dramaticallytransformingwhat were still profoundlyhierarchical and primarily rural societies via land reform and state-directedimport-substitution industrialisationstrategies. However, despite these efforts, which sometimes never went beyond the planning stage, long-standing divisions in these societies, in the context of complex colonial legacies, were reinforced and reconfiguredratherthan undermined,and most state-capitalistand socialist-orientated national development projects in the ThirdWorld were already in crisis before relative late-comers such as Mugabe even came to power.79The statemediated national development project as it emerged in Africa and elsewhere rested on a growing range of governmentalstructuresto manage productionfor domestic and export markets.These elaboratetariff systems and dual exchange rates, and a range of subsidies on food and other items, combined with the expansion of the education system, health care and other social services and led to the emergence of overburdenedstates that increasingly buckled under rising foreign debt and the predationsof corruptelites both civilian and military.80This general crisis provided the context for the UN Declarationon the Establishment of a New InternationalEconomic Order(NIEO).81The call for a restructuringof the world economy in favour of the nation-statesof the ThirdWorld made at the special session of the General Assembly of the UN between 9 April and 2 May 1974 was reinforcedby the 1973 oil crisis, but flowed from, and built on, earlier efforts to address the structural inequalities of the international politicaleconomic order.These previous efforts included the establishmentof the Group 23

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of 77 at the 1962 Economic Conference of Developing Countriesin Cairo and the establishment in 1964 of the United Nations Conference on Trade and Development (UNCTAD). RauilPrebisch, who was Director-Generalof the UNsponsoredEconomic Commissionfor Latin America (Comision Economica para America Latina-CEPAL)from 1948 to 1962, also helped to found and then went on to head UNCTAD from 1964 to 1969, using the latteras a forum to encourage preferentialtariffs for exports from the late-industrialisingnation-statesof the ThirdWorld. The immediateimpetus for the NIEO, meanwhile, was the decision by the Non-Aligned Movement, taken at its meeting in Algiers in September 1973, to ask the UN to hold a special session on 'problems relating to raw materials and development'.82 As noted earlier, a central figure in the promotion and planning of the NIEO Declaration was Houari Boumedienne, President of Algeria, who was responsible for the initial request to the UN that a special session on international economic developmentbe held. The other main sponsors were the presidentsof Venezuela and Mexico, Carlos Andres Perez (1973-78) and Luis Echeverrma Alvarez (1970-76) and the Shah of Iran, MohammedReza Pahlavi (1954-79). The changes asked for in the NIEO were, of course, never implemented.The NIEO effectively called for the extension to the internationaleconomic system of the redistributiveframeworkthat had been consolidatedin the social democraciesof Western Europe after World War II but was now in crisis at its point of origin. Implementingsuch a set of reformswould have requireda new global structure of governance that went far beyond the UN-centred internationalsystem. This new global structurewould have requiredthe power to reorganiseglobal markets and extracttaxes at a global level and then redistributethem globally as well. In retrospectthe NIEO was, in the words of one commentator,the 'last avatar' of post-World War II development economics, while the latter was, in turn, the intellectual anchor of state-mediatedcapitalist development between the 1940s and the 1970s.83The call for an NIEO followed on the heels of the 1973 oil crisis and the demonstrationby the Organisationof Petroleum Exporting Countries (OPEC) of its ability to set the price of oil. While some commentatorssee OPEC's assertivenessin the 1970s as an example of the wider ThirdWorldistpush in this period, OPEC'S growing influence weakened rather than strengthened Third Worldism. The rise of conservative, anti-communist, oil-rich nation-states, particularly in the Middle East, and their often strong links to the USA, representeda major obstacle to the realisationof the NiEO and the wider Third Worldist project. Of course, in a somewhat contradictoryfashion, the new 'petro-states' were also in a position by the 1980s to resist the economic liberalising thrust of the US-led globalisation project.84 Third World retreating: the end of the Bandung era, 1980s-2000s The climacteric of Third Worldism The 1980s ushered in the climacteric of Third Worldism. At the very moment when the ThirdWorld was being seen by some observersto have 'come of age', the Bandungera was alreadycoming to a close.85For example, wars between the 24

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'red brotherhood' of Vietnam, Cambodia, Laos and China in the late 1970s pointed to the obvious failure of socialist internationalismand its close relative, Third Worldism.86More broadly, by the beginning of the 1980s, the emphasis on restructuringthe world economy to address the North-South divide was challenged with increasing effectiveness by the emergent US-led globalisation project.87With the world recession and the Debt Crisis at the start of the 1980s, and the subsequent spread of neoliberal economic policies and practices, the UN-sponsored idea of a New InternationalEconomic Order disappearedfrom view, displaced by the globalisation project. The InternationalMonetary Fund and the World Bank, supported by the administration of Ronald Reagan (1981-88), the governments of Margaret Thatcher in Britain (1979-90) and Helmut Kohl in (West) Germany(1982-98), encouragedthe governmentsof the ThirdWorld to liberalise trade,privatisetheir public sectors and deregulatetheir financial sectors.88This trend also coincided with the renewal of the Cold War and the further weakening of the Non-Aligned Movement. Despite regular meetings, NAM played an increasinglylimited role in internationalaffairs during the so-called New Cold War and after.89 During the New Cold War, from the end of the 1970s to the late 1980s, the Reagan administrationpresided over an unprecedentedmilitary build-up and a reinvigorated anti-communist crusade directed at the Soviet bloc and Third Worldist regimes such as Nicaragua.90Apart from Central America, a key regional focus of the New Cold War, which also highlights the vicissitudes of non-alignmentspecifically and Third Worldism more generally, was Southwest Asia. Once the Soviet Union entered Afghanistan to prop up the increasingly embattledstate-socialistregime in Kabul in late 1979, US aid to Pakistan,which Washington had suspended because of nuclear testing by Islamabad, was restoredand then significantlyincreased.In the 1980s the Pakistanimilitary,and the country's powerful intelligence organisation,the Inter-ServicesIntelligence directorate(isi), played an importantrole (along with the Saudi Arabianand the Chinese governments) in supporting the loose coalition of resistance groups (Islamic Unity of Afghan Mujahideen) fighting the Soviet occupation. The Carteradministration(1977-80) also attemptedto improve its relations with the Indian government, under Prime Minister Morarji Desai (1977-80), who was trying to lessen reliance on the USSR. However, once the USA resumedmilitary and economic aid to Pakistanand increasingly tilted towards China against the backdropof Washingtonand Beijing's rapprochementin the 1970s and the war in Afghanistanafter 1979, Prime Minister IndiraGandhi, who replaced Desai in 1980, moved again to strengthenIndian relations with the USSR. This situation only changed when Soviet military forces withdrew from Afghanistan (between May 1988 and February1989), and when the subsequentend of the Cold War brought about the end of all US aid to Pakistan (in the context of renewed US concern about Pakistan'sclandestinenuclearweapons programmein the 1990s). The general deterioration of US relations with Pakistan was paralleled by improvementsin US relations with India in the post-cold war era.91 While there were clear shifts in direction and geographical orientation in post-cold war USA foreign policy there were also significantcontinuities. On the one hand the administrationof Bill Clinton (1992-2000) introduceda range of 25

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reforms that were ostensibly aimed at 'enlargingthe community of democratic nations worldwide' with importantimplicationsfor the erstwhile ThirdWorld.92 For example, the four main goals of US foreign aid in the post-cold war era were identified in the 1997 US Agency for International Development (USAID) StrategicPlan as: the promotionof the 'rule of law', the promotionof 'elections and political processes', building and expanding 'civil society' and improving 'governance'.Movement towards all these objectives was regardedby USAID as 'necessary to achieve sustainable democracy'.9 A greater emphasis was also placed on humanitarianassistance and sustainable development. However, the foreign aid bill that was passed by the US Congress in 1994 continued, not surprisingly,to reflect a commitment to often long-standing geopolitical concerns. In the year the bill was passed Israel and Egypt received over one-third of all US foreign aid. The figurefor Israelwas US$3 billion and for Egypt it was $2.1 billion, while the 1994 figure for sub-SaharanAfrica as a whole was $800 million.94This was more or less the same percentagefor Israel and Egypt as they had received in the 1980s. Israel's importanceto US foreign policy (and to domestic US politics) goes back decades, while Egypt has been a majorstrategic outpost for Washington since 1977 when Nasser's successor, Anwar Sadat, ended his government's ties to the USSR and became a central player in the US-sponsoredpeace process in the region. From the time of this reorientationto the end of the 1990s Cairo received at least $46 billion in militaryand economic aid from Washington.Since the late 1970s US policy towardsEgypt has viewed it as the key to making and expandingpeace in the region.95With the end of the Cold War foreign aid was also directedincreasinglyat the formerSecond World, again for broadgeopolitical reasons, relatedparticularlyto a concernto improve relations with, and enhance the political stability of, a post-communistRussia that still possesses a majorcapacity for nuclearwarfareand is the world's second largest oil exporter after Saudi Arabia.96 The redirectionof, but limited changes to, the basis of US foreign aid policy after the Cold War make clear the relative continuityin US strategicthinkingin the 1990s. For example, planningdocumentsand the public pronouncementsthat emanated from the administrationof George Bush Sr (1989-92) reflected the continued preoccupationwith Russia and some of the other successor states, such as the Ukraine, that had emerged from the collapse of the Soviet Union. There was also a continuedfocus on the Middle East, at the same time as Central America quickly droppedfrom view.97Despite the high degree of continuity in US foreign policy in the 1990s, the Clinton administrationemphasised at the outset that it intended to shift from 'containmentto enlargement'.98Clinton advised that his administration'smain goal was not just to 'securethe peace won in the Cold War', but to strengthen the country's 'national security' by 'enlargingthe communityof marketdemocracies'. However, like the administration of his predecessor, the Clinton team understood that the immediate post-cold war world conferredclear geopolitical and economic advantageson the USA and they sought primarilyto manage and maintainthe status quo. Like the Bush Sr administration,Clinton remainedfocused on the majorpowers: the UK, Germany,France, Russia, Japanand China. Clinton, like Bush before him, also attemptedto maintainas high a level of defence spending as possible. Through26

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out the 1990s rhetoric about humanitarianintervention to the contrary, the Clinton administrationclearly viewed Europe,East Asia/the Asia-Pacific and the Middle East/SouthwestAsia as the three most importantregions in the world in terms of US strategyand security. Meanwhile, Latin America, Africa and South Asia, were perceived as regions where no vital US security or economic interests were at stake. Europe was apparentlyat the top of the list, while the Middle East/Southwest Asia was third. In this period East Asia/the Asia-Pacific was regarded as number two and rising. The interconnectionbetween security and economic development was also particularlyobvious in the thinking of defence planners in relation to East Asia. For example, a 1995 Departmentof Defense document described the US military operations in the Asia-Pacific as the 'foundation for economic growth' and the 'oxygen' of 'development'."? This reflected the wider approachthat perceived a close connection between China's economic development and geopolitics, as the search for threats to the US position in the world shifted increasingly to East Asia in the 1990s. It was in the Asia-Pacific, in fact, where the end of the Bandung era and the decline of ThirdWorldism more generally had become particularlyevident well before the end of the Cold War. For a growing number of observers the economic success of the Newly Industrialising Countries of Northeast and Southeast Asia by the 1980s and 1990s had called into question many of the tenets of, and the need for, Third Worldism. For increasingly influential neoliberals the capitalist transformationof Asia had undermined the Third Worldist idea that the hierarchicalcharacterof the world economy was holding back the Third World. From this perspective, and from the perspective of proponentsof state-mediateddevelopment as well, the notion of a Third World still remained relevant. But, now the developing countries of the Third World could become successful late-developersby emulatingthe Newly Industrialising Countries(NIcs)of Asia. At the same time, by the late 1970s successful capitalist development in East Asia had displaced the socialist agenda contained in the idea of the Third World and Third Worldism.101This process of displacement was consummatedby the turnto the marketon the part of the People's Republic of China and the Democratic Republic of Vietnam (the only first-generation Bandung regimes that had pursued fully fledged state-socialism) in the 1980s and 1990s. In ideological terms, Third Worldism was increasingly marginalised in Asia by efforts to promote a distinctly post-Third Worldist Pan-Asianism groundedin state guided capitalist development.102 Most of the key elements of this shift are reflected in the efforts of Singaporean leader, Lee Kuan Yew (whose recent autobiographywas entitled From ThirdWorldto First). He linked an increasingly conservative nationalism to an equally conservative PanAsianism, while presiding over a state-guidedexport-orientatedindustrialisation projectgroundedin a very particularhistory, which he, nevertheless,represented as providing developmentlessons for the rest of the world.103Meanwhile, by the 1980s the Prime Minister of Malaysia, MahathirMohamad (1981-2003), was articulatinga particularlystridentanti-WesternPan-Asianismthat was grounded in an explicitly racial conception of national and internationalpower relations. Interestingly,however, Mahathirnot only increasinglytook on the mantle of the voice of Asia, but at the very moment when Third Worldism was in dramatic 27

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decline, he also positioned himself as a voice of the ThirdWorld."4Against this backdrop,as alreadynoted, Mahathirassumed the chairmanshipof NAM (which now has 114 member nation-states)in February2003. Reinventing the Third World As demonstratedby Mahathir's Third Worldism, undergirdedby Malaysia's assumptionof the leadershipof NAM, the idea of a ThirdWorld continuesto have geopolitical, if not conceptual, significance in many quarters.In fact, in her contributionto this special issue Vicky Randall argues that, while the idea of a Third World has continued, albeit diminishing, relevance at the geopolitical level, there has been a dramaticdecline in its conceptualrelevance for comparative political analysis.'05She concludes, however, that it still retains strategic relevance in some geopolitical circumstances.In 'The rise of neo-ThirdWorldism: the Indonesian trajectory and the consolidation of illiberal democracy', Vedi Hadiz suggests the Third World retains even more conceptual utility than that implied by Randall. His article examines both the older and more recent theories of modernisationand developmentin the ThirdWorld, with a focus on debates about democratisationin Indonesia. This provides the backdrop for a detailed examination of the intellectual sources for ideas and definitions of democracy deployed by contemporaryIndonesianpolitical actors in their efforts to rebuild the archipelago's political system in the wake of the demise of Suharto's New Order.He goes on to argue that the post-cold war world order centred on US hegemony is weakening rather than strengtheningthose forces that support liberal democracy in Indonesia, reinforcing the consolidation of illiberal democracy and the rise of 'neo-Third Worldism' in Indonesia and beyond. For Hadiz, neo-Third Worldism has revived the most conservative characteristicsof Third Worldism without retaining any of the progressive and internationalistideals of the early cold war era. John Saul also looks at the significance of the deployment of Third Worldist rhetoric in the post-cold war era. He looks at what he regards as both the strengthsand weaknesses of the continueduse of the ThirdWorld, groundinghis analysis by focusing on the African National Congress (ANc) in South Africa since its election to government and the end of apartheid in 1994. Saul is especially interested in the presidency of Nelson Mandela's successor, Thabo Mbeki. Under Mbeki, the ANC has continued to present itself as a leader of the ThirdWorld. However, there are, argues Saul, 'profoundcontradictionsinherent in the ANc's effort both to retain its Third Worldist credentials and to present itself as a reliable client to the BrettonWoods institutionsand foreign investors'. Since 1994 the ANc has followed a series of policies that Saul describes as 'deeply compromisedquasi-reformism',which have worked 'to deflect consideration away from the options pressed by other, much more meaningfully radical internationaland South African labour organisations,environmentalgroups and social movements'. This has meant that, as the ANCreaches the 10-yearmark as a governing party, a numberof significantgrassrootsmovements have increasingly opted to mobilise against the government's 'bankruptpolicies'. This growing grassrootsopposition might eventually help to steer South Africa-via 28

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the dramatictransformationof the ANCor the establishmentof a new political project in South Africa with the same potentialfor hegemony as the ANC-away from quasi-reformism and back into the ranks of the progressive groups, movements and governments that are increasingly looking for and applying 'innovative and appropriatelyrevolutionary approaches to challenge the geographical,racial and class-based hierarchiesof global inequality'. Taking up a set of concerns that flows from the same geographical location and the same political-economic question, David Moore examines the current crisis in development theory and development policy. Moore seeks to advance the ongoing debate about progress beyond the cold war nomenclatureof three worlds of development into the increasingly global, but still highly differentiated, political-economic terrainof the 21st century. At the same time he seeks to retain and reinvent the notion of the Third World. The post-cold war era of neoliberal globalisation, says Moore, is also the 'Second Age of the Third World'. In its 'First Age', the Third World' was defined by comparisons with advancedcapitalism and state socialism and by Third Worldist efforts to pursue a non-aligned path between the two superpowersand the competing models of development they represented.In its 'Second Age', argues Moore, the identity of the Third World is now framed by its re-entryinto the protractedprocess of primitive accumulation.For Moore, 'the uneven, destructive and creative, route towards proletarianisationand private property' is both accelerated and aggravated under neoliberal globalisation. The brutalityof primitive accumulationin the post-cold war era has thrown 'contemporary development theory into disarray, especially when confronted with the ever-present but usually hidden role of the increasingly internationalisedstate'. A key response by development theorists has been the notion of 'global public goods'. Moore, by contrast, following a detailed discussion of primitive accumulation and global public goods, proposes that a better alternativeis to be found in what he calls 'public accumulation'. Meanwhile, in her contribution, 'Re-crossing a different water: colonialism and Third Worldism in Fiji', Devleena Ghosh looks closely at the possibilities and prospects for postcolonial Fiji in the wake of a series of major political and social crises in the past 15 years. She emphasises the deterritorialisation,or transnationalisationof the Fijian conflict, looking at the ways in which indigenous Fijians and Fiji's Indian communities have sought to reconstitutenational and communal identities via various strategies that involve transnationalnetworking as well as more localised approaches.Drawing on the specificity of the postcolonial Fijian trajectoryshe proffers a 'non-reductiveway to think about decolonisation, cultural transformationand notions of autonomy and Third World solidarity'. From a complementaryperspective Arif Dirlik probes the Eurocentricdimensions of Third Worldism. In 'Spectres of the Third World: global modernity and the end of the three worlds' he emphasises that the three worlds of development 'was a productof Eurocentricmappings of the world to deal with the postcolonial situation'that unfolded in the aftermathof World War II. By 'mortgaging' their future to some form of socialism or some form of capitalism, 'which was a premise of this mapping', Third Worldist regimes embraced 'a future dominatedby alternativesof Europeanorigin'. Meanwhile, 29

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the present juncture, Dirlik argues, is one of 'global modernity' by which he means 'a post-Eurocentricmodernity that has scramblednotions of space and time inheritedfrom modernity'.While the post-cold war era flows directly from 'the struggles that the idea of three worlds sought to capture... those struggles have led to unanticipatedreconfigurationsglobally, including the reconfiguration of capitalism, which has globalised following the fall of the second world (the world of socialisms)' and produced a range of new challenges. In particular Dirlik examines the way in which the 'spectre of the ThirdWorld' continues to inform questions about globalisationand modernityregardlessof whetheror not we are reinventing the Third World or ending with the Third World. Ending with the Third World In contrastto the contributorsdiscussed above the rest of the contributorsto this special issue clearly seek to exorcise the spectre of the Third World and move beyond the three worlds frameworkratherthan revise or reinvent it. In 'Transforming centre-peripheryrelations', Fouad Makki traces the history of the idea of development and its rise to centralityin 'understandingglobal hierarchiesof wealth and power'. His article historicises the 'developmentframework'and its links to the making and unmaking of the Third World (the latter formulation was, of course, made well known by Arturo Escobar in the mid-1990s in his influentialbook, EncounteringDevelopment: The Making and Unmakingof the Third World),highlighting the way that neoliberalglobalisationhas emerged as a new, but still fragile, frameworkof global power relations grounded in the transformationof the centre-peripherydynamics that underpinnedthe earlier development framework.Meanwhile, in 'From national bourgeoisie to rogues, failures and bullies: 21st century imperialism and the unravelling of the Third World', Radhika Desai draws attentionto the fragility of neoliberal globalisation. In fact she goes furtherthanMakki and arguesthat: 'if globalisationspelled the end of development ... then the launchingof the war on terrorismsignals the end of globalisation'. According to Desai, the 'post-globalisationphase' ushered in by the 'war on terrorism'representsa particularly'aggressive' form of 'US imperialism'. For Desai, the US imperium is 'no longer based on primarily financial globalisation' as the means by which Washington and US-based corporationsexercise and extend global power. Instead,US imperialismis 'now more openly based on the directcontrol of productiveassets and territory'.In her view this historical turningpoint also signals 'the definitive end of the idea of the Third World and its associated ideology of Third Worldism, although this end has, of course, been repeatedlyproclaimedand contested over the past two decades'. She argues that 'the idea of the ThirdWorld, and the associated ideas of developmentand non-alignmentwere predicatedupon the core concept of the nationalbourgeoisie and associated notions of the inherentlyprogressive potential of nationalism'. Furthermore,the 'idea of a united and rising Third World had a greater reality as a hope than it ever had as an objective historical possibility'. The analysis I have offered in this introductoryarticle, meanwhile, has also argued that the age of the Third World has passed irrevocably into history. I 30

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have also emphasisedthat the state-centredcharacterof Third Worldism and its emphasis on an alliance of ostensibly sovereign territorialnation-statesis a key element in the overall failure of Third Worldism generally and of the failure of a wide arrayof state-guidednationaldevelopmentprojects more specifically. As we have seen, the nation-statebecame the embodimentof the efforts of both the first- and second-generation Bandung regimes to mediate the transformative impact of colonialism and build an anti-colonialpolitics that combined tradition and cultural specificity with Marxism and/or 'Western' modernity more generally. Once in power, however, Bandung regimes used Third Worldism as a powerful legitimating narrativeat the same time as they were unable to realise the prosperity and progress that national liberation and independence were supposed to deliver. The failure of Third Worldism-as an ideological trend centred on a wide array of anti-colonial nationalisms and national liberation movements that linked the utopian strands of Marxism and/or liberalism to romantic conceptions of the pre-colonial era-needs to be set against the wider history of decolonisation, the formationof new nation-statesand the Cold War. It was the contradictions inherent in the universalisation of the nation-state system and the global economic orderof the cold war era that both producedthe Third Worldist challenge and eventually helped to undermine it as a serious alternativeto liberal capitalism or state-socialism.At the same time, even if the mantle of ThirdWorldism can successfully be taken up in the post-cold war era by non-statecentredmovements, the now irrelevanttripartitepolitical, economic and territorialdivision of the globe lingers on in the continued use of the idea of a Third World to manage diverse and complex polities in an era when the US-led globalisation project is at the centre of the reshaping of the nation-state system and the global political-economic order. I take the view that the notion of a Third World, even in a limited or reinvented form, is intellectually and conceptually bankrupt,while politically Third Worldism has already lost any relevance or legitimacy it once had. Challenging neoliberal globalisation and post-cold war capitalismmeans moving beyond the territorialpolitics of nationstates-a politics to which Third Worldism is inextricably connected. Furthermore, it can be argued that the notion of the Third World has now been most successfully appropriatedby the very US-led globalisation project that proponents of a reinvented Third Worldism want to challenge. The way in which the Third World has been appropriatedas part of the managerialrepertoireof the US-led globalisationproject is highlighted in detail in Heloise Weber's article, 'Reconstitutingthe Third World? Poverty reduction and territorialityin the global politics of development'. She notes that world politics are increasingly conceptualised by development theorists and policy makers in terms of globalisation and/or fragmentation.Implicit in much of the discussion about globalisation (whetherby proponentsor critics) is the idea that territorially grounded notions of the political should be superseded by an approachthat takes global social formationsas it primaryfocus and views world order as socially and not territoriallyconstituted. Significantly, however, the dominant political and policy prescriptions for alleviating inequality and immiseration are still articulatedprimarily,if not exclusively, via strategies of poverty reduction and development that focus explicitly on 'developing coun31

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tries' and the 'Third World'. Weber argues that, against the backdrop of the globalisationproject, it is not just the continueddeploymentof the ThirdWorld that is problematic-it is, in fact, the 'continued political significance of the territorialin strategiesof neoliberalgovernance' that needs to be addressedand challenged. At the same time, she emphasises that the centrality of 'territorial politics' to the dominant discourse on development and world order is most readily apparentin relationto the theory and practicearoundthe 'governanceof the Third World'. By and large the 'governance of the Third World' is approached via the incorporation of the politics of development (or more specifically by focusing on the question of poverty reduction) in the so-called 'developing countries' into the overall frameworkof 'neoliberal governance'. Weberpoints in particularto the recentrevision of conditionallending strategies, centred on the introductionof the 'Poverty Reduction Strategy Paper (PRSP) approach' by both the IMF and the World Bank. While the PRSP approachhas been promotedas a way of strengtheningdemocracy,Weber argues that the PRSP approach is best seen as an effort to 'constitutionalise' a particulartype of 'supra-stategovernance of the Third World' via detailed conditions and constraintsthat include directly linking poverty alleviation and development objectives to the goals of the World TradeOrganization(wTo). She concludes that the PRSP approachultimately promotes a type of governance that 'reconstitutesthe Third World' geographically regardless of the increasingly supra-territorial characterof globalisation. For Weber the Third World is being reconstituted within the contemporaryglobal orderin a way that cuts across efforts to pursue 'social solidarityas a political project-both within and across state boundaries'. This means that the Third World serves as a key site of 'empowerment'in the global politics of development and also as a key site of 'disciplinaryefforts to manage the contradictions'of neoliberal globalisation. ArturoEscobar also sees a need to overcome the limits the idea of the Third World continues to place on the pursuit of progress. He argues that, as it becomes increasingly clear that 'there are modernproblems for which there are no modern solutions', it also becomes clear that it is necessary to move 'beyond the paradigmof modernityand, hence, beyond the ThirdWorld'. Escobarpoints to the need for 'imaginingafter the ThirdWorld'. The post-cold war context for this project includes what he calls an emergent 'new US-based form of imperial globality', which he defines as 'an economic-military-ideological order that subordinates regions, peoples and economies world wide' which is in turn complementedby what he calls 'global coloniality': a process that involves 'the heightened marginalisationand suppression of the knowledge and culture of subalterngroups'. Another key characteristicof this new era is 'the emergence of self-organising social movement networks, which operateunder a new logic, fostering forms of counter-hegemonicglobalisation'. For Escobar 'these movements represent the best hope for reworking imperial globality and global coloniality in ways that make imagining after the Third World, and beyond modernity,a viable project'. As part of an effort to do this he looks in particular at the social movements in black communitieson the Pacific Coast of Colombia. In 'ThirdWorldism and the lineages of global fascism: the regroupingof the global South in the neoliberalera', Rajeev Patel and Philip McMichael also seek 32

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AFTER THE THIRD WORLD?

to move the politics of development beyond the Third World. They argue that the theory and practice of development generally has been grounded in a form of 'biopolitics, rooted in a regime of sovereign state control, and designed to mobilise citizens in ways favourable to capital'. Furthermore,Third Worldism 'embracedthis form of sovereignty and its biopolitics' at the same time as Third Worldism can be also be located in direct relation to the rise of 'global fascism'. They emphasise that many 'contemporaryresistances to neoliberalism' (global justice movements, or the forces of 'globalisation-from-below' or counterglobalisation), now recognise the state's complicity with capital. These 'new internationalisms',which have emerged from the wreckage of Third Worldism, increasingly articulate an approach to 'sovereignty' that runs counter to the dominantconception of state sovereignty that was universalised during the rise and decline of Third Worldism between the 1940s and the 1970s.106 A major exemplar of 'globalisation-from-below'has been the rise of the Zapatistas in southern Mexico in the post-cold war era. As Thomas Olesen emphasises, the rebellion launched on 1 January1994 by the Ejercito Zapatista de Liberacion Nacional (EZLN), better known as the Zapatistas, captured the imaginationof activists and academics in the Americas and aroundthe world. In the second half of the 1990s the Zapatistas and their main spokesperson, SubcomandanteMarcos, increasingly occupied an importantinternationalposition comparable with, but also clearly distinct from, the romantic guerrilla Marxism and Third Worldism of the cold war era.107Virtually all observers agree that the uprising in Chiapas representedan importantdeparturefrom the Marxism and Third Worldism of this era. Furthermore,the Zapatistashave had an importantimpact on progressive politics in Mexico and in Latin America. Olesen, meanwhile, focuses on the way that the Zapatistasquickly became an importantrallying point for progressive organisationsand solidarity activists in Europe and North America and beyond. In the mid-1990s they emerged as a symbol of progressive social change for those looking for new political alternatives in a post-cold war world apparently bereft of systemic alternatives to neoliberal globalisation. Olesen argues that one of the importantaspects of the global solidarity efforts that surroundthe Zapatistasis the partial dissolution of cold war era ideas about 'solidarity with the Third World' and the 'one-way' paternalismthat was often centralto this type of support.Many of the post-cold war global solidarityefforts aroundthe Zapatistasare based on what he suggests is a new, 'two-way' relationshipbetween the Zapatistasand their international supporters.This reflects the changing characterof the post-cold war global order and the notion that there are lessons flowing in both directions in a world in which the analyticalsalience and political purchaseof the idea of the First World and the Third World have dramaticallydiminished or disappearedentirely. Conclusion: history, destiny and the fate of Third Worldism The articles in this special issue both reflect, and reflect on, the overall breadth and significance of the idea of the Third World and the practice of Third Worldism. As they also make clear, both the history of, and the current perspectives on, the ThirdWorld and ThirdWorldism are linked to a wide range 33

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MARK T BERGER

of political and intellectualpositions, organisationsand initiatives engaged in the rethinking of the history and contemporarysignificance of the Third World against the backdrop of a whole range of other trends. It is hoped that by bringing together a number of approachesto the question of 'After the Third World?' this special issue will facilitate and stimulate engagement with the power of the idea of the Third World and the wide range of Third Worldist currentsand their relationshipto the changing global order of the 21st century.

Notes I would like to thank Tim Shaw and all the other participantsin the 'Workshop on Globalization/New Regionalisms/Development',which was held at the Instituteof CommonwealthStudies (University of London, 15 December 2002) at which a much earlier version of this chapter was presented. I would like to thank Sally Morphet for her particularlydetailed comments. 1

R Malley, The Call From Algeria: Third Worldism,Revolution and the Turn to Islam, Berkeley, CA: University of California Press, 1996. 2 For example, Edward Said enthusiasticallyoverstated the situation when he said that: 'By the time of the Bandung Conferencein 1955 the entire Orienthad gained its political independencefrom the Western empires and confronteda new configurationof imperialpowers, the United States and the Soviet Union'. E Said, Orientalism: Western Conceptions of the Orient, London: Penguin Books, 1995, p 104. R Abdulgani, Bandung Spirit: Moving on the Tide of History, Djakarta:Prapantja,1964. See also CP Romulo, The Meaning of Bandung, Chapel Hill, NC: University of North Carolina Press, 1956. For the notion of the 'Bandung era' (1955-75) see S Amin, Eurocentrism,London: Zed Press, 1989, p 143. 4 The key elements of ThirdWorldism,as I am using the term here, are the assumptionsthat: 1) the 'popular masses' in the Third World had 'revolutionaryaspirations';2) the fulfilment of these aspirationswas an inevitable working out of history that linked pre-colonial forms of egalitarianismto the realisation of a future utopia; 3) the vehicle for the achievement of this transformationwas a strong and centralised nation-state; and 4) in foreign policy terms these nation-states should form an alliance that would act collectively under the umbrella of various regional and internationalforms of political and economic co-operation, such as the non-alignmentmovement and the United Nations. This definition is similar to, but also departs in key respects from, the conception of Third Worldism provided in Malley, The Call From Algeria, pp2, 72, 94-114. G Lundestad,East, West, North, South: Major Developments in InternationalPolitics Since 1945, New York: Oxford University Press, 1999. The notion of a Third World also became central to academic and policy-orientated work on development and underdevelopment.P Worsley, The Third World, London: Weidenfeld and Nicolson, 1964; IL Horowitz, Three Worlds of Development, New York: Oxford University Press, 1966; RA Packenham,Liberal America and the Third World: Political Development Ideas in Foreign Aid and Social Science, Princeton,NJ: Princeton University Press, 1973; IL Gendzier, Managing Political Change: Social Scientists and the Third World,Boulder, CO: Westview Press, 1985; C Ramirez-Faria,The Origins of Economic InequalityBetween Nations: A Critique of Western Theories of Developmentand Underdevelopment,London:Unwin Hyman, 1991; and B Hettne, DevelopmentTheory and the Three Worlds: Toward an InternationalPolitical Economy of Development, New York: Wiley, 1995. 6 G Rist, The History of Development: From WesternOrigins to Global Faith, London: Zed Press, 2002, p 140. 7For example, see RE Bissell, 'Who killed the ThirdWorld?', WashingtonQuarterly,13 (4), 1990; J Manor, 'Introduction',in Manor (ed), RethinkingThird World Politics, London: Longman, 1991; G Hawthorn, "'Waiting for a text?" ComparingThird World politics' in Manor, RethinkingThird World Politics; V Randall, 'Third World: rejected or rediscovered?', Third World Quarterly, 13 (4), 1992; M Williams, 'Re-articulatingthe Third World coalition: the role of the environmentalagenda', Third World Quarterly,14 (1), 1993; RO Slater, BM Schutz & SR Dorr, 'Introduction:toward a better understandingof global transformationand the Third World', in Slater, Schutz & Dorr (eds), Global Transformationand the Third World,Boulder, CO: Lynne Rienner, 1993; Slater, Schutz & Doff, 'Global transformationand the Third World: challenges and prospects', in Slater et al, Global Transformationand the Third World; M Williams, InternationalEconomic Organisationsand the Third World, New York: HarversterWheatsheaf, 1994; M Kamrava, 'Political culture and a new definition of the Third World', Third World Quarterly, 16 (4), 1995; A Dirlik, The Postcolonial Aura: Third World Criticism in the Age of Global

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AFTER THE THIRD WORLD? Capitalism, Boulder, CO: Westview Press, 1997; V Randall & R Theobald, Political Change and Underdevelopment:A Critical Introductionto Third WorldPolitics, London: Macmillan, 1998; P Darby, The Fiction of Imperialism: Reading Between International Relations and Postcolonialism, London: Cassell, 1998; M Kamrava, Cultural Politics in the Third World, London: University College London Press, 1999; AN Roy, The Third Worldin the Age of Globalisation: Requiem or New Agenda?, London: Zed Press, 2000; and R Pinkney, Democracy in the Third World, Boulder, CO: Lynne Reinner, 2003. For example, see J-F Bayart, 'Finishing with the idea of the Third World: the concept of political trajectory', in Manor, Rethinking Third World Politics; A Loomba, 'Overworkingthe "ThirdWorld"', OxfordLiteraryReview, 12, 1991; MT Berger, 'The end of the "ThirdWorld"?', Third World Quarterly, 15 (2), 1994; F Buell, National Culture and the New Global System, Baltimore, MD: Johns Hopkins University Press, 1994, pp 101-37; A Escobar, EncounteringDevelopment: The Making and Unmaking of the Third World,Princeton,NJ: PrincetonUniversity Press, 1995; R Kiely, 'ThirdWorldist relativism: a new form of imperialism',Journal of ContemporaryAsia, 25 (2), 1995; G Crow, ComparativeSociology and Social Theory:Beyond the Three Worlds,London: Macmillan, 1997; MW Lewis & KE Wigen, The Myth of Continents:A Critique of Metageography, Berkeley, CA: University of California Press, 1997; MW Lewis, 'Is there a Third World?', CurrentHistory, 98 (631), 1999; R Malley, 'The Third Worldist moment', Current History, 98 (631), 1999; C Thomas, 'Where is the Third World now?', Review of International Studies, 25 (4), 1999; M Hardt & A Negri, Empire, Cambridge, MA: HarvardUniversity Press, 2000; A Payne, 'The global politics of development: towards a new research agenda', Progress in Development Studies, 1 (1), 2001; A Hoogvelt, Globalization and the Postcolonial World: The New Political Economy of Development,Basingstoke: Palgrave, 2001; and M Hardt, 'Today's Bandung?',New Left Review II, 14, 2002. 9 I am following on, but departing,from David Scott's notion of three Bandung generations. See D Scott, Refashioning Futures: Criticism after Postcoloniality, Princeton, NJ: Princeton University Press, 1999, pp 197-198, 221-222. Other writers, by contrast, talk in terms of a single Bandung generation. See, for example, P Gilroy, Between Camps:Race, Identityand Nationalism at the End of the Colour Line, London: Allen Lane, 2000, pp 288, 345. 10 MT Berger, 'The rise and demise of national development and the origins of post-cold war capitalism', Millennium: Journal of International Studies, 30 (2), 2001. For a good discussion of the origins of Third Worldism, see Malley, The Call From Algeria, pp 17-33. Although Robert Young does not use the term 'Third Worldism', his encyclopaedic history of postcolonialism is also a detailed history of Third Worldism. Young restates the importance of Marxism to anti-colonialnationalismand also reinstatesMarxismin the wider history of postcolonial theory. See RJC Young, Postcolonialism: An Historical Introduction,Oxford: Blackwell, 2001. The one region not well covered by Young is Southeast Asia. This gap is nicely filled by CJ Christie, Ideology and Revolution in Southeast Asia 1900-1980: Political Ideas of the Anti-Colonial Era, Richmond: Curzon Press, 2001. 12 The notion of the Third World is often traced to the writing in the early 1950s of the French economist, Alfred Sauvy. See Sauvy, 'Trois Mondes, Une Planete', L'Observateur, 14 Aout 1952, no. 118, p. 14. See also TC Lewellen, Dependencyand Development:An Introductionto the ThirdWorld,London:Bergin & Garvey, 1995, p 3; L Wolf-Phillips, 'Why "ThirdWorld"?Origin, definition and usage', Third World Quarterly, 9 (4), 1987. Other observers have suggested that its origins also lie in the somewhat earlier promotionof a 'ThirdForce' in internationalpolitics by LabourParty MPs in Britain following the onset of the Cold War in 1947. Furthermore,this coincided with the call for a 'Third Force' on the part of Fenner Brockway (a British socialist) to unite people and movements in Africa, Asia and Europe in the pursuit of peace, democracy and socialism. JE Goldthorpe, The Sociology of Post-Colonial Societies: Economic Disparity, CulturalDiversity and Development,Cambridge:CambridgeUniversity Press, 1996, pp 15-16. Stephen Howe, Anticolonialism in British Politics: The Left and the End of Empire, Oxford: Clarendon Press, 1993, pp 168-179. 13 P Lyon, 'The emergence of the ThirdWorld', in H Bull & A Watson (eds), The Expansion of International Society, Oxford: Oxford University Press, 1984, pp 229-230; HW Brands, The Specter of Neutralism: The United States and the Emergence of the Third World,1947-1960, New York: Columbia University Press, 1990. 14 For first hand accounts of the conference see A Appadorai,The Bandung Conference, New Delhi: Indian Council of World Affairs, 1955; G McTurnanKahin, TheAsian-African Conference,Bandung, Indonesia, April 1955, Ithaca, NY: Cornell University Press, 1956. l5 Young, Postcolonialism, pp. 191-192. Christie, Ideology and Revolution in Southeast Asia 1900-1980, 131-132. 16 pp Malley, The Call From Algeria, p 90. 17 RF Betts, Decolonization, London: Routledge, 1998, p 43. 18 P Willetts, The Non-AlignedMovement:The Origins of a ThirdWorldAlliance, London: Macmillan, 1978; and RA Mortimer, The Third World Coalition in World Politics, Boulder, CO: Westview Press, 1984. 19 OA Westad, 'Introduction',in Westad (ed), Brothers in Arms: The Rise and Fall of the Sino-Soviet

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MARK T BERGER Alliance, Stanford, CA: Stanford University Press, 1998, pp 7-29. see also C Jian, Mao's China and the Cold War, Chapel Hill, NC: University of North Carolina Press, 2001. 20 Although the Great Leap Forwarddepartedfrom the Soviet model, it not only retained links to Stalinist conceptions of economic development, but it also resonated with Stalinist approachesto agriculturein the 1930s in its human costs. The Great Leap Forward affected the peasantrybadly as the diversion of resources to industry led to starvation in the countryside. The loss of life from famine between 1958 and 1961 is now calculated to run to upwardsof 30 million people. M Goldman & AJ Nathan, 'Searching for the appropriatemodel for the People's Republic of China', in M Goldman& A Gordon(eds), Historical Perspectives on ContemporaryEast Asia, Cambridge,MA: HarvardUniversity Press, 2000, pp 298-299, 302-303. In the 1960s the PRC increasingly pursued a rural-orientatedcommunism based on mass mobilisation culminatingin the social and economic upheaval of the CulturalRevolution in the late 1960s and early 1970s. Despite this shift, both the Chinese leadershipand most outside observers took the view that, up to the second half of the 1970s, China's economy remained groundedin the Soviet model. Only with Mao's death were many basic Stalinist economic concepts challenged even if the Soviet model had been domesticated to and reorientated by Chinese practice at least two decades earlier. NP Halpern, 'Creating socialist economies: Stalinist political economy and the impact of ideas', in J Goldstein & R O Keohane (eds), Ideas and Foreign Policy: Beliefs, Institutionsand Political Change, Ithaca,NY: Cornell University Press, 1993, pp 101-102; and FC Teiwes, 'The Chinese state during the Maoist era', in D Shambaugh(ed), The Modern Chinese State, Cambridge:CambridgeUniversity Press, 2000, pp 139-148. 21 M Stuart-Fox,A Short History of China and SoutheastAsia: Tribute,Trade and Influence, Sydney: Allen and Unwin, 2003, pp 169-176. 22 See A Hutchison, China's Africa Revolution, London: Hutchinson, 1975, pp72-79. 23 JW Garver, Protracted Conflict: Sino-Indian Rivalry in the Twentieth Century, Seattle, WA: University of Washington Press, 2002. 24 G Krishna, 'India and the internationalorder:retreat from idealism', in H Bull & A Watson (eds), The Expansion of International Society, Oxford: Oxford University Press, 1984, pp 269-271, 282-286. 25 S Wolpert, Nehru: A Tryst With Destiny, New York: Oxford University Press, 1996, pp 466-467. 26 RJ McMahon, The Cold War on the Periphery: The United States, India and Pakistan, New York: Columbia University Press, 1994, pp 7, 337-338. 27 Wolpert, Nehru, p 460. 28 D Merrill, Bread and the Ballot: The United States and India's Economic Development, 1947-1963, Chapel Hill, NC: University of North CarolinaPress, 1990; and D Engerman,'West meets East: the Center for InternationalStudies and Indian economic development', in D Engerman, N Gilman, M Haefele & M Latham (eds), Staging Growth:Modernization,Developmentand the Global Cold War, Amherst, MA: University of Massachusetts Press, 2002. 29 S Khilnani, The Idea of India, New York: FarrarStraus Giroux, 1997, pp 81-86. 30 F Frankel, The Gradual Revolution: India's Political Economy, 1947-1977, Princeton, NJ: Princeton University Press, 1978, pp 124-125. 31 S Seth, Marxist Theory and Nationalist Politics: The Case of Colonial India, New Delhi: Sage Publications, 1995, pp 215-218, 221-222, 232-236. 32 Christie, Ideology and Revolution in Southeast Asia, pp 159-174. 33 Wolpert, Nehru, pp 460-461; G McTurnan Kahin, Southeast Asia: A Testament, London: RoutledgeCurzon, 2002, pp 145-146; JD Legge, Sukarno:A Political Biography, Sydney: Allen and Unwin, 1990. 34 N Schulte Nordholt, 'The Janus face of the Indonesian armed forces', in K Koonings & D Kruijt (eds), Political Armies: The Military and Nation Building in the Age of Democracy, London: Zed Press, 2002, pp 137-141. 35 MT Berger, 'Post-cold war Indonesia and the revenge of history: the colonial legacy, nationalist visions, and global capitalism', in MT Berger & DA Borer (eds), The Rise of East Asia: Critical Visions of the Pacific Century, London: Routledge, 1997, pp 174-175. 36 M Jones, Conflict and Confrontationin Southeast Asia, 1961-1965: Britain, the United States, Indonesia and the Creation of Malaysia, Cambridge: Cambridge University Press, 2002. 37 MT Berger, 'Old state and new empire in Indonesia:debatingthe rise and decline of Suharto'sNew Order', Third World Quarterly, 18 (2), 1997. 38 M Doran, Pan-ArabismBefore Nasser: Egyptian Power Politics and the Palestine Question, New York: Oxford University Press, 1999; and A Dawisha,Arab Nationalism in the TwentiethCentury:From Triumph to Despair, Princeton, NJ: Princeton University Press, 2002. 39 K Kyle, Suez: Britain's End of Empire in the Middle East, London: IB Tauris, 2003. 1991. 4( As observers, such as Edward Said, have emphasised, Nasser 'was never popular in the West', but for many this was 'a true index of how successfully he stood up to imperialism,despite his disastrousmilitary campaigns, his suppressionof democracy at home, his over rhetoricalperformancesas maximum leader'. Ultimately, he was 'the first modern Egyptian leader ... to transformEgypt into the major Arab and third

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AFT;ERTHE THIRD WORLD? world country'. EW Said, 'Egyptianrites', in Said, Reflections on Exile and Other Literary and Cultural Essays, London: Granta, 2001, p 161. 41 Young, Postcolonialism, pp 189-190. 42 GA Nasser, Egypt's Liberation: The Philosophy of the Revolution, Washington, DC: Public Affairs Press, 1955. 43 MM Wahba, The Role of the State in the Egyptian Economy, 1945-1981, Reading: Garnet Publishing, 1994, pp 70, 75-80, 86-87. 44 Young, Postcolonialism, p 190. 45 By the 1980s there were majordivisions within the Arab League. Out of a membershipof 20 governments, 12 supportedthe UN-sponsored and US-led 'Gulf war' against Iraq in February 1991 after the latter's invasion of Kuwait. R Schulze, A Modern History of the Islamic World, London: I. B. Tauris, 2000, 46 pp 123-135, 260-267. Young, Postcolonialism, pp 190-191. 47 4 For a good critical overview, see D Rooney, KwameNkrumah:The Political Kingdomin the Third World, London: ]B Tauris, 1988. 48 HS Wilson, African Decolonisation, London: Edward Arnold, 1994, pp 92-110, 177. 49 F Cooper, Africa Since 1940: The Past of the Present, Cambridge:Cambridge University Press, 2002, pp 58-59, 81 50 Young, Postcolonialism, pp 236, 240-241. 51 K Nkrumah, Neo-Colonialism: The Last Stage of Imperialism, London: Heinemann, 1968. 52 D Farah, 'Gadhafi seen as root of instability in Africa', Guardian Weekly, August 21 2003, p 28. 53 L De Witte, The Assassination of Lumumba,London: Verso, 2002. 54 F Halliday, Cold War, Third World:An Essay on Soivet-AmericanRelations, London: HutchinsonRadius, 1989, pp 29-31; and Malley, The Call From Algeria, p 111. 5 E San JuanJr, 'Postcolonialismand the problematicof uneven development' in C Bartolovich & N Lazarus (eds), Marxism, Modernity and Postcolonial Studies, Cambridge: Cambridge University Press, 2002, pp 221-222, 238. For a similar perspective see A Ahmad, In Theory: Classes, Nations, Literatures, London: Verso, 1992, pp 291-304, or S Amin, Empire of Chaos, New York: Monthly Review, 1992, 56 pp 8-9. The year after Cabral's death Guinea-Bissau emerged as an independent state under President Luis de Almeida Cabral, while Cape Verde was inducted into the United Nations in 1975. 57 For San Juan, Cabral's 'originality' and significance lay in 'his recognising that the nation-in-itself immanentin the daily lives of African peoples can be transformedinto a nation-for-itself,this latterconcept denoting the peoples' exercise of their historical right of self-determinationthrough the mediation of the national liberation movement, with the PAIGC as an educational organising force that seeks to articulate the national-popularwill'. San Juan, 'Postcolonialism and the problematic of uneven development', pp 233-237. P Gleijeses, Conflicting Missions: Havana, Washington, and Africa, 1959-1976, Chapel Hill, NC: University of North Carolina Press, 2002, pp 185-186; P Chabal, Amf7carCabral: RevolutionaryLeadership and People's War,Cambridge:CambridgeUniversityPress, 1983; and R Chilcote, Amilcar Cabral's Revolutionary Theory and Practice: A Critical Guide, Boulder, CO: Lynne Rienner, 1991. 59 Young, Postcolonialism, p 213. 60 AG Frank, Capitalism and Underdevelopmentin Latin America: Historical Studies of Chile and Brazil, New York: Monthly Review Press, 1967; Frank,LatinAmerica: Underdevelopmentor Revolution:Essays on the Developmentof Underdevelopmentand the ImmediateEnemy, New York: Monthly Review Press, 1969; Frank,Lumpen-Bourgeoisie,Lumpen-Development:Dependence, Class and Politics in Latin America, New York: Monthly Review Press, 1972; W Rodney, How Europe UnderdevelopedAfrica, London: Bogle-L'OuverturePublications, 1972; S Amin, Accumulationon a WorldScale: A Critiqueof the Theory of Underdevelopment,Sussex: HarvesterPress, 1974; Amin, UnequalDevelopment:An Essay on the Social Formations of Peripheral Capitalism, New York: Monthly Review Press, 1976; and Amin, Imperialism and Unequal Development, New York: Monthly Review Press, 1977. 61 IM Wall, France, the United States and the Algerian War, Berkeley, CA: University of California Press, 2001. 62 M Connelly, A Diplomatic Revolution:Algeria's Fight for Independenceand the Origins of the Post-Cold War Era, New York: Oxford University Press, 2002. 63 Malley, The Call From Algeria, p 81. The particularlydark side of both the FLN's eventual triumphand the tactics of the French colonial authoritiesin their effort to avert defeat are now well known and the subject of considerable debate. For a good overview of the recent literatureon this issue see A Shatz, 'The torture of Algiers', New York Review of Books, 49 (18), 2002, pp 53-57. 64 Gleijeses, Conflicting Missions, pp 38-39. 65 L Addi, 'Army, state and nation in Algeria', in K Koonings & D Kruijt (eds), Political Arnies: The Military and Nation Building in the Age of Democracy, London: Zed Press, 2002, pp 182-184.

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MARK T BERGER 66

SB Liss, Marxist Thought in Latin America, Berkeley, CA: University of California Press, 1984, pp 238-239. 67 Miller, Soviet Relations with Latin America 1959-1987, Cambridge:CambridgeUniversity Press, 1989. 68 R Munck, Politics and Dependency in the Third World: The Case of Latin America, London: Zed Press, 1984, p 328. 69 PJ Dosal, ComandanteChe: Guerrilla, Soldier, Commanderand Strategist, 1956-1967, University Park, PA: Penn State Press, 2003. See also RL Harris,Death of A Revolutionary:Che Guevara's Last Mission, New York: WW Norton, 2000; J Castafieda,Companiero:The Life and Death of Che Guevara, London: Bloomsbury, 1997. 70 TP Wickham-Crowley,Guerrillas and Revolution in Latin America A ComparativeStudy of Insurgents and Regimes Since 1956, Princeton, NJ: Princeton University Press, 1992, pp 209-213. 71 Munck, Politics and Dependency in the Third World, pp 328-239. 72 M Zimmermann, Sandinista: Carlos Fonseca and the Nicaraguan Revolution, Durham, SC: Duke University Press, 2000. 73 Gleijeses, Conflicting Missions. 74 N MacQueen, The Decolonization of Portuguese Africa: MetropolitanRevolution and the Dissolution of Empire,London:Longman, 1997; P Chabal et al, A History of Postcolonial LusophoneAfrica, London: Hurst and Company, 2002. 75 T Hodges, Angola: From Afro-Stalinismto Petro-DiamondCapitalism,Bloomington, IN: IndianaUniversity Press, 2001. 76 MT Berger, 'The Cold War and nationalliberationin SouthernAfrica: the United States and the emergence of Zimbabwe', Intelligence and National Security:An Inter-DisciplinaryJournal, 18 (1), 2003. Meanwhile the control of South West Africa (Namibia) by the white minority government in South Africa and the apartheidsystem in South Africa itself generatedpowerful, armedresistancemovements throughoutmuch of the cold war era. Namibia eventually emerged as an independent nation-state in 1990, while the apartheidregime in South Africa finally gave way to black majority rule under the African National Congress in 1994. 77 P Bond & M Manyanya,Zimbabwe's Plunge: ExhaustedNationalism, Neoliberalism and the Search for Social Justice, Pietermaritzburg:University of Natal Press, 2002; and M Meredith.Our Votes, Our Guns: Robert Mugabe and the Tragedy of Zimbabwe, New York: Basic Books, 2002. 78 M Baker, 'West bent on domination, says Mahathir', Sydney Morning Herald, 25 February2003, p 9. 79 DA Low, The Egalitarian Moment:Asia and Africa 1950-1980, Cambridge:CambridgeUniversity Press, 1996, pp 1-2; and M Mamdani, Citizen and Subject: ContemporaryAfrica and the Legacy of Late Colonialism, Princeton, NJ: Princeton University Press, 1996. 80 Hoogvelt, Globalization and the Postcolonial World, pp 176-178. 81 Third World governmentshad gained significant numericalinfluence at the UN by the 1970s. The UN's membershiprose from 51 in 1945 to 156 in 1980. The vast majority of the new members were from Asia and Africa. 82 R Gilpin, The Political Economy of Intemational Relations, Princeton, NJ: Princeton University Press, 1987, pp275, 298-301. 83 Rist, The History of Development, pp 143-144, 153-154. 84 TL Karl, The Paradox of Plenty: Oil Booms and Petro-States, Berkeley, CA: University of California Press, 1997; CM Henry & R Springborg,Globalization and the Politics of Development in the Middle East, Cambridge:Cambridge University Press, 2001. 85 LS Stavrianos, Global Rift: The Third World Comes of Age, New York: William Morrow, 1981. 86 G Evans & K Rowley, Red BrotherhoodAt War: Vietnam, Cambodia and Laos Since 1975, London: Verso, 1990. 87 P McMichael, Development and Social Change: A Global Perspective, Thousand Oaks, CA: Pine Forge Press, 2000, pp 147-237. 88 SD Krasner,Structural Conflict: The Third WorldAgainst Global Liberalism, Berkeley, CA: University of California Press, 1985. 89 Between the 1961 conference in Belgrade and the end of the 1990s there was a total of 12 non-aligned conferences. Following Cairo (Egypt) in 1964, Lusaka (Zambia) in 1970 and Algiers (Algeria) in 1973, there was a conference in Colombo (Sri Lanka)in 1976. The venue in 1979 was Havana (Cuba), followed by New Delhi (India) in 1983, Harare(Zimbabwe)in 1986, with a returnto Belgrade in 1989. A meeting in Jakarta(Indonesia) in 1992 was followed by Cartagena(Colombia) in 1995 and Durban(South Africa) in 1998, with 113 different national governments represented at the last two meeting in the 1990s. Lundestad,East, West,North, South, pp 296-298. For good overviews and relatively hopeful assessments of the non-aligned movement, see S Morphet, 'The non-aligned in "the New World Order":the Jakarta Summit, September 1992', InternationalRelations, 11 (4), 1993; Morphet, 'Three non-aligned summitsHarare 1986; Belgrade 1989 and Jakarta1992', in DH Dunn (ed), Diplomacy at the Highest Level: The Evolution of International Summitry,London: Macmillan, 1996. 67

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AFTER THE THIRD WORLD? 90 F Halliday, The Making of the Second Cold War, London: Verso, 1986. 91 SR Tahir-Kheli,India, Pakistan, and the United States: Breaking With the Past, New York: Council on Foreign Relations Press; 1997. 92 WI Robinson, Promoting Polyarchy: Globalization, US Intervention and Hegemony, Cambridge: Cambridge University Press, 1996. see also T Carothers,Aiding Democracy Abroad: The Learning Curve, Washington, DC: Brookings Institution, 1999. USAID, 'Agency objectives', at http://www.usaid.gov/democracy/dgso.html. 94 F Adams Dollar Diplomacy: United States Economic Assistance to Latin America, Aldershot: Ashgate, 2000, pp 110-111. 9 This has resulted in the emergence in Cairo of the 'biggest USAID programin the world' and the 'largest US diplomatic complex in the world'. R Owen, 'Egypt', in R Chase, E Hill & P Kennedy (eds), The Pivotal States: A New Frameworkfor US Policy in the Developing World,New York: WW Norton, 1999, pp 120-121, 133. 96 In fact, by the beginning of the 21st century there was a steady and significant increase in oil output in Russia. EL Morse & J Richard, 'The battle for energy dominance', Foreign Affairs, 81 (2), 2002, pp 16-17. Between 1992 and 1997 more than US$2.2 billion of foreign aid was disbursed to Russia by Washington under the Freedom Support Act (FSA). Over the same period over $2.6 billion was also disbursed to Russia via programmesnot covered by the FSA. The figures for the Ukraine were over $1 billion FSA funds and $652 million worth of non-FSA funds, while the former Soviet republics in the Caucasus and Central Asia together received over $1.9 billion in FSA funds and $2.4 billion in non-FSA funds between 1992 and 1997 inclusive. See JR Wedel, Collision and Collusion: The Strange Case of WesternAid to Eastern Europe 1989-1998, New York: St Martin's Press, 1998, pp 199-203. 9 DCF Daniel & AL Ross, 'US strategicplanning and the pivotal states', in Chase et al, The Pivotal States, 98 pp 385-387. A Lake, 'From containment to enlargement', US Department of State Dispatch, 4 (39), 27 September 1993. 99 Office of the Presidentof the United States, A National SecurityStrategyof Engagementand Enlargement, Washington, DC: US Government Printing Office, 1996, at http://www.fas.org/spp/military/docops/ national/1996stra.htm,p2. 'o Daniel & Ross, 'US strategic planning and the pivotal states', pp 388-392, 402; US Department of Defense, Office of InternationalSecurity Affairs, United States Security Strategyfor the East Asia and Pacific Region, Washington, DC: US Department of Defense, February 1995, pp 1-2. 101 N Harris, The End of the Third World: Newly IndustrializingCountries and the Decline of an Ideology, London: IB Tauris, 1986. 102 MT Berger, 'The new Asian renaissance and its discontents: national narratives,Pan-Asian visions and the changing post-cold war order', InternationalPolitics: A Journal of TransnationalIssues and Global Problems, 40 (2), 2003. tO3 KY Lee, From Third World To First: The Singapore Story, 1965-2000, New York: HarperCollins, 2000. 10 BT Khoo, Paradoxes of Mahathirism:An Intellectual Biography of Mahathir Mohamad, Kuala Lumpur: Oxford UniversityPress, 1995, p 332; MT Berger, 'APEC and its enemies: the failure of the new regionalism in the Asia-Pacific', Third WorldQuarterly,20 (5), 1999; and I Stewart, The Mahathir Legacy: A Nation Divided, A Region At Risk, Sydney: Allen and Unwin, 2003. 105 For implicit, if not explicit, defence of the continued relevance of the idea of the Third World for comparative politics, see J Haynes, Third World Politics, London: Blackwell, 1996; BC Smith, Understanding Third WorldPolitics: Theories of Political Change and Development, Bloomington, IN: Indiana University Press, 1996; P Calvert& S Calvert,Politics and Society in the Third World,London:Longman, 2001; and December Green & Laura Luehrmann, Comparative Politics of the Third World: Linking Concepts and Cases, Boulder, CO: Lynne Rienner, 2003. 106 R O'Brien, AM Goetz, JA Scholte & M Williams, ContestingGlobal Governance:MultilateralEconomic Institutionsand Global Social Movements,Cambridge:CambridgeUniversity Press, 2000; A Starr,Naming the Enemy:Anti-CorporateMovementsConfrontGlobalization,London: Zed Press, 2000; WK Tabb, The Amoral Elephant: Globalization and the Struggle for Social Justice in the Twenty-First Century, New York: Monthly Review Press, 2001; S Gill, Power and Resistance in the New World Order, Basingstoke: Palgrave, 2003; N Harris,The Returnof CosmopolitanCapital: Globalization, the State and War,London: IB Tauris, 2003. 107 MT Berger, 'Romancing the Zapatistas: international intellectuals and the Chiapas rebellion', Latin American Perspectives, 28 (2), 2001.

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World Developpmenr, Vol. 22, No. 9, pp. 1269-l 293, 1994 Copyright 0 1994 Elsevier Science Ltd Printed in Great Britain. All rights reserved 0305-750x/94 $7.00 + 0.00

Pergamon

0305-750x(94)00051-4

Where Do High Growth Political Economies Come From? The Japanese Lineage of Korea’s “Developmental State” ATUL KOHLI* Princeton University, New Jersey While many scholars have sought to analyze South Korea’s economic success, not enough attention has been paid to the impact of Japanese colonialism. Japanese colonial influence on Korea in 1905-45, while brutal and humiliating, was also decisive in shaping a political economy that later evolved into the high-growth South Korean path to development. More specifically, three statesociety characteristics that we now readily associate as elements of the South Korean “model” originated during the colonial period: Korean state under the Japanese influence was transformed from a relatively corrupt and ineffective social institution into a highly authoritarian, penetrating organization, capable of simultaneously controlling and transforming Korean society; production-oriented alliances involving the state and dominant classes evolved, leading up to considerable expansion of manufacturing, including “exports;” and the lower classes in both the city and the countryside came to be systematically controlled by the state and dominant classes. While there were important discontinuities following WWII. when the dust settled, South Korea under Park Chung-Hee fell back into the grooves of colonial origins and traveled along them, well into the 1980s

Summary. -

Questions about the wide range of (economic) performance of underdeveloped countries today . belong as much to history as (they) do to economic analysis. Sir Arthur Lewis [We] turn to history and only to history if what we are seeking are the actual causes, sources, and conditions of overt changes of patterns and structures in society. Robert Nisbet

1, INTRODUCTION

Three decades of sustained, high economic growth has made South Korea a “model of development.” Performance of other developing countries is now often judged against that of “East Asian newly industrializing countries (NICs),” including South Korea. Scholars and policy makers around the world have become curious: “How did South Korea do it?; “Can others learn from the experience?” A large body of literature has developed - some of it of rather high quality - attempting to interpret the Korean political economy.’ A central debate in this literature concerns the relative roles of the state and of the market in explaining South Korea’s economic success. While hardly any sensible observer continues to deny the state’s extensive role in Korean economic develop-

ment, the current debate bogs down over the interpretation of this role, i.e. over the extent to which state intervention was “market conforming” versus “market distorting,” or to use a related set of concepts, the extent to which the state “led” rather than “followed” the market.’ Interesting and significant as this debate is, it is also incomplete. Much of it revolves around unraveling the economic role of the South Korean state and, in turn, tracing the impact of this role on economic outcomes. The prior question of why the South Korean state was able to do what it did, and the related genetic issue of the historical roots of the Korean political economy thus tend to be underemphasized. Since there is much to be learned about the Korean “model of development” by adopting a longer historical per-

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*I would like to acknowledge the helpful comments of the anonymous reviewers and the following: Bruce Cumings. Anthony D’Costa, Frank Dobbin, Cary Fraser, Stephan Haggard, Koichi Hamada, Chung-in Moon, James Palais, Gustav Ranis, Benjamin Schneider, Robert Wade and John Waterbury. This paper was written during 1992-93, while I was on sabbatical and, thanks to T. N. Srinivasan. a visitor at the Economic Growth Center, Yale University. Financial support from Ford Foundation is also acknowledged. Final revision accepted: March 15, 1994.

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spective, especially tracing its origins back to its Japanese colonial lineage. this neglect is unfortunate. For example, few “developmentalists,” if any, ascribe much significance to the continuities that link colonial and postcolonial Korea. This is certainly so among the more strictly economic analysts of South Korean growth experience;? however, somewhat surprisingly and unfortunately. this problem also characterizes the works of several institutionally sensitive scholars of South Korea. Among the latter, some discuss the colonial period but quickly conclude that the impact was not of lasting significance (e.g., Jones and Sakong, 1980, pp. 22-37). others deny the contributions of this past altogether? and yet others virtually ignore it, presumably because of a view that significant changes in South Korean economy began only after the adoption of an “export-led model of development” in the early 1960~.~ Korean scholarship on Korea has its own, albeit understandable, blind spots; the nationalist impulse often leads to a denial of any continuity between colonial and postcolonial periods, lest the contemporary achievements be viewed as a product of a much disliked colonial rule.” Only a handful of Korean specialists, especially those with a strong historical bent, have understood and emphasized the Japanese colonial roots of the more recent. high-growth Korean political economy.’ Building on the insights of this last group of Korean specialists, I attempt in this essay to reinterpret some specific historical materials with the hope of derivjing general lessons of interest to scholars of comparative and international development. The argument below is that Japanese colonial influence on Korea, in 1905-45, was decisive in shaping a political economy that later evolved into the high-growth South Korean path to development. Japanese colonialism differed in important respects from the colonialism of European powers. As late developers, the Japanese made extensive use of state power for their own economic development, and they used the same state power to pry open and transform Korea in a relatively short period. Japanese colonial impact was thus more intense, more brutal and deeply architectonic; it also left Korea with three and a half decades of economic growth (the average, annual growth rate in production was more than 3%) and a relatively advanced level of industrialization (nearly 35% of Korea’s “national production” in I940 originated in mining and manufacturing).* While there were important discontinuities in the postcolonial period, the grooves that Japanese colonialism carved on the Korean social soil cut deep. The decade and a half following the departure of the Japanese was at least chaotic, and often tragic. When the dust settled, however, South Korea under Park Chung-Hee fell back into the grooves of an earlier origin and traversed along them, well into the 1980s. Of course, this was not inevitable: historical continuities seldom are.

Korea had competing historical legacies: e.g., there was the distant legacy of Chosen (i.e. of Korea under the rule of Yi dynasty) of corrupt court politics at the apex; then there were indigenous revolutionary tendencies that found expression in North Korea; and there was the possibility of considerable American influence. Moreover, completely new paths could have been charted. Subsequent decisions were thus critical in putting South Korea on a path that reestablished historical continuities. Nevertheless, it is difficult to imagine South Korea adopting a growth path that it did without a deeply influential Japanese colonial past. More specifically, I trace below the colonial origins of three patterns that we now readily associate as elements of the South Korean “model.” First, I discuss how the Korean state under the Japanese influence was transformed from a relatively corrupt and ineffective social institution into a highly authoritarian, penetrating organization, capable of simultaneously controlling and transforming the Korean society. This is followed by an analysis of a second pattern, namely, the new state’s production-oriented alliances with the dominant classes. an alliance that buttressed the state’s capacity to both control and transform. Relatedly, it is also important to take note of the structural changes in the economy: not only did the colonial economy experience steady growth and industrialization, but it also became rather heavily export-oriented, including exports of manufactured products. Finally, there was the third pattern of brutal repression and systematic control of the lower classes in both the cities and the countryside. The cumulative impact of these state-class configurations was to help create a framework for the evolution of a high-growth political economy. I also, toward the end of this discussion, briefly suggest - though not develop, leaving that for another essay - how these patterns continued into subsequent periods. It is important to reiterate that the main task of this paper is not to set the historical record straight. That is for historians of Korea; they are already busy doing so and 1am only building on some of their work. Given the importance of the South Korean case in the contemporary discourse on development, it is important that developmentalists understand what country specialists already know; I thus hope to reinterpret and synthesize some specific materials with general implications. Three sets of general ideas will be debated via the historical materials. First, there are Korea-related comparative questions. For example, how much choice does a developing country really have when adopting a specific development strategy: i.e. to what extent was South Korea a beneficiary of its historical inheritance. as distinct from creating anew a highgrowth. export-oriented “model of development‘!” Closely related is the issue of transferability of the Korean “model” across national boundaries: if the

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roots of contemporary South Korean political economy are indeed as deep as a relatively unique colonial experience, can others really emulate the experience? Second, at a higher level of generality, there are theoretical issues revolving around the concept of “developmental states”: what characterizes them and where do they come from? Finally, at the most general level, there is at least an implication in this essay that some of the variations we notice today among the more or less dynamic Third World political economies may have some of their roots in a variable colonial past. If so, a further investigation of this analytical claim would require reopening the issue of the colonial roots of the contemporary Third World that has unfortunately been lost in the postdependency scholarship on development.

2. THE CONSTRUCTION OF A COLONIAL STATE (a) The old, “predatory” state By the time the Japanese gained decisive influence over Korea-say around 1905, after the Japanese victory in Russo-Japanese war of 1904 - the old state within Chosbn was already in an advanced state of disintegration. While it is not necessary to recall historical details, a brief understanding of the state-society links in late Chosen are essential to appreciate changes wrought by Japanese colonial power.‘The Yi dynasty had provided continuous and, for the most part, stable rule to Korea for nearly 500 years. The same intricate state and class alliances that were responsible for this stability, however, also became major constraints on successful adaptation to changing external pressures, especially in the second half of the nineteenth century. For example, the clearest manifestation of the powerlessness of a centralized monarchial state was the continued inability to collect taxes owed to the state on agrarian incomes, especially from the powerful Yangban elite, the landowning-official class of Korea (Palais, 1975). This recurring inability, in turn, came to be associated with several problematic political trends: First, the state resorted to squeezing the peasantry via “taxation” (e.g., corvee labor and military service), contributing to brigandage and a restive peasant population. Second, the state’s limited resources exacerbated the competition and tensions in what was already a personalized and factionalized elite at the apex of the political pyramid. Finally, financial limitations made it difficult to mobilize any serious military response to growing external pressures. How does one explain powerlessness in a centralized polity? The leading historian of late Yi Korea, James Palais, traces the roots of this conundrum back to the manner in which the monarchy and the Korean

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officials-cum-aristocrats, the Yangban, mutually checked each others powers. The power of the Yangban class rested in part on access to hereditary land wealth but also on a close identification with the centralized bureaucracy, which helped both secure socioeconomic privileges and was a further source of wealth and power. Royal authority, in turn, was seldom all that great. Being under Chinese suzerainty, Korean emperors did not enjoy the “mandate of heaven” that the Chinese emperors possessed. In addition, the recruitment of the aristocracy to the bureaucracy via the examination system enabled landed power to be deeply embedded all through the Korean state, checking the scope of Royal authority vis-d-vis the Yangban. I0 While this balance of power was a source of stability for several centuries, as external pressures grew, and along with it the state’s need for taxes and other socioeconomic resources, it also became a major constraint on monarchial power to initiate reforms: The monarchial state, according to Palais, “could not solve the problem of creating adequate political authority for the achievement of national goals.” Yi state was thus simultaneously “centralized and weak.“” In addition to the limiting balance of power between the monarchy and the Yangban, there were other factors at work that contributed to the Yi state’s ineffectiveness. First, it was not merely the presence of a powerful land-controlling strata in society that limited the state’s capacity. As I discuss below, the colonial state in Korea carved out a different type of ruling alliance with the same landowning class, but with a vastly more effective state. The key factor at work in Yi Korea was thus the direct control that landed groups exercised on state offices (Fairbank, Reischauer and Craig, 1978, p. 307). Second, the Korean monarchy remained to the end a highly personalistic, patrimonial institution. In the words of Cumings (1981) the Korean monarchs were incapable of acting along “the modern distinction between public and private realms” and thus incapable of designing state-led national goals of economic development (p. 10). Third, the ruling strata below the monarch was highly factionalized.r2 Such strife in the ruling strata made it difficult to design cohesive responses to growing challenges. Finally, it is important to note that the reach of the Yi state from the center to the periphery was rather limited. While provincial and county officials were directly appointed from Seoul, each county magistrate was responsible for governing nearly 40,000 people (there being some 330 magistrates for about 12 million Koreans).” Since these magistrates were rotated frequently, they often depended on the well-entrenched Yangban elite for local governance. Moreover, the lower level officials -below the magistrate - were not salaried employees. They were rather a hereditary group who were allowed to collect and keep some local taxes as com-

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pensation for their service\. These petty functionaries operated virtually as local czars. not easily influenced from above and responsible for the “venality and exploitation of the peasant population” (Lee in Eckert er LII.. 1990. p. 1I I). In sum. the ineffectiveness of the Yi state was rooted in part in the pattern of state-class linkages and in part in the design of the state itself. Regarding the latter, a personalistic apex. a factionalized ruling strata, and a limited downward reach of central authorities. were all significant characteristics contributing to the state’s powerlessness. This state weak from the inside and hemmed in by powerful social actors from the outside - contributed little. if any, to sustained economic progress? Worse, when faced with growing security challenges and related fiscal crises, the Yi state turned on its own society, becoming rapacious and predatory. The views of several historians and observers of the day converge on such a perspective on the precolonial Korean state: programs of the Yi government became “embezzlement facilities for a rapacious officialdom” (Lew in Eckert et crl., 1990. p. 179); “maladministration of the native Yi dynasty had affected adversely the whole of Korean public service” (Ireland. 1926. p, 92): “one of the strongest and most fixed impressions made (during my travels to Korea) WI\ that of the well-nigh hopeless corruption of Korean court:“‘i and the Korean govermnent “takes from the people directly and indirectly, everything that they earn ovel and above a bare subsistence. and gives them in return practically nothing.“l(> Since corrupt and ineffecti\;e states arc indeed a common feature in parts of the contemporary Third World. one may genuinely wonder: how ~a\ Korea’s “predatory” state historically transformed into what some may describe as a “developmental” state?” The impact of Japanese colonial pow’er was decisive in altering both the nature of the Korean state and the relationship of this state to various social classes. The transformation of the state is discussed immediately below and the changing relationship of the state to social classes in subsequent sections,.

The Japanese military victory over the Russians in 1904 marked the emergence of Japan as the major regional power. a power that had been ri\ing ste&ly since the Meiji restoration in the 1860s. Subsequently. Japan. with the acquiescence of Wcstcrn powers. had a relatively free hand in dominating and molding Korea. Japanese motives in Korea. like the motives of all imperial powers. were mixed; they sought to control it politically and to transform it economically lip their own advantage. Security concern\ were probably dominant insofar as Korea had been an ob.jcct of

regional power competition for quite some time (Conroy. 1960). Given the mercantilist nature of Japanese political economy. however, it does not make much sense to raise the old question on imperialism of whether security was more important than economic interests. More than in the case of most imperial powers. the Meiji oligarchs of Japan readily associated national power with national wealth and national wealth with overseas economic opportunities (Duus. 1984, pp. 132-133). Certain unique aspects of Japanese imperialism are essential to note for a full understanding of the colonial impact on Korea (Peattie. 1984, pp. 3-60). First, the Japanese had themselves barely escaped being imperialized. As both late developers and late imperialists. Japan colonized neighboring states with whom they shared racial and cultural traits; it was as if England had colonized a few, across-the-channel continental states. Proximity meant that many more Japanese ended up playing a direct role in colonial rule. including a much larger role of military and police. than was ever the case in European overseas colonies. The near geographical contiguity and shared cultural and racial traits also implied that the Japanese could realistically consider their rule to be permanent, leading eventually to a full integration of colonies into an expanded Japan. As will be discussed below. this possibility, in turn, influenced both the economic and political strategies of Japan in Korea. especially the Japanese-initiated industrialization of Korea. Furthermore. Japanese colonial strategy was deeply informed by their own successful domestic reform efforts following the Meiji restoration. Of all the colonizing nations. Japan stands out as nearly the only one with a successful record of deliberate. stateled political and economic transformation. By trial and error the Meiji oligarchs had designed a political economy that was well suited for the task of “catching up” with advanced Western powers. The essential elements of this political economy are well known and can be briefly reiterated: the creation of an effective centralized state capable of both controlling and transforming Japanese society: deliberate state intervention aimed. first at agricultural development. and Teetrnd at rapid industrial growth: and production of a disciplined. obedient and educated work force. It was this model of deliberate development. with its emphasi\ on state building and on the use of state power to facilitate socioeconomic change - in contrast say, to the British, who having created a private property regime. waited in vain for Bengali ~ctminclar.s in India to turn into a sheep farming gentry -that moved the Japanejc colonizers. IH In Peattie’s words, much of v, hat Japan undertook in its colonies “was based upon Meiji experience in domestic reform” (Peattie, 1984. p. 2Y). It is not surprising that the earliest Japanese efforts in Korea were focused on reforming the disintegrating

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Chosbn state; both political control and economic transformation depended on it. A fair number of political reforms had thus in fact been put into place during 1905-10, especially 1907-09, even prior to the formal annexation of Korea in 1910. Subsequently, the decade of 1910-20 was again critical, when, under very harsh authoritarian circumstances, a highly bureaucratized and a deeply penetrating state was constructed. A key architect of the early reforms in 1907-09, whose role helps us trace the origins of the design of the new Korean state, was the Meiji oligarch and the former Meiji era premier of Japan, Ito Hirubumi. Ito as a young man had been one of the handful of leaders who had led the Meiji “revolution” and who had subsequently participated in the reform efforts that followed the destruction of Tokugawa Shogunate. Ito had travelled extensively in Europe and had been fascinated with Prussian bureaucracy as a model for Japan: the Prussian “model” offered to him a route to Western rationality and modernity without “succumbing” to Anglo-American liberalism (Halliday, 1975, p. 37). Within Japan, Ito in 1878 had “led the campaign to make the bureaucracy the absolutely unassailable base and center of political power in the state system.” Subsequently, Ito helped reorganize Tokyo University in 1881 as a “school for government bureaucrats” and by 1887, “a basic civil service and entrance apprenticeship based on the Prussian model was installed.“19 With this experience behind him, when Ito was appointed in the early 1900s to run the Korean protectorate, and where his powers as Resident-General were near absolute “The uncrowned King of Korea” -he was quite self-conscious of his task: “Korea can hardly be called an organized state in the modem sense; I am trying to make it such” (Ladd, 1908, pp. 435 and 174). Ito and his successors set out to deliberately construct a new Japanese-controlled Korean state. The first task was to gain central control. With superior military power behind them, the Japanese in 1907 dismantled the Korean army, repressed those who “mutinied,” incorporated other army officers into a Japanese-controlled gendarmery, and forced the Korean monarch to abdicate. Having captured the heart of the state, the colonial rulers sought to systematically create a depersonalized “public arena,” to spread their power both wide and deep, and to coopt and/or repress native Korean political forces. For example, the patrimonial elements of the monarchial state were destroyed rather early, and replaced by a cabinet-style government run by Japanese bureaucrats.20 Since the appointments of these and other lower level bureaucrats were governed by “elaborate rules and regulations which, in the main follow(ed) the lines of the Imperial Japanese services,” the new Korean state quickly acquired a “rational” character (Ireland, 1926, p. 104; and H.I.J.M.‘s Residency

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General, 1909, p. 45); scholarly observers have in retrospect characterized the Japanese colonial civil service as “outstanding,” composed of “hard working and trusted cadres,” who deserve “high marks as a group” (Peattie, 1984, p. 26). Elements of the highly developed, Japanese style of bureaucratic government were thus transferred directly to Korea. (i) The new civil service While other colonial powers in other parts of the world also created a competent civil service (e.g., the British in India), the Japanese colonial project was qualitatively distinct; both the extent and the intensity of bureaucratic penetration was unique. There were some 10,000 officials in the Japanese-Korean govemment in 1910; by 1937. this number was up to 87,552. More than half of these government officials in 1937, 52,270 to be exact, were Japanese. Contrast this with the French in Vietnam (where, by the way, the presence of the French was already more significant than, say, that of the British in Africa), who ruled a nearly similar sized colony with some 3,000 French; in other words, there were nearly 15 Japanese officials in Korea for every French administrator in Vietnam (Robinson, in Eckert et al., 1990, p. 257). The presence of Korean bureaucrats, trained and employed by the Japanese, was also sizable: nearly 40,000 Koreans qualified as government officials just before WWII. While most of the Koreans did not occupy senior positions in the colonial government, there can be little doubt that, over the four decades of colonial rule, they became an integral part of a highly bureaucratic form of government. Moreover, during WWII, as the demand for Japanese officials grew elsewhere, many Koreans moved higher up in the bureaucratic hierarchy. I will return below to the issue of continuity: this sizable cadre of Japanese-trained Korean bureaucrats virtually took over the day-to-day running of a truncated South Korea, first under US military government and eventually when a sovereign state was formed. One further characteristic of the colonial govemment that needs to be underlined is the successful links that the Japanese created between a highly concentrated power center in Seoul, and a densely bureaucratized periphery. All bureaucracies face the problem of how to ensure that central commands are faithfully implemented by the officials at the bottom rung. This, in turn, requires ensuring that lower level officials respond mainly to those above them in the bureaucratic hierarchy, rather than to personal interests, or to the interests of societal actors with whom they interact. The Japanese in Korea were quite self-conscious of this problem and repeatedly experimented till they arrived at arrangements deemed satisfactory. Of course, certain circumstances were helpful in establishing authority links between the center and the periphery: ruling arrangements in Seoul were highly authoritarian - the power of the Japanese Governor

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Generals in both policy making and implementation was absolute and nearly all of them were senior military men - and Korea was not a very large country (again, for example, note the contrast with the role of the British in India). The Japanese, however, took additional actions.” For example, when confronted with corrupt regional or local officials, the central authorities experimented - in line with “new” institutional economics - with paying these officials higher salaries, especially “entertainment-allowance,” with the hope that, if more satisfied, they may perform public tasks better. When this did not work, or at least not fully, the colonial authorities further centralized, leading up to even less discretion, and more rule-governed behavior for lower level officials. These officials in the early colonial period were even required to wear crisp uniforms, replete with swords, so as to distinguish them sharply from an average citizen - thus creating a state-society, or a public-private, distinction through the use of symbolic politics - as well as to convey the will of the state in the far reaches of the society. When such efforts also failed to secure full compliance, Korean officials would be replaced by the more socialized and complying Japanese officials, at least until more suitable Koreans, who were likely to comply, could be found for the job. (ii) The poiicr jbrce In addition to the civil bureaucracy, the other essential arm of the new Korean state that the Japanese helped develop was a well-organized police force. Once again, there is nothing unique about colonial powers developing a police force; what is noteworthy here are both the extensive and the intensive nature of police supervision in colonial Korea. The colonial police force was designed on the lines of the Meiji police force insofar as it was highly centralized, well disciplined and played an extensive role in social and economic reforms.-?2 The police force in colonial Korea grew rapidly: from some 6,222 gendarmes and police in I9 IO to 20,777 in 1922 and again to over 60,000 in 1941 (Robinson in Eckert et al., 1990, p. 259). One scholar suggests that at the height of the colonial rule, there were enough police so that the lowest level policeman knew “every man in the village” (Chen, 1984, p. 225). While senior police officers were normally Japanese, over half the police force was made up of Koreans, often lower class Koreans. These Koreans were trained by the Japanese in police academies, especially established within Korea for the purpose. Records indicate that for every Korean police position there were 30-20 applicants (Chen, 1984, p. 236), suggesting a level of cooperation between Koreans and Japanese that probably pains the modern Korean nationalist sentiments. Beyond formal training, the Japanese maintained very close supervision over their police force; for example,

during 19 15-20, about 2,000 policemen - or nearly one out of every 10 available policemen - were sternly disciplined every year for transgression of police rules (Chen, 1984, pp. 236-239). This extensive and closely supervised police force, that penetrated every Korean village, performed numerous functions other than “normal” police duties of law and order maintenance. Powers granted to police included control over “politics, education, religion, morals, health and public welfare, and tax collection” (Robinson in Eckert et cd., 1990, p. 259). The police, who presented themselves in military uniforms, again replete with swords, also had summary powers to judge and punish minor offenders, including the punishment of whipping. Even in production, local police were known to have “compelled villages to switch from existing food crops” to cash crops and to adopt “new techniques” in rice production so as to facilitate exports to Japan. Moreover, during land surveys (conducted during 1910&l 8; more on this below), as a result of which tenancy and conflicts over land increased, local police “always intervened in favor of landlords.“” It is thus not surprising that even a Japanese observer was led to conclude that Terauchi (the first Japanese Governor General of Korea, following Ito and formal annexation) and his successors had transformed the “entire Korean peninsula into a military camp.“‘” One final aspect of the police role concerns the links between the police and local society via local elites. The police successfully utilized the proverbial carrot and stick to incorporate “village elders” and others into a ruling “alliance.” The police thus buttressed their already extensive powers by working with, rather than against, indigenous authority structures. So armed, the police used the knowledge and influence of the local elites to mold the behavior of average citizens in such diverse matters as, “birth control. types of crops grown, count and movement of people, prevention of spread of diseases, mobilization of forced labor and to report on transgressions” (Chen. 1984, p. 226). The police and many local elites thus came to be viewed and despised by Koreans at large as “collaborationists”; unfortunately for Koreans, while many of the landed elite were indeed eventually eliminated as a political force (i.e. via land reforms following the Korean War), much of the colonial police force was incorporated directly into the new state structure of South Korea. In sum, the personalized and factionalized Yi state with a limited reach in society came to be replaced by a colonial state with considerable capacity to penetrate and control the society; this state was simultaneously oppressive and efficacious. A highly centralised apex with near absolute powers of legislation and execution - and thus of setting and implementing “national” goals - and a pervasive, disciplined civil and police bureaucracies constituted the cores of the new state.

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(iii) The politics ofthe new state The politics practiced by the new rulers added to the state’s capacity to convey its will to the society. Except for a somewhat liberal interlude in the 1920s for the most part, the political practices of the Japanese colonial state in Korea were brutally authoritarian. For example, Korean newspapers were either suspended or heavily censored, political protest was met with swift retribution, and political organizations and public gatherings were generally banned. Those professing Korean nationalist sentiments were thus either exiled or remained fragmented; while there was latent and scattered sympathy for nationalists and for communists all through the colonial period, a coherent nationalist movement was never allowed to develop.25 The Japanese used “thought police” to detect and eliminate political dissidence, and also developed a “spy system” to buttress the civil and police bureaucracy that was “probably better developed in Korea than anywhere in the world” (Grajdanzev, 1944, p. 55). The colonial authorities were quite self-conscious about their use of repression as a means to instill fear in the minds of Koreans and thus to minimize dissidence and reinforce bureaucratic control: in order to avoid “restlessness” in the “popular mind,” note government reports of the period, it was “essential” to “maintain unshakable the dignity of the government” and “to impress the people with the weight of the new regime” (Government-General of Chosen, 1914, pp. 2-3). When Koreans still resisted, Governor General Terauchi Masatake supposedly responded, “I will whip you with scorpions” (quoted in Peattie, 1984, p. 18), and when eventually the Koreans succumbed, the gloating satisfaction is also obvious in official documents: “they have gradually yielded their obstinate their prejudices and disdainful attitude” (Government-General of Chosen, 1935, p. 8 1). In spite of the awesome state that the Japanese created, it would be a mistake to believe that a thorough bureaucratic penetration and politics of fear were the only ruling instruments in the hands of the colonialists. There is no doubt that bureaucratic growth enabled the new state to undertake many more economic activities that contributed to economic growth (more on this below), and that repression enabled the establishment of order, freeing the state elite to focus on other “developmental” matters. Nevertheless, bureaucratic and repressive power are seldom enough to elicit a measure of cooperation - from, at least, some groups in society -that is essential for generating economic dynamism. We must thus also take note of some other, nonrepressive ruling instruments that the new colonial state put to use. First, a segment of the Korean political elite in the precolonial period was quite favourably inclined toward Japan.26 These Koreans from the political class were both officially and unofficially incorpo-

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rated into the new system of colonial rule. Second, and relatedly, the colonial state forged numerous implicit and explicit “alliances” with Korean propertied classes. The nature of these turned out to be of critical long-term significance. While I return to a detailed discussion of this issue below, it should be noted here that, on the whole, Korean monied groups - in both the city and the countryside-did not oppose colonial rule. Most of them benefited from this rule and generally went along - some even with enthusiasm-with the colonial project. Third, the Japanese undertook considerable expansion of education, facilitating propaganda and political resocialization. Whereas in 1910 nearly 10,000 students attended some sort of school, by 1941 this number was up to 1.7 million and the rate of literacy by 1945 was nearly 50%. The focus was on primary education and the curricula was designed with the “object” of raising “practical men able to meet the requirements of the state.” 27 To conclude this subsection, the Japanese colonialists in Korea replaced the decrepit Yi state with a centralized and powerful state. This was no liberal state; it was more statist vis-&vis the Korean society, and considerably more repressive, than even the statist and illiberal Japanese political economy of the period. Central decision making was highly concentrated in the office of the Governor General. The Governor General’s will, reflecting the imperial design and goals, was translated into implemented policies via the use of an extensive, well-designed and disciplined bureaucracy. The new state also achieved considerable downward penetration: both the civil and police bureaucracies reached into the nooks and crannies of the society, while continuing to respond to central directives: Korean elites in the localities were incorporated into the ruling “alliance”; and, when all else failed in the Japanese efforts to control and transform Korea, there existed a well-functioning intelligence service to buttress the state’s supervisory role. While a fuller understanding of how power was generated in this system, and the uses to which it was put, will emerge in due course, it should already be evident as to how the precolonial, ineffective state was transformed into a state that - for better or for worse could get things done.

3. THE COLONIAL STATE, PROPERTIED CLASSES AND ECONOMIC CHANGE The colonial state in Korea was a busy state. While pursuing the imperial interests of Japan, it evolved a full policy agenda, including the goal of economic transformation of Korea. The broad strategy of transformation was two pronged: the state utilized its bureaucratic capacities to directly undertake quite a few economic tasks; and, more important, the state involved propertied groups -both in the countryside

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and in the cities, and both Japanese and Koreans - in production-oriented alliances leading up to sustained economic change. The results measured by the criteria of growth and industrialization (though not by such other criteria as human rights, national self-determination and fair economic distribution) were a considerable success. Since successes generally begets emulation and continuity, it is important to analyze the colonial economic strategy. Two general observations ought to be noted at the outset. First, while the Governor-General in Korea possessed near absolute powers, he was nevertheless an agent of the Japanese imperial government. The colonial state in Korea thus pursued, not Korean, but Japanese needs and interests that changed over time.?” In broad brush strokes, during the early phase, say, the first decade of the colonial rule, Japan treated Korea mainly as a strategic gain that could also be exploited in a fairly classic fashion: exchange of agricultural products for manufactured goods. Subsequently, as Japanese demand for food outpaced its own supply, the colonial state aggressively undertook measures to increase food production in Korea. Manufacturing was discouraged in this early phase, again in a fairly classic fashion, to protect Japanese exports to Korea. Following WWI, however, with swollen company profits, Japan sought opportunities for export of capital and thus relaxed restrictions against production of manufactured products in Korea. At the same time, following the need to coopt nationalistic pressures within Korea, the colonial state also involved selected and prominent Korean businessmen in the growth of manufacturing. Aggressive industrialization of Korea occurred only in the 1930s. This was in part a result of Japan’s strategy to cope with the depression - i.e. to create a protected, high-growth economy on an empire-wide scale - and in part a result of Japan’s aggressive industrialization, again on an empire-wide scale, that reflected national power considerations.‘” Japan was able to switch its imperial policies in Korea frequently and decisively; this, in turn, underlined the highly centralized nature of authority within the Japanese controlled Korean state. The second related observation concerns the pressures on the Governor-General in Korea to simultaneously pursue imperial interests and run a cost-effective government. Reading through historical documents of the time, especially the annual reports of the Governor-General in Korea, it becomes clear that, among their various achievements, the colonial authorities in Korea wanted to emphasize their repeated efforts to enhance revenues and to minimize expenditures, especially by rationalizing the bureaucracy.30 Since any shortfall between revenues and expenditures within Korea had to be financed by the Japanese Imperial government and typically, there was a net revenue inflow from Japan to Korea-one presumes that constant and firm

pressure was maintained on respective GovernorGenerals to boost the cost-efficiency of public services. Unlike many other governments. the colonial state in Korea did not operate with a “soft budget constraint.” On the contrary, there was consistent pressure to economize, “hardening” the budget constraint, with significant. positive “trickle-down” effect on the efficiency of the bureaucracy, including the economic bureaucracy.

(a) Incrensed state capnci9 The increased capacity of the new colonial state in Korea to directly undertake economic tasks is evident fairly early in the historical record. For example, there was the issue of state capacity to collect taxes. The old Yi state, one may recollect, proved quite incapable of extracting taxes from society, especially revenues from landowners. The contrasting performance of the colonial state is notable. Land revenue in 1905. the year the Japanese influence in Korea started to grow. was some 4.9 million yen; by 1908, this had jumped to 6.5 million yen, or a real increase of some 30% in three years.” Subsequently, numerous other sources of revenue were added to that obtained from land e.g., railways, post office and customs; and receipts from the ginseng monopoly and from such public undertakings as salt manufacture, coal mines. timber work and printing bureaus - and the jump in revenue intake was phenomenal. Whereas the total revenue in 1905 (land and other revenues) was 7.3 million yen, by 191 1 one year after formal annexation, the total revenue intake was 24 million yen. or an increase of more than 300%.3’ The factors that help explain this increased state capacity were two-fold. First, the colonial state. backed by superior coercive power, snapped the stranglehold landowning groups had on the Yi state, pensioning off the Yangban elite, and replacing them by Japanese career bureaucrats: I will return to this issue below. Second. the colonial elite utilized the newly created civil and police bureaucracy to collect taxes. More specifically. as early as 1906, 36 revenue collection officers, again replete with uniforms and swords. were posted all over Korea to identify cultivated land, owners of the land, and the revenue due from the land (H.I.J.M.‘s Residency General, 1908. Chapter V). While the rate oftaxation on land was not increased, it was regularized. In addition. uniformed revenue officers worked in conjunction with local police officers in the process of tax collection, lest any one forget this newly established separation of state and society, or the willful presence of the new state in society. The successful land survey that the Japanese conducted in Korea during I9 IO- I8 similarly highlighted the efficacy of the new state. The Yi state had repeatedly discussed such a comprehensive land survey but

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never carried it out; the bureaucratic capacity was absent, as was the power to confront land controlling groups who wanted to hide the extent of their taxable lands. By contrast. the colonial state made an exhaustive land survey a priority. Over a period of eight years the Japanese invested some 30 million yen in the project (compared, say, to the total revenue intake of the Government-General in 1911 of 24 million yen). The survey “mapped all plots of land, classified it according to type, graded its productivity and established ownership.“?? While Japanese civil servants supervised the entire project, Korean landowners cooperated and eventually benefited; local land investigation committees, for example, who were responsible for investigating the “ownership, location, boundaries and class of land” were composed of “land-owners themselves” (Government-General of Chosen, 1912, p. 13). As a result of the survey, the colonial state secured a revenue base and, less obviously, enhanced its control over the Korean agrarian sector by involving the landowning classes as ruling partners. What the Korean landlords lost in terms of autonomy from, and influence over, the traditional Yi state, they made up by, first, securing new, Western-style, legal private property rights and later (as discussed below), by enhanced profits from land (Robinson in Eckert er al., 1990, pp. 266-267). Over time, the colonial state in Korea undertook numerous other projects of economic value. This is no place for a comprehensive discussion; I simply wish to flag some of the main areas.34 First, the Govemment-General invested heavily in infrastructure, so much so that Korea’s roads and railways were among the finest that a developing country inherited from their colonial past. Second, as mentioned above, the Japanese made significant investments in Korea in primary education. Given the long gestation period, however, the returns on this investment were probably reaped, less by colonial Korea, but more by the two sovereign Koreas who inherited a relatively literate labor force. Third, the colonial government ran a number of economic enterprises directly: e.g., railways, communications, opium, salt and tobacco. Judged by the regular financial contribution that these public undertakings made to public revenues, they were run relatively efficiently. Finally, the GovernmentGeneral played an important role in the overall process of capital accumulation. While I will return to this issue again below, and the direct role of the new colonial state in extracting taxes has already been noted, a few other points also deserve attention. The currency and banking reforms that the new colonial state undertook rather early led to a significant jump in private, institutional savings: e.g., deposits in the Bank of Chosen (Korea) doubled from some 18 million yen in 1911 to 37 million yen in 1913 and the number of depositors in the postal savings bank went up from about 20,000 in 1909 to 420,000 in 19 13 (the

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corresponding sums of deposits being 120,000 yen in 1909 and 98 1,000 yen in 19 13) (Government-General of Chosen, 19 14, p. 19). Later during the colonial rule, the Government-General required Koreans to buy government bonds that helped finance the industrialization drive of the 1930s. While capital inflows from Japan remained the dominant source, local capital accumulation also increased considerably. The colonial state in Korea, even more than the Japanese Meiji state on which it was modeled, became heavily and directly involved in economic tasks, and judged strictly by economic criteria, performed these tasks rather effectively. More significant than the state’s direct economic role was the indirect role that led up to the involvement of wealthy groups in productive activities. The mechanics of how these state-private sector alliances were created are important because similar arrangements were later central to South Korea’s phenomenal economic success. The dynamics of change in both the agrarian and industrial sectors thus deserve our attention.

(b) The state and the agrarian sector The colonial state restructured its relationship with the Korean landed classes. The highest Yangban elite who held offices in the Yi state were pensioned off (Government-General of Chosen, 1911, pp. 18-19). As career bureaucrats took over official functions, the direct control of landed classes on the state weakened. The successful land survey further confirmed the supremacy of the new state because, as a result of it, the capacity of the landed classes to evade the reach of the state had shrunk. In return, however, the state offered the landowners plenty, so as to not only not alienate them, but to make them active partners in executing the state’s goals. For example, the Japanese introduced a new legal code - based on the Meiji legal code - that created Western-style legal private property, thus securing the control of Korean landed groups over land in perpetuity. While the Japanese in the process ended up owning significant amount of agricultural land in Korea, most Koreans who controlled land prior to the arrival of the Japanese maintained, nay, even expanded their land ownership.35 Moreover, as mentioned above, many among the landed elite were incorporated into local governance, cooperating with and helping local agents of the state maintain control over villages. While students of colonialism often distinguish direct and indirect colonial rule, the Japanese political arrangement in Korea utilized both forms: direct bureaucratic penetration was buttressed by the authority of local influentials. This arrangement also suggests that, contrary to some recent arguments, the presence of a landowning class does not necessarily inhibit the formation of a power-

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ful “developmental” state; much depends on the specific relationship of the state and landowners.‘h The Japanese colonial government periodically made significant efforts to boost agricultural production, especially Korea’s main product, rice. The underlying motivation was changing Japanese economic needs: e.g., prior to 1919, the efforts to boost production were minimal. Following a rice shortage and related riots in Japan in 1918, a major plan to expand rice production in Korea was implemented. The success on this front contributed to “over production” and following a glut and pressures from Japanese rice producers, all plans to increase rice production were cancelled in 1933. Again, however, the war with China in 1938-39 created food shortages in Japan and Korea was “resuscitated as a granary of the Empire.“37 During the early phase the Japanese focused their efforts on land improvement, especially on irrigation, drainage and reclamation of arable land. The resulting increase in production was not huge and resulted both from extensive and intensive efforts; e.g., increase in rice production during 1910-24 averaged around 1.5% per annum and land productivity in the same period improved at about 0.8% per annum (Suh, 1978, p. 73, Table 33). Subsequently, when rapid increase in rice production became a goal, Korea’s Japanese rulers utilized the knowledge acquired during the Meiji transformation and concentrated their efforts on spreading the use of improved seeds, fertilizer and irrigation. The gains were significant: the percentage of paddy land using improved seed doubled during 19 15a0, reaching 85%; fertilizer input expanded 10 times during the same period (Suh, 1978, p. 77, Table 34); and during 1919-38 land under irrigation increased annually by nearly 10% (Suh, 1978, p. 73, Table 33; and Ishikawa, 1967, pp. 84-109). As a result, rice production during 1920-35 grew at nearly 3% per annum and nearly two-thirds of this growth resulted from improvements in land productivity.‘x The overall rate of increase in rice production per unit of land for the colonial period (1910-40) averaged a respectable 2% per annum (compare this, for example, with India’s post-Green Revolution - say, 1970 to present-rates of productivity increase in cereal production; they have been only a little higher than 2% per annum). While some of these improvements may have been a “spontaneous” response to food shortages and higher prices in Japan, it is nevertheless difficult to imagine a relatively quick increase in supply without significant public efforts, especially in providing new seeds and in facilitating the spread of fertilizer. It is a sad fact that increases in production in Korea did not lead to improvement in food consumption. Bulk of the increased production ended up in the export market and imported goods did not become consumption items for the vast majority. As a well documented study concludes, “per capita use of food

grains as a whole declined substantially after the early years of the colonial period.” The same author points out that this disjuncture between production and consumption was a result of several causes, but mainly due to a combination of population growth and few nonagricultural opportunities that increased the burden on tenants and on small farmers (Sub, 1978, pp. 86-87). If there was steady growth in production but the consumption for the majority of the population declined, given the considerable inequality in land ownership, it is likely that the incomes of landowning groups mushroomed. Other available evidence is consistent with this proposition: the rates of return on agricultural investment were very high for most of the period; income inequalities widened; and, as noted above, there was rapid growth of small depositors in saving institutions. The general point is that Korean landowning groups did rather well under colonial government; they became part of an implicit but comfortable ruling alliance. Three other characteristics of the changing agrarian sector are noteworthy. First, Japanese corporations and entrepreneurs ended up owning large tracts of Korean agricultural land - anywhere from one-quarter to one-third of all the arable land. This was a result of a conscious government policy that began with the hope of attracting Japanese immigrants to Korea, but when that goal met with only limited success. Japanese corporations became heavily involved. Especially significant as a landowner was the infamous Oriental Development Company (e.g., see Moskowitz, 1974), which, like most other Japanese landowners, leased lands to tenants, collected rents in kind, most often rice, and sold the rice in the export market back to Japan. The rate of return on such activities was high, higher than in Japan, and many a fortunes were made (Suh, 1978, p. 85, Table 39). From our standpoint, the direct involvement of the Japanese in Korean agriculture helps explicate two points: the mechanics of how the more advanced techniques of agricultural production may have been transferred from Japan to Korea: and the mechanics underlying “forced exports,” whereby Japanese landowners sold rice grown in Korea back to Japan directly. A second characteristic of the changing agrarian sector was its heavy export orientation. For example, while total Korean rice production during the colonial period nearly doubled, rice exports to Japan during the same period increased six times (Suh, 1978, p. 92, Table 43). In addition. while the overall economy of the Japanese empire was protected, trading within the empire was relatively free of tariffs and other restrictions. Rapid growth of exports to the metropole with a more advanced agricultural sector thus points to an additional source -the quintessential source of competition - that must have also contributed to sustained improvements in agricultural productivity. Finally, the geography of the changing agrarian scene

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is worthy of attention. Rice production and Japanese ownership of Korean land were both more concentrated in the southern half of Korea. Bulk of rice exports also originated in the South. The southern half of Korea thus developed a relatively productive agriculture during the colonial period. To conclude this discussion on the changes in the agrarian sector, two developments of long-term consequence need to be underlined. The nearly obvious point is that a productive agriculture was a necessary component of rapid economic growth, first during colonial Korea, and later, even more prominently, in sovereign South Korea. While many developing countries, such as in Africa, are still attempting their agricultural revolution, and others, such as India and the Philippines, hailed the Green Revolution from the mid- 1960s onward, Korea was already undergoing a biological revolution in agriculture in the first half of this century. Just before WWII, rice yields in Korea were approaching Japanese yields, which were then among the highest in the world (e.g., if the US yields in 1938 were 100, Japan’s were 154 and Korea’s 111) (Grajdanzev, 1944, p. 87; and Ishikawa, 1967, p. 95, Charts 2-5). Rapid increase in agriculture production, in turn, provided both food and inputs to sustain an industrial drive on the one hand, and on the other hand, yielded high incomes and savings that found their way back into a growing economy. A decade hence, after land reforms were implemented in South Korea, the productive agricultural base and related incomes also contributed to the emergence of a domestic market for manufactured goods. The other less obvious legacy concerns the “model of development” that undergirded the agrarian transformation. As in Meiji Japan, but even more so, the colonial state in Korea established its superiority as the key actor that would direct economic change. The state then employed various carrots and sticks to incorporate the propertied groups in a production-oriented alliance. A key focus of the state’s efforts was improving the technology of production, namely, better seeds, fertilizer and irrigation. Even after decolonization, these efforts left behind a bureaucratic infrastructure that was adept at facilitating technologyintensive agricultural development. Moreover, public subsidies from the colonial state helped improve the profitability of private producers, as well as productivity and production. This pattern of state and propertied class alliance for production, centered around technology and other public subsidies, would of course repeat itself in subsequent periods, and in numerous other economic activities, especially in industry, to which I now turn. (c) The .state and industrialization The extent of Korea’s industrialization during the colonial phase was both considerable and nearly

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unique in the comparative history of colonialism: the average, annual rate of growth in industry (including mining and manufacturing) during 1910-40 was nearly 10%; and by 1940, nearly 35% of the total commodity production originated in the industrial sector (Suh, 1978, p. 48, Table 11; and p. 46, Tables 17 and 18). While analyzing the why and how of this experience below, as well as its long-term significance, the main point is not that South Korea somehow inherited a relatively industrialized economy. It did not! A fair amount of the heavy industry was located in the north and significant industrial concentrations were destroyed during the Korean war. Nevertheless, a wardestroyed economy, with an experience of rapid industrialization behind it, is quite different than a tradition-bound, nearly stagnant, agrarian economy.3y I will return below to the issue of the creation of a trained and disciplined working class. At the apex of the social pyramid, and from the standpoint of the colonial legacy, several issues of long-term significance deserve our attention here: the style of development, especially a state-dominated, state-private sector alliance for production and profit that emerged under Japanese rule; the emergence of a significant entrepreneurial strata among Koreans; and a growing economy whose structure was already heavily export oriented. The Japanese approach to Korea’s industrialization went through three more or less distinct phases. During the first decade of the colonial rule, Japan sought to protect Korean market as an outlet for Japanese manufactured goods. Rules and regulations were thus created to inhibit the start up of new factories in Korea by both Japanese and Korean entrepreneurs. The fact that annual growth rates in the manufacturing sector during this decade still averaged a respectable 7%, reflected the very low starting base. This growth had several components. First, there were the new public sector investments in power, railways and other infrastructure. The private sector growth originated mainly in food processing industries especially rice mills-that were initiated by Japanese migrants with the hope of selling rice back to Japan. Exchanging Japanese manufactured goods for Korean rice and other primary products was, of course, the initial colonial policy. The Government-General thus helped Japanese entrepreneurs start up these mills by providing both financial and infrastructural support. Finally, some of this early growth also involved the participation of Koreans. Small-scale manufacturing did not require the permission of the GovemmentGeneral. Moreover, incomes of landowning Koreans had started to rise and not all of their demand could be met by Japanese imports. Emulating the Japanese migrants, Koreans set up small industries (often called household industries in Japanese colonial documents; they employed l&20 workers) in such areas as metals, dyeing, paper making, ceramics, rubber shoes,

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knitted cotton socks and sake and soy sauce. The number of small factories thus increased from 15 1 in 19 10 to 1.900 in 1,919; 971 of these 1900 factories were owned by Koreans (Park, 1985, pp. 16-18). WWI transformed Japan from a debtor to a creditor country. With swollen company profits, the Japanese imperial government sought opportunities for Japanese capital overseas, including in Korea. Restrictions on manufacturing in Korea were abolished and thus began a second phase in Korean industrialization. Japanese investors did not rush in. The competitive pressure from Japanese manufactured goods was considerable and the Government-General wanted to encourage complementarities rather than competition between Japanese exporters to and Japanese investors in Korea. The colonial state supported a select few Japanese investors by helping them chose areas of investment, providing cheap land, raising capital for investment, guaranteeing initial profits via subsidies and by moving workers to out-ofthe-way locations. As a result, major business groups such as Mitsui and Mitsubishi moved into Korea; others followed. The average, annual rate of growth in industry during the 1920s was over 8%. A significant component of this was Japanese private investment in textiles, some in processing of raw materials and some rather large scale investments in mining, iron, steel, hydroelectric power, and even shipbuilding. The number of factories employing more than 50 workers went up from 89 in 1922 to 230 in 1930 (Park, 1985. p. 42). Korean participation in this second phase, while a distant second to the role of Japanese capital was not insignificant, Relatively small-scale. Korean “household industries” continued to mushroom. Their growth reflected several underlying trends: rising demand resulting from growing incomes of wealthy Koreans and Japanese in Korea, as well as economic growth in Japan; the role of Japanese factories as “Schumpeterian innovators” that were followed by a “cluster” of Korean imitators; and forward and backward linkages created by Japanese investments (Chung, 1973, p. 93). Moreover, after the Korean nationalist outburst in 1919, the colonial government liberalized its ruling strategy for several years and sought to coopt some wealthy Korean businessmen. Enterprising Koreans with initial capital -often with roots in land wealth - were thus allowed to enter medium to large-scale trade and manufacturing. Those willing to cooperate with the GovernmentGeneral were also provided credit, subsidies, and other public supports. Of the 230 factories that employed more than SO workers in 1930,49 thus came to be Korean owned (Park, 1985, p. 42). South Korean nationalist historiography often underestimates the level of cooperation between Japanese colonial state and native Korean capital. Revisionist historians. however, have now documented the extensive nature of such cooperation (Eckert, 199 1: and McNamara.

1990). In the words of Eckert, “Korean capitalism came to enjoy its first flowering under Japanese rule and with official Japanese blessing” (Eckert, 1991, p. 6). Major Korean chaebols, such as Kyungbang - the most prominent Korean group during the colonial period, that began in textiles Kongsin Hosiery. Paeksan Trading Company, Hwasin Department Store and Mokpo Rubber Company thus got started during this period.?” During the 1930s and well into WWII, Korea underwent very rapid industrialization. The rate of industrialization hastened and the process acquired considerable depth during this phase. The annual, average rate of growth of industry was nearly 15% and a significant component of new growth originated in heavy industries, especially chemical industry. The moving force behind these developments was, once again, government policies. As the Western world went into a depression, and protected economies sprouted, Japan aggressively sought growth by creating an import-substituting economy of sorts on an empire-wide scale (Schumpeter, 1940, Chs. XXI. 3 and XXII. 8). After annexing Manchuria in 193 1, moreover, Korea became an advanced military supply base for the Japanese war efforts in China. The Korean economy was thus developed by the colonial govemment as part and parcel of an empire-wide strategy to promote rapid growth, with a potential war always in mind. The development of hydroelectric power in northern Korea during the 1920s and early 1930s had brought down costs of electricity and thus barriers to starting new factories. Raw materials such as coal and iron ore were also concentrated in the same part of Korea, reducing transportation costs. With wages for workers nearly half of that in Japan, and absolutely no labor protection laws (more on this below), “market conditions” for investment in Korea, especially in northern Korea, were far from adverse during the 1930s. There was also a “push” factor at work: the Japanese imperial government had tightened control on Japanese industry within Japan, while giving business a freer hand elsewhere in the Empire. Nevertheless, direct role of the Government-General in encouraging business into Korea was essential. The colonial state periodically laid out its industrial policy, indicating the preferred direction of economic change, especially given war planning, where the government expected demand to grow. Moreover, government and business cooperated to an extent that contours of corporate policy were ‘*indirectly fixed’ by the government’s economc plans (Eckert, 199 1, p. 73). Another analyst notes that “adaptability to state economic priorities was a prerequisite for successful large-scale enterprise” in colonial Korea (McNamara, 1990, p. 9). The Government-General utilized several economic and nonecomonic instruments to ensure compliance with its preferred economic direction. First.

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the colonial state kept a “tight control on the colony’s financial structure” (Eckert, 199 I, p. 73). The Chosen Industrial Bank, which helped finance new investments, and which had controlling interests in a number of diverse industries, was controlled by the Government-General. This was a critical issue for Korean investors who had no other independent source of credit. Even for Japanese zaibatsu, who could raise some of their finances from corporate sources in Japan, cooperation with the state was important; for example, the Government-General floated compulsory savings bonds within Korea as a way of helping Japanese companies finance some of the gigantic investment projects (hydroelectric power and fertilizer plants) in northern Korea. Second, there were the perennial subsidies; one analyst estimates that these were of the order of 1% of “GNP” per year (Chung, 1973, p. 91). These were used selectively to promote government’s priorities. For example, the highest subsidy for a time was provided to Mitsubishi to encourage gold mining; the Japanese imperial government needed the gold to pay for such strategic imports from the United States as scrap iron, copper and zinc4’ The next largest subsidy was provided to producers of zinc and magnesium, products necessary for manufacturing aeroplanes. And so on (Grajdanzev, 1944, pp. 138-140). Tax exemptions were similarly used discriminately to both encourage and direct economic activity. While it is difficult to assess the significance of noneconomic factors in this state-directed, state-business alliance, they are nevertheless worth noting. The Governor-General would periodically exhort businessmen to eschew narrow “capitalistic profits and commercial self-interest” and to consider the economic “mission” of Korea from the standpoint of the “national economy.” The direction of influence between the state and business is also nicely captured by the fact that both Japanese and Korean businessmen referred to the Governor-General as j[fii (a loving father), highlighting the benevolent upper hand of the state. Again, in the words of Eckert, businessmen were intricately incorporated into the policy making process and what they lost in “autonomy,” they made up for “magnificently” by way of “corporate profits.“42 A few specific examples of government-business cooperation will further help flush out the nature of this mutually convenient alliance. The example of government subsidies for Mitsubishi to encourage gold mining has already been noted. Mitsui was similarly granted the ginseng monopoly by the Government-General in exchange for a healthy share of the sprawling profits as taxes on the monopoly. The case of the smaller Onoda cement factory has been studied in detail and is interesting (Park. 1985, pp. 83-99). The Government-General discovered large limestone deposits in Korea during its surveys. This

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information was provided to cement manufacturers in Japan. The Government-General also indicated its needs for cement within Korea. thus encouraging Onoda to invest in Korea. Most important. the Government-General laid the ground work for Onoda’s expansion by ordering provincial governors to buy cement from Onoda factories for all government construction projects during the agricultural expansion phase in the 1920s and regularly set aside nearly 10% of the annual budget intended for agricultural production projects for purchase of this cement. The level of cooperation between the GovernmentGeneral and colonial Korea’s largest Japanese business group, Nihon Chiss6, was so intricate that it is difficult to tell where the public efforts ended and private efforts began. For example, the preliminary work for the construction of hydroelectric power plants such as the necessary surveys, choice of location, soil tests - was conducted by the Government General. Private energies of Nihon Chisso were then tapped but, again. the Government-General played a critical role in capital accumulation by putting at the company’s disposal the service of government controlled Industrial Bank, and by floating savings bonds. The government further helped move workers from the south to the labor-scarce northern region, where power generators were to be located. and subsequently remained deeply involved in the pricing and distribution of electrical power. What the government got out of all this collaboration was a ready supply of cheap electricity in Korea which, in turn, became the basis for rapid industrialization. From Nihon Chisso’s point of view, hydroelectric power was only one of numerous projects that the company undertook in Korea. What it did buy in the process was enormous goodwill of the Government-General that subsequently was translated into opportunities for expansion in a number of other lucrative fields, such as nitrogen and fertilizer production. Several of the larger Korean Business groups also benefited from a close cooperation with the Government-General. For example, new research has documented how the largest Korean business group, Kyongbang, financed its investments with the help of the Government-General (Eckert, 1991). The subsidies provided by the government during 1924-35 added up to nearly “one fourth of the company’s paidup capital in 1935” (p, 84). Furthermore, the main source of finance was loans from the government-controlled Chosen Industrial Bank. Personal relationships of key actors helped secure the bonds between Kyongbang, the Industrial Bank and the GovernmentGeneral. The terms of the loans were very favorable, indicating a comfortable and close relationship between the colonial state and a Korean business group. Another research similarly documents the close cooperation between the colonial state and the Min brothers in the field of banking and Pak Hung-sik

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in commerce; these ventures eventually matured into such major Korean chaebols as the Hwasin Department Store (McNamara, 1990). Within the framework of a war economy, the planned government-business cooperation became the basis of very rapid industrialization of Korea during 1930-45. During some years the rates of growth wre especially breathtaking: for example, during 1936-39, industrial production more than doubled. By the early 1940s agricultural and industrial production were nearly at par (both providing some 40% of the national production); and by 1943, heavy industry provided nearly half of the total industrial production (Park, 1985, p. 51, Tables I I and 12). Some specific patterns within this overall economic transformation also deserve our attention, especially because they proved to be of long-term significance. First, the colonial state preferred to work with large business groups. Following the Meiji model, but with a vengeance in Korea, the Government-General utilized various means to encourage the formation of large-scale business enterprises: larger groups enjoyed preferred interest rates on credit, lower charges on electricity, direct price supports, and indirect subsidies such as lower transportation costs on government-controlled railways. Nearly two-thirds of the total production in the late 1930s was thus produced by ony a handful of Japanese zaibatsu in Korea. Since the Korean, family-centered, but gigantic enterprises also came into their own under this regime, herein may lie the origin of chaebols.43 It is important to underline a second pattern, namely, that a significant strata of Korean entrepreneurs emerged under the colonial auspices. Many of these would go on to establish such major chaebols of modem South Korea as Samsung, Hyundai and Lucky. If judged mainly by the proportion of total private capita1 or of large enterprises that Koreans owned, the Korean presence in comparison to that of the Japanese appears minuscule.““ As has been pointed out by others, however, this approach is misleading. A significant minority of firms (nearly 30%) were owned jointly by Koreans and Japanese. More important from the standpoint of the emergence of an entrepreneurial class was the scale of Korean participation by 1937: “there were 2,300 Korean run factories throughout the industrial spectrum, and about I60 of these establishments employed over 50 workers” (Eckert, 1991, p. 55). Since these figures are for all of Korea, and since it is fair to assume that most of these must have concentrated in the South after the communists took over the northern half, one may observe with some confidence that colonialism left behind a considerable density of entrepreneurship in South Korea. A third pattern concerns the geographical distribution of industry. Those wishing to deny continuities with the colonial period again point to the fact that

much of the industry was located in the north and was thus not inherited by South Korea. This is partly true, insofar as the largest chemical and other heavy industries were indeed located in the northern provinces. A number of qualifications, however, are also needed. The chemical, metal and electricity-generating industries. that were concentrated in the North, constituted 30.8 and 2.2% respectively of the total industrial production in I 938.Js That adds up to some 40%. leaving a good chunk for the South. More than half of the total industry was probably located in the South. The nature of southern industries was also distinct; they tended to be in such fields as food processing, textiles, machine and tools and tobacco related industries. By contrast, the industries in the north were highly capital intensive, high-cost production units that were not well integrated with the local economy. Northern industries were much more likely to evolve into “white elephants,” requiring continuous protection, rather than into nimble, labor-intensive exporters of consumer products. The last pattern that needs to be noted concerns the deep ties that came to link colonial Korean and Japanese economies. This pattern is, of course, not unique to Japan and Korea; it tends to characterize many metropoles and their colonies. What is unique, however, is the degree to which Korea was already an exporting economy, and the degree to which it was already exporting manufactured products to Japan during the colonial phase. If the average “foreign trade ratio” for a country of the size of Korea in 1938-39 was 0.24, Suh (1978) estimates that Korea’s foreign trade ratio in those years was around 0.54, suggesting that Korea was exporting &vice as much as any other comparable economy. Moreover, 43% of these exports were manufactured goods (Suh, 1978, pp. 120-121, Table 58). How many other developing countries in the world emerged from colonialism with this type of an economic profile? Critical to note here is not only the structure of the economy that was inherited by South Korea, but also the psychological legacy: whereas most developing countries emerged from WWII with a distrust of open economies because they either associated openness with stagnation (as in India), or import substitution with successful industrial growth (as in Brazil) many South Korean elites came to associate, rather early, an export orientation with a high-growth economy. To sum up this section, the highly authoritarian and bureaucratic state that the Japanese helped construct in colonial Korea turned out to be a rather efficacious economic actor. The state utilized its bureaucratic capacities to directly undertake numerous economic tasks: anywhere from collectiong more taxes, to building infrastructure, to undertaking production directly. More important, the state incorporated property-owning classes in-production-oriented alliances. The colonial state was highly purposive: it

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put increasing production near the top of its priorities. Propertied classes were offered various rewards especially, handsome profits - for cooperating with the state in fulfilling this economic agenda. The state, in turn, utilized numerous means -including promotion of technology, control over credit, subsidies, capital accumulation, and even noneconomic exhortations - to ensure compliance from both Korean and Japanese landlords and businessmen. As a result of this state-business alliance, the economy was successful in exporting manufactured goods. Moreover, as documented by revisionist historians, a substantial strata of Korean entrepreneurs developed, who either flourished while cooperating with the state, or who wished for larger government support so they could also flourish. In either case, a “model” of development - inspired by Meiji Japan, but also transformed in a colonial setting - was in the making that would situate a state-directed economy with state-business alliance at the heart of the strategy of transformation.

4. THE COLONIAL STATE AND THE LOWER CLASSES The colonial authorities sought to transform Korea in accordance with Japanese imperial needs. Controlled involvement of the lower classes - peasants and workers - was essential for the success of this project; and both the colonial state and the propertied classes collaborated to ensure their compliance. While historical studies of lower classes in colonial Korea are meager-and as they become available, we may well be led to change our minds -the scattered evidence that is available suggests that both peasants and workers lived highly constrained lives, deriving few benefits from Korea’s rapid economic transformation. These outcomes, moreover, were part of a deliberate plan that served important political and economic interests. From a political standpoint, the highly repressive and penetrating colonial state succeeded in imposing order on Korean society; this freed the state to focus its political energies in the pursuit of a narrow, production-oriented agenda. On the economic front, incomes and wages generally lagged behind productivity gains, facilitating higher profitability, savings and investments. Moreover, since much of the growth was export oriented, lagging incomes and the limited mass demand did not become a constraint on growth. Since repression and exclusion of the lower classes was integral to the colonial political economy, and since critical components of this “model,” especially the harsh political control of the working class, continued well into the future, it is important to analyze the structure and the dynamics of the labor-repressive strategy. As far as trends in the colonial countryside were concerned, recall that precolonial, Yi Korea was

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hardly a haven for the lowly tenants, peasants or others at the bottom of the social hierarchy. Yi Korea was a slave society, at least until 1800,and even though the practice of slavery declined sharply through the 19th century, it was the Japanese who abolished slavery in Korea. The recurring fiscal crises of the Yi state had also led Korean rulers to squeeze the peasantry, especially via indirect taxation, thus contributing to misery, rebellion and brigandage. What the Japanese did in this situation was rationalize the strategies of both extraction and control. While well-organized gendarmes subdued pockets of openly rebellious peasants, and continued to do so for quite some time, bulk of the peasantry was systematically brought under state’s domination. First, the legalization of private property in the hands of landlords, and a regularization of land rents, created a legitimate basis for tenancy as the modal relationship adjoining the tiller and the landowner. While tenancy had existed in Korea for a long time, given steady population growth, tenancy increased throughout the colonial period; toward the end of the period, nearly 70% of farming households worked under tenancy arrangement of one type or another (Robinson in Eckert ef al., 1990, p. 307). And as most students of agrarian socieites understand, tenancy as the main mode of production makes tenants dependent on landowners, and dependencies tend to be especially severe where tenants are not legally protected, where attempts to forge tenant organizations are met with swift retribution, and where the weight of the state is mainly behind the landowners. The Japanese strategy for controlling the peasant population was twofold: direct and effective downward penetration of the state; and incorporation of landowning or other influential local groups as ruling allies. Both of these themes have been discussed above. To the best of my knowledge, there are no detailed studies available (at least not in English language) as to how this system worked in practice. especially from the viewpoint of the peasant. As far as one can make out, while sporadic peasant rebellion never died out, the ruling strategy was effective at establishing a repressive order.46 In addition to severe economic dependencies, which sap the rebellious energy of any social group, the effectiveness of control rested on a combination of direct and indirect rule. The traditional system of influence within villages, as well as of information flows, was buttressed by a well-organized bureaucracy: local police with uniforms and telephones; tax collectors, also replete with uniforms; and an intelligence service that periodically prepared reports for the provincial and central governments on a wide variety of issues. The Korean working class originated under Japanese rule. While Korea was still largely an agrarian country in the 1940s (more than 70% of the population still derived its livelihood from agriculture), a

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considerable working class had also come into being by then. For example, if there were less than 10,000 industrial workers in 1910, the population of industrial workers had reached 1.3 million in 1943 (Park, 1985. Part I). Assuming a minimum family size of four, a good 207~ of the population must have thus depended on industrial work for their livelihood. Moreover, another 15% of Koreans lived outside of Korea in the Japanese empire, a significant minority working as unskilled urban labor in Japan and some in Manchuria. Since many of the workers within Korea had been moved from the populated south to factories in the north. and since most of the Koreans working in the Empire returned to Korea when the Empire disintegrated, a significant minority of the population in colonial Korea found itself moved around and uprooted from its traditional society niche.47 The colonial state collaborated with both Japanese and Korean capitalists to devise the structures of control for this working class. The state provided the broad framework, which, in its essence, was brutally simple: attempts to create labor union were prohibited: trespasses were met with severe retribution; and few, if any, laws existed to regulate and protect workers (Grajdanzev, 1944, p. 182). While these restrictions did not fully succeed in eliminating unionization attempts and even strikes (Park, 1985, pp. 60-68; Asagiri. 1929; and Chen, 1930) - especially in the somewhat more liberal 192Os, and again in the late 193Os, when with a war economy, labor demand and thus labor’s bargaining power increased - they do help underline the highly anti-labor stance of the colonial state. Within this broad framework, individual companies had a fairly free hand in setting down labor management practices (at least until the war years, when the state actively got involved in the control and mobilization of labor). Not surprisingly, Japanese companies. such as the Onoda cement factory - which, as already noted. has been studied in detail - adopted a Japanese labor management style.48 Japanese managers sought to create a skilled, disciplined, and hierarchically organized work force in exchange for decent wages - that were often higher than earnings in both Korean-owned factories and in agriculture. but lagged way behind the steady productivity gains and job security. Young Koreans of peasant origins, with only little education, were hired at a rather early age (say I X-22). provided on-the-job training, occusionally sent to Japan for more specialized experience, punished severely for lack of punctuality or diligence. rewarded for loyalty and steady performance. and for those who survived the various tests and hurdles. given assurances of continuous service pension and retirement fund benefits. The carrots and sticks appear to have been quite successful: in this one specific case, at least, over a few decades. young Korean peasants were transformed into “Onoda men.” who, in spite of

such social problems as being treated as inferior to Japanese workers, took pride in their skilled industrial work in a Japanese company. Since there is very little research available that does not depend on company documents, one has to be wary of how “satisfied” and “loyal” Korean workers really were. There was very little real increase in wages throughout this period of high growth. Moreover, when economic opportunities increased during the hypergrowth of the 1930s. workers voted with their feet: e.g., the rate of turnover in the Onoda cement factory during the 1930s rose sharply as skilled workers took their skills elsewhere for higher wages (Park, 1985, p. 142). Most important, workers were totally prohibited from forming any organizations of their own. Any efforts were met with dismissal, arrest and a permanent police record. Industrial relations in colonial Korea were thus “absolutely one sided,” favoring the management (Park, 1985. p. 142). Workers were closely supervised. The factories themselves were “very closed. isolated, and protected place(s).” The work place was “closed to outsiders by a wire fence, the constant patrol of its guards and the availability of police protection in case of an incident.” Finally, closing the state and company cooperation loop. the Japanese management “kept radical elements out by tight inspection and in doing this they were fully supported by government policy and a strong police posture” (Park, 1985, p. 184). Worker’s conditions in Korean-owned factories were certainly no better, and may have been worse. One case study of the largest Korean business house that is readily available would certainly support this view.49 For example, 80% of the workers at Kyongbong’s textile mill were unmarried peasant girls in their late teens, some even recruited from tenant families who worked the lands owned by the mill owners. The factories operated round-the-clock, each girl working a grueling 12.hour shift, with one 40. minute rest time. Since labor control was deemed essential, work was under “intense labor supervision.” Discipline inside the factory was “severe” and extended to personal lives. All the girls lived in dormitories within a factory compound and needed permission to both leave the compound and to receive visitors. The system resembled “a low-security prison.” Whenever labor conditions in this and other plants became turbulent. “strikes were repressed with the same energy as was used to repress communism.” State “intimidation and force” were thus central to this relatively Gmplc and “crude approach to social control.” During the war years social controls on workers tightened as the state got directly involved in labor management. A .sclrn,~, system was established. whereby, “industrial patriotism clubs.” involving employers and employees, were created. aimed at

JAPANESE LINEAGE OF KOREA’S “DEVELOPMENTAL STATE” increasing production. Workers’ representatives paid full-time salaries by employers - and employers formed associations that designed programs of “educating the workers, making the production process more efficient and preventing disputes among workers.050 In sum, a bureaucratic and penetrating authoritarian state collaborated with property-owning groups in colonial Korea to carve out a rather repressive and exclusionary strategy to control the laboring classes. This strategy of control, moreover, was necessary for rapid economic transformation. With majority of the lower classes subdued, the colonial state was free to concentrate its architectonic energies on devising and pursuing a strategy of economic transformation. Moreover, the political capacity to hold wages behind productivity gains facilitated high rates of profitability and thus continued investment and growth.

5. GENERAL INFERENCES If Korea at the turn of the 20th century was a miniChina, by mid-century, Japanese colonialism had transformed it into a mini-Japan. While this statement both oversimplifies and distorts, the grain of truth in it is essential for understanding the subsequent high growth political economy of South Korea. Moreover, if this claim is acceptable, a number of general inferences follow. In order to draw these out, I address three themes below: the implications of the historical materials discussed above for a comparative understanding of Korea; the insights that can be derived from these historical materials for the study of the nature and origins of “developmental states”; and finally, some general thoughts on the importance of reopening the issue of the variable colonial pasts of developing countries, so as to fully appreciate the roots of the divergent paths that these countries are now traversing.

(a) Korea in a comparative perspective

It is clear that Japanese colonialism in Korea helped establish some basic state-society patterns that many now readily associate as integral to the later South Korean “model” of a high-growth political economy. These patterns include a highly bureaucratized, penetrating and architectonic state, a state-dominated alliance of state and property owners for production and profits. and repressive social control of the working classes. Demonstrating parallels between historical and contemporary situations, however, is clearly not enough to sustain an argument for historical continuity; one also needs to point out the mechanisms whereby continuity was maintained. It would take a separate essay to fully demonstrate

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exactly how and why there was a fair amount of institutional continuity between colonial Korea and subsequent South Korea, especially under Park ChungHee.51 In any case, elements of such an argument already exist in the literature (Cumings, 1984b; Eckert, 1991; and McNamara, 1990) and, for our present purposes, a brief outline will suffice. There was more than a 15year interlude, a traumatic interlude one may add, between the Japanese leaving Korea and when a truncated South Korea settled on a highgrowth path under Park Chung-Hee. This interlude was marked by a US occupation, a civil war, a division of the country into communist and anti-communist halves, establishment of a government with some nationalist and democratic credentials in the South, and then a degeneration of this government under diverse pressures, leading up to a military coup. In spite of all of this social drama, when diverse historical legacies were simultaneously unleashed and when the future was anything but certain, how did South Korea under Park Chung-Hee end up resembling colonial Korea in its basic state-society outlines? The answer revolves in part around the structures that were simply never altered in any fundamental way, and in part around conscious choices made by leaders of South Korea. For example, Cumings has demonstrated with great care how and why the US occupying forces in Korea left the colonial state more or less intact; the alternative would have been to unleash a popular revolution of nationalist and radical forces. As a result, the bureaucracy, the police and the military that sovereign South Korea inherited were essentially colonial creations. In Cumings’s words, in spite of a prolonged American involvement in Korean affairs, “it was Japan’s impact that lasted,” and “whether it was in the military, the bureaucracy or the polity, Americans during the occupation found themselves playing midwife to a Japanese gestation, rather than bringing forth their own Korean progeny.“5’ Not only were state structures kept intact but the state’s capacity and willingness to direct economic change, as well as the economic instruments used by the state - e.g., control over credit-continued from colonial to postcolonial periods.53 There is little evidence, moreover, that Korean businessmen in South Korea objected much to these arrangements. On the contrary, there was also a fair amount of continuity in the state-dependent nature of Korean capitalism. For example, Eckert ( 199 I, p. 254) has found that “60 percent of the founders of South Korea’s top fifty chaebol” had participated directly in business under colonial auspices. Since these businessmen had either flourished with the help of the colonial state, or complained and periodically petitioned the colonial state for more support, it is likely that their political preferences strengthened the state-directed, state-business alliance for production and profit. Finally, the corporatist patterns of worker control were also colonial in

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origin: the employer-employee “clubs” for promoting “patriotism” and production, in the words of a labor analyst. became “one of Japan’s permanent contributions to Korea’s industrial relations system” (Ogle. 1990, p. 6). None of these continuities were inevitable. North Korea, a product of the same historical legacy, clearly went on a very different path. In South Korea, the chaos of the Rhee period could have continued indefinitely; or, alternatively, a new leadership could have undertaken basic changes and put South Korea on a totally different path. The postcoup leadership, however, chose continuity with colonial patterns. While complex motivations of national security and of protecting sectional social interests were at work, it was the nature of the leadership which finally undergirded the choice of continuity. Park Chung-Hee was a product of Japanese colonial Korean army, trained in Japanese military academy in Manchuria. Chong-Sik Lee, one of the leading Korea scholars in the United States, describes him as a “Japanophile,” fascinated by the “Meiji model,” and bent on steering Korea along the Japanese path to modernity (Lee. 1985. pp. 62-63). South Korean leaders often covered such proclivities with an anti-Japanese rhetoric here and a nationalist flourish there. Desirous mainly of high economic growth, however, leaders such as Park Chung-Hee knew well that the key elements of the “model” left behind by the Japanese were still intact in the early 1960s: a highly pervasive and penetrating state that could be turned authoritarian, purged of corruption and made to refocus attention on matters economic; a state-dependent business strata that understood the benefits of cooperating with a purposive state: and a highly controlled working class. Since this “model” had worked in the past, until proven to the contrary, or unless it had to be abandoned. there was no reason why it ought not also work for sovereign South Korea. Moreover, the extent to which postwar Japan remained a “reference society” for South Korea was itself, in part. a production of considerable colonial contacts that had created links of language. economic structures and a shared understanding of how to construct high growth policital economies. If the case for considerable continuity is thus persuasive - and this does not necessitate denying either some important changes in the subsequent political economy, or the credit due to Koreans for their economic achievements, for they could have easily derailed the whole process - it follows that the roots of the high-growth Korean political economy lie deep in a unique colonial experience. Two further implications follow. First, quite a few development scholars compare South Korea’s economic performance to that of other slower growing developing countries. The underlying assumption often is that, all of these countries began from more or less the same starting point of very low per capita incomes in the 1950s. but some-

how South Korea, and a few other newly industrializing countries (NICs) rushed ahead. The question then becomes, “Why South Korea?” In light of the discussion above, this manner of posing the question appears inappropriate. The starting point for comparison has to be deeper in history, especially in the formative colonial phase. Even if South Korea’s low per capita income in the 1950s was similar to that of an India, Brazil or a Nigeria, South Korea’s starting point was very different: it had a much more dynamic economy in the half a century preceding the 1950s and, by the 1950s. its deeper state-society configurations were relatively unique. Second, some development scholars pose the puzzle of South Korea’s phenomenal economic success in the following terms: Why was South Korea able to switch to an “export-oriented policy” in the early 1960s whereas many other developing countries continued on the “import substitution” path (e.g., Haggard. 1991). Again, this manner of framing the comparative question is somewhat misconceived. South Korea indeed made some important policy changes under Park Chung-Hee. but their significance can easily be exaggerated; moreover, the state-society configuration that enabled these policies to succeed had deeper historical roots. In this sense, South Korea under Park Chung-Hee did not so much “switch,” as it fell back into the grooves of colonial origins, or, more precisely, chose one of the two or three main alternatives that were available to it from its complex historical legacy. Revolutionary communism, a corrupt and wasteful autocracy of the Rhee type and a more USstyle open democracy were all realistic possible paths along which South Korea could have traveled. The key elements, however, of the eventual path it adopted - a Japanese-style, state-driven export economy were deeply etched into the social fabric. More specifically. Korean economy, especially southern Korean economy, was already export-oriented. its entrepreneurs had considerable experience in selling abroad, and the state within this economy had learned from its own history that strong support for business and exports, and tight control over labor. was a route to high economic growth.

Among scholars who share the view that states have played both a positive and a negative role in economic development, a pressing subsequent question concerns the comparative analysis of “developmental” and “predatory” states.54 More specifically, what distinguishes patterns of state intervention in the economy, and why do some developing country states end up successfully transforming their economies. whereas others end up as “rent seekers,” preying on their own society’s scarce resources? While detailed

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comparative analyses are the best route to develop answers to this complex but important question, the single country materials presented above also speak to the issue, especially because the Korean case is central to any such analysis and because the Korean state was itself, at the turn of the century, transformed from a “predatory” to a “developmental” state. Evans (1989) has described “developmental states” as exhibiting the characteristic of “embedded autonomy”; “autonomy” of bureaucratized states from social entanglements gives them a capacity to direct social change, and social “embeddeness,” in turn, especially the links these states forge with business and industrial classes, enable state elites to incorporate these powerful groups in the state’s economic project. The historical materials analyzed above are not inconsistent with this account of “developmental states.” Nevertheless, the Korean historical materials also suggest some qualifications and further specifications. The first important qualification concerns the issue of where the policy goals of any state directed economy come from. Arguments about “developmental states,” whether in Evans’s or in other versions, often focus more on explaining a state’s capacity to implement goals and less on where these goals come from in the first place. The latter issue requires an explicit focus on the political process of a society. Policy goals of any society reflect complex processes involving how the highest authorities balance their own preferences against national and international pressures. In the colonial Korean case discussed here, it was clear that the major shifts in policy goals - trade of raw materials for manufactured goods, followed by encouragement of food production in the early phase; encouragement of Japanese investments in manufacturing, along with some Korean participation during the middle phase; and finally, in the last phase, a war economy with rapid industrialization mainly reflected Japanese priorities, with an occasional concession to Korean pressures. In sovereign polities, this process of policy prioritization is often highly complex and would require a more detailed study than the colonial type of case discussed here. Nevertheless, the general point ought to be clear: since efficacious states can be used by their leaders to accomplish various goals, including nondevelopmental goals, the politics of how developmental goals emerge as a priority must be an important component of any study of “developmental states.” The juxtaposition of the late Chosbn or Yi state against the colonial state also yields some further insights about “predatory” and “developmental” states. The late Chosbn state was personalistic and factionalized at the apex, and it had very little downward reach in the society; it was also deeply penetrated by landowning classes. These characteristics bequeathed political incapacity. The result was that the Yi state was quite incapable of laying out and pursuing an agenda of socioeconomic change. By con-

“DEVELOPMENTAL

STATE”

1287

trast, the colonial state turned out to be highly efficacious. While this was no developmental state in the sense that it helped develop the whole society - on the contrary, it was a rather brutal, exclusionary state, not to mention that it was a colonial state - it nevertheless could establish order and facilitate economic growth. How did it achieve this capacity? The changes introduced by the Japanese that helped increase state capacity can be best thought of as changes along three dimensions: changes in the state structures; creation of new economic instruments in the hands of the state; and new patterns of state-class relations. Since all of these have been discussed in some detail above, now they only require a brief reiteration. First, the significant changes in the state structure were three: creation of centralized authority with a clear agenda of change; depersonalization of authority structures, so that public and private interests were first separated and only then reintegrated on a new basis, with public goals mainly in command; and downward penetration of the state’s authority in society via the creation of a disciplined bureaucracy.5s These changes enabled the new political authorities to formulate specific public goals and to implement them in the far reaches of the society. Second, the state also created a number of economic instruments that did not exist before and that enhanced the state’s capacity to direct the economy: a rationalized currency system, banks and other credit institutions that the state controlled, long and shortterm economic plans, production-oriented new technology, and a variety of direct and indirect subsidies. Finally, the state and social classes established a new relationship. In both the countryside and the city, the state and property-owning classes entered an alliance that was set mainly on the state’s terms, but that was nevertheless mutually beneficial: the state desired and succeeded in securing steady increases in production, whereas the property-owning groups received enough political support to ensure healthy profits. The state and property owning classes also collaborated to control peasants and workers in what amounted to a successful labor-repressive strategy. This last point directs attention to another important modification in Evans’s type of formulation of “developmental states,” namely, the significance of downward penetration of systematic political control. Far too much analytical attention is being devoted in contemporary attempts to understand “developmental states” to the apex of the political economy. This is unfortunate because the relationship of the state to laboring classes, especially the modalities of participation and control in the process of production, is a central part of the “story” of how and why some states succeed in industrializing their economies. For example, it is clear in the account above that the colonial state and Japanese and Korean businessmen collaborated, not only to strictly control any demand-making

I788

WORLD

DEVELOPMEN

or dissident actions of workers. but also to train them at work. pay a living wage. transmit some pride in their endeavors and provide job security. This combination of “carrots and sticks” generated considerable control over the lives and behavior of workers. While hardly conducive to the creation of a free and desirable society. this control. in turn, contributed to both productivity gains and. more importantly, enabled the state to single-mindcdly pursue economic growth. A bureaucratized and penetrating authoritarian state with clear growth-oriented goals. armed wjith a panoply of economic instruments. and allied with propertied but against laboring social classes, this is the stuff of which transformative power in the hands of the stale is made of. Or so. at least. emerges from the study of this one specific case. Neither the brutal. controlling nature. nor the colonial origins of this specific “developmental state” can be recommended to others on normative gounds. Yet, for those who believe that state\ have an important role to play in facilitating economic development. the question remains: how can power to develop be generated without outside forces remolding state structures, or without states that repress and control large majorities of their own citizens? The study of other cases and imaginative rethinking may yield insights into how to approximate “developmental states.” without acquiring SOIIIC of their worst features.

Finally. I wish to conclude with some speculative thoughts concerning future research directions. Developmental success has always ignited intellectual inquiry: why did “they” succeed’! Why not the “others”? Marx and Webcr struggled over these questions. trying to understand the early rise of capitalism in north-western Europe. Ever since. succrssful industrialircrs have attracted scholarly attention. It is hardly surprising that in our own times the successful NIC\ should attract similar attention. The puzzle i\ especially appealing when. in a group assumed to he more or less similar. sorbic ITIOVL‘ ahead. while others are left behind. Scholarly imagination then wants an explanation for both the \pecdy grower\ und the laggards. A variety of answers have been proposed in recent years as to why some developing countries have better performing economics than others; these vary from sharply market-oriented answers. through more statefocused analyses. all the way to religion and culture a'r the real variahlcs. What many of' these efforts in the hands of “developmentalis~~” lack. unfortunately. is historical depth. Large-scale processes of historical 1ransformation often tend to display long historical

continuities; when they do not, ruptures, new beginnings and shifts in path are dramatic. Establishment of sovereignty or. at least, the post-WWII beginning, is often assumed by development scholars as the “new beginning” from where comparative analyses of developing countries must begin. This trend is unfortunate. because it is likely that a significant component of the explanation for why countries traverse different developmental paths lie in their colonial heritage. An earlier generation of “dependency” scholars were well aware of historical continuities. However. that body of scholarship lost its intellectual sway for a variety of reasons, including the tendency to homogeniLe the anti-developmental nature of all colonialism. A central question in the minds of a new generation of scholars became. “why are developing countries traversing such different paths.” Any framework that mainly drew attention to a universal constraint (e.g., “world capitalism” or “neocolonialism”) was thus likey to loose appeal: satisfactory answers would rather have to explain why countries dealt differently with the same set of constraints. Unfortunately, however, scholars in rightly discarding dependency propositions, also threw out the proverbial baby with the bathwater; they threw out the colonial pasts of the developing world. Instead of asking, could the roots of varying performances be located in a variety of colonial pasts, most developmentatists now focus on the nature of post-WWII states, social structures, and policy choices as the primary explanations of divergent performances. If the historical discussion in this essay is persuasive, it suggests that the roots of economic dynamism in the critical case of South Korea are located, at least in part, in the state-society relations created under the auspices of Japanese colonialism: as a late developer, who had perfected a state-led model for catching-up in the world economy. Japan in its colonies constructed a political economy which also turned out to be well suited at catching-up. In other historical cases, different colonial powers, in different time periods, pursued a variety of colonial ruling strategies. They thus left behind a variety of political economies: distributive politics and a slow-growing economy in India; incomplete state\ that readily turned into predatory states in much of Africa: semi-sovereign political economies that came to be dominated by foreign investors and agrarian oligarchies prior to the onset of deliberate, state-led developmental experiments in large parts of Latin America. Is it not possible that the legacy of colonialism. though varying from case to case, especially region to region. was of long lasting significance in much of the developing world? If so. it bchoo\es scholars interested in understanding divergent path\ of contemporary developing countries 10 once again pay attention in their comparative analyses to the colonial pasts of these countries.

JAPANESE

LINEAGE OF KOREA’S “DEVELOPMENTAL

STATE’

1289

NOTES 1. The literature here is rather large; the bibliographies in any of the following sources (especially Amsden and Woo) offer a complete list of references. An incomplete list (listed alphabetically) of some of the major works with a political economy focus would include: Amsden (1989); Cumings (1984a); Deyo (1987);Haggard (199 I), especially the chapter on South Korea and some of his other work cited therein; Jones and Sakong (1980); Mason et al. (1980): Westphal (1990); and Woo (1991). 2. The conceptual distinction between government’s leading or following the market is made in Wade (1990), especially p. 28 and chapter 10. The scholar who has probably gone the farthest in suggesting that Korean government “distorted” prices to get growth up is Alice Amsden. See , Amsden (1989). especially chapter 6. For the argument that South Korean and other East Asian economic successes resulted from “free market” conditions, see Balassa’s essays in his own edited volume (1981); and Krueger (1980). 3. See, for example, Frank, Kwang and Westphal(1975); Hasan (1976); and Krueger (1979). For an early exception, see Kuznets (1977). 4. See, for example, Amsden (1989), when in five pages (pp. 31-35) the author quickly concludes that the “inheritance” left by the Japanese colonialists to Koreans was “useless” for their future developmental struggles. 5. Haggard, for example, has made valuable contributions to unraveling the “why” and “how” of South Korean industrialization. Bulk of his analytical energy, however, is devoted to the onset of export-led model under Park ChungHee. See, for example, Haggard (1991), the chapter on South Korea, where only about two paragraphs are devoted to the colonial period. 6. I am afraid I have only examined the English language publications of Korean scholars. One good example of the nationalist bias in what is otherwise an excellent study is, Suh (1978). My confidence in extrapolating the broader assertion from limited materials was enhanced when another scholar, who had examined many of the Korean language sources, reached the same conclusion. See, Woo (1991) pp. 1920. 7. Most significant here are the contributions of Cumings. He states his basic thesis in a summary form in Cumings (1984a). Scattered but brilliant insights on this topic can also be gleaned from his other writings: Cumings (1981); Cumings (1990); and Cumings (1984b). Another very important book that helps trace historical continuities is Eckert (1991). Also see, Woo (1991); and McNamara (1990). 8. While these issues will be discussed in greater detail below, the economic data here is taken from Suh (1978, Tables 11 and 17). Note that the “national production” data do not include construction, trade, services and public utilities that are generally included in the more conventional “national income” data; the latter for pre-WWII Korea are not readily available.

9. The best book on the late Chosbn continues to be Palais (1975). For a differing account, see, Choe (1972). A good “overview” account is provided by Ki-baik Lee in Eckert, et al. (1990). For another useful but abbreviated account that helps put traditional Korea in a comparative perspective visci-vis China and Japan, see Fairbank, Reischauer and Craig (I 978) chapters 12 and 20. 10. For a discussion of how “open” or “closed” Korea’s examination system may have been to non-Seoul based landed elite, see, Wagner (1974). Prolonged study of Chinese classics that was necessary to succeed in the exams appears to have been a major impediment for those without an independent source of wealth. Nevertheless, below the highest levels, there is evidence to indicate that some merit-based recruitment did occur. 11. Palais (1975). especially chapters l--I and direct quotes are from p. 5. Palais has informed me sonal communication that he has modified some views. While these are not readily available to me, apparently developed in Palais (forthcoming).

14. The in a perof these they are

12. As I read the historical evidence, Palais is probably correct in denying intraelite factionalism the central place in his analysis of the political problems of Yi Korea. See Palais (1975), especially the “Introduction.” Nevertheless, most historical treatments document a deeply factionalized elite in Yi Korea. See, for example, Ki-baik Lee in Eckert et al. (1990), where he concludes that “intra-bureaucratic strife” rendered “the decision making process dilatory and ineffective,” p. 110. Fairbank, Reischauer and Craig (1978), also note that factional struggles were “hereditary” and “endemic” in Yi Korea (p. 313). I see no analytical conflict, therefore, in suggesting factionalism as an additional debilitating trait. 13. See Palais (1975) chapter 2. Palais cites the figure of 10 million for Korean population in the mid-19th century. Later research has revised this estimate upwards. See Mitchell (1979-80). I owe this reference to James Palais. 14. This is not to suggest, as Palais rightly corrected me on his comments on this paper, that the state did not on occasion aid economic activity. There is also some evidence from revisionist historians that late Yi Korea experienced a degree of economic dynamism, but none to suggest that this was state induced. Cumings cites the work of Korean historian Kim Yang-Sop to suggest that pre-Japanese Korean agriculture was probably not stagnant. See Cumings (1984b), p, 491. Also see Shin (1975). 15. See Ladd (1908). While this is a highly pro-Japanese, even a prejudiced, account, there is no reason to not make use of some of its more descriptive observations, 16. The quote is from George Kennan, a friend of Theodore Roosevelt, who influenced Roosevelt’s attitudes toward Korea. It was cited - though not approvingly - in Grajdanzev (1944), p. 35. 17.

I use quotations

around

the evocative

concepts

of

1290

WORLD DEVELOPMENT

predatory and developmental states to indicate my considerable discomfort in describing these states as such. Predatory is misleading because it creates a state versus society image: in reality, where “predation” prevails, political and economic elite often collude to squeeze and misuse a society’s resources. Developmental is also misleading because the states so described are often not strictly developmental. For example, both the Japanese colonial state and the subsequent South Korean state under Park Chung-Hee, while successful agents of economic transformation, were also, to varying degrees, rather brutal states. The normative calcu1us, in turn, of evaluating a state that is simultaneously brutal and helps promote economic growth is clearly complex. In any case, two recent and useful essays that discuss the concept of developmental states are, Johnson (I 987); and Evans (I 989).

18. Kublin (1959) has argued that Japanese “colonial doctrine” evolved in Formosa (later Taiwan) and was subsequently implemented in Korea. This is true insofar as Formosa was colonized in 1895 and Korea in 1910. It is important to note, however, that Kabo reforms in Korea (tried around 1895) and early experimentation in Formosa were simultaneous efforts, both probably a product of a single “colonial official mindset” in Japan-a product of Meiji Japan - with simultaneous political learning going on in both Korea and Formosa. 19. Halliday (1975). pp. 35-36. For a discussion of the development of the Prussian bureaucracy, especially concerning how some such traits as an espirit de corps. an ethos of public service, a degree of insulation from aristocratic interests, tight internal authority structure and a relative absence of corruption, developed, see Rosenberg (1958); and for evolution of this bureaucracy in 19th century Germany, see Bonham (1991). especially chapters 2,7 and 8. 20.

For details see, H.I.J.M.‘s Residency General (1908).

2 I. The following examples are taken from various reports on “administration” that the Japanese colonial government published regularly. See, for example, H.I.J.M.‘s Residency General (1908); and Government-General of Chosen ( 1921, chapter on “local administration”). 22. One scholar of Meiji Japan thus notes: “The police. had operational responsibility for a bewildering variety of government programs and policies in addition to public safety, traffic control, and criminal investigation and apprehension. They enforced economic controls, discouraged censored publications, unionism, inspected factories, licensed commercial enterprises, arranged for public welfare aid, supervised druggists and publications, controlled public gatherings, managed flood control and fire prevention, maintained surveillance of people suspected of “dangerous thoughts,” and did countless other things that brought government close to the daily life of every Japanese.” See Spaulding (I 97 I ). pp. 36-37. 23. Chen (1984), pp. 228-23 I, It is important to note that the extensive role of the police remained intact throughout the colonial period. For example, when Americans finally arrived in Korea after the Japanese surrender, they found (e.g., in South Cholla province) that police departments were the biggest within the local bureaucracy, and within the

police departments, “economic sections” of the police were important. See Meade (195 I), p. 3 I. 24. The quote is from Shakuo Shunjo and is cited in Chen (1984), p. 222. 25. See Lee (1963). For a discussion liberal interlude, see Robinson (I 989).

of the brief, more

26. For example, when confronted with the fact of being left behind in the race to modernity, many Koreans had looked to Meiji Japan as a model for their own advancement; for better or for worse, therefore, “modernity” to many Koreans came to be represented by Japan. See Henderson (1968, p. 67). Moreover, some Korean elites, enamored with Japan, had participated in Japanese-supported Kabo reforms of 1895. Later, the pro-Japanese Korean organization. I/chinhoe (Advancement Society) enjoyed considerable support in 1905-10; for example, at its least popular phase in 1910, the I/chin-hoe still enjoyed a membership of nearly 140,000 and had some one hundred subsidiary organizations. See, for example, Chandra (1974, p. 52). 27. The quote is from official documents of the Government-General and taken from Ireland (1926. p. 190). 28. For one review of Japanese cies, see Ho (1984, pp. 347-386).

colonial

economic

poli-

29. See, for example, Schumpeter (1940), especially chapters IX-XI, XXI and XXII. and the conclusion. 30. The reference is to Government-General of Chosen, Annual Report on Refkms and Progress in Chosen (Korea), Keijo, (Seoul), published regularly - for the most part. annually ~ during 1910-39. See, for example, the 1914 report, where in the opening chapter, repeated references are made to “financial efficiency” and to the “economy of administration.” 31. The figures are from H.I.J.M.‘s Residency General (1908 and 1909). The real increase was probably somewhat less because this simple calculation does not take account of increase in production, which, in any case, we know to have been relatively small in those years. 32. The 1905 figure is from H.I.J.M.‘s Residency General (1907), and the I91 I figure is from Government-General of Chosen (1910-I I). While reliable data on inflation for these years is not readily available, there is no indication in government documents of huge price increases. 33. See Robinson in Eckert (l990), p. 265. There is apparently also a good doctoral thesis on the subject of this land survey by Edward Gragert at Columbia University. Unfortunately, I was unable to locate this unpublished manuscript. 34.

For a full discussion.

see Ho ( 1984).

35. The colonial government’s own assessment is intereating. While lamenting the political opposition from educated Koreans, government documents of the period note: “People of the upper class having personally experienced imperial

JAPANESE

LINEAGE OF KOREA’S “DEVELOPMENTAL

favor and being in a position to feel directly or indirectly the benefit of the new regime, seem to be contented with it.” See Government General of Chosen (1914). p. 64. Also see Robinson in Eckert, et al. (1!290), pp. 266-267. 36. Migdal(1988). for example, tends to view state capacity in agrarian societies as inversely related to the power of landowning and other traditional elites. Evans (1987). makes a similar argument. 37. For these policy swings and for the direct quote, see Grajdnazev (1944), pp. 92-94. 38. Suh (1978), p. 73, Table 33. Also see, Ishikawa, (1967), pp. 84-109. 39. This distinction can be sharpened by using the concepts of “idea gaps” and “object gaps” proposed in the “new” economic growth theory. Whereas the “object gap” refers to lack of concrete objects as factories, that direct attention to savings and investment bottlenecks in development, the “idea gap” refers to the knowledge base on which development rests. The “new” growth theory emphasizes (as did several old growth theories) the role of knowledge and technology in economic growth: See, for example, Romer (1993). One may thus argue that in Korean colonial economic history, even if “objects” were destroyed during decolonization, the legacy of “ideas” was substantial. 40. The point here is not that these same groups subsequently facilitated Korea’s export-led growth. Some contributed to this process, others failed and yet other new ones also emerged. The point here is instead that a “system” was being created. I am indebted to Chung-in Moon’s criticisms that forced me to clarify this point. 41. There is a great self-congratulaory discussion of how Governor-General Ugaki thought of this scheme to provide subsidies for gold mining. See his speech in, GovemmentGeneral of Chosen (1935).pp. 85-87. 42. All the materials in quotations in this paragraph are from Eckert (1991), pp. 73-74. Note that the exhortations to businessmen began rather early with colonial rule. A govemment report of 1914 notes that the Governor General called business leaders to a party, explained government’s policies, and urged them to be concerned not only with profits but “to bear in mind the promotion of the interest of the state.” See Government General of Chosen ( 19 14). p. 13.

STATE”

1291

43. This theme is well developed in McNamara (1990). pp. 127-I 30. 44. This, for example, (1978).

is the approach

adopted

in Suh

45. These and the subsequent facts concerning geographical distribution of industry are from Grajdanzev (1944). Appendix III. 46. For evidence on the nature and extent of lower class restiveness, especially as expressed through the communist movement. See Scalpino and Lee (1972). chapter III. 47. See, Cumings (198 I), Chapter 2 for a moving discussion of the human toll exacted by the large scale movement of Koreans under Japanese rule. 48. The following account is based on the case study of Onoda cement factory in Park (1985). Part II, B, sections 1, 4,5, and 9. 49. See, Eckert (1991), chapter 7, from where the account in this paragraph is drawn. 50. This quote and the materials drawn from Ogle (1990). p. 6.

in this paragraph

are

5 1. I am currently involved in writing such an essay, but in the context of a larger study from which the present essay is drawn. The larger study is a comparative analysis of the “state and economic development” in four countries, namely, Korea, Brazil, India and Nigeria. 52. See Cumings (184b). pp. 479480. For his detailed analysis of why and how Americans left the colonial state more or less intact in Korea, see Cumings (1981), chapter 5. 53. See Woo (1991) for the specific issue of state control over credit. 54. For one insightful analysis of this question, see Evans ( 1989). 55. Note that Evans’s “autonomy” component of the “embedded autonomy” formulation (1989) mainly directs attention to the second of these three structural components.

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(Advancement Society) of Korea,” Occasional Papers on Korea, No. 2 (Seattle: University of Washington, March 1974), pp. 43-72. Chen, Ching-Chih, “Police and community control systems in the empire,” in Ramon Myers and Mark Peattie (Eds.), The Japanese Colonial Empire (Princeton: Princeton University Press, 1984). pp. 213-239. Chen, Ta, ‘The labor situation in Korea,“Monthly Labor Review, Vol. 31 (November 1930). pp. 26-36. Choe, Ching Young, The Rule of the Taewongun,

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WORLD DEVELOPMENT

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(Princeton: Princeton University Press, 1981). Deyo, Fredric C. (Ed.), The Political Economy ofNew Asian Industrialism (Ithaca. NY: Cornell Umversity Press, 1987). Duus, Peter, “Economic dimensions of Meiji imperialism: The case of Korea, 1895-l 9 IO,” in Ramon H. Myers and Mark R. Peattie (Eds.), The Japunese Colonial Empire, (Princeton: Princeton University Press, 1984) pp. 128-163. Eckert, Carter, J., Oflypring of Empire: The Koch ‘ung Kim.7 and the Colonial

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18761945

(Seattle: University of Washington Press, 1991). Eckert, Carter, J., Ki-baik Lee, Young Ick Lew, Michael Robinson, Edward W. Wagner, Korea Old und New: A History (Korea Institute, Harvard University, 1990). Evans, Peter, “Predatory, developmental and other apparatuses: A comparative political economy perspective on the third world state,” Sociologiccd Forum. Vol. 4. No. 4 (Fall 1989). pp. 561-587. Evans. Peter, “Class, state and dependence in East Asia: Lessons for Latin Americanists,” in Fredric D. Deyo (Ed.), The Political Economy of the New Asian fndustrialism (Ithaca, NY: Cornell University Press, 1987), pp. 2033226. Fairbank, John K., Edwin 0. Reischauer and Albert M. East Asia: Tradition trnd Trcmsformtitiort Craig, (Boston: Houghton Mifflin Company, 197X). Frank, Charles R. Jr., Kwang Suk Kim and Larry E. Westphal. Foreign Trade Regimes and Ec~onomic Development: South Korea (New York: Columbia University Press, 1975). Government General of Chosen, Thriving Chosen: A Survey of Tbventy Five Years’ Administration. (1935) (no place of publication listed). Government General of Chosen, Annual Report on Reji1rm.s tind Progress in Chosen (Korea) (1918-21) (Seoul: 1921). Government General of Chosen, Results of Three Years Administmtion of Chosen Since Atmexution (Seoul: 1914). Government General of Chosen, Annucd Report on Refr,rms

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Press, 1976). Korea: The Politics of’ Vorter Henderson, Gregory, (Cambridge, Mass.: Harvard University Press, 1968). “Colonialism and development: Ho, Samuel Pao-San. Korea. Taiwan, and Kwantung,” in Ramon Myers and Mark Peattie (Eds.), The Jtrpnnese Colonial Empire (Princeton: Princeton University Press, 1984). pp. 3477386. Ireland, Alleyne, The New Korea (New York: E. P. Dutton and Company, 1926). Ishikawa, Shigeru. Economic De\,elopment itI A.YiuI Perspective (Tokyo: Kinokuniya Bookstore Co.. 1967). Jones, Leroy P., and II Sakong, Government. Rusinrs.v crud Development: Entrepreneurship in Economic Korean Case (Cambridge: Harvard University

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Press,

1980). Johnson, Chalmers, “Political institutions and ccontrmic performance: The government-busines\ relationship in Japan, South Korea and Taiwan.” in Fredric C. Deyo, (Ed.), The Politicul Eco~lo~n~ oj the Ne\v A.titrn Industrialism (Ithaca: Cornell University Press. 1987), pp. 136-164. Krueger, Anne, “Trade policy as an input to development,” Americun Economk Rnkts, Vol. 70. No. 2 (May 19X0), pp. 228-292. Krueger, Anne 0.. Studies in the Moder~~i;otioi~ of Koreu: The Developmental

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(Cambridge, MA: Harvard University Press. 1979). Kublin, Hyman, “The evolution of Japanese colonialism.” Comparcrti\~r Studies in .kirry trnd Histor:v. Vol. II. No. 1 (October 1959). pp. 67784. Kurneta, Paul, Ecorwmic Grobcth ~ntl Structure i,r the Republic oj’Koreo (New Haven: Yale Univjersity Press. 1977). Ladd, George Trumball, /IZ Korea \t,ith Mar@.\ /to (New York: Charles Scribner’s Son\. 1908). Lee, Chong-Sik, Jopun und Korrcr: The Politkal Dimrukm (Stanford, CA: Hoover Institution Press. 1985). Lee. Chong-Sik, The Politics of Koretm Ntrtmntrlinn (Berkeley, CA.: University of California Press. lY63).

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Mason,

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Mitchell, Tony, “Fact and hypothesis in_Yi Dynasty economic history: The demographic dimension,” Korean Studies Forum, No. 6 (Winter-Spring, 1979-80). pp. 65-93. Moskowitz, Karl, “The creation of the Oriental Development Company: Japanese illusions meet Korean reality,” Occasional Papers on Korea, No. 2 (Seattle: University of Washington, March 1984). McNamara, Dennis L., The Colonial Origins of Korean Enterprise 1910-45 (New York: Cambridge University Press, 1990). Ogle, George E., South Korea: Dissent Within the Economic Miracle (London: Zed Books Ltd., 1990). Palais, James B., Confucian Statecraft and Korean Institutions (Seattle: University of Washington Press, forthcoming). Palais, James B., Politics and Policy in Traditional Korea (Cambridge, MA: Harvard University Press, 1975). Park, Soon Won. “The emergence of a factory labor force in colonial Korea: A case study of the Onoda Cement Factory,” Ph.D. Dissertation (Cambridge, MA: Harvard University Press, 1985). Peattie, Mark, “Introduction,” in Ramon Myers and Mark Peattie (Eds.), The Japanese Colonial Empire (Princeton: Princeton University Press, 1984). Robinson, Michael E., Cultural Nationalism in Colonial Korea, 1920-1925 (Seattle: University of Washington Press, 1989).

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Romer, Paul, “Idea gaps and object gaps in economic development,” Paper presented at the World Bank Conference on “How do National Policies Affect Long Run Growth’ (Washington, DC: February 7-8, 1993). Rosenberg, Hans, Bureaucracy, Aristocracy and Autocracy: the Prussian Experience, 1660-1815 (Cambridge, MA.: Harvard University Press, 1958). Scalpino, Robert, and Chong-Sik Lee, Communism in Korea, Part I: The Movement (Berkeley: University of California Press, 1972). Schumpeter, E.B., The Industrialization of Japan and Manchukuo 1930-1940 (New York: The Macmillan Company, 1940). Shin, Susan J. S., “Some aspects of landlord-tenant relations in Yi Dynasty Korea,” Occasional Papers on Korea, No. 3 (Seattle: University of Washington, June 1975), pp. 49-88. Spaulding, Robert M. Jr., “The bureaucracy as a political force, 1920-45,” in James William Morley (Ed.), Dilemmas of Growth in Prewar Japan (Princeton: Princeton University Press, 1971). Suh, Sang-Chyul, Growth and Structural Changes in the Korean Economy, 1910-1940 (Cambridge, MA: Harvard University Press, 1978). Wade, Robert, Governing the Market: Economic Theory and the Role of Government

in East Asia Industrialization

(Princeton: Princeton University Press, 1990). Wagner, Edward, “The ladder of success in Yi Dynasty Korea,” Occasional Papers on Korea, No. 1 (Seattle: University of Washington, April 1974). Westphal, Larry, E., “Industrial policy in an export-propelled economy: Lessons from South Korea’s experience,” Journal of Economic Perspectives, Vol. 4, No. 3 (Summer 1990). pp. 412459. Woo, Jung-en, Race to the Swift: State and Finance in Korean Zndustrialization (New York: Columbia University Press, 1991).

Predatory, Developmental, and Other Apparatuses: A Comparative Political Economy Perspective on the Third World State Author(s): Peter B. Evans Source: Sociological Forum, Vol. 4, No. 4, Special Issue: Comparative National Development: Theory and Facts for the 1990s (Dec., 1989), pp. 561-587 Published by: Springer Stable URL: http://www.jstor.org/stable/684425 . Accessed: 26/01/2015 07:39 Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp

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Sociological Forum, Vol. 4, No. 4, 1989

Predatory, Developmental, and Other Apparatuses: A Comparative Political Economy Perspective on the Third World State Peter B. Evans1

Disappointment over the contributions of Third World state apparatuses to industrial transformation and the increasing intellectual dominance of "neoutiliarian" paradigms in the social science has made if fashionable to castigate the Third Worldstate as "predatory"and "rentseeking." Thispaper argues for a more differentiated view, one that connects differences in performance to differences in state structure. The "incoherent absolutist domination" of the "klepto-patrimonial" Zairian state are contrasted to the "embedded autonomy" of the East Asian developmental state. Then the internal structure and external ties of an intermediate state-Brazil- are analyzed in relation to both polar types. The comparative evidence suggests that the efficacy of the developmental state depends on a meritocraticbureaucracy with a strong sense of corporate identity and a dense set of institutionalized links to private elites. KEY WORDS: state; industrialization;developmental state; neo-utilitarianism;East Asia; Japan; Brazil.

INTRODUCTION Scholars of development often vent their frustrations by identifying the culprits that keep their theories from working. Recently, an old favorite has been brought back into the dock with new vehemence. Instead of the peasant clinging to traditional values (as in early normatively oriented work by sociologists) or the multinational manager funneling surplus back to headquarters (as in the dissident views that supplanted earlier perspectives), the state Department of Sociology, University of New Mexico, Albuquerque, New Mexico 87131. 561 0884-8971/89/1200-0561$06.00/0

? 1989 Plenum Publishing Corporation

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bureaucrat, strangling the golden goose of entrepreneurship and lining his pockets with unproductive rents, has again become the central villain. Disillusionment on the part of even sympathetic students of the postcolonial state has helped motivate this shift, but the intellectual apparatus has been provided primarily by the resurgence of "neoutilitarian" models. Such models have rapidly expanded the domain in which the logic of market exchange is claimed to have explanatory preeminence. The thoroughness with which neoutilitarian theorizing has penetrated thinking on development is impressive, but its untrammeled success provokes a certain unease. Enough bathwater is being discarded that the possibility of losing a baby or two in the process must be considered (cf. Killick, 1986). A skeptical reexamination of argumentsthat make state action the principal impediment to development is in order and that is where this essay begins. After examining, albeit in a sketchy and summary fashion, the logic of neoutilitarian descriptions of the state, it moves on, even more briefly, to discuss some of the comparative-historical and institutional perspectives that have argued that not only regulatory but also entrepreneurial activity on the part of the state is a necessary part of economic transformation. This review of general perspectives serves as a prelude to the main task of the article, which is setting the theoretical debate in the context of some comparative historical evidence on the role of the state in Third World countries.2 State are not standardized commodities. They come in a wide array of sizes, shapes, and styles. That incumbents sometimes use the state apparatus to extract and distribute unproductive rents is undeniable. That all states perform certain functions indispensableto economic transformationis equally so. That both characteristics are randomly distributed across states is very unlikely, yet we have only a hazy sense of the range of variation, to say nothing of its causes. As a starting point, we can imagine a range of states defined in terms of the way in which they affect development. Some states may extract such large amounts of otherwise investable surplus and provide so little in the way of "collective goods" in return that they do indeed impede economic transformation. It seems reasonable to call these states "predatory."Zaire might be considered an archetypal case of such a state. Those who control the state apparatus seem to plunder without any more regard for the welfare of the citizenry than a predator has for the welfare of its prey.3 Other states, however, are able to foster long-term entrepreneurialperspectivesamong pri2The concept of the state used here is a modified Weberian one, as in Rueschemeyer and Evans (1985:46-48). 3It is important to note that this usage of "predatory" differs from that of other advocates of the term (e.g., Lal, 1988, and Levi, 1988) who define revenue maximizing states as "predatory."

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vate elites by increasing incentives to engage in transformative investments and lowering the risks involved in such investments. They may not be immune to "rent seeking" or to using some of the social surplus for the ends of incumbents and their friends rather that those of the citizenry as a whole, but on balance, the consequences of their actions promote ratherthan impeding transformation. They are legitimately considered "developmental states" (cf. Jonhson, 1982; White and Wade, 1988). The East Asian NICs are usually cited as examples of this type of state. Here we will focus on the "first NIC"- Japan- during the initial period of its post-World War II industrialization. Most Third World countries have "otherapparatuses."The balance between predatory and developmental activities is not clear-cut but varies over time, and depends on what kind of activities are attempted. Brazil will be the illustrative "intermediary"case. Thinking about states as varying along a continuum from predatory to developmental is a heuristic device, not an end in itself. It helps focus attention on structural variation. What do states that prey on their societies look like organizationally? Are they more or less bureaucratic than developmental states? Should we think of them as "autonomous"or "captured"?How do developmental states emerge historically? What kinds of changes would be necessary in order for other apparatuses, intermediary states whose developmental impact is more ambiguous, to achieve a performance closer to that of the developmental states? Trying to answer questions like these is much more likely to be fruitful, both theoretically and practically, than condemning "the state" as an inherentlyantidevelopmentalinstitution. Nonetheless, the neoutilitarianshave set the terms of the contemporary debate and any attempt to move it foward must begin by considering their arguments. THE STATE AS A NEXUS OF EXCHANGE Neoclassical economics always admitted that "the existence of the state is essential for economic growth"(North, 1981:20), but the essential state was a minimal state, "restricted largely, if not entirely, to protecting individual rights, persons and property, and enforcing voluntarily negotiated private contracts" (Buchanan et al., 1980:9). In its minimal neoclassical form, the state could safely be left exogenous, a "black box" whose internal functionings were not a proper subject for economic analysis. The neoutilitarians, however, became convinced that the negative economic consequences of state action were too important to leave the black box closed. More important, they have decided to try to apply the "standardtools of individual optimization" to the analysis of the state itself (Srinivasan, 1985:41).

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"Public choice" theory has generated the most prominent and powerful version of the neoutilitarian vision of the state (see Buchanan et al., 1980; Niskanen, 1971; Auster and Silver, 1979). The public choice vision of the state makes no pejorative assumptions about stupidity, traditional attitudes, or lack of expertise within the state apparatus. To the contrary, it assumes only that incumbents in public office, like all other social actors, are rational maximizers. Incumbents require political supporters to survive and these in turn must be provided with incentives sufficient to retain their support. The exchange relation between incumbents and supporters is the essence of the state. Incumbents may distribute resources directly to supporterssubsidies, cheap loans, jobs, contracts, dams, water, etc. Alternatively, they may use their rule-making authority to create rents by restricting the ability of market forces to operate-rationing imports, licensing a limited number of producers, prohibiting the introduction of new products, etc. Incumbents may also exact a share of the rent for themselves. Indeed, it is hypothesized that "competition for entry into government service is, in part, a competition for rents" (Krueger, 1974:293). The symbiotic relationship involved in rent creation is self-reinforcing. Supporters whose original economic power derived from productive activities are likely to become increasingly dependent on rents and therefore increasingly committed to the expansion of "rental havens." Conversely, since returns in the "rent-seeking economy" are highly skewed toward those involved in the production and usufruct of rental havens, the command over resources, and by extension, the political power of those involved in this sector, will increase relative to that of other sectors. The developmental implications of the argument are obvious. As states expand their size, their range of functions, and the amount of resources they control, the proportion of economic activity that becomes incorporated into rental havens will increase correspondingly and economic efficiency and dynamism will decline. Conversely, to the degree that the economic power and prerogatives of the state can be curtailed, prospects for growth, efficiency, and welfare will be enhanced. Therefore, the sphere of state action should be reduced to the minimum, and bureaucratic control should be replaced by market mechanisms wherever possible. The range of state functions considered susceptible to "marketization"varies, but some authors even speculate on the possibility of using "prizes" and other incentives to induce "privateers"and other private citizens to provide at least partially for the national defense (Auster and Silver, 1979:102). It would be foolish to deny that the neoutilitarian vision captures a significant aspect of the functioning of most states. Certainly, rent seekingconceptualizedmore primitivelyas corruption- has always been a well-known facet of the operation of Third World states. In some respects, the neoutilitarianview is an improvementon the traditional neoclassical vision of the

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state as neutral arbiter. Indeed, the neoutilitarian assumption that state policies "reflect vested interests in society" (Colander, 1984:2) partially recaptures some of Marx's original insights into biases likely to characterize state policy. Neoutilitarian perspectives may also produce useful policy when focused on the issue of the relative susceptibility of different kinds of state activities to distortion by rent seeking. Krueger's(1974) suggestion that quotas are more likely than tariffs to lend themselves to the formation of rentseeking alliances is one example. As an explanation of one facet of the behavior of state bureaucrats, neoutilitarian thinking is a useful contribution. As a monocausal master theory of all aspects of state action, which is what it tends to become in the hands of its more dedicated adherents, neoutilitarianism is highly problematic. Analyzing the behavior of incumbents as though they were atomistic individuals is a dubious starting point. Even the most primitive activity of the state- coercion - requiresan apparatusthat acts corporativelyratherthan as a collection of individuals. A protection racket whose triggermen cut individual deals at the first opportunity does not last very long, and the larger the coercive apparatus involved, the more difficult the problem. Without the existence of a powerful motivational logic to constrain individual behavior in the direction of consistency with collective aims, the state would be unable to perform even its minimal role as an enforcer of contracts. Even the minimal state requires that incumbents redefine individual aims in ways that motivate them to pursue corporate goals. If we ignore this problem and assume that the state apparatus has somehow managed to achieve sufficient corporate coherence to play its "minimal role" of eliminating force and fraud from exchange relations, another equally serious theoretical problem emerges. What keeps the minimal state from moving into the business of providing rents? Within the logic of neoutilitarian arguments there is no reason for those who have a monopoly of violence to rest content being nightwatchmen and every reason for them to try to expand rental havens indefinitely. Strict adherence to their own logic makes the state that is the sine qua non of economic life for the neoutilitarians, one that will restrict itself to those actions necessary to sustain bilaterally voluntary exchange, unattainable. Recognition of this problem compels economists with more historical and institutional interests to introduce complementary motivational principles. North's invocation of ideology and the concept of "legitimacy"is an example. Falling back on ideology and legitimacy may not suffice to solve the problem, but it does acknowledge that a vision of the state built only on a model of individual maximizers joined by exchange relations is not adequate. Taking into account the theoretical problems inherent in the neoutilitarian view, one can still ask, "Whatpredictionsdoes this perspectivemake about the relative efficacy of different kinds of state structure?" In principle, one

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might imagine a neoutilitarian theory of how a developmental state should be organized internally and linked to society. Preference for a restrictedrange of state activities should not preclude inquiry into how best to structure the implementation of these activities. In practice, as we have seen, the neoutilitarian focus on individual maximization makes it difficult to contribute to our understanding of corporately coherent organizations. The problem is compounded by the fact that neoutilitarians see any kind of state intervention on behalf of economic transformation as likely to have the "perverse effect" (cf. Hirschman, 1989) of impeding the very transformations desired. They are, as Levi (1988:24) puts it, "obsessed with demonstrating the negative impact of government on the economy." Given this vision, it is not even clear that an "efficient" state organization is superior to a bumbling and inept one. If less is good and least is best, than anything that diminishes the ability of the state to act may be a good thing. It is hard to build a positive organizational theory of the state starting with the attitude that "The only good bureaucracy is a dead bureaucracy." Neoutilitarians also seem to lack useful expectations regardingthe relative developmental efficacy of different sorts of linkages between the state and the surrounding social structure. Autonomous bureaucrats are likely to be disasterously rapacious, but incumbents dependent on constituents will do their bidding at the expense of the general interest. Implicitly, then, the neoutilitarianview seems to come closest to that of the "structuralMarxists" (e.g., Poulantzas, 1973). The state should be "relativelyautonomous" in the sense of being constrained by the structural requirements of capital accumulation without being closely connected to or dependent on specific private elites. The neoutilitarian approach provides us with a general expectation that the state action is likely to be associated with developmentally negative outcomes, but offers only the vaguest clues as to how the structure of developmental states will differ from the structure of predatory ones. For a richer set of expectations regarding the consequences of variations in state structure, it is necessary to turn to a different tradition of work on the state. HISTORICAL PERSPECTIVES ON STATES AND MARKETS A long tradition of scholarship, which goes back at least to List (1885/1966) and includes some of the foremost theorists of early industrialization as well as scholarship of latecomers, has focused on the historical role of the state in industrialization. Its ranks include some ardent defenders of the proposition that a determined and effective state apparatus is an essential ingredient in successful industrialization. White and Wade (1988:1)

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argue, for example, that "the phenomenon of successful 'late development' ...should be understood...as a process in which states have played a strategic role in taming domestic and international market forces and harnessing them to a national economic interest." This tradition has also been critical of the proposition that exchange was a "natural" activity that required only the most minimal institutional underpinnings. Forty years ago Polanyi (1944/1957) reminded us that Smith's "naturalpropensity to truck and barter"had not sufficed to produce the rise of the market in England. Instead, Polanyi argued (1957:140) "The road to the free market was opened and kept open by an enormous increase in continuous, centrally organized and controlled interventionism."From the beginning, according to Polanyi, the life of the market has been intertwined not just with other kinds of social ties, but with the forms and policies of the state. Looking at established market societies, Weber carried this line of reasoning further, arguing that the operation of large-scale capitalist enterprise depended on the availability of the kind of order that only a modern bureaucratic state could provide. As he put it (1911-1968:1395, footnote 14), "capitalismand bureaucracyhave found each other and belong intimately together." Weber's assumption of the intimate relation was, of course, based on a conception of the bureaucratic state apparatus that was the mirror image of the neoutilitarian view. Weber's bureaucrats were concerned only with carryingout their assignments and contributing to the fulfillment of the goals of the apparatus as a whole. Use of the prerogatives of office for maximizing private interests was, for Weber, a feature of earlier prebureaucratic forms. For Weber, the state was useful to those operating in markets precisely because the actions of its incumbents obeyed a logic quite different from that of utilitarian exchange. The state's ability to support markets and capitalist accumulation depended on the bureaucracybeing a corporately coherent entity in which individuals see furtherance of corporate goals as the best means of maximizing their individual self-interest. Corporate coherence requires that individual incumbents be to some degree insulated from the demands of the surrounding society. Insulation, in turn, is enhanced by conferring a distinctive and rewarding status on bureaucrats. The concentration of expertise in the bureaucracythrough meritocraticrecruitmentand the provision of opportunities for long-term career rewards was also central to the bureaucracy's effectiveness. In short, Weber saw construction of a solid authoritative framework as a necessary prerequisite to the operation of markets. Gerschenkron's (1962) work on late developers complements Weber by focusing on the specific contributions of the state apparatus to overcoming

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problems created by a disjunction between the scale of economic activity required for development and the effective scope of existing social networks. Late industrializersconfronting production technologies with capital requirements in excess of what private marketswere capable of amassing, were forced to rely on the power of the state to mobilize the necessary resources. Instead of simply providing a suitable environment, as it did in Weber's model, the state was now actively organizing a crucial aspect of the market. Gerschenkron's argument also raises a new issue-the problem of risk taking. The crux of the problem faced by late developers is that institutions allowing large risks to be spread across a wide network of capital holders do not exist, and individual capitalists are neither able nor interested in taking them on. Under these circumstancesthe state must serve as surrogate entrepreneur. Hirschman takes up this emphasis on entrepreneurship as the missing ingredient for development in much more detail. Based on his observations of the "late late" developers of the 20th century Third World, Hirschman argues that "capital" in the sense of a potentially investible surplus is not the principal ingredient lacking in developing countries. What is lacking is entrepreneurship in the sense of willingness to risk the available surplus by investing it in productive activities, or in Hirschman's own words (1958:35) "the perception of investment opportunities and transformation into actual investments." If "maximizinginduced decision-making"is the key as Hirschman argues it is (1958:44), then the state's role involves a high level of responsiveness to private capital. It must provide "disequilibrating"incentives to induce private capitalists to invest and the same time be ready to alleviate bottlenecks that are creating disincentives to investment. Viewed from the perspective of Gerschenkron, or even more clearly, Hirschman, the ability to implement rules predictably, however necessary, is not sufficient. A Prussian style bureaucracy might well be effective at the prevention of force and fraud, but the kind of surrogate entrepreneurship that Gerschenkron talks about or the kind of subtle triggering of private initiative that Hirschman emphasizes would demand more than an insulated, corporately coherent administrative apparatus. It demands accurate intelligence, investiveness, active agency, and sophisticatedresponsenessto a changing economic reality. The Gershenkronian/Hirschmanian vision makes the relationship between state "capacity" and "insulation" (or "autonomy") more ambiguous. Since corporate coherence clearly requires some degree of insulation from the surrounding social structure, the state's capacity to act as an effective organization depends on some degree of insulation. Neo-Marxist arguments for the necessity of "relative autonomy" from the particularistic demands of individual capitalists reinforce the idea of a positive relation between capacity and autonomy (cf. Rueschemeyer and Evans, 1985). Yet for the insu-

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lated state to be effective, the nature of a project of accumulation and the means of implementing it must be readily apparent. In a Gerschenkronian or Hirschmanian scenario of transformation, the shape of a project of accumulation must be discovered, almost invented, and its implementation demands close connections to private capital. While comparative historical visions do provide us with the beginnings of a positive vision of how an effective state might be organized internally, they are ambiguous regarding the nature of effective relations between state and society. While the Weberian vision is consistent with the kind of Poulantzian insulation that seems favored by a neoutilitarian logic, Gerschenkronianor Hirschmanian arguments demand a state that is much more "embedded" in society (cf. Granovetter, 1985, for a discussion of "embeddedness"). Neoutilitarian and comparative historical arguments do have one thing clearly in common. They apply to a similar range of cases. Unless a state is sufficiently enmeshed in the modern world to make economic transformation a goal that cannot be ignored, many of the questions raised by both views become moot. Likewise, unless private interests and market forces play a significant role in the process of transformation (or its absence), the resonance and tension between the state and the market that are central to both perspectives are likely to take on forms quite different from those expected by either approach. In short, application of these arguments to traditional societies or communist states would require substantial extension and revision. Finally, while most of the arguments apply in principle to both advanced industrial and developing countries, they apply most strongly to situations in which structural transformation, like the movement from reliance on agriculture to reliance on industry, is the order of the day. Thus, the debate is probably best moved forward by comparing Third World states, including some obviously ineffective states and some relatively effective ones. We will begin by examining a case of what appears an exemplary predatory state-Zaire under Mobutu.

THE PREDATORY STATE-ZAIRE Since Joseph Mobutu Sese Seko gained control over Zaire in 1965, he and his coterie within the Zairian state apparatus have extracted vast personal fortunes from the revenues generated by exporting the country's impressive mineral wealth. During the first two decades of Mobutu's rule, Zaire's gross national product per capita has declined at an annual rate of 2.1% (World Bank, 1988), gradually moving the country toward the very bottom of the world hierarchy of nations and leaving its population in misery as bad

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as or worse than they suffered under the Belgian colonial regime. Zaire is, in short, a textbook case of the sort of predatory state we should expect to be pervasive if neoutilitarian logic held. The preoccupation of the political class with rent seeking has turned the rest of society into prey. What Zaire does not demonstrate, however, is that excessive bureaucratization lies at the heart of the problem. To the contrary, most descriptions of the Zairian state seem to vindicate Weber. Callaghy (1984:32-79) emphasizes its patrimonial qualities-the mixture of traditionalism and arbitrariness that Weber argued retards capitalist development. True to the patrimonial tradition, control of the state apparatus is vested in a small group of personalistically interconnected individuals. At the pinnacle of power is the "presidential clique," which consists of "50-odd of the president's most trusted kinsmen, occupying the most sensitive and lucrative positions such as head of the Judiciary Council, Secret police, Interior ministry, President's office and so-on" (Gould, 1979:93). Next there is the "Presidential Brotherhood" who are not kin, but whose positions still depend on their personal ties with the president, his clique, and each other. One of the most striking aspects of the Zairian state is the extent to which the "invisible hand of the market"dominates administrative behavior, again almost as a caricature of the neoutilitarian image of how state apparatuses are likely to work. A Zairian archbishop (cited in Callaghy, 1984:420) described it as follows: Why in our courts do people only obtain their rights by paying the judge liberally? Why do the prisoners live forgotten in prisons? They do not have anyone who can pay the judge who has their dossiers at hand. Why in our office of administration, like public services, are people required to return day after day to obtain their due? If they do not pay the clerk, they will not be served.

President Mobutu himself characterized the system in much the same way, saying Everything is for sale, everything is bought in our country. And in this traffic, holding any slice of public power constitutes a veritable exchange instrument, convertible into illicit acquisition of money or other goods (cited in Lemarchand, 1979:248, from Young, 1978:172).

The prevalenceof such a thoroughgoing market ethic might at first seem inconsistent with what Callaghy (1984) calls an "earlymodern absolutist state" but it is in fact quite consistent. Personalism and plundering at the top destroys any possibility of rule-governed behavior in the lower levels of the bureaucracy, giving individual maximization free rein. At the same time, however, the "marketization"of the state apparatus makes the development of a bourgeoisie oriented toward long-term profit-based productive investment almost an impossibility. With a bureaucracy whose maxim is "make the quest for wealth and money an obsession" (Tshitenji-Nzembele, cited in

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Lamarchand, 1979:249), anyone risking a long-term investment must be considered more a fool than an entrepreneur. Mobutu has at least managed to construct a repressive apparatus with the minimal amount of corporate coherence necessary to fend off potential competitors, but only by relying on the patronage of other, more effective states. As Gould (1979:93) puts it bluntly, "the bureaucraticbourgeoisie owes its existence to past and continued foreign support." Aid from the World Bank as well as individual Western nations has helped, but French and Belgian troops at critical moments (e.g., in Shaba in 1978) have been the sine qua non of Mobutu's remaining in power (Hull, 1979). Thus, Mobutu provides only a weak test of the limits to which individual maximization can be allowed to rule without undermining even the repressive apparatus necessary for regime survival.4 Zaire confirms our initial suspicion that it is not bureaucracy that impedes development so much as the lack of capacity to behave like a bureaucracy, but it poses some problems for conventional definitions of state autonomy. On the one hand, the state as a corporate entity is incapable of formulating goals or implementing them. Because decisions are eminently up for sale to private elites, the state lacks autonomy. In this optic the Zairian state confirms the idea that autonomy is a necessary prerequisite for effective state action. Yet the Zairian state is strikingly unconstrained by any set organized social interests and in this sense very autonomous. The combination of weak internal organization and individualized external ties produces an incoherent absolutist domination that in no way enhances the state's transformative capacity.

DEVELOPMENTAL STATES While states like Mobutu's were providing practical demonstrations of the perversions predicted by neoutilitarian visions of the state, a different set of "new nations" halfway around the world were writing historical records that were more problematic from the point of view the neoutilitarians. By the end of the 1970s, the economic success of the major East Asian NICsTaiwan and Korea-was increasingly interpreted as depending in important ways on the active involvement of the state. Amsden (1979) argued that Taiwan was not the model market economy portrayed by its American advisors 40bviously, a full analysis of both the original character of the regime and its persistence would require more careful attention to the nature of Zaire's social structure. For a general approach to the question of the state and development that begins with an analysis of social structure, see Migdal (1988).

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nor the exemplar of dependence portrayed by its detractors, but a successful case of estatism. Even observers with a neoclassical bent (e.g., Jones and Sakong, 1980) recognized the central role of the state in Korea's rapid industrialization. Credit for dubbing Taiwan and Korea "developmental states," however, should probably go to the researchers associated with the Institute of Development at Sussex University (see Wade and White, 1984, revised as White, 1988). This group in turn seems to have been inspired, at least partially, by the growth of interest at the end of the 1970s in the state that served, in different ways, as a model to both Taiwan and Korea-Japan. None of these states are paragons of virtue. In certain periods their regimes have appeared more predatory than developmental (e.g., the KMT on the mainland, the Rhee regime in Korea) and even while basking in their developmental success they are hardly immune to corruption. In addition, it must be acknowledged that there are important differences among them in terms of both internal structures and state-society relations. Nonetheless, they have, on balance, played a developmental role, and looking for shared features among them is probably the best starting point for an inductive understanding of the organizational and social structural characteristics that allow the state to play a developmental role. Johnson's description of MITI (1982) provides one of the few detailed pictures of a "developmental state" in action. Regardless of whether his account overstates the relative weight of state action in producing Japan's impressive rates of industrialization, his description is fascinating because it corresponds so neatly to what a sophisticated implementation of ideas from Gerschenkron and Hirschman might look like in practice. In the capital-scarce years following World War II, the Japanese state acted as a surrogatefor a missing capital market while at the same time helped to "induce"transformative investment decisions. State institutions from the postal saving system to the Japan Development Bank were crucial in getting the needed investment capital to industry. The willingness of state financial institutions to back industrial debt/equity ratios at levels unheard of in the West was a critical ingredient in the expansion of new industries. The state's centrality to the provision of new capital also allowed it to implement "industrialrationalization"and "industrialstructurepolicy" (Johnson, 1982:27-28). MITI, given its role in the approval of investment loans from the Japan Development Bank, its authority over foreign currency allocations for industrial purposes and licenses to import foreign technology, its ability to provide tax breaks, and its capacity to articulate "administrative guidance cartels" that would regulate competition in an industry, was in a perfect position to "maximize induced decision-making" (see Johnson, 1982:236). The administrativeapparatus that oversaw Japan's industrial transformation was as impressive as the transformation itself. Some might consider

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Johnson's (1982:26) characterization of MITI as "without doubt the greatest concentration of brainpower in Japan" hyperbole, but few would deny the fact that Japan's startling postwar economic growth occurred in the presence of "a powerful, talented and prestige-laden economic bureaucracy." Nor is it controversial to assert that, at least up to the recent past, "official agencies attract the most talented graduates of the best universities in the country and positions of higher level officials in these ministrieshave been and still are the most prestigious in the country" (Johnson, 1982:20). The ability of the higher civil service exam to weed out all but the top graduates of the top universities is apparent in the failure rate. As few as 2% or 3%oof those who take the exam in a given year pass (Johnson, 1982:57). There is clearly a Weberian aspect to the Japanese developmental state. Officials have the special status that Weber felt was essential to a true bureaucracy. They follow long-term careerpaths within the bureaucracy, and generally operate in accordance with rules and established norms. In general, individual maximization must take place via conformity to bureaucratic rules rather than via exploitation of individual opportunities presented by the invisible hand. Weberian pronouncements regarding the necessity of a coherent meritocratic bureaucracy are confirmed but the Japanese case also indicates the necessity of going beyond them. All descriptions of the Japanese state emphasize the indispensibility of informal networks, both internal and external, to the state's functioning. Internal networks are crucial to the bureaucracy'scoherence. Johnson (1982:57-59) emphasizes the centrality of the gakubatsu, ties among classmates at the elite universities from which officials are recruited, and particularly the "batsu of all batsu," which bring together the alumni of Tokyo University Law School who comprised in total an astounding 73%7of higher bureaucrats in 1965. Informal networks give the bureaucracyan internal coherence and corporate identity that meritocracy alone could not provide, but the character and consequences of these networks fundamentally depend on the strict selection process through which civil servants are chosen. That formal competence, rather than clientelistic ties or traditional loyalties, is the prime requirement for entry into the network, makes it much more likely that effective performance will be a valued attribute among loyal members of the various batsu. The overall result is a kind of "reinforced Weberianism," in which the "non-bureaucratic elements of bureaucracy"reinforce the formal organizational structure in the same way that Durkheim's "non-contractual elements of contract" reinforce the market (cf. Rueschemeyer and Evans, 1985). External networks connecting the state and private corporate elites are even more important. As Nakane puts it, "the administrative web is woven more thoroughly into Japanese society than perhaps any other in the world"

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(cited in Okimoto, 1989:170). Japanese industrial policy depends fundamentally on the maze of ties connecting MITI and major industrialists. According to Okimoto (1989:157), the deputy director of a MITI sectoral bureau may spend the majority of his time with key corporate personnel. Ties between the bureaucracy and private powerholders are reinforced by the pervasive role of MITI alumni, who through amakudari (the "descent from heaven" of early retirement) end up in key positions not only in individual corporations but also in the industry associations and quasigovernmental organizations that comprise "the maze of intermediate organizations and informal policy networks, where much of the time-consuming work of consensus formation takes place" (Okimoto, 1989:155). The centrality of external ties has led some to argue that the state's effectiveness emerges "not from its own inherent capacity but from the complexity and stability of its interaction with market players" (Samuels, 1987:262). This view may be a useful corrective to some descriptions, like Johnson's, that tend to overemphasize MITI's ability to act authoritatively rather than building consensus, but setting external networks and internal corporate coherence as opposing alternative explanations misses the point. If MITI were not an exceptionally competent, cohesive organization, it could not participate in external networks in the way that it does. If MITI were not autonomous in the sense of being capable of independently formulating its own goals and able to count on those who work within it to see implementing these goals as important to their individuals careers, then it would have little to offer the private sector. MITI's "relative autonomy" is what allows it to address the collective action problems of private capital, helping capital as a whole to reach solutions that would be hard to attain otherwise, even within the highly organized Japanese industrial system. This "embedded autonomy," which is precisely the mirror image of the "incoherent absolutist domination" of the predatory state, is the key to the developmental state's effectiveness. It depends on the ability to construct an apparently contradictory combination of Weberian bureaucratic insulation with intense immersion in the surroundingsocial structure. THE DYNAMICS OF DEVELOPMENTAL STATES A full-fledged exposition of the developmental state would require exploration of the substantial variations on the Japanese theme that are found in Korea and Taiwan.5 Such a comparative examination, which unfortunately 5For some recent discussions of the role of the Korean state in industrialization, see Cheng (1987), Choi (1987), B. K. Kim (1987), E. M. Kim (1987), K. W. Kim (1987), M. S. Kim (1987), and Woo (1988). On the Taiwanese state see Amsden (1979, 1985), Cheng (1987), Gold (1986), Pang (1987), and Wade (forthcoming). For comparative arguments see Deyo (1987) and especially Cumings (1987).

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cannot be undertaken here, would produce a number of important revisions and refinements to the picture drawn so far. There is, however, one revision too important to forgo. The static image of the developmental state must be replaced by a more dynamic one. The idea that East Asian states are developmental is a relatively recent one. The Rhee regime in Korea and the KMT on the mainland certainly seemed more predatorythan developmental. Nonetheless, their historical legacies provided important foundations for their subsequent success. They all began the post-World War II period with long bureaucratic traditions and considerable experience (albeit some of it disastrous) in direct economic intervention. World War II and its aftermath provided all of them with highly unusual societal environments. Traditional agrarian elites were decimated, industrial groups were disorganized and undercapitalized, and foreign capital was channeled through the state apparatus. Thus, what were, in terms of domestic dynamics, largely exogenous events qualitatively enhanced the autonomy of the state. The combination of historicallyaccumulatedbureaucratic capacity and conjuncturallygeneratedautonomy put these state apparatuses in a very exceptional position. At the same time, the state's autonomy was constrained by the international context, both geopolitical and economic, which conspired to create the conviction, first, that rapid industrialization was necessary to regime survival, and later, that export competitiveness was essential to industrialization. Commitment to industrialization motivated attempts to promote the growth of local industrial capital. Their exceptional autonomy allowed the state to dominate (at least initially) the formation of the ties that bound capital and the state together. The conjuncture as a whole made possible the embedded autonomy that characterized these states during the most impressive periods of their industrial growth. Embedded autonomy depends on the existence of a project shared by a highly developed bureaucratic apparatus with interventive capacity built on historical experience and a relatively organized set of private actors who can provide useful intelligence and a possibility of decentralized implementation. In contrast to the incoherent absolutist domination of the predatory state, which seems self-reinforcing, embedded autonomy has been, to a surprising extent, its own gravedigger. Its very success as a framework for structuring the accumulation of industrial capital has changed the nature of relations between capital and the state. Private capital has become less dependent on the resources provided by the state and the relative dominance of the state diminished. Even the capacity of state apparatus to command the loyalties of the "most talented graduates of the best universities" began to shift as private careers became more rewarding. Concurrently, economic growth was accompanied by a resurgence of distributional demands, both political and economic, that the elite networks and bureaucratic structures that had successfully fostered industrial accumulation were not necessarily

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well adapted to meet. For nonelite social actors making new demands on the state, both existing forms of embeddedness and the existing insulation of the bureaucracy are likely to be seen as disadvantages rather than advantages. There is, in short, no necessary reason to presume either that the developmental state will persist in the form that has been described here or that if it does persist it will be able to satisfy future social needs. It has proved itself a formidable instrument for instigating the accumulation of industrial capital, but it will have to be transformed in order to deal with the problems and opportunities created by the success of its initial project.6 The question of the future of the developmental state is fundamental for East Asia, but for countries with other apparatuses the historically contingent character of the developmental state raises different issues. Do their own bureaucratic traditions and state-society networks hold the potential for generating the same kind of transformative capacity that Japan and the East Asian NICs have enjoyed, or are the differences insurmountably large? AN INTERMEDIATE CASE: BRAZIL Most developing states offer combinations of Zairian "kleptopatrimonialism" and East Asian "embedded autonomy." The balance varies not only over time but also from organization to organization within the state apparatus itself. We will focus on one such state-Brazil-in hopes of gleaning some clues has to how its internal structures and external ties are distinguished from those of the ideal typical developmental state. The character of the Brazilian state apparatus, both historical and contemporary, has been thoroughly chronicled by a series of detailed field studies and telling interpretiveanalyses.7 The differences between the apparatus that they describe and the ideal typical developmental state begin with the simple question of how people get jobs in the state. Geddes (1986) chronicles the difficulty that Brazil has experienced in instituting meritocratic recruitment procedures that approximate the Japanese or Korean ones, even in the con6"Embedded autonomy" might also be used as a way of characterizing the small states of northwesternEurope as described by Katzenstein (1984, 1985). The comparison between these states and those of East Asia is particularly interesting since the networks in which Northern European states are embedded include organized representation of labor as well as industrial capital. 7Among historical studies, those by Murilo de Carvalho (1974) and Uricoechea (1980) are particularly relevant to this discussion. Important recent contemporary studies include Abranches (1978), Barzelay (1986), Hagopian (1987), Geddes (1986), Raw (1985), Schneider (1987a), Shapiro (1988), and Willis (1986). The discussion that follows draws especially on Schneider.

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temporary period. Unusually extensive powers of political appointment are the necessary complement to lack of generalized meritocratic recruitment. Extending Johnson's (1982:52) comparison of Japan and the United States, Schneider (1987a:5, 212, 644) points out that while Japanese prime ministers appoint only dozens of officials and U.S. presidents appoint hundreds, Brazilian presidents appoint thousands (15-100 thousand by Schneider's estimate). It is little wonder that the Brazilian state is known as a massive cabide de emprego (source of jobs), populated on the basis of connection rather than competence and correspondingly inept in its developmental efforts. Unable to transform the bureaucracy as a whole, political leaders try to create "pocketsof efficiency" (bolsoes de eficiencia) within the bureaucracy (Geddes, 1986:105), thus modernizing the state apparatus by addition rather than transformation (see Schmitter, 1971; Schneider, 1987a:45). The BNDE (National Development Bank), favored especially by Kubitschek as an instrument of his developmentalism in the 1950s, was, at least until recently, a good example of a "pocket of efficiency" (see Martins, 1985; Willis, 1986) Unlike most of Brazil's bureaucracy, the BNDE offered "a clear career path, developmental duties and an ethic of public service" (Schneider, 1987a:633). Early in its institutional life (1956) the BNDE started a system of public examinations for recruitment. Norms grew up against arbitraryreversal of the judgments of the bank's technical personnel (opinido do tecnico) by higherups. A solid majority of the directors were recruited internally, and a clear esprit de corps developed within the bank (Willis, 1986:96-126). Agencies like the BNDE are, not surprisingly, more developmentally effective than the more traditional parts of the Brazilian bureaucracy. According to Geddes (1986:116), those projects in Kubitschek'sTarget Plan that were under both the jurisdiction of Executive Groups and Work Groups and the financial wing of the BNDES fulfilled 102% of their targets, whereas those projects that were the responsibility of the traditional bureaucracy achieved only 32%. Because the BNDE was a major source of long-term investment loans,8 its professionalism was a stimulus to improving performance in other sectors. Tendler (1968) notes, for example, that the necessity of competing for loan funds was an important stimulus to the improvement of proposals by Brazil's electrical power generating companies (see Schneider, 1987:143). Unfortunately, the pockets of efficiency strategy has a number of disadvantages. As long as these pockets are surrounded by a sea of traditional clientelisticnorms, they are dependent on the personal protection of individual 'According to Willis (1986:4), the bank has "virtually monopolized the provision of long term credit in Brazil, often accounting for as much as 10% of gross domestic capital formation."

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presidents. Geddes (1986:97) examines the fate of DASP (the Administrative Servicesdepartmentestablishedby Getulia Vargas)once its presidentialpatron's protection was no longer available. Willis (1986) emphasizes the dependence of the BNDE on presidentialsupport,both in termsof the definitionof its mission and in terms of its ability to maintain its institutional integration. Trying to modernize by piecemeal addition also has disadvantages in terms of the organizational coherence of the state apparatus as a whole. As the pieces are added, a larger and ever more baroque structureemerges. Having entered power with the hope of shrinking the state by as much as 200,000 positions, the Brazilian military ended up creating "hundreds of new, often redundant, agencies and enterprises"and watching the federal bureaucracy grow from 700,000 to 1.6 million (Schneider, 1987a:109,575,44). The resulting apparatus has been characterizedas "segmented"(Barzelay, 1986), "divided" (Abranches, 1978), or "fragmented"(Schneider, 1987a). It is a structure that not only makes policy coordination difficult, but encourages resort to personalistic solutions. As Schneider (1987a:27) puts it, "personalism . . . is now made indispensible by bureaucratic fragmentation." The fragmentation of the structure is complemented in turn by the character of the careers that take place within it. Instead of being tuned to the long-term returns to be gained through a series of promotions based on organizationally relevant performance, careers in the Brazilian bureaucracy are staccato, punctuated by the rhythms of changing political leadership and periodic spawning of new organizations. Brazilian bureaucrats shift agencies every four or five years (Schneider, 1987a). Since the top four or five layers of most organizations are appointed from outside the agency itself, long-term commitment to agency-relevantexpertise has only a limited return and construction of an ethos that can act effectively to restrain strategies oriented toward individual gain is difficult. Just as the internal structure of the Brazilian state apparatus limits its capacity to replicatethe performance of the East Asian developmental states, the character of its embeddedness makes it harder to construct a project of industrial elites. As in the case of the East Asian developmental states, this embeddedness must be understood in historical terms. While the Brazilianstate has been an uninterruptedlypowerful presence in the country's social and economic development since colonial times, it is important to keep in mind that, as Fernando Uricoechea (1980), Jose Murilo de Carvalho (1974), and others have emphasized, "the efficiency of government . . . was dependent . . . on the cooperation of the landed oligarchy" (Uricoechea, 1980:52). Over time, the state has become less dependent on the political support of reactionary rural elites, but they have never been dramatically swept from the stage as in the East Asian cases (see Hagopian, 1986). Thus, rather than being able to focus on its relationship with industrial capi-

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tal, the state has always had to simultaneously contend with traditional elites threatened by the conflictual transformation of rural class relations.9 At the same time, relations with industrial capital have been complicated relative to those in East Asia by the early and massive presence of transnational manufacturing capital in the domestic market (see Evans, 1987). Forcing domestic capital to face the rigors of the competitive market is much more difficult in an environment where transnational capital is the likely beneficiary of any "gale of creative destruction" (cf. Evans, 1982). The character of the state itself reinforced the problems intrinsic to the nature of the social structure. The lack of a stable bureaucratic structure makes it harder to establish regularized ties with the private sector of the "administrative guidance" sort, and pushes public-private interaction into individualized channels. Even the military regime, which had the greatest structural potential for "insulation" from clientelistic pressures, proved unable to construct on a general basis an "administrative guidance" kind of relationship with the local industrial elite. The regime was "highly legitimate in the eyes of the local bourgeoisie, yet unconnected to it by any wellinstitutionalized system of linkages" (Evans, 1982:S221). Instead of becoming institutionalized, relationships became individualized, taking the form of what Cardoso (1975) called "bureaucraticrings," that is, small sets of individual industrialists connected to an equally small set of individual bureaucrats, usually through some pivotal office holder. As Schneider (1987b:230-231) points out, the ad hoc personalized character of these linkages makes them both undependable from the point of view of industrialists and arbitrary in terms of their outcomes. They are, in short, quite the opposite of the sort of state-society ties described by Samuels and others in their discussions of the developmental state. Overall, this reading of the internal structure and external ties of the Brazilian state is consistent with Schneider's (1987:4) lament that "the structure and operation of the Brazilian state should prevent it from fullfilling even minimal government functions," but obviously the picture has been overdrawn in order to sharpen the contrast with the model of the developmental state. It is important to keep in mind that the Brazilian state has in fact been entrepreneuriallyeffective in a variety of industrial areas, ranging from creation of infrastructure to the installation of the automotive industry. In the creation of electric power generating capacity, the state was not only willing to invest massively, it also succeeded in creating relatively effi9This problem is even more severe in other intermediary states like India in which the rural areas weigh more heavily in both politics and economics (see Bardhan, 1984; Rudolf and Rudolf, 1987).

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client firms (see Tendler, 1968).Furnas, for example, is reputedto employ fewer employees per gigawatt/hour of electricity than either the Tennessee Valley Authorityor major Europeanpower companies(Schneider,1987a:87).Shapiro's (1988)thoroughand dispassionateanalysisof the implantationof the auto industry concludes that overall "the Brazilianstrategywas a success"(1988:57), and that the planningcapacityand subsidiesprovidedby the state were crucialto inducing the requiredinvestments. Trebat (1983) concludes that state-led investment in the petrochemical industry not only saved foreign exchange but were economically reasonable given the prevailing opportunity costs of capital, despite the apparent irrationality of the projects at their outset (see Evans, 1981). Brazil's state-owned steel companies have not only increased local capacity sevenfold over the course of the last 20 years, but produced steel at internationally competitive costs and enabled the country to become a net exporter (Baer, 1969; Trebat, 1983; Schneider, 1987a). These successes are, as we would expect, found in areas where the immediately involved state organizations had exceptional coherence and capacity. In areas of success, more coherent state organization also enabled a more institutionally effective set of linkages with the private sector, with results something akin to the embedded autonomy of the developmental state. Shapiro's (1988) discussion of the role of GEIA (Grupo Executivo para Industria Automobilistica) in the implantation of Brazil's auto industry during the late 1950s and early 1960s is a good example. GEIA served as a kind of sectorally specific "mini pilot agency." Because it combined representation from all the different agencies that needed to pass on plans, it "could implement its program independentof the fragmentedpolicy-makingauthority" that plagued the government as a whole (Shapiro, 1988:111). Its ability to provide predictable timely decisions was "criticalto risk reduction" as far as the TNCs who were being asked to invest were concerned. In addition, again much like MITI or the IDB, it "played a critical coordinating role between the assemblers and the parts producers" (Shapiro, 1988:58). The later development of the petrochemical industry exhibited an even more potent variant of embedded autonomy (see Evans, 1979, 1981, 1982, 1987). At the heart of the initiative was Petrobras, the most autonomous and corporately coherent organization within the state enterprise system. Equally crucial to the explosive growth of Brazil's petrochemical capacity in the 1970s, however, was the dense network of ties that were constructed to link the Petrobras system to private capital, both domestic and transnational. How can we summarizethe differences between these intermediarycases and our polar ideal types? The principaldifference between the Brazilianstate and the archetypal developmental state is that embedded autonomy is a partial rather than a global attribute in the Brazilian case. The impossibility of constructing a global embedded autonomy is in turn rooted both in the lack

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of internal organizational capacity and in the greater challenge posed by Brazil's complex and contentious elite structure. Internally, the bureaucracy is not a uniformly patrimonial caricature of a Weberian structure as in the predatory case, but still lacks the corporate coherence of the developmental ideal type. Organizationallyconsistent career ladders that bind the individual to corporate goals while simultaneously allowing him or her to acquire the expertise necessary to perform effectively are not well institutionalized. Not only is the level of bureaucratic capacity lower, but the demands placed on the apparatus are much greater. The state faces greater social structural complexity and is less selective in its intervention. The ability to cope with the task of industrialization is specifically complicated by the continuing social power of agrarian elites. The lesser capacity of the bureaucracy and the more difficult environment combine to make embedded autonomy of the sort that characterizes developmental state impossible. The intermediary state does not dominate their societies in the fashion of the truly predatory state, but neither can it construct common projects of accumulation in the way that developmental states can. It is organizationally uneven, both over time and across tasks, sometimes capable of fostering transformative change, often threatening to slip back into predatory patrimonialism. COMPARATIVE CONCLUSIONS AND FUTURE AGENDAS The main conclusions of this comparative analysis are straightforward. The differential effectiveness of Third World states as agents of industrial transformation can in fact be connected to differences in their internal structures and external ties. The most effective states are characterizedby embedded autonomy, which joins well-developed, bureaucraticinternal organization with dense public-private ties. In the least effective states, the mirror image"incoherent absolutist domination"- combines undisciplined internal structures with external ties ruled by the "invisible hand." Intermediate states occasionally approximateembedded autonomy, but not sufficiently to give them the transformative capacity of developmental states. The cases analyzed here confirm many of the conclusions reached by earlier comparative historical analyses of the state. East Asian developmental states have followed Geschenkronian/Hirschmanian paths in their strategies to a striking degree. Earlier Weberian ideas on the usefulness of the ideal typical bureaucratic frame to capitalist development are confirmed as well, but Weberian bureaucracy by itself is insufficient. Nonbureaucratic bases of internal solidarity are necessary to reinforce the coherence of formal bureaucratic structures. Even more important, a bureaucracy without an or-

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ganized network of external ties cannot effectively promote industrial transformation. The idea that the effective capitalist state is characterized by embedded autonomy has interesting implications for Marxian nations of the state as well as Weberian ones. The old aphorism about the capitalist state being the "executive committee of the bourgeoisie" may have been abandoned for more abstract structural notions too quickly. It is true that the effective capitalist state cannot be simply a passive register for private interests, but it is equally clear that the guidance provided by the generic requirements of capital accumulation is insufficient to allow the state to construct a project of industrial transformation. If it is assumed that an "executive committee" normally acquires an expert staff and sufficient independence from its consituency to avoid catering to particularistic interests, then it may be a better analogy for the developmental state than the more remote Hegelian visions conjured up by structural Marxists. The comparative evidence has also confirmed initial doubts with regard to the usefulness of the neoutilitarianimage of the Third World state. Neoutilitarianclaims that a state run by an undisciplinedcollection of individually maximizingincumbentswill tend to become a predatorymonster are plausible, but it is patently false that some natural law of human behavior dictates that states are invariably constructed on this basis. This is not to say that the prescriptionsthat flow from the neoutilitarian paradigmare uniformly perverse.On one important point comparativeanalysis concurs with the admonitionsof the neoutilitarians.Strategicselectivitydoes seem crucial to developmentallyeffective intervention. In many societal contexts the state has attempted to perform a range of tasks that goes for beyond what existing and likely future bureaucraciescan deal with effectively. Brazil, our intermediary case, is a good example. In such cases, a positive response to neoutilitariancries to "shrinkthe state" may be a prerequisiteto the constructionof an effective state apparatus.It is on the "capacity"side that comparativeanalysiscontradictsthe neoutilitarianprescriptions.The neoutilitarian admonition to "minimizethe state"is generallyinterpretedto mean imposing a general reduction on the resources allocated to the bureaucracy. Since the bureaucraticappratus is considered genericallypredatory, little is lost by evisceratingit. A differentiatedview of Third World states suggests, to the contrary, that the construction of a "real"bureaucraticapparatus (as opposed to a pseudobureaucraticpatrimonial apparatus)is a crucial developmental task. To accomplishthis task, the institutionalizationof meritocraticrecruitmentpatterns and predictablecareer paths must be accompanied by the provision of sufficient resourcesto make careersin the state competitive with careersin the private sector. Neoutilitarian exhortations may be useful in helping to bring the scope of state initiatives in line with feasible capacity, but they are likely

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to have counterproductiveconsequences for the supply of effective capacity. Intermediarystate apparatusesare most vulnerableto the negative consequences of neoutilitarianpolicies. Stringent cuts in real wages and the reduction of resources for training of personnel will undermine the "islands of efficiency" that still exist in these bureaucracies,undercutting any possibility of moving in the directionof becoming developmentalstates and pushingthose who remain trapped in the bureaucracyto become predatorsin order to maintain their standardsof living. Insofar as only states with considerableautonomy are likely to force firms to confront the disciplineof the market, the results of neoutilitarianprescriptionsare likely to be doubly perversc. They will help foster preciselythe kind of predatorystates that neoutilitariansfind abhorrent and undercutthe kind of market-inducedgales of creativedestructionthat they most desire.10 A differentiatedview of states suggeststhat policy should be two pronged, aimed at increasingthe selectivity of tasks undertaken by the state apparatus but devoting equal attention to reforms that will help reconstructstate apparatuses themselves. It is the latter task that is the more difficult and demanding of intellectualimagination.Existingexamplesof developmentalstatescan provide useful clues, but not solutions. They are embedded institutions historically as well as social structurally. Neither the historical traditions nor the special class configurationsout of which they arisecan be reproducedby policy choices. The task of reconstructionis made doubly difficult by the rudimentarynature of our theoreticalunderstandingof the state. Researchinspiredby the neoutilitarian vision devoted itself assiduously to demonstrating the predatory character of public organizations, trying to demolish reported evidence of public efficiency, and extolling the virtues of market solutions. Research in "public administration"has generally remained pedestrian, providing no effective intellectual counterweight. The growing comparative literatureon states and social structurescontains a variety of useful case studies and promisingconcepts, but remains very much in process. The idea of embedded autonomy provides a good illustration. It grew out of previous work on the concepts of autonomy and capacity and by several excellent studies of the social context of the developmental state in Japan. It seems to help summarize differences between developmental states and intermediate cases like Brazil. It directs the attention of others engaged in comparative research to the possibility that bureaucratic capacity and social connectedness may be mutually reinforcing rather than in opposition. It remains, however, primitive. The constraints that keep the inevitable clientelism and corruption from overwhelming the utility of ties to private '?Confirmation of this hypothesis would have the ironic side effect of demonstrating the vulnerability of neoutilitarians to the same "thesis of the perverse effect" that they have used so often against others in the past (see Hirschman, 1989).

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capital are still not well defined. Nor are those that prevent internal "batsulike" solidarity from undercutting performance-based criteria within the bureaucratic hierarchy. We do not even have a clear picture of how information flowing between the private sector to the state apparatus and back can change public policy and private strategies. The task of constructing a credible comparative political economy of the Third World state is just beginning. Trying to move it foward is likely to be onerous and frustrating, but such efforts are crucial if we are ever to discover how Third World states might become less part of the problem and more part of the solution. ACKNOWLEDGMENTS I would like to acknowledge the support of a Guggenheim Fellowship and a fellowship from the Center for Advanced Study in the Behavioral Sciences (funded by NSF Grant No. BNS8700864) without which this article could not have been written. I am also grateful to Kathleen Much for editorial assistance, and to Pranab Bardhan, Robert Bates, Jeff Frieden, Mark Granovetter, Albert Hirschman, Atul Kohli, Kathleen Much, Ben Schneider, Helen Shapiro, Ian Shapiro, Barbara Stallings, Evlyn Huber Stephens, John Stephens, Charles Tilly, Steven Topik, Robert Wade, and John Waterbury, the issue editors, and two anonymous reviewers for having provided useful substantive commentaries on an earlier draft. REFERENCES Abranches, Sergio 1978 "The divided leviathan: The state and economic policy making in authoritarian Brazil."Ph.D. dissertation, Department of Political Science, Cornell University. Amsden, Alice 1985 "The state and Taiwan's economic development." In Peter Evans, Dietrich Rueschemeyer, and Theda Skocpol (eds.), Bringing the State Back In: 78-106. New York: Cambridge University Press. 1979 "Taiwan's economic history: A case of estatisme and a challenge to dependency theory." Modern China 5(3): 341-380. Auster, Richard D. and Morris Silver 1979 The State as Firm: Economic Forces in Political Development. The Hague: Martinus Nijhoff.

Baer, Werner 1969 The Development of the Brazilian Steel Industry. Nashville, TN: Vanderbilt University Press. Bardhan, Pranab 1984 The Political Economy of Development in India. Oxford: Basil Blackwell. Barzelay, Michael 1986 The Politicized Market Economy: Alcohol in Brazil's Energy Strategy. Berkeley: University of California Press. Buchanan, James M., Robert D. Tollison, and Gordon Tullock, eds. 1980 Toward a Theory of the Rent-Seeking Society. College Station, TX: Texas A & M University Press. Callaghy, Thomas 1984 The State-Society Struggle: Zaire in Comparative Perspective. New York: Columbia University Press.

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Predatory, Developmental, and Other Apparatuses Cardoso, Fernando Henrique 1975 Autoritarismo e Democratizacao. Rio de Janeiro, Brazil: Paz e Terra. Cheng, Tun-jen 1987 "The politics of industrial transformation: The case of the East Asia NICs." Ph.D. dissertation, Department of Political Science, University of California, Berkeley. Choi, Byung Sun 1987 "Institutionalizing a liberal economic order in Korea: The strategic management of economic change." Ph.D. dissertation, Kennedy School, Harvard University. Colander, David C., ed. 1984 Neoclassical Political Economy: An Analysis of Rent-seeking and DUP Activities. Cambridge, MA: Ballinger. Cumings, Bruce 1987 "The origins and development of the Northeast Asian Political Economy: Industrial sectors, product cycles and political consequences." In F. Deyo (ed.), The Political Economy of the New Asian Industrialism: 44-83. Ithaca, NY: Cornell University Press. Deyo, Frederic, ed. 1987 The Political Economy of the New Asian Industrialism. Ithaca, NY: Cornell University Press. Evans, Peter B. 1987 "Class, state and dependence in East Asia: Some lessons for Latin Americanists." In F. Deyo (ed.), The Political Economy of the New Asian Industrialism. Ithaca, NY: Cornell University Press. 1982 "Reinventingthe bourgeoisie: State entrepreneurship and class formation in dependent capitalist development." American Journal of Sociology 88: S210-S247. 1981 "Collectivized capitalism: Integrated petrochemicalcomplexes and capital accumulation in Brazil." In Thomas C. Bruneau and Philippe Faucher (eds.), Authoritarian Brazil. Boulder, CO: Westview. 1979 Dependent Development: The Alliance of Multinational, State and Local Capital in Brazil. Princeton, NJ: Princeton University Press. Geddes, Barbara 1986 Economic Development as a Collective Action Problem: Individual Interests and Innovation in Brazil. Ann Arbor, MI: University Microfilms.

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Gerschenkron, Alexander 1962 Economic Backwardness in Historical Perspective. Cambridge, MA: Belknap. Gold, Tom 1986 State and Society in the Taiwan Miracle. New York: M. E. Sharpe. Gould, David 1979 "The administration of underdevelopment." In Guy Gran (ed.), Zaire: The Political Economy of Underdevelopment: 87-107. New York: Praeger. Granovetter, Mark 1985 "Economic action and social structure: The problem of embeddedness."American Journal of Sociology 91: 481-510. Hagopian, Frances 1986 "The politics of oligarchy: The persistence of traditional elites in contemporary Brazil." Ph.D. dissertation, Department of Political Science, MIT, Cambridge, MA. Hirschman, Albert 1989 "Reactionary rhetoric." The Atlantic Monthly, May:63-70. 1958 The Strategy of Economic Development. New Haven, CT: Yale University Press. Hull, Galen 1979 "Zairein the world system: In search of sovereignty." In Guy Gran (ed), Zaire: The Political Economy of Underdevelopment: 263-283. New York: Praeger. Johnson, Chalmers 1982 MITI and the Japanese Miracle: The Growth of IndustrialPolicy, 1925-1975. Stanford, CA: Stanford University Press. Jones, Leroy, and Il Sakong 1980 Government, Business and Entrepreneurship in Economic Development: The Korean Case. Studies in Modernization of the Korean Republic, 1945-1975. Cambridge, MA: Harvard University Press. Katzen Stein, Peter J. 1984 Corporatism and Change: Austria, Switzerland and the Politics of Industry. Ithaca, NY: Connell University Press. 1985 Small states in world markets: Industrial Policy in Europe. Ithaca, NY: Connell University Press. Killick, Tony 1986 "A reaction too far: Contemporary thinking about the economic role of the state, with special reference to developing countries."Unpublishedmanuscript.

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586 Kim, Byung Kook 1987 "Bringingand managing socioeconomic change: The state in Korea and Mexico." Ph.D. dissertation, Department of Political Science, Harvard University. Kim, Eun Mee 1987 "From dominance to symbiosis: State and chaebol in the Korean economy, 1960-1985."Ph.D. dissertation, Department of Sociology, Brown University. Kim, Kwang Woong 1987 "Therole of the state bureaucracyin development policies: Cases of selected countries in Asia." Papers of the ASEAN and Japan Project no. 21, Nihon University, Tokyo. Krueger, Anne O. 1974 "The political economy of the rentseeking society." American Economic Review 64:291-303. Lal, Deepak 1988 The Hindu Equilibrium, Vol. I Cultural Stability and Economic Stagnation, India c1500BC-AD1980. Oxford: Clarendon Press. Lemarchand, Rene 1979 "The politics of penury in rural Zaire: The view from Bandundy." In Guy Gran (ed.), Zaire: The Political Economy of Underdevelopment: 237-261. New York: Praeger. Levi, Margaret 1988 Of Rule and Revenue. Berkeley:University of California Press. List, Friedrich 1966 The National System of Political Economy (1885*). New York: Augustus M. Kelley. Martins, Luciano 1985 Estado Capitalista e Burocracia no Brasil Pos64. Rio de Janeiro, Brazil: Pza e Terra. Migdal, Joel 1988 Strong Societies and Weak States: StateSociety Relations and State Capabilities in the Third World. Princeton, NJ: Princeton University Press. Murilo, Jose de Carvalho 1974 "Elite and state-building in Brazil." Ph.D. dissertation, Department of Political Science, Stanford University. Niskanen, William A. 1971 Bureaucracy and Representative AldineGovernment. Chicago: Atherton. North, Douglas 1981 Structureand Change in Economic History. New York: Norton.

Okimoto, Daniel I. 1989 Between MITI and the Market: Japanese Industrial Policy for High Technology. Stanford, CA: Stanford University Press. Pang, Chien Kuo 1987 "The state and economic transformation: The Taiwan case." Ph.D. dissertation, Department of Sociology, Brown University. Polanyi, Karl 1957 The Great Transformation (1944*). Boston: Beacon Press. Poulantzas, Nicos 1973 Political Power and Social Classes. London: New Left Books. Raw, Silvia 1985 "The political economy of Brazilian state-owned enterprises."Ph.D. dissertation, Department of Economics, University of Massachusetts, Amherst. Rudolf, Lloyd I. and Susanne Hoeber Rudolf 1987 In Pursuit of Lakshmi: The Political Economy of the Indian State. Chicago: University of Chicago Press. Rueschemeyer, Dietrich and Peter Evans 1985 "The state and economic transformation: Toward an analysis of the conditions underlying effective state intervention." In Peter Evans, Dietrich Rueschemeyer, and Theda Skocpol (eds.), Bringingthe State Back In:44-77. New York: Cambridge University Press. Samuels, Richard J. 1987 The Business of the Japanese State: Energy Markets in Comparative and Historical Perspective. Ithaca, NY: Cornell University Press. Schmitter, Philippe 1971 Interest Conflict and Political Change in Brazil. Stanford, CA: Stanford University Press. Schneider, Ben R. 1987a "Politics within the state: Elite bureauc.lats and industrial policy in authoritarian Brazil." Ph.D. dissertation, Department of Political Science, University of California, Berkeley. 1987b "Framing the state: Economic policy and political representation in postauthoritarian Brazil." In John D. Wirth, Edson de Oliveira Nunes, and Thomas E. Bogenschild (eds.), State

*Original publication date.

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Predatory, Developmental and Other Apparatuses and Society in Brazil: Continuity and Change. Boulder, CO: Westview Press. Shapiro, Helen 1988 "State intervention and industrialization: The origins of the Brazilian automotive industry."Ph.D. dissertation, Department of Economics, Yale University. Srinivasan, T. N. 1985 "Neoclassical political economy, the state and economic development." Asian Development Review 3:38-58. Tendler, Judith 1968 Electric Power in Brazil: Entrepreneurship in the Public Sector. Cambridge, MA: Harvard University Press. Trebat, Thomas 1983 Brazil's State-Owned Enterprises: A Case Study of the State as Entrepreneur. Cambridge: Cambridge University Press. Uricoechea, Fernando 1980 The Patrimonial Foundations of the Brazilian Bureaucratic State. Berkeley: University of California Press. Wade, Robert Forthcoming Governingthe Market:Economic Theory and the Role of Government in Taiwan's Industrialization. Princeton, NJ: Princeton University Press.

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Weber, Max 1968 Economy and Society. (1911*) Guenter Roth and Claus Wittich, eds. New York: Bedminster Press. White, Gordon, ed. 1988 Developmental States in East Asia. London: Macmillan. White, Gordon and Robert Wade 1984 Developmental States in East Asia (IDS Research Report No. 16). London: Gatsby Charitable Foundation. 1988 "Developmental states and markets in East Asia: An introduction." In Gordon White (ed.), Developmental States in East Asia. London: Macmillan. Willis, Eliza J. 1986 "The state as banker: The expansion of the public sector in Brazil."Dissertation, University of Texas at Austin. Ann Arbor, MI: University Microfilms International [Microfilm No. 8706131]. Woo, Jung-eun Forthcoming State Power, Finance and Industrialization of Korea. New York: Columbia University Press. World Bank 1988 World Development Report, 1987. New York: Oxford University Press. *Originalpublication date.

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Swimming Against the Current: The Rise of a Hidden Developmental State in the United States*

FRED BLOCK

Despite the dominant role of market fundamentalist ideas in U.S. politics over the last thirty years, the Federal government has dramatically expanded its capacity to finance and support efforts of the private sector to commercialize new technologies. But the partisan logic of U.S. politics has worked to make these efforts invisible to mainstream public debate. The consequence is that while this “hidden developmental state” has had a major impact on the structure of the U.S. national innovation system, its ability to be effective in the future is very much in doubt. The article ends by arguing that the importance of these development initiatives to the U.S. economy could present a significant opening for new progressive initiatives. * This article is part of a special issue of Politics & Society on the topic, “Between the Washington Consensus and Another World: Interrogating United States Hegemony and Alternative Visions.” The papers were initially presented at a mini-conference organized in conjunction with the American Sociological Association meetings in August 2007. For more on the theme, please see the “Introduction” to this issue. This paper was written with funding from the Ford Foundation and support from the Longview Institute and the U.C. Washington Center. I am deeply grateful to Leonardo Burlamaqui for suggesting this research focus and to Dina Biscotti, Athmeya Jayaram, Matt Keller, and Jason Logan for research assistance. I also want to thank Leonardo Burlamaqui, Gary Dymski, Peter Evans, Neil Fligstein, Glenn Fong, Marion Fourcade-Gourinchas, Matt Keller, James Shoch, Michael Peter Smith, and Nicholas Ziegler for their participation in a workshop held on April 28, 2007 at U.C. Berkeley. It was at that event that Peter Evans suggested the phrase—hidden developmental state. The participants at the Politics & Society mini-conference also provided valuable feedback; particular thanks go to Andrew Schrank, Linda Weiss, and Josh Whitford. I also received important comments from Shelley Hurt and Erica Fuchs, who both made available some of their research findings. Finally, the Politics & Society editorial board and Matt Keller made very useful suggestions for revising. POLITICS & SOCIETY, Vol. XX No. X, Month XXXX xx-xx DOI: 10.1177/0032329208318731 © 2008 Sage Publications

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Keywords: developmental state; industrial policy; technology policy; varieties of capitalism; economic sociology

On a number of key dimensions, the trajectory of the United States has diverged sharply from that of Western Europe over the past thirty years.1 The divergence is most marked in social policy and the philosophy of governance, where the choices made by the United States have been influenced by market fundamentalism—a vastly exaggerated belief in the capacity of market selfregulation to solve economic and social problems. To be sure, many Europeans have also been taken with the idea of Afree markets since the fall of the Berlin Wall, but their actual policies have been far more restrained in cutting back government regulation of business, leaving the poor and sickly on their own, and directly challenging the institutionalized role of organized labor at the workplace and in the political arena. As a consequence, most Western European societies have not experienced the dramatic increases in economic inequality and heightened economic insecurity that have occurred in the United States.2 But in one important and often overlooked respect, European and U.S. policies have converged. On both sides of the Atlantic, governments have played an increasingly important role in underwriting and encouraging the advance of new technologies in the business economy.3 Consistent with ideas of the “knowledge economy” or postindustrial society that stress the economy’s immediate dependence on scientific and technological advance, governments have embraced developmental policies that support cutting edge research and work to assure that innovations are transformed into commercial products by companies.4 Governments do this because they recognize that in a competitive world economy, failing to create new high value added economic activities in the home economy will ultimately threaten their citizen’s standard of living. But the way in which governments pursue these policies differs dramatically between Europe and the United States. In Europe, both national governments and the European Community are open and explicit about their developmental agendas, and political parties occasionally compete over which will be more effective in pursuing such initiatives.5 In the United States, in contrast, the developmental state is hidden; its existence is not recognized in political debate or in the media. Congress, under the rubric of “competitiveness policy,” periodically passes legislation that bolsters and expands the developmental capacities of the U.S. state, but this happens with little public debate or discussion.6 The hidden quality of the U.S. developmental state is largely a result of the dominance of market fundamentalist ideas over the last thirty years. Developmental policies have lived in the shadows because acknowledging the state’s central role in promoting technological change is inconsistent with the market fundamentalist claim that private sector firms should simply be left alone to respond autonomously and spontaneously to the signals of the marketplace.

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For example, in their highly influential book, Free to Choose, Milton and Rose Friedman see no economic justification for the government funding scientific research through the National Science Foundation.7 If funding scientific research is not a proper governmental role, then certainly there is no justification for public agencies getting involved in the commercialization of new technologies. In this sense, it is remarkable that the United States has any kind of developmental policies outside of the defense and national security sectors. That they exist at all is testimony to the powerful dynamism of an emerging knowledge economy that has been able to swim upstream against the current of a hostile political philosophy. But the inevitable result is that U.S. developmental practices have been significantly distorted by the constraints within which they have emerged. It is here where the divergence between the United States and Europe again becomes apparent. In Europe, developmental state policies often work in synergy with the legacy of social democratic and Christian democratic policies that emphasize social inclusion, partnership between business and labor, and a commitment to the sharing of rewards.8 In the United States, in contrast, the “winner takes all” model with its attendant increases in inequality tends to work at cross purposes with developmental state policies. The argument is developed in five main sections. The first section introduces the concept of a Developmental Network State and tells the story of how this institutional structure emerged in the United States beginning in the 1980’s. The second explains how partisan politics and ideology worked to keep this U.S. developmental system hidden. The third provides an overview of how the Developmental Network State functions currently in the United States. The fourth section explains how its peculiar development, and particularly its covert character, undermines the sustainability of U.S. developmental efforts. The conclusion argues that the pressing need to reform the Developmental Network State provides significant political opportunities for progressives in the United States. UNDERSTANDING THE DEVELOPMENTAL NETWORK STATE

The types of developmental policies being pursued in both Europe and the United States are quite distinct from the more familiar form of developmentalism that was deployed in East Asia in the decades after World War II.9 That approach, exemplified by Japan’s Ministry of Industry and Trade (MITI), was a centralized form of state policy that has been usefully called a Developmental Bureaucratic State (DBS).10 The DBS was designed to help domestic firms catch up and challenge foreign competitors in particular product markets. As practiced in Japan and South Korea, it worked by government planners providing a series of economic incentives and subsidies to established firms to compete in markets that they would otherwise have considered too risky to enter. When this type of developmental state was identified by journalists and academics, it was easily

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grasped as the coordinated activity of a unified group of government officials who often worked under the same roof. What Europe and the United States have created is something very different called a Developmental Network State (DNS).11 The main focus of the DNS is to help firms develop product and process innovations that do not yet exist, such as new software applications, new biotech medications, or new medical instruments.12 For this, the older Japanese model is basically irrelevant because there is no international leader that firms can imitate. Moreover, firms already have strong incentives to innovate, so the addition of government subsidies or incentives is unlikely to have any additional impact. Instead of the DBS reliance on providing firms with incentives, the DNS is much more “hands on”; it involves public sector officials working closely with firms to identify and support the most promising avenues for innovation. A precondition for a Developmental Network State is a community of people with high levels of technological expertise. It requires substantial previous investments in higher education and in the production of scientific and engineering knowledge. Once the mechanisms for producing expertise and new knowledge are already in place, the DNS attempts to make this technological community more effective in translating research into actual products. The DNS can be thought of as a set of government actions that are designed to improve the productivity of a nation’s scientists and engineers.13 The work of the DNS can be divided into four distinct but overlapping tasks— targeted resourcing, opening windows, brokering, and facilitation. Targeted resourcing involves government officials identifying—often after considerable consultation—important technological challenges, the solution of which would open up important economic possibilities. Officials then provide funding and other resources to groups that have promising ideas for achieving breakthroughs. Targets can include both fundamental problems, such as figuring out how to splice DNA to create new organisms as well as much more focused problems, such as developing improved imaging technologies for better cancer screening. This kind of targeted resourcing requires that funders exert considerable discipline over the technologists. They have to set benchmarks and withdraw funding from those groups who fail to show adequate progress in meeting goals. This makes it very different from standard practices in military contracting where procurement officials often keep the money flowing despite slow progress in meeting goals. Targeted resourcing is intended to focus the energies of scientists and engineers on a particular set of tasks and create synergies by getting groups of highly skilled people working together. It follows the basic model of the Manhattan Project demonstration that technological progress can be accelerated by concentrating resources. Opening windows rests on the contrasting logic that many good ideas for innovation will bubble up from below and might not fit with the targeted priorities being pursued by particular agencies. The goal is to create multiple windows

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to which scientists and engineers, working in university, government laboratories, or business settings, can bring ideas for innovations and receive funding and other types of support. This is the “let a thousand flowers bloom” dimension of technology policy where government agencies provide fertilizer to help new ideas grow.14 Money is not the only fertilizer; sometimes in-kind assistance, such as use of specialized equipment in government laboratories, is critical. Brokering encompasses two overlapping dimensions—technological brokering and business brokering. Technological brokering is a central part of the innovation process, since it often involves putting together already existing technologies in new ways or one laboratory combining a new technique from another laboratory with its own incremental change to make something new and different.15 Brokering is the activity of connecting these different groups together so they can take advantage of each other’s knowledge. Officials engaged in targeted resourcing are sometimes able to play this role effectively because they have developed a broad overview of the research activities going on within a particular technological subfield. But those at open windows can sometimes also play this role by making connections that would not otherwise occur. Business brokering is more obvious. It involves helping a group of technologists who are trying to commercialize a new product to make the business connections that they need to create an effective organization, get the required funding, and find potential customers for the product. Again, public sector technology officials, who have built up networks both within the government and with private firms, including venture capitalists, are sometimes able to play this role effectively. Finally, facilitation encompasses a range of activities. Often, the more radical the technological innovation, the more obstacles have to be cleared away to create viable markets for the new technology. With the railroad and the automobile, for example, expensive infrastructure had to be put in place before the new technology could mature. At the less radical end of facilitation, standards are often an issue, since purchasers need to know that a new product actually does what is promised and will work effectively in combination with existing infrastructure. Some technologies also require creating new regulatory frameworks that makes it safe for firms to invest and overcome consumer concerns. Sometimes considerable coordination is required because a new technology depends on multiple firms making investments in the same time frame. In the case of the Internet, facilitation involved an extended period in which the state effectively manages the technological infrastructure before privatizing it. This brief catalog helps to understand why the DNS is necessarily a highly decentralized structure. Most of these activities require a very high level of specific expertise within the relevant government agencies. To be effective, these officials require “embedded autonomy”; they have to be deeply rooted in the particular technological community that they are funding.16 For example, an official at the National

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Cancer Institute within NIH might be very effective at providing resources and brokering for scientists working on ways to cut off the blood supply to tumors, but he or she might be completely ineffective if shifted over to work on genetic markers for breast cancer. Facilitation is somewhat different; the more ambitious version cannot be done by one or two people working in a single office; it usually requires networks of collaboration within the government, since different types of expertise need to be brought to bear. But in this case as well, some of those involved must have a deep understanding of the particulars of the technology. Moreover, for opening windows and brokerage to be most effective, it is desirable to have some redundancy built into this structure. Without that redundancy, a single small office might be able to completely shut down a promising line of investigation by denying funding. With multiple windows and multiple potential brokers, an idea might be able to survive and ultimately flourish despite initial negative responses. Since centralization tends to eliminate duplication of functions, this is yet another reason that a DNS is highly decentralized. This decentralization makes any DNS far less visible to journalists, scholars, and the public than a DBS. A DNS is not housed in a single place; rather its activities might be carried out in literally hundreds of different offices located in different government agencies or facilities. It also doesn’t have a unified budget; spending is disbursed across a wide range of different agencies. Even its impact tends to be decentralized as hundreds or thousands of distinct groups of technologists are supported in their work across a wide range of different economic sectors. In both Europe and the United States, constructing the DNS required significant policy innovations and the creation of new institutions and funding streams. The difference is that most European nations had stronger twentieth century traditions of active state engagement in the management of the civilian economy than the Unites States. Both at the national and the European Community level, officials could draw on strong traditions of state leadership to justify these new policies. In the United States, in contrast, the transition to a DNS was necessarily more convoluted. THE EMERGENCE OF THE DNS IN THE UNITED STATES: ARPA

The United States has a long history of state developmental efforts that go back to Alexander Hamilton and the beginning of the Republic.17 But this tradition has co-existed uneasily with the counter tradition of laissez-faire and reliance on the market.18 In the twentieth century, the tension was resolved by carrying out developmental policies within the framework of national defense. In the years after World War II, the Pentagon worked in close cooperation with other national security agencies such as the Atomic Energy Commission and the National Aeronautics and Space Agency (NASA) and as a consequence, government funding and infrastructure played a key role in such technologies

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as computers, jet planes, civilian nuclear energy, lasers, and ultimately, biotechnology.19 Not surprisingly, most of the core methods employed by the Development Network State in the United States were pioneered by one particular office in the Pentagon—the Advanced Projects Research Agency (ARPA).20 ARPA was initially created in the aftermath of the Soviet success with Sputnik to push the technological frontier of Pentagon procurement efforts. The intention was to provide funding for “beyond the horizon” technologies, since the rest of the Pentagon’s budget for research and development was linked to immediate procurement of weapons for the various military services. ARPA initiatives occurred across a range of technologies, but it was the offices that supported technological advance in the computer field that established a new paradigm for technology policy. ARPA’s computer offices carefully cultivated a model that was quite distinct from the standard practice of other government agencies that fund research. The National Science Foundation, for example, has relied very heavily on peer review of research proposals, which leaves most of the initiative in the hands of the research community. Since ARPA’s computer initiatives began at a time when the established computer science research community was very small, ARPA was far more proactive in shaping the direction of research. From the start, it engaged in targeted resourcing. ARPA made a practice of hiring visionary technologists and giving them a very high degree of autonomy to give out research funds. The organizational structure was extremely lean with very small staffs and a minimum of paperwork. ARPA’s Information Processing Techniques Office (IPTO) was initially established in 1962 and played a central role in the advance of computer technology in the 1960s and 1970s. IPTO provided the resources to create computer science departments at major universities and funded a series of research project that successfully pushed forward advances in the human-computer interface. In fact, many of the technologies that were ultimately incorporated into the personal computer were developed by ARPA-funded researchers.21 Of course, the Internet itself began as an ARPA project in the late 1960s that encouraged communication among computer researchers funded by the agency. While responsibility for the early Internet was eventually shifted from ARPA to NSF, it was in the ARPA period that the technological barriers to networked communication among computers were overcome. The key features of the ARPA model can be described as follows: 1. A series of relatively small offices, often staffed with leading scientists and engineers, are given considerable budget autonomy to support promising ideas. 2. These offices are proactive rather than reactive and work to set an agenda for researchers in the field. The goal is to create a scientific community with a presence in universities, the public sector, and corporations that focuses on specific technological challenges that have to be overcome.

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3. Funding is provided to a mix of university-based researchers, start-up firms, established firms, and industry consortia. There is no dividing line between “basic research” and “applied research,” since the two are deeply intertwined.22 Moreover, ARPA personnel are encouraged to cut off funding to groups that were not making progress and reallocate resources to other groups that had more promise. 4. Since the goal is to produce usable technological advances, the agency’s mandate extends to helping firms get products to the stage of commercial viability. This can involve the agency in providing firms with assistance that goes well beyond research funding. 5. Part of the agency’s task is to use its oversight role to make constructive linkages of ideas, resources, and people across the different research and development sites.23 In short, the ARPA model encompassed targeting of resources, technological and business brokering, and a certain amount of facilitation. Moreover, ARPA’s computer offices also opened windows for scientists and engineers—who had good network ties—to propose ideas for funding. PARALLEL DEVELOPMENTS: BIOTECHNOLOGY

The ultimate political impact in the United States of the ARPA model was magnified by a second and largely independent technological transformation that occurred in the 1970—the emergence of genetic engineering under the wing of the National Institutes of Health (NIH). In the aftermath of Watson and Crick’s discovery of the structure of DNA in 1953, substantial funding from NIH made possible rapid advances in molecular biology by U.S. scientists. Their achievements included understanding the genetic code and figuring out how DNA replicates itself. These breakthroughs paved the way for the creation of new organisms by combining DNA from different sources. As early as 1967, experiments were underway to splice genes together, and the first success was achieved in 1971. When a team at Stanford led by Paul Berg successfully created a DNA molecule that combined fragments from different organisms, genetic engineering moved from the realm of science fiction into practicality. In 1977, Herbert Boyer’s team at UCSF successfully created a new organism designed to produce a particular protein—somatostatin.24 Well before Boyer’s important achievement, the biotechnology gold rush was underway. Both established and new firms recognized the extraordinary commercial importance of this new technology. Deliberately engineered organisms could be turned into factories to produce large supplies of proteins that were far more difficult and expensive to obtain in other ways. Moreover, bioengineering also created the potential for the discovery of new blockbuster medications that could cure human illnesses as well as new variants of plants and animals engineered to have

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particular qualities that were rare or nonexistent in nature. U.S. firms have remained in the forefront in exploiting these possibilities for the last thirty years. Officials at NIH did not follow the kind of model that ARPA had pioneered with computer technology. There is no evidence for the 1970s of NIH officials setting technological goals in the way that ARPA routinely did. On the contrary, NIH continued to rely heavily on the peer review model in which funds were distributed for the research projects that were deemed most worthy by other scientists. Moreover, the timeline on NIH research projects was very different from the way that ARPA worked. In the computer field, ARPA would often expect to see significant results in a year and would decide to either continue or stop funding after twelve months. At NIH, in contrast, grants were usually for five years, reflecting the far slower progress when work in the laboratory involves the manipulation of actual living organisms. Nevertheless, NIH operated from a developmental logic of its own that ended up paralleling ARPA’s achievements. NIH’s funding mandate rested on progress in fighting human disease, so as NIH officials grasped the disease fighting possibility of genetic engineering, they were aggressive in advancing the technology, both with the grants they provided and with the research going on within their own labs. The rapid growth in funding for genetic engineering reflects this enthusiasm. In 1975, NIH supported only two recombinant DNA research projects. In 1976, this rose to 123 projects with $15 million dollars of support. By 1980, this had increased to 1,061 projects funded with $131 million of funding. Moreover, as early as April 1976, one of the constituent institutes announced a contract program designed to accelerate the development of organic chemicals required for recombinant DNA research.25 NIH officials in this critical period were also supportive of efforts by scientists to commercialize their discoveries. Some of his colleagues were scandalized when the UCSF scientist Herbert Boyer helped found Genentech in 1976, the first of the biotech startups specifically created to commercialize genetic engineering. However, NIH raised no objections when Boyer continued to use his NIH-funded lab at UCSF for Genentech’s first commercial project—the development of a bacteria that would synthesize human insulin. This sent an important signal to other scientists that the relevant government agency was encouraging the closest possible collaboration between scientists and business firms. Most importantly, NIH did the difficult facilitation work of running political interference for the new technology. In the mid-70s, there was considerable public anxiety around the perceived dangers involved with scientists creating new life forms. Proposals were introduced in Congress for new regulatory agencies that would closely supervise this type of research. The leadership at the NIH skillfully outmaneuvered the opponents by holding public hearings, issuing guidelines, and promoting self-regulation by the scientists themselves. As a consequence, the agency successfully held on to its jurisdiction as the key

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responsible governmental authority, even though NIH was neither equipped nor authorized to serve as a regulatory agency.26 The NIH leadership anticipated that public anxieties would diminish once the new technologies produced valuable medical breakthroughs. And once this happened, they moved quickly to relax the strictness of the initial guidelines. Most importantly, their maneuvering meant that biotechnology firms faced no additional regulatory barriers in pursuing this new type of research. Private firms were urged to self-police in the same way as university scientists by creating internal safety committees that would review proposed research in advance. Private firms that were developing pharmaceuticals or other human therapies would ultimately have to go through the complex FDA approval process, but avoiding new forms of regulation before human trials was quite significant for the rise of this new industry. The resulting growth in biotechnology firms was spectacular: “32 in 1978, 42 in 1979, 52 in 1980, and 100 in 1981. . . .”27 Genentech went public in October 1980, and its shares, initially priced at $35, soared to $89 on the hopes for rapid therapeutic advances. The reality, of course, was that some of these startups failed, and the drawn out process of testing and approving new pharmaceuticals has meant that the industry’s performance has consistently disappointed the expectation of investors looking for overnight results. But in recent years, most of the successful new pharmaceuticals are products of these new technologies.28 The point, however, is that NIH’s role in the genetic engineering revolution in the 1970s had important consequences both within the agency and within the government more broadly. Just as with ARPA earlier, NIH leaders came to see the nurturing of new firms as part of their agency’s mission. Moreover, the centrality of ARPA to the computer industry and NIH to biotechnology persuaded many policy makers that the Federal government had a role to play in nurturing the industries of the future.29 WINNING WHILE LOSING: THE INDUSTRIAL POLICY DEBATE AND ITS AFTERMATH

This new understanding was a key part of the industrial policy debate that took place in the early 1980s. The standard history of the U.S. industrial policy debate has been provided by Otis Graham.30 He shows how industrial policy ideas developed within Democratic Party policy circles at the end of the 1970s were widely debated during Ronald Reagan’s first term, becoming a central axis of discussion within the Democratic primaries in 1984. He argues that the critical turning point came when the Democratic nominee in that year, Walter Mondale, repudiated the idea that the government should play an active role in “choosing winners.” Mondale focused his campaign instead on well-established Keynesian ideas that had been part of the party’s repertoire since the 1930s. With that choice, Graham argues that the industrial policy debate basically ended with clear victory for those advocating reliance on markets.

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The reality, however, is significantly more complex. It was anxieties about the ability of U.S. firms to compete successfully in the global economy that had forced industrial policy ideas onto the political agenda in the first place. The U.S. trade deficit in goods worsened significantly in the second half of 1970s, improved slightly during the years of belt tightening and recession from 1979 to 1982, and then dramatically worsened as the Reagan economic boom unfolded. Japan at this time appeared to be a highly effective juggernaut that had successfully captured much of the U.S. market for automobiles and electronic goods and was threatening U.S. leadership in computer chips, computers, and other emergent technologies. Old line U.S. industrial firms, exemplified by the auto companies and big steel, were seen as rusty dinosaurs, thick with bureaucracy, pretty much incapable of adapting to a new environment. For politicians in both parties, anxieties about U.S. competitiveness translated directly into the issue of jobs. They were concerned whether new jobs were going to open up for their constituents as older manufacturing jobs disappeared. So during the same period that proponents of an explicit and open industrial policy were politically defeated, politicians of both parties nevertheless supported a series of measures that were designed to translate the nation’s scientific and technological leadership into commercially viable products that would be produced in the United States.31 Taken together, these initiatives can be seen as efforts to build on the successes of ARPA and NIH in nurturing new industries. So despite public declarations that industrial policy was wrong because government should not try to pick winners, initiatives were taken that created a decentralized system through which public agencies would, in fact, invest in potential winners. Some of these initiatives simply facilitated the privatization of publicly funded intellectual property, but others significantly expanded the government’s role in directing technological change. The initiatives mentioned here begin at the end of the Carter Administration and end before Bill Clinton started his presidential term in 1993.32 In other words, the vast majority of these actions occur during the free-market administrations of Ronald Reagan and George H. W. Bush.33 Stevenson-Wydler Technology Innovation Act of 1980 This act encouraged the network of Federal laboratories to engage in direct collaboration with state and local governments, universities, and private industry on research efforts. It also mandated that the laboratories spend funds on technology transfer activities. 1980: Bayh-Dole Act This act was passed by Congress in 1980 to encourage universities and small businesses to pursue commercial exploitation of technological breakthroughs that resulted from Federally funded research. There is some dispute as to how much difference this legislation has actually made, since previous law allowed universities to gain property rights over key technologies developed with Federal support. Nevertheless, the new legislation served an important symbolic function in legitimating close cooperation between university researchers and industry.34

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1982: Small Business Innovation Development Act of 1982 This legislation created the Small Business Innovation Research Program, which was a consortium between the Small Business Administration and government agencies with large research budgets such as Department of Defense, Department of Energy, and Environmental Protection Agency (EPA). The agencies were required to devote a fraction, initially 1.25 percent of their research funding, to support initiatives that came from small, independent, for-profit firms. Small Phase I awards of $50,000 could be followed by larger Phase II awards of $500,000.35 1984 National Cooperative Research Act This act created a blanket antitrust exemption for private firms to engage in cooperative research efforts to develop new products. It created the legal foundation to establish industry-wide research consortia that shared funding and information on “pre-competitive” research. 1985: NSF Establishes Program for Engineering Research Centers These university-based centers were designed to create a decentralized network of researchers working on concrete problems of translating scientific breakthroughs into usable technologies.36 1986: Federal Technology Transfer Act This created the legal framework for Cooperative Research and Development Agreements (CRADA’s) between Federal laboratories and private firms that would give firms the right to commercially exploit research findings that originated at those laboratories. 1988: Advanced Technology Program (ATP), Department of Commerce Originally authorized in the Omnibus Trade and Competitiveness Act of 1988, ATP is a program that provides a Federal matching grant for private sector research efforts designed to commercialize promising new technologies. Potential recipients include both big businesses and small. 1988: Manufacturing Extension Program The same piece of trade legislation also authorized funding for a network of manufacturing extension projects. These were developed on the analogy with agricultural extension programs—a widely decentralized program that would provide locally available expertise to help manufacturers make use of advanced technologies.37 1991 Defense Industrial and Technology Base Initiative The Defense Authorization Act authorized Critical Technology Institutes to “advance the development of technologies deemed critical to U.S. national security and economic competitiveness.” The legislation also authorized manufacturing extension programs that would help diffuse advanced manufacturing technologies developed under DOD auspices to small firms.38 1991 High Performance Computing and National Research and Education Network Act This legislation was intended to protect the U.S. international lead in high performance computing and networking. It was also explicitly intended that the technological developments would enhance productivity and industrial competitiveness. It initially allocated $654 million in support of research at the Department of Defense and the National Science Foundation.39 1992 Small Business Research and Development Enhancement Act of 1992 This act created a program on the model of the SBIR called the Small Business Technology Transfer Program (SBTTR). The basic design of the program is the same as SBIR, except the research effort must involve a collaboration between a small business and a non-profit research institution such as a hospital, university, or government laboratory.

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These initiatives all began at the Federal level, but many of them were designed to coordinate with state and local initiatives. During this same period, driven by concerns about employment creation, most states launched new initiatives to expand their established economic development programs. Many of these initiatives provided technical assistance and some provided startup capital to new firms. Staff at these state agencies could educate the firms about the different types of available Federal assistance. Similarly, both universities and Federal laboratories were also encouraged to take on the task of assisting businesses—both established and startups—with technological problems. The most dramatic instance of this decentralization was the Manufacturing Extension Program that provided services through literally hundreds of locations across the country. Three of the Reagan era initiatives are of particular importance because they represented significant advances in the scale of Federal developmental efforts. The first was ARPA’s Strategic Computing Initiative. In the face of aggressive Japanese initiatives in the computer industry, Congress voted additional funds to ARPA in 1983 to support a ten-year Strategic Computing initiative intended to achieve major breakthroughs in Artificial Intelligence. While the program’s architects were far too optimistic about the short-term potential for major breakthroughs in developing thinking machines, the initiative provided an opportunity to further refine the ARPA model of industrial policy. The SCI’s leaders identified what they saw as the key technological barriers that had to be overcome, and they then funded competing groups that had different strategies for surmounting the obstacles. When a group demonstrated progress, they were given additional resources, sometimes in the form of procurement contracts, to facilitate the transformation of their ideas into commercially viable products. ARPA’s managers served as public sector venture capitalists for those developing more advanced computer technologies. They facilitated the transfer of key ideas from one research group to another, so that innovations could diffuse more quickly. They also were able to link start-up firms with private venture capital firms, potential customers, and other key resources that would help make them more successful.40 A second key ARPA initiative of this period was the creation of Sematech in 1987 after years of pressure by the U.S. semiconductor industry for a response to intensifying Japanese competitive pressures.41 SEMATECH began as a consortium of twelve semiconductor firms and was initially financed with $100 million per year of ARPA money that was combined with contributions from the consortium members. Its ambitious mission was to both upgrade technological capacity all along the “semiconductor manufacturing food chain” and create an ongoing research and education infrastructure “for sustained U.S. leadership in semiconductor technology.”42 By most accounts, the Federal investment in SEMATECH was successful. The collaboration between government and industry was able to target resources

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at key industry bottlenecks, particularly the firms that produced the equipment used for manufacturing semiconductors. The initiative helped U.S. firms to regain significant market share from foreign competitors. The funds also helped to build an academic community around the design of chips making it possible for the industry to maintain the geometric expansion of chip capacity. After ten years, Sematech became self-supporting, relying on industry contributions alone, although ARPA continued to fund key academic work in chip design. SEMATECH became a model for subsequent industrial policy efforts. Over the next twenty years, there are repeated efforts by government officials to assemble similar types of industrial consortia to accelerate technological development up and down the supply chain. The core idea is that putting some Federal money into the mix gives industry participants an incentive to begin cooperating to identify shared research and logistical challenges that might be solved through joint efforts. The hope is that once industry officials see the benefits of this kind of cooperation, they will continue to finance the consortium efforts without government funds. Another important initiative of this period was the Human Genome Project that was launched somewhat improbably by the Department of Energy (DOE). DOE’s budget included the funding for the system of Federal laboratories that had grown out of weapons programs in the early years of the Cold War. As Cold War tensions eased in the second half of the 1980s, DOE’s leadership recognized that the protection of the agency’s budget required establishing the commercial value of the Federal laboratories. Hence, DOE became one of the first civilian agencies to embrace parts of the new ARPA model of industrial policy and it seized on mapping the genome as an ideal opportunity. From the start, the logic of the Human Genome Project was to mobilize the energies of the scientific community around the specific task of mapping the genome as a way to accelerate the discovery of commercially viable products. At NIH, there was initial resistance to the idea because of fear that embracing this kind of top down model would divert resources from the traditional peer reviewed granting process. But these objections were overcome, and the Human Genome Project was formally launched in 1991 as a joint effort of the NIH and DOE, with annual funding of $135 million. NIH, as well, was now in the business of directing scientific and technological development down one particular track.43 KEEPING THE DEVELOPMENTAL STATE HIDDEN

From its origins in the Reagan years up to the present, the play of partisan politics has been the key factor in keeping this developmental activity largely hidden from public view. To be sure, the various components of the developmental state are not covert or secretive; agencies that provide assistance for technological innovation advertise their services broadly to the business community, and

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they brag about their success stories on their Web sites. Like the purloined letter, the hidden developmental state is hidden in plain view. But it has been rendered invisible by the success of market fundamentalist ideology. Since that ideology insists that the private sector is efficient and dynamic while the state is wasteful and unproductive, there is simply no conceptual space for the idea that government plays a critical role in maintaining and expanding the private sector’s dynamism. It is here that the contrast with Europe’s experience is most dramatic. There is ongoing debate about European developmental policies, but the arguments are generally pragmatic rather than ideological. They focus on whether particular initiatives are accomplishing their stated objections, not whether it is appropriate for the state to play an active role in driving technological innovation. To be sure, in the United States, a small scholarly community has been trying to make the workings of the U.S. developmental state more visible since the 1980s,44 and there are important studies showing the centrality of the state role in a series of different technologies. But this body of work has had little influence on the society’s common sense understandings or the way that journalists report on technologies and technological breakthroughs. As late as 2007, a Google search for the phrase, “U.S. developmental state” found no entries beyond the Ford Foundation grant that funded the research for this article. This invisibility has been maintained through a long history of partisan conflict over the ARPA model of industrial policy. This conflict first came into the open during the administration of George H. W. Bush and has erupted repeatedly since then. The conflict is rooted in the unusual political coalition that has dominated the Republican Party from the mid-1970s onward. That coalition unites social and religious conservatives with business conservatives around a political agenda that centers on market fundamentalism. However, big business support of market fundamentalism is not principled, but strategic, since large firms are heavily dependent on government providing them with subsidies, a favorable regulatory environment, research support, protection of their “intellectual property,” and reliable backing overseas. Nevertheless, they find market fundamentalism useful as a way to resist unwanted regulations and to win ever more favorable tax treatment.45 The problem is that some parts of the Republican coalition take market fundamentalist ideas seriously, so Republican presidents periodically have to demonstrate their loyalty to the doctrine. The Cato Institute, for example, expresses the views of libertarians by routinely denouncing many of the programs analyzed here as “corporate welfare.” Hence, Republican presidents have periodically played to this part of their base by publicly repudiating programs that go too far in the direction of “picking winners.” An early episode in this ongoing drama occurred in 1990 when the administration of George H. W. Bush fired the head of ARPA for being too aggressive in

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his industrial policy initiatives.46 One possible precipitant of Field’s ouster was “a decision the agency made this month to invest $4 million in Gazelle Microcircuits, Inc., a Silicon Valley electronics company that is working on highspeed circuits of gallium arsenide.”47 In that case, ARPA was acting openly as a public sector venture capitalist. Shortly before, Fields had also been repudiated in his efforts to use ARPA funding in support of high definition television technology. But even though the Bush Administration publicly reined in ARPA in 1990, it still supported in 1991 the Congressional passage of the High Performing Computing Initiative that provided enhanced support for ARPA’s initiatives in this arena. In short, it seems that Fields was sacrificed not because he was engaging in developmental policies, but because he was making those policies too visible. The complexity is that Democratic politicians have seen technology policy as an opportunity to separate parts of the business community from their loyalty to the Republican coalition. They think that if their party provides aggressive support for technology funding, key business groups could be persuaded to enter into a durable alliance with the Democratic Party.48 Republican administrations, therefore, have to walk a kind of tightrope. On the one side, they have to provide a high enough level of support for developmental policies to keep key business constituencies from defecting to the Democrats who are promising them a better deal. But at the same time, they have to make a certain number of gestures to prove their support for the idea that market competition, by itself, is the ultimate guarantor of technological progress. For George W. Bush, the key public gesture has been joining in the right wing’s attack on the ATP that has been housed in the Department of Commerce since the late 1980s. The program provides matching grants to business firms, both large and small, that are seeking to overcome a technological barrier. While the program’s track record has been excellent, it is particularly despised by market fundamentalists because it supports big businesses that could easily raise funds for their R&D efforts in the capital markets. So George W. Bush has obligingly zeroed out the program in the budgets he has submitted to Congress.49 But even when the Republicans controlled both Houses of the Congress, they allowed the ATP to survive at the $150–160 million per year level, since the program was popular with the businesses that it supported. But this repeated dance allowed Bush to appease the most ideological market fundamentalists and reinforce the narrative that the U.S. government does not engage in developmental state activities. But the real story was that George W. Bush used his dogged opposition to ATP funding as political cover to provide significant funding for much larger technology initiatives. For example, the Bush Administration has enthusiastically embraced the National Nanotechnology Initiative, begun under Clinton, which, like ATP, provides funding to both big business and small business at funding levels of $1 billion per year.50 Since nanotechnology encompasses

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research at the atomic and molecular scales, it includes everything from material sciences, chemistry, and energy efficiency to computers and biotechnology. While the Cato Institute is contemptuous of this spending as “pork barrel research,” the Bush Administration has moved full speed ahead with this and other developmental initiatives.51 In fact, the White House’s own Web page reveals the administration’s ambivalence. In January 2006, President Bush announced a new competitiveness initiative with requests for additional funds to support technologies policies. Right on the White House Web page for that effort (http://www.whitehouse .gov/stateoftheunion/2006/aci/), there is a graphic of Apple’s IPod, showing how Federally funded research produced some of the key technologies on which that commercial product depends. In a word, an administration that is unswervingly ideological on many other policy fronts has pursued a more pragmatic path in maintaining the hidden developmental state and even occasionally bragging about its accomplishments. When Bill Clinton was in the White House, the dynamic was completely different. His administration was unequivocal in its support for increasing funding for a range of different technology policies. He campaigned on a public investment platform that involved ambitious outlays in support of technological development.52 But the Republicans in the Congress fought fiercely to limit funding for most of these initiatives. Republican opposition served two functions; it provided an opportunity to press their case that Democrats were unreconstructed supporters of big government while also making it more difficult for Democrats to woo business allies with expanded R&D programs.53 Clinton, for example, sought to expand the ATP from its relatively small size under George H. W. Bush. In fact, he brought in an experienced ARPA hand to ramp up the agency’s efforts. But this initiative made ATP a particularly attractive target for the Republican Right. They relentlessly attacked Clinton as an advocate of big government who had failed to learn Ronald Reagan’s key lesson that “government is not the solution, government is the problem.” They used this rhetoric to oppose Clinton’s entire public investment agenda. Moreover, the attack was intended to keep Clinton from getting Congressional approval for the resources he wanted to outbid the Republicans for business support. As soon as the Republicans gained control of Congress in the 1994 mid-term elections, they sought to cut off all funding for ATP. The agency’s budget for FY 1996 was slashed to $19 million, but the Clinton Administration was ultimately able to push funding back up to $150 million per year. The new Republican majority also used their budgetary power to limit the Clinton Administration’s pursuit of other new technology initiatives such as the Partnership for a New Generation of Vehicles. They also dismantled the Congressional Office of Technology Assessment that had carefully cultivated bipartisan support through its twenty three-year history. Over the years, its staff had developed considerable

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expertise and had produced a series of important reports on some of the different programs of the hidden developmental state. In closing it down, Gingrich and his allies appear to have calculated that if they killed the messenger, the news about the hidden developmental state was less likely to get out.54 In sum, partisan conflict during both Republican and Democratic administrations has worked to keep the U.S. developmental state hidden and the ideology of market fundamentalism in place. Nevertheless, the various programs passed in the 1980s and early 1990s have gradually matured into a Developmental Network State with considerable breadth and effectiveness. While defense and national security remain central concerns of this DNS, its activities now extend into every corner of the civilian economy. CHANGES IN THE ORGANIZATION OF INNOVATION

Over the past twenty years, despite deep partisan conflicts and budgetary fluctuations, a quite elaborate Developmental Network State has emerged in the United States. One of the key mechanisms of this maturation has been organizational learning; officials within various agencies of the Federal government have learned from the ARPA model and have become effective at supporting and advancing new technologies. But the organizational learning has not been confined to the Federal government. Deep changes have also occurred at the state and local level, universities, Federal laboratories, and in the private sector itself. The changes outside of the Federal government can only be touched on briefly here, but the basic idea is that commercializing new technologies has become a major preoccupation of university administrators, Federal lab administrators, and networks of state and local economic development officials. When Herbert Boyer created Genentech in 1976, he was challenging the norms of the academic community. Thirty years later, the situation has reversed. An academic or Federal laboratory scientist who refuses to take action to commercialize his or her discovery is likely to be seen as deviant. Moreover, in many parts of the country, there are now networks of supportive institutions designed to help the scientist or engineer with the project of commercialization. These institutions provide technical, business, and moral support as well as network connections. The two most relevant private sector changes have been the dramatic growth of private sector venture capital and shifting corporate strategies around innovations. The apparatus of private sector venture capital firms in the United States has grown enormously in recent years. These investors usually wait to support firms until they have developed a commercial prototype of a product. Nevertheless, founders of new firms recognize that if they can manage to get past that hurdle with a product with growth potential, they have a reasonable chance of attracting venture financing. Moreover, the venture firms have developed considerable expertise in nurturing and supporting new technology firms.55

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Changing strategies—even in the largest corporations—means that many firms now pursue innovations through partnerships rather than primarily through their own laboratories. The model that began in the pharmaceutical industry where the largest firms seek partnerships in drug development with small, biotech start-ups has spread to many other sectors of the economy.56 Taken together, these shifts have radically changed the national innovation system in the United States. A generation ago, a large portion of innovations could be traced to the autonomous and self-financed work that went on in the laboratories of Fortune 500 companies. Now, however, most innovation occurs among networks of collaborators that cross the public-private divide. A snapshot of this shift can be seen by looking at the R&D 100 Awards. For forty-five years, R&D Magazine has been recognizing the one hundred most innovative commercial products introduced in the previous year. In 1975, forty-seven out of eighty-six domestic innovations were produced by Fortune 500 companies, and forty of these involved no outside partners. By 2006, the big firms were responsible for only six out eighty-eight innovations, and in most cases, they had partners. In 2006, fifty of these innovations were the products of researchers at U.S. government laboratories, universities, or other public agencies, working alone or in collaboration with private firms. Another thirteen innovations came from “supported spin-offs,” relatively new firms started by scientists or technologists that had received considerable Federal funding both before and after the firm’s founding. Of the remaining twenty-five innovations that belonged to private sector organizations, at least another fourteen involved Federal dollars. In short, all but eleven of the prize winning innovations in 2006 depended on some public financing. Since these recognized innovations ranged over every sector of the economy, there is reason to believe that the pattern revealed in the awards reflects the broader trends in innovation in the U.S. economy.57 Another indicator of the importance of the government role has been provided in a recent analysis of the “valley of death”—the often daunting transition between a new scientific or engineering discovery and its successful transformation into a commercial prototype. Funds for Early Stage Technology Development (ETSD) that help firms through this valley are estimated to represent only between 2 percent and 14 percent ($5–$36 billion) of total R&D spending in the United States. The authors then calculate that Federal spending—across many different programs—account for 20–25 percent of these total ESTD outlays with another 6–7.5 percent coming from state governments and universities. Significantly, they argue that venture capital firms play a relatively minor role (2.3–8 percent), while the remaining funding comes from industry and “angels”—individual investors.58 By showing the relatively small amounts of funds that go to ETSD, this finding helps demonstrate that Federal programs that might spend as little as $50 million or $150 million per year could still be making a significant difference

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for overall rates of innovation. Moreover, the DNS also seeks to increase the efficiency with which ETSD funds are used. One means is to provide in-kind assistance such as access to the most sophisticated laboratory equipment and highly skilled technicians. Another is by effective technology brokering; helping to connect groups of scientists and engineers with other researchers who can provide important leverage for solving their problems. MAPPING THE U.S. DEVELOPMENTAL STATE

While considerations of space make it impossible to describe all of the key agencies that play an important role in the U.S. developmental state, it is still important to provide some kind of overview of how this system works. By returning to the four key functions of a developmental network state, it is possible to identify some of the key locations within the Federal government where these activities are carried out. Targeted Resourcing ARPA continues to push technologists to overcome certain key hurdles. ARPA funds a variety of initiatives to advance supercomputing and to overcome the barriers that potentially limit the ability of semiconductor designers to double the number of circuits on a chip. But ARPA is also playing an active role in biological science and nanotechnology.59 But ARPA initiatives have been copied from the early 1990s onward in the Department of Energy that has carried out hundreds of programs in collaboration with industry that focus on overcoming specific technological barriers. One particularly ambitious and successful program involved partnering with General Electric and Westinghouse in the 1990s to develop a new generation of gas turbines to produce electricity with significant increases in efficiency and comparable decreases in pollution. The idea was to burn the gas at extremely high temperatures without melting the turbines themselves. DOE covered half the cost of this project and created at Georgia Tech University a new academic specialty focusing on the issues of constructing high temperature turbines.60 This model is being used today to create collaborations between universities and industries to discover cost-effective techniques for turning agriculture waste products and fast growing weeds into ethanol. The ATP at the National Institute of Standards of the Department of Commerce has elements both of resource targeting and opening windows. Proposals are reviewed for both their technological merits and their business potential. ATP has funded both smaller start-up firms and the largest corporations, sometimes working in consortia. For example, ATP worked with the big U.S. auto companies and their major suppliers in a multi-year initiative that was

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designed to make a significant improvement in the accuracy with which metal parts are machined.61 Similarly, the National Science Foundation and a wide variety of other government agencies have pursued a strategy that can be called micro-targeting. The core idea is to fund the creation of a university research center that is focused on a particular set of technological challenges. The funded university is then expected to build networks with other scholars doing related research and build connections with business firms with an interest in solving such problems. As early as 1978, the National Science Foundation expanded a pilot program to create the Industry University Cooperative Research Centers program. NSF provides seed money for these centers with the expectation that they will find ongoing support from industry and other government agencies. A program for Engineering Research Centers was established in 1984 with more generous funding for the individual centers to cover large equipment costs. By 2007, NSF was supporting fifty of these Industry-University centers involving many universities and more than 500 cooperating business firms. For each dollar that NSF contributed, firms were providing $10 to keep these centers going. Moreover, a number of these NSF-originated centers had “graduated” and no longer received any NSF funding.62 These NSF programs provided other government agencies with a model of how to organize the collaboration among university-based researchers and multiple business firms. DOD and DOE followed this model when they were trying to accelerate the development of particular technologies. Moreover, Congress itself has funded many of these centers as part of the earmarking process; it is a way that members can deliver resources to their districts with the hope that centers might actually generate some economic development activity. While some of these fall squarely within the category of Congressional pork, others have proven to be productive. Finally, an increasingly important form of targeting follows a model that ARPA used in the Strategic Computing Initiative. ARPA realized that the fabrication of computer chips represented a major bottleneck in the effort to design faster and more powerful chips. Since fabrication was costly and required elaborate equipment, it was difficult for outsiders to test their chip designs. So ARPA funded a lab called MOSIS, affiliated with the University of Southern California, which would fabricate at no charge a small number of chips from designs that were sent in via e-mail. This relatively small expenditure broke the logjam because start-ups and even graduate students could now pursue their ideas for radical new chip designs.63 So across the whole system, the government has been actively building sophisticated laboratories that can be used by scientists and engineers to attack particular types of problems. This strategy lies at the heart of the National Nanotechnology Initiative. Since working at the atomic or molecular level

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requires elaborate machinery and instruments, the government has built a series of nanotechnology laboratories at major universities with the idea that such laboratories would run experiments for technologists working both in nonprofit and for profit settings.64 NIH is doing something similar in using its laboratories to test promising compounds that are submitted by researchers who lack the equipment to run such tests.65 And increasing numbers of businesses—both small and large—are turning to the Federal laboratories for assistance because of the equipment and technological expertise that has been assembled there.66 OPENING WINDOWS

The most important and largest open windows are organized through the Small Business Innovational Research and the Small Business Technology Transfer programs.67 The first provides funds to small businesses alone, and the second supports collaborations between small businesses and public researchers at universities or government laboratories. Both programs are organized as Federal set-aside programs. All of the government agencies that fund a significant amount of R&D are required to reserve a certain percentage of their budgets to fund initiatives by small business. The percentage started at a tiny .2 percent but was gradually raised to 2.5 percent in the 1997 Fiscal Year. Both programs involve Phase I and Phase II grants: the smaller Phase I awards of up to $100,000 support investigations into the feasibility of an idea, and then larger Phase II awards—up to $750,000—are designed to develop the idea into a prototype. (These are current funding levels; they have increased over time.) Phase III, the actual commercialization of the product, is to be financed outside of this program. These awards do not have to be re-paid, and the small businesses retain full control of the resulting intellectual property. By 2004, the government was making 4,304 phase one awards and 2,044 phase two awards for total funding of $2 billion and another $200 million of SBTTR grants.68 While the program is loosely coordinated by the Small Business Administration, the actual funding decisions are made within each of the eleven participating Federal agencies. A firm that is turned down by the Department of Defense can turn around and apply to NASA or the Department of Energy.69 Some agencies initially saw the set aside as an encumbrance on their capacity to spend research dollars.70 After all, agencies like DOD and NASA were accustomed to working entirely in a top-down manner, but with SBIR, the agency has to choose among the proposals made by the grantees. However over time, it appears that most agencies have come to see considerable advantages to this program. It provides a kind of ear-to-the-ground through which agency personnel can stay abreast of what cutting edge researchers are doing. It also links the agency with firms that might be willing to take on tasks that existing contractors lack the interest or capacity to pursue. Finally, the program provides the obvious political

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advantage of a dispersed set of beneficiaries for the agency’s research budget that has obvious advantages in discouraging Congress from cutting these funds.71 Most of the agencies involved now have an SBIR honor roll on their Web sites, where they list “success stories”—firms that got their start on a particular technology with SBIR funds from that agency. In some cases, these firms began as tiny start-ups and eventually grew into substantial firms, sometimes continuing to specialize as contractors for one or two agencies in particular. Moreover, many of the initiators of these new firms began, and sometimes continue to be, scientists or engineers employed in universities or government laboratories. Starting in the 1980s and continuing down to the present, there has also been increasing coordination between the SBIR programs and initiatives within the fifty states to encourage high technology growth. State governments have created networks of technology development programs that provide small business with advice about accessing the SBIR process as well as other forms of technical assistance.72 Many states have also created public venture capital funds to invest resources in particularly promising businesses that have successfully maneuvered through the SBIR process. A survey in 2006 by the National Association of Seed and Venture Funds showed that forty-four states had invested $5.8 billion in venture capital funds with $2.2 billion still available for new investments.73 In recent years, there is a growing recognition that the SBIR program doesn’t support firms long enough for them to bring new technologies to the marketplace.74 A number of agencies have experimented with ways to provide funding in “Phase III.” The most radical experiment began with the Central Intelligence Agency (CIA) in 1999 when it was given the green light to charter and fund its own not-for-profit venture capital firm called In-Q-Tel. According to its website, In-Q-Tel has invested in ninety different organizations that are developing new technologies that the agency needs.75 The U.S. Army quickly followed this model, creating its own parallel organization called OnPoint in 2003, with an initial endowment of $25 million. OnPoint now includes ten small firms in its investment portfolio. NASA followed in 2006 with the creation of Red Planet Capital that plans to invest in the neighborhood of $20 million per year. The DOE has launched its venture capital fund in partnership with Battelle, the large nonprofit research organization that runs several of the DOE laboratories.76 But SBIR is not the only open window option. The decentralized network of state business development programs and technology incubators operate as a parallel set of windows, linking firms to SBIR and other Federal programs. Many of the Federal laboratories and university-industry research centers also operate as screening mechanisms where firms, large and small, that have successfully identified a relevant group of experts, can come to test ideas and possibly find collaborators. Finally, the Manufacturing Extension Program has worked through a highly decentralized network to provide thousands of small businesses with assistance in adopting new production technologies.77

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BROKERING

Effective technology brokering that links scientists and engineers to others who have the ideas and techniques that they need to solve their problems is probably the most central developmental task, but it is notoriously difficult to increase the frequency with which such brokering activity occurs. The problem is that the universe of people with both sufficient technological understanding and broad enough networks is always small, and those people also tend to be very busy with multiple demands on their time. Nevertheless, the Federal initiatives have sought to expand the number of places where these critical brokering conversations might occur. As suggested earlier, the program officers within the Federal agencies are one key locus, particularly those who are following the ARPA model of targeted resourcing. Such officials can use what they learn from reading proposals and research reports from a wide variety of laboratories to make key linkages. Many of them also organize periodic meetings of their grantees to exchange ideas to accelerate possible synergies. University researchers who are at the center of university-industry collaborative research centers are a second key locus. They are in a structural position where they can move key ideas from one part of the network to another. Third are some of the SBIR program officers at Federal agencies and the technology transfer officers at the larger Federal laboratories. If these individuals gain enough mastery over a particular technological area, they might be able to make some of these key connections. Fourth are the industry consortia that the Federal government has often supported, following the SEMATECH model that hope to bring together researchers from a range of different firms. As for economic brokering, this is increasingly likely to occur both at the targeted agencies and at many of the open windows. It has always been part of the ARPA model to worry about the economic viability of enterprises, and as the ARPA model has spread to other agencies, so has the emphasis on economic brokering. Testimony from SBIR program officers suggest that many of them see their role as “public sector venture capitalists” who are trying to provide recipients with network connections to other government agencies, major government contractors, venture capitalists, or particular consultants who can provide needed managerial assistance.78 FACILITATION

Across many new technologies, the understudied National Institutes of Standards and Technology has performed critical work in establishing technical standards that have accelerated commercialization of new technologies.79 And, as we have seen earlier, NIH and the FDA continue to play a key role in establishing public confidence in new medical technologies, although there have

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been increasing questions as to whether FDA has had sufficient independence from the firms that they are supposed to be regulating. It is, however, in the larger scale forms of facilitation that the U.S. developmental state has proven weakest over the past twenty years. There are a number of significant cases where new technologies required considerable sponsorship at higher levels of government, but this did not happen, either because of the weight of market fundamentalist ideology, the power of entrenched corporate interests, or some combination of the two. Probably the most dramatic failure has been the slow rate in the United States of transition of households to high speed, broadband connections to the Internet.80 The decision in the United States to rely almost entirely on private firms and households to bear the cost of these connections has meant that the percentage of households with high speed connections has lagged behind the connectivity rates achieved by Japan, Taiwan, and a number of European nations as well. A recent Organization for Economic Co-operation and Development (OECD) report showed the United States falling to fifteenth place internationally after being in fourth place as recently as 2001. Moreover, the infrastructure being developed in other countries also allows for significantly higher speeds of connection and greater possibilities for later upgrading.81 Similar problems of high level facilitation are reported by Galperin in his study of high definition television in the United States. Both under George H. W. Bush and Bill Clinton, the government failed to get the various industry representatives to agree on standards that might have allowed the United States to leapfrog over the European and the Japanese in making the transition from analog to digital delivery of television signals. Had this effort been successful, the United States might once again have had an onshore industry for producing television receivers. As it happened, the United States will ultimately make a transition to high definition, but producers in other nations will reap many of the benefits.82 Energy conservation technologies tell a similar story. The single most egregious example has been the failure of the United States to emulate Japanese and French investments in high speed, passenger rail lines connecting major cities. The DOE has nurtured a wide range of energy-saving technologies, but there has been a long-term failure in the Executive Branch to expand the scale of these efforts enough to reduce the economy’s dependence on fossil fuels. The Clinton Administration, for example, tried with the highly publicized Partnership for a New Generation of Vehicles to collaborate with the big auto firms to achieve major advances in fuel efficiency, but the initiative’s results were disappointing.83 And even this effort was canceled by the Bush Administration that has been ideologically opposed to major efforts to reduce the economy’s dependence on oil and coal. The U.S. health care system represents yet another example of this failure of facilitation. While the U.S. DNS is extremely successful at rolling out new

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medications and new medical instruments, translating these into improvements in public health has proven an elusive goal. The weakness of facilitation is reflected in the highly uneven quality of health care and steadily rising costs. LIMITS OF THE HIDDEN DEVELOPMENTAL STATE

The dilemma in analyzing the U.S. developmental state is whether the proverbial glass is half empty or half full. The optimistic version emphasizes how remarkable it is that an institutional structure that is hidden or has developed against the current has had such a profound impact on the way innovation occurs in the economy. The pessimistic version stresses that because this institutional structure grew up in the shadows, it has deep flaws that limit its ability to support and accelerate desirable innovations. Five flaws are particularly significant. 1. Democratic deficit and ineffectual facilitation. Since these developmental state activities are hidden, the whole system lacks democratic legitimation, and the public exercises little voice in determining the Federal government’s R&D priorities.84 Without public participation, the military and the national security apparatus continue to exert disproportionate influence on the direction of technological advance. Similarly, certain entrenched corporate interests have been able to put their needs ahead of the public interest. The relatively low level of DOE spending on alternative fuels relative to oil and coal based technologies is one example. Another is Federal support for the agrochemical industry to develop seeds that actually increase the use of chemical pesticides. Moreover, during these thirty years of market fundamentalism, the idea that there is such a thing as the public interest has atrophied. This makes it very difficult for political leaders to frame arguments that certain policies will contribute to the common good. The result is a kind of structural bias against any significant domestic policy initiatives other than those that attempt to increase individual self reliance. Without democratic legitimation and a vigorous concept of the public good, there is a real danger of a public backlash against the “triple helix” formed by the universities, business, and government. Elements of such a backlash are already present in a range of different social movements. It is obvious in the religious right’s opposition to the teaching of Darwinian evolution and their successful campaign to limit Federal support for embryonic stem cell research. But it is also an element in the environmental movement’s critiques of bioengineered organisms and widespread fears that manmade toxins are responsible for a rising share of human disease. The anti-science thrust of the current administration in its muzzling of climate scientists and its dissemination of misinformation on reproductive issues could be early indicators of an even more intense attack on science and technology by a future administration.85

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But even putting aside the issue of potential backlash, the democratic deficit and atrophied notion of the public interest makes it very difficult for government to be effective at the more complex tasks of facilitation. In cases such as broadband Internet access, high definition television, and a number of large scale, energy saving technologies, there have to be coordinated investments by a range of different market participants. In these cases, government facilitation by investing in infrastructure, creating confidence among market participants, and helping them to coordinate the timing of their outlays, are indispensable. But under the current circumstances, the U.S. government’s capacity to perform those tasks is quite limited. It is not just that certain corporate interests have been able to exercise veto power on government action that challenges their entrenched position. It is also that the democracy deficit has left the Federal government with very limited reserves of legitimacy for anything beyond national security initiatives. If, for example, a newly elected U.S. president saw global climate change as a true emergency and was able to silence the entrenched energy firms, he or she would still encounter fierce opposition to a large scale program to address the problem. Almost thirty years of ideological claims that government is the problem and not the solution have taken a toll on public confidence in governmental initiatives. 2. Unstable funding. To make matters worse, the hidden developmental state lacks a sound fiscal foundation. It grew up in a period when the ideas that the benefits of these Federal initiatives need to be shared with the public was either absent or marginalized. The problem is most obvious in the areas of biotechnology, where, despite huge Federal outlays to support the development of new drugs and new medical instruments, the firms that ultimately market these products have resisted any restrictions on their right to charge whatever the market will bear. Even when drugs have been explicitly developed under a Cooperative Research and Development Agreement with the government, there are no requirements for profit sharing or even limits on pricing.86 But the problem is much more general. If it was DOE spending that helped GE and Westinghouse to develop a new generation of gas turbines, why aren’t they paying a share of their profits on those turbines back to the public? The problem is so serious because corporations have used the rhetoric of market fundamentalism to win continuous declines in the effective rate of taxation on corporate profits. So at the same time that profits are increasingly dependent on Federal R&D efforts, corporate tax effort has been declining. This puts the whole developmental state at continuous budgetary risk since Federal R&D spending must compete with all of the other claims on the Federal budget. This particular problem could be solved relatively easily because the developmental state has repeatedly proven effective in creating vast amounts of private wealth. Google, for example, emerged out of academic research at Stanford that

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was funded by the National Science Foundation. A law requiring that Google and other firms that emerged with Federal support would be required to put 5 percent of their shares in a public sector trust fund would create a powerful mechanism for financing future DNS spending as well as other government programs.87 3. Commoditization of Knowledge. The Developmental Network State in the U.S. has been shaped by the ideology of market fundamentalism in treating knowledge as nothing more than a commodity. This is the presumption that underlies an increasingly restrictive regime of “intellectual property rights” through which the government organizes and enforces private monopolies over certain types of knowledge both at home and abroad. But knowledge is not a commodity, and aggressive ownership claims threaten the open debate and discussion on which scientific communities depend.88 There are two deep problems that result from the commoditization of knowledge. First, it erects barriers to the inter-organizational research collaborations that are indispensable for technological advance.89 Fear that one of the other collaborators might gain ownership of any knowledge that is produced can act as a powerful deterrent to launching such efforts. Second, when firms gain durable monopolies over certain avenues of technological development by virtue of patent or copyright protection, the result can slow further technical progress to a crawl.90 There are policy solutions that minimize these problems while also rewarding innovators for their breakthroughs. But in the United States, in the era of market fundamentalism, the policy regime has been heavily tilted in the other direction by the political influence of powerful incumbent corporations seeking to maximize the return on their intellectual property portfolios. For the Developmental Network State to achieve its full potential, significant reforms of the intellectual property regime are necessary. 4. Lack of Coordination. The absence of coordination in the U.S. version of the DNS means that four different Federal agencies could be providing resources to five or six different groups of technologists to solve the identical problem without any of them knowing about the other’s efforts. Some duplication of efforts is desirable, but only if different groups are able to learn from each others successes and failures. But an excessive lack of coordination and information sharing across agencies prevents such learning and makes it less likely that effective technology brokering will happen. Without strong coordinating mechanisms, agencies engage in turf warfare and unproductive forms of duplication, and it is difficult to establish serious government-wide priorities. It also leaves more room for various interest groups to colonize R&D budgets for their own particularistic ends. Finally, without coordination, there is little in the way of systematic evaluation that compares the effectiveness of different DNS initiatives and allows program officers in one agency to learn from the successes and failures of other

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agencies. Despite all of the difficulties with evaluation procedures, they are still essential if the DNS is to have the capacity for self-correction and the ability to learn from its mistakes. 5. Low road labor practices. Since it emerged in the epoch of market fundamentalism, the U.S. developmental state grew up with almost no attention to issues of labor in high technology industries. To be sure, policy makers concern themselves with the production of PhD scientists and engineers and facilitating the immigration of individuals with technological expertise. But virtually no attention is paid to the question of who will make the computer chips and other high tech products. It has simply been assumed that the market fundamentalist policies that have weakened labor unions, increased the use of contingent workers, and led to wage and benefit stagnation for production workers are desirable for all employers. However, this is not the case. High technology production often requires higher levels of worker skill and new forms of cooperation between employees and management. Research has shown that “high road” management strategies often are often more effective in these settings than the “low road” alternative.91 Moreover, as compared to its rivals in both Europe and Asia, the United States is unusual in how few public resources are devoted to creating the skills needed by high technology firms. Such firms are usually left to their own devices to recruit the set of skills they need. In explaining the decision of U.S. firms to move production overseas, most discussion centers on labor costs. But since labor costs constitute such a small proportion of overall costs for high technology production, it is just as likely that some of these movements occur because of the greater availability of pools of trained production workers in some of these overseas locations. For example, U.S. firms, with government support, played a key role in developing the technologies that made possible the enormous growth of the market for flat panel displays. Nevertheless, production of these displays moved to South Korea and Taiwan where governments were not shy to help firms with the task of recruiting and training the necessary labor force of skilled workers.92 In short, the institutionalization of low road labor practices can make it harder for new high tech firms to attract the skilled labor force they need to ramp up production levels and also increases the likelihood that when the shift to large-scale production occurs, firms will move production overseas. The Manufacturing Extension Program that has grown steadily since the late 1980s has had successes in helping small firms train their employees and master cutting edge technologies. But with Federal funding of only about $100 million per year, the program is nowhere near the scale that is needed to impact labor force development for a high tech economy. The budgeting comes out to about $6 per manufacturing production worker nationally when it takes tens of thousands of dollars of investment in training to make significant increases in employee earnings.

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Some of the United States’ competitors use a tripartite system of cooperation among government, labor unions, and business to organize much larger investments in skill development for production workers. The United States’ neglect of this key dimension of developmental policies is a major weakness that can undercut the effectiveness of its other initiatives. CONCLUSION

This article has argued that legislative and executive branch decisions made in the U.S. between 1980 and 1992 significantly expanded the capacity of the U.S. state to accelerate technological development in the business economy. Since then, this capacity has grown into a highly decentralized Developmental Network State, and this DNS has transformed the way many businesses operate and has successfully focused a large cadre of publicly funded researchers on the task of turning new technologies into commercially viable products and processes. Essentially, Daniel Bell’s postindustrial vision of a knowledge society built around government-university-industry has been largely realized. The existence of this hidden developmental state has important political implications both domestically and internationally. The international implications are immediately apparent, but the domestic implications are potentially transformative and could ultimately have deep global ramifications. The hidden developmental state in the United States suggests that developing nations have more room for active industrial policies than has generally been assumed. Within the WTO framework on Subsidies and Countervailing Measures, developing nations could use governmental R&D support to launch domestic startup firms that would initially produce for the home market and ultimately compete in overseas markets.93 These start-ups could be structured as partially state-owned enterprises that raise capital from both public and private venture capital funds and international development banks. With appropriate technical and financial support from global aid agencies, complementary initiatives across the Global South could generate hundreds of thousands of new jobs and generate much needed foreign exchange. More generally, this research highlights the deep disconnect between what the United States does at home and the economic policies that it has sought to impose on the rest of the world.94 The constant message of the Washington Consensus has been that other nations must pull the government back from playing an active role in the economy. But as we have seen, the real Washington has become ever more deeply immersed in its own business economy through its technology policies. Moreover, U.S. foreign economic policy always insists that foreign governments must treat both foreign and domestic firms identically. Yet at home, the DNS is heavily focused on supporting domestic industries. Exposing this kind of systematic hypocrisy could and should empower those who are challenging Washington’s market fundamentalist agenda.

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Domestically, the Hidden Developmental State has critical implications because ever since the decay of the New Deal Democratic coalition in the 1970s, progressives in the United States have lacked a persuasive story of how an egalitarian and democratic turn in social and economic policies could assure prosperity for the nation. However, the pressing need to expand and reform the Developmental Network State creates an unprecedented opportunity for progressives to lead a transformation of U.S. politics. This project would have four central emphases. The first would be creating a new partnership model for organizing and managing the relationship between business firms and government. Society would continue to invest heavily in measures to support business innovation, but firms would be expected to act as social partners to help achieve environmental protection, improved employee welfare, and the creation of more resilient communities. Within this framework, government would use a combination of carrots and sticks to discourage firms from using “low road” strategies of blocking effective regulation, lobbying to avoid a fair tax burden, or discouraging socially beneficial technologies. This is hardly a utopian vision because the partnership already exists; U.S. firms are already heavily dependent on publicly provided resources to innovate. Thus far, however, market fundamentalist ideology has allowed business firms to escape the ordinary expectations of reciprocity between partners. The task facing progressives is to define and justify these expectations and develop a strategy that would gradually isolate those firms who insist on their right to behave badly. The second emphasis would be on the need for policies of social inclusion to make a high technology society function effectively. It is essential to raise the level of technological literacy of the population so people can fulfill their tasks both as citizens and as employees and to expand the potential pool of technological innovators. This calls for improvements in the educational system, efforts to assure universal access to high- capacity, broadband Internet services, and significant new investments in programs for training and retraining employees. But all of these efforts will quickly confront the reality of deep poverty and racial division in U.S. society that leaves a significant segment of the population on the wrong side of the digital and educational divides. Hence, a major effort to eliminate poverty is required to overcome these divides and create the full social inclusion that is necessary for a high-functioning knowledge society.95 The third emphasis is on expanding the space for public deliberation on the direction of technological change. This is necessary to overcome the democratic deficit of the existing developmental efforts and to reduce the vested power of the military and entrenched industries. This broader participation in technological decision making would pave the way for a fairer system for financing the DNS, improved coordination of developmental initiatives, and significant improvements in the government’s capacity for high level facilitation. The final emphasis would be to redeploy U.S. research and development dollars away from military missions such as space-based weaponry towards initiatives that

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could address the global climate crisis and diminish disease, hunger, and lack of access to information in the developing world. While developmental initiatives in the United States gathered strength under the auspices of the military, these same tools can be used as part of an effort to redefine U.S. national security to focus on global cooperation and poverty reduction. This agenda could both overcome the current weaknesses of the Developmental Network State in the United States and fundamentally realign U.S. politics. It would also open up new opportunities for activists around the world who have mobilized around the slogan: “Another World is Possible.” It is far too late to have illusions that advanced technologies will by themselves reduce global poverty and diminish international conflict. But it is hardly utopian to imagine that new technologies in combination with the conscious and determined exercise of political agency can create another, better world for all of the world’s people. NOTES

1. Fred Block, “Understanding the Diverging Trajectories of Europe and the United States: A Neo-Polanyian Analysis,” Politics & Society 35, no. 1 (2007): 1–31. 2. Evelyne Huber and John Stephens, Development and Crises of the Welfare State (Chicago: University of Chicago Press, 2001); Jonas Pontusson, Inequality and Prosperity: Social Europe vs. Liberal America (Ithaca: Cornell University Press, 2005). On rising insecurity in the United States, see Jacob Hacker, The Great Risk Shift (New York: Oxford 2006). 3. On developmental policies in Europe see Sean O’ Riain’s important study of Ireland—The Politics of High-Tech Growth: Developmental Network States in the Global Economy (Cambridge: Cambridge University Press, 2004). European efforts are also understudied, but see Thomas Lawton, ed., European Industrial Policy and Competitiveness: Concepts and Instruments (New York: St. Martin’s, 1999); Jakob Edler, Stefan Kuhlmann, and Maria Behrens, eds., Changing Governance of Research and Technology Policy: The European Research Area (Cheltenham, UK: Edward Elgar, 2003). On the United States, the evidence will be provided in the body of the paper. 4. The argument here is an extension of Daniel Bell’s pioneering work, The Coming of Post-Industrial Society (New York: Basic Books, 1973). See also Fred Block, Postindustrial Possibilities: A Critique of Economic Discourse (Berkeley: University of California Press, 1990). For an overview of the debate, see Howard Brick, Transcending Capitalism: Visions of a New Society in Modern American Thought (Ithaca: Cornell University Press, 2006). 5. For example, the European Community speaks openly about engaging in industrial policy, see http://ec.europa.eu/enterprise/enterprise_policy/industry/index_en.htm. 6. The best account is Kent Hughes, Building the Next American Century: The Past and Future of Economic Competitiveness (Washington: Woodrow Wilson Center Press, 2005). The most recent piece of legislation passed with little press coverage was the America COMPETES Act of 2007 that reconfigured some of the programs described below. 7. New York: Harcourt Brace and Jovanovic, 1980. 8. For the persistence of these legacies in Europe, see Stefan Berger and Hugh Compston, eds., Policy Concertation and Social Partnership in Western Europe: Lessons

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for the 21st Century (New York: Bergahn Books, 2002). A comparison of the strengths and weaknesses of the United States and European developmental efforts is well beyond the scope of this paper, but I am arguing that the European efforts are more durably institutionalized. 9. The classic studies are Chalmers Johnson, MITI and the Japanese Miracle: The Growth of Industrial Policy 1925–1975 (Stanford: Stanford University Press, 1982); Robert Wade, Governing the Market: Economic Theory and the Role of Government in East Asian Industrialization (Princeton: Princeton University Press, 1990). 10. The key distinction between a Developmental Bureaucratic State and a Developmental Network State is elaborated in O’Riain, Politics of High-Tech Growth. 11. The use of the DNS is hardly exclusive to the United States and Europe as O’Riain argues, but the global diffusion of the DNS is beyond the scope of this paper. 12. Product and process innovations are closely intertwined, since finding markets for new products requires figuring out how to produce the new product at much lower cost. In the discussion that follows, “product innovation” should be read as shorthand for “product and process innovations.” 13. The resources on which a DNS based are addressed in the literature on “national systems of innovation.” See Richard Nelson, ed., National Innovation Systems: A Comparative Analysis (New York, Oxford University Press, 1993); Philippe Laredo and Philippe Mustar, eds., Research and Innovation Policies in the New Global Economy (Northampton, MA: Edward Elgar, 2001). 14. The early development of Silicon Valley provided the paradigm for this approach. Scientists and engineers both at Stanford and at large firms set out on their own to create a series of new firms to pursue promising technological ideas. Ever since, replicating Silicon Valley’s success has become central to economic development strategies. On the history, see Annalee Saxenian, Regional Advantage: Culture and Competition in Silicon Valley and Route 128 (Cambridge, MA: Harvard University Press, 1996); Martin Kenney, ed., Understanding Silicon Valley: The Anatomy of an Entrepreneurial Region (Stanford: Stanford University Press, 2000). 15. The concept of technological brokering is elaborated by Andrew Hargadon, How Breakthroughs Happen: The Surprising Truth About How Companies Innovate (Boston: Harvard Business School Press, 2003). See also Richard Lester and Michael Piore, Innovation—The Missing Dimension (Cambridge, MA: Harvard University Press, 2004). Hargadon’s emphasis on the incremental sources of “breakthroughs” is also elaborated in John Alic, David Mowery, and Edwards Rubin, U.S. Technology and Innovation Policies: Lessons for Climate Change (Arlington, VA: Pew Center for Global Climate Change, 2003). 16. Peter Evans, Embedded Autonomy: States and Industrial Transformation (Princeton: Princeton University Press, 1995). 17. Richard Bingham, Industrial Policy American Style: From Hamilton to HDTV (Armonk, NY: M. E. Sharpe, 1998); Hughes, Building the Next American Century. 18. The tension is an important theme in Frank Dobbin, Forging Industrial Policy: The United States, Britain, and France in the Railway Age (New York: Cambridge University Press, 1994). 19. John Alic, Trillions for Military Technology: How the Pentagon Innovates and Why It Costs So Much (New York: Palgrave Macmillan, 2007). The importance of the military in biotechnology is elaborated by Shelley Hurt, “Patent Law, Biodefense, and the National Security State, 1945–1972,” paper presented at the International Studies Association Conference, March 2006.

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20. The agency’s name shifts a number of times between ARPA and DARPA (Defense Advanced Research Projects Agency) as later administrations sought to emphasize the defense mission. For simplicity, it will be referred to consistently as ARPA here. 21. On ARPA, I have relied heavily on Alex Roland with Philip Shiman, Strategic Computing: DARPA and the Quest for Machine Intelligence 1983–1993 (Cambridge, MA: MIT Press, 2002). See also National Research Council, Committee on Innovations in Computing and Communications, Funding a Revolution: Government Support for Computing Research (Washington, DC: National Research Council, 1999); Glenn Fong, “ARPA Does Windows: The Defense Underpinnings of the PC Revolution,” Business and Politics 3, no. 3: 213–237; Nathan Newman, Net Loss: Internet Prophets, Private Profits, and the Costs to Community (University Park, PA: Pennsylvania University Press, 2002). 22. The now classic discussion of the limitations of the basic/applied science distinction is Donald Stokes, Pasteur’s Quadrant: Basic Science and Technological Innovation (Washington: Brookings, 1997). 23. For a similar mapping of the agency’s procedures, see William Bonvillian, “Power Play: The DARPA Model and U.S. Energy Policy,” The American Interest II, no. 2 (November-December, 2006): 39–48. 24. Sheldon Krimsky, Genetic Alchemy: The Social History of the Recombinant DNA Controversy (Cambridge, MA: MIT Press, 1982); Susan Wright, Molecular Politics: Developing American and British Regulatory Policy for Genetic Engineering, 1972–1982 (Chicago: University of Chicago Press, 1994). 25. Steven Collins, The Race to Commercialize Biotechnology: Molecules, Markets and the State in the United States and Japan (New York: RoutledgeCurzon, 2004). The NIH Guide for Grants and Contracts is available at http://grants.nih.gov/grants/guide/ historical/index.html#1976. 26. Krimsky, Genetic Alchemy; Wright, Molecular Politics. 27. Collins, Race to Commercialize, 100. 28. Walter W. Powell, Douglas R. White, Kenneth W. Koput, and Jason Owen-Smith, “Network Dynamics and Field Evolution: The Growth of Interorganizational Collaboration in the Life Sciences,” American Journal of Sociology 110 (2005): 1132–1205. 29. Hughes, Building the Next American Century. 30. Otis Graham, Jr., Losing Time: The Industrial Policy Debate (Cambridge, MA: Harvard University Press, 1992). Graham makes clear that since Japan was the model, industrial policy advocates were generally calling for a DBS—a centralized effort to jump start new industries. 31. Hughes, Building the Next American Century. 32. Some of these initiatives grew out of a Domestic Policy Review that the Carter Administration completed in October 1979. James Turner, “The Next Innovation Revolution: Laying the Groundwork for the United States,” Innovations (Spring 2006): 123–144. 33. For a similar list, see Sheila Slaughter and Gary Rhoades, “The Emergence of a Competitiveness Research and Development Policy Coalition and the Commercialization of Academic Science and Technology,” in Science Bought and Sold, eds. Mirowski and Sent, 69–108. Slaughter and Rhoades point out that most of the relevant pieces of legislation passed with large bipartisan majorities. 34. Robert A. Lowe, David C. Mowery, and Bhaven N. Sampat, Ivory Tower and Industrial Innovation: University-Industry Technology Transfer before and after the Bayh-Dole Act in the United States (Stanford: Stanford Business Books, 2004).

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35. Josh Lerner, “The Government as Venture Capitalist: The Long-Run Impact of the SBIR Program,” The Journal of Business 72, no. 3 (July 1999): 285–318. 36. Ernest Steinberg, Photonic Technology and Industrial Policy: U.S. Responses to Technological Change (Albany: SUNY Press, 1992). 37. On both ATP and MEP, see Paul Hallacher, Why Policy Issue Networks Matter: The Advanced Technology Program and the Manufacturing Extension Program (Lanham, MD: Rowman and Littlefield, 2005). 38. Erik Pages, Responding to Defense Dependence: Policy Ideas and the American Industrial Base (Westport, CT: Praeger, 1996). See also Hallacher, Policy Issue Networks. 39. Glenn Fong, “Breaking New Ground or Breaking the Rules: Strategic Reorientation in U.S. Industrial Policy,” International Security 25, no. 2 (August 2000): 152–186. 40. Roland, Strategic Computing. 41. Pages, Responding to Defense Dependence; Corey, E. Raymond, Technology Fountainheads: The Management Challenge of R&D Consortia (Boston, Harvard Business School Press, 1997); Fong, “Breaking New Ground”; Andrew P. Cortell, Mediating Globalization: Domestic Institutions and Industrial Policies in the United States and Britain (Albany, SUNY Press, 2006). 42. The mission statement is cited in Fong, “Breaking New Ground,” 175–176. 43. Daniel Kevles, “Out of Eugenics: The Historical Politics of the Human Genome,” in The Code of Codes: Scientific and Social Issues in the Human Genome Project, eds. Daniel Kevles and Leroy Hood (Cambridge, MA: Harvard University Press, 1992), 3–36. To be sure, NIH is still criticized for not engaging in enough targeted research. See, for example, Robert Cook-Deegan, “Does NIH Need a DARPA ?” Issues in Science and Technology 13, no. 2 (Winter 1996): 25–29. 44. Among the most important early studies have been Martin Kenney, Biotechnology: the University-Industrial Complex (New Haven: Yale University Press, 1986); National Research Council, Committee on Science, Engineering, and Public Policy, The Government Role in Civilian Technology: Building a New Alliance (Washington: National Academy Press, 1992); John Alic, Lewis Branscomb, Harvey Brooks, Ashton Carter, and Gerald Epstein, Beyond Spinoff: Military and Commercial Technologies in a Changing World (Boston, MA: Harvard Business School Press, 1992). More recently, Glenn Fong has made important contributions that have already been cited here. See also, the work of Henry Etzkowitz, particularly, “Innovation in Innovation: The Triple Helix of University-Industry-Government Relations,” Social Science Information 42, no. 3 (2003): 293–337. 45. Block, “Diverging Trajectories.” 46. Fields went on to be the chief executive at SEMATECH, so he continued to play a critical role in diffusing the ARPA approach to technology commercialization. 47. John Markoff, “Pentagon’s Technology Chief is Out,” New York Times, April 21, 1990. 48. For an amusing account of Democratic efforts to build support among Silicon Valley businesses in the 1990s, see Sara Miles, How to Hack a Party Line: The Democrats and Silicon Valley (Berkeley: University of California Press, 2001). 49. See, for example, Robert Pear, “Applying Breaks to Benefits Gets Wide GOP Backing,” New York Times, January 9, 2005. 50. For more information and funding levels, see http://www.nano.gov. 51. Clyde W. Crews Jr., “Washington’s Big Little Pork Barrel: Nanotechnology,” Cato Institute Web page, May 29, 2003 at http://www.cato.org/pub_display.php?pub_id=3110.

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52. For an account of the Clinton plan, its fate in Congress, and the eventual retreat from the public investment agenda, see James Shoch, “Bringing Public Opinion and Electoral Politics Back In: Explaining the Fate of ‘Clintonomics’ and Its Contemporary Relevance,” Politics & Society 36: 1(2008): 89–130. 53. These conflicts are described in Hughes, Next American Century and Hallacher, Networks Matter. 54. Hughes, Next American Century. In the absence of OTA, the work of evaluating these governmental initiatives has been taken up by the National Academies of Sciences that has produced a valuable stream of reports about the various programs described here. 55. On venture capital firms, see Paul Gompers and Josh Lerner, The Venture Capital Cycle, 2nd ed. (Cambridge, MA: MIT Press, 2004). On the reluctance of venture capital to support firms at the early stage, see Philip Auerswald and Lewis Branscomb, “Valleys of Death and Darwinian Seas: Financing the Invention to Innovation Transition in the United States,” Journal of Technology Transfer 28 (2003): 227–239. 56. On the shift to “networked” firms, see Walter Powell, “The Capitalist Firm in the Twenty-First Century: Emerging Patterns in Western Enterprise,” in The Twenty-First Century Firm: Changing Economic Organization in International Perspective, ed. Paul DiMaggio (Princeton: Princeton University Press, 2001), 35–68; Raymond Miles, Grant Miles, and Charles Snow, Collaborative Entrepreneurship: How Communities of Networked Firms Use Continuous Innovation to Create Economic Wealth (Stanford: Stanford University Press, 2005). 57. Results of an analysis of the R&D Awards over the last four decades are presented in Fred Block and Matt Keller, “Where Do Innovations Come From?” unpublished paper. 58. Auerswald and Branscomb, “Valleys of Death.” 59. While some of its programs are top secret, others are discussed with some detail on its Web site, http://www.darpa.mil. 60. On the advanced turbine project, see Vicki Norberg Bohm and Robert M. Margolis, “Reaching Environmental Goals Through R&D Collaboration: Lessons from the U.S. Department of Energy Programs for Gas Turbines and Photovoltaics,” Industrial Transformation: Environmental Policy Innovation in the U.S. and Europe, eds. Theo de Bruijn and Vicki Norberg Bohm (Cambridge, MA: MIT Press, 2005), 147–173; Mike Curtis, “United States: Advanced Turbine System,” Innovation in Energy Technology: Comparing National Innovation Systems at the Sectoral Level, OECD (Paris: OECD, 2006), 295–317. 61. Information is available at http://www.atp.nist.gov. See also, Hallacher, Policy Networks Matter. 62. Http://www.nsf.gov/eng/iip/iucrc. See also, Etzkowitz, “Innovation in Innovation,” and Steinberg, Photonics. 63. This is reported by Roland, Strategic Computing. 64. For a listing of the university-based centers funded under the National Nanotechnology Initiative, go to http://www.nano.gov/html/centers/nnicenters.html. 65. For example, the National Cancer Institute has a program called Rapid Access to NCI Discovery Resources, see http://dtp.nci.nih.gov/docs/rand/rand_index.html. 66. The scale of this support activity by government funded laboratories is impressive. In 2006, the Department of Energy laboratories alone accounted for 2,416 Workfor-Others Agreements, in which they did research for other agencies and private firms. In addition, they also had 3,474 active user facility agreements in which outsiders were permitted to use laboratory resources. See Report on Technology Transfer, Office of Policy and International Affairs, U.S. Department of Energy, March 2007. http://www. llnl.gov/IPandC/news/specialreports/FY2006AnnualReportonTTfinal.pdf.

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67. While the SBIR program was passed by Congress in 1982, the program began as a pilot program of NSF during the Carter Administration, see Turner, “Next Innovation Revolution.” 68. Data are from http://www.sba.gov/SBIR/indexsbir-sttr.html#sbirstats. 69. On SBIR and STTR, see Scott Wallsten, “Rethinking the Small Business Innovation Research Program,” Investing in Innovation: Creating a Research and Innovation Policy that Works, eds. Lewis Branscomb and James Keller (Cambridge, MA: MIT Press, 1998), 194–220; Josh Lerner, “The Government as Venture Capitalist: The Long Run Impact of the SBIR Program,” The Journal of Business 72, no. 3 (July 1999): 285–318; Charles Wessner, ed., SBIR and the Phase III Challenge of Commercialization: Report of a Symposium (Washington: National Research Council, 2007). 70. Wallsten, “Rethinking.” 71. However, it has been a persistent problem that 40 percent of all SBIR grants go to California and Massachusetts—the nation’s leading technology centers, Lerner, “Government as Venture Capitalist.” 72. Christopher Coburn and Duncan Brown, “State Governments: Partners in Innovation,” in Investing in Innovation, eds. Branscomb and Keller, (Cambridge, MA: MIT Press, 1999), 422–437; Maryann P. Feldman and Maryellen R. Kelley, “How States Augment the Capabilities of Technology-Pioneering Firms,” Growth and Change 33, no. 2 (2002): 173–195. 73. See http://www.nasvf.org. 74. Wessner, ed., SBIR and the Phase III Challenge. 75. See http://www.inqtel.org. 76. For OnPoint, go to http//www.onpoint.us. On NASA, see Liz Moyer, “Venture Capital’s Space Shot,” Forbes, February 21, 2006 at http//www.forbes.com/2006/02/21/ nasa-venture-capital-cx_Im_0221redplanet.html. Battelle Ventures is described at http:// www.battelleventures.com 77. On MEP, see Hallacher, Policy Networks Matter; Josh Whitford, The New Old Economy: Networks, Institutions and the Organizational Transformation of American Manufacturing (Oxford: Oxford University Press, 2005). 78. Wessner, ed., SBIR and the Phase III Challenge. 79. The key sources are periodic evaluations by the National Academies. See, for example, National Research Council, An Assessment of the National Institute of Standards and Technology Measurement and Standards Laboratories: Fiscal Years 2004–2005 (Washington: National Academies Press, 2006). 80. Even larger are the problems with the U.S. health care system. The failure to turn medical advances into improved health outcomes is another case of failed facilitation. See John Alic, “Postindustrial Technology Policy,” Research Policy 30 (2001): 873–889. 81. S. Derek Turner, “Shooting the Messenger—Myth vs. Reality: U.S. Broadband Policy and International Broadbank Rankings,” Freepress, July 2007 at http://www.freepress.net/docs/shooting_the_messenger.pdf. 82. Hernan Galperin, New Television: Old Politics: The Transition to Digital TV in the United States and Britain (Cambridge, Cambridge University Press, 2004). 83. Daniel Sperling, “Public-Private Technology R&D Partnerships: Lesson from U.S. Partnership for a New Generation of Vehicles,” Technology Policy 8 (2001): 247–256. 84. Arguably, the major exception is the funding priority that Congress and the White House have given to biomedical research. But even in that case, business interests and university-based bioscientists tilt spending towards finding magic bullets rather than improving the delivery of health care.

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85. Chris Mooney, The Republican War on Science (New York: Basic Books, 2005). 86. One of the most notorious cases is the cancer drug Taxol. See Vivien Walsh and Jordan Goodman, “Cancer Chemotherapy, Biodiversity, Public and Private Property: The Case of the Anti-cancer Drug Taxol,” Social Science and Medicine 49 (1999): 1215–1225. The General Accounting Office reported in 2003 that NIH received $35 million in royalty payments for Taxol, but Medicare alone had paid $500 million for Taxol treatments. U.S. General Accounting Office, Technology Transfer: NIH-Private Sector Partnership in the Development of Taxol, June 2003. 87. John Battelle, The Search (New York: Penguin Books, 2005). The idea of a “share levy” has been advocated by Robin Blackburn as a means to restore progressivity to the tax system, “How to Tax the Rich and Live Happily Ever After,” Dissent (Summer 2007): 63–67. The idea makes even more sense in the framework of a DNS. 88. For the argument that knowledge is a “fictitious commodity,” see Fred Block, “Towards a New Understanding of Economic Modernity,” The Economy as Polity: The Political Constitution of Contemporary Capitalism (London: UCL Press), 3–16; Sean O’Riain, “Time-Space Intensification: Karl Polanyi, the Double Movement, and Global Informational Capitalism,” Theory and Society 35: 5–6 (December 2006): 507–528. For a powerful critique of the commoditizing of knowledge, see Yochai Benkler, The Wealth of Networks (New Haven: Yale, 2006). 89. Hargadon, How Breakthroughs Happen. 90. For example, the antitrust suit against Microsoft in the 1990s arose out of fears that the firm would be able to control future technological development in the entire industry. David Bank, Breaking Windows: How Bill Gates Fumbled the Future of Microsoft (New York: Free Press, 2001). 91. Eileen Appelbaum, Thomas Bailey, Peter Berg, and Arne Kalleberg, Manufacturing Advantage: Why High-Performance Systems Pay Off (Ithaca: ILR Press, 2000). 92. This argument is speculative. For a careful account of the movement of flat panel production to Asia, see Thomas Murtha, Stephanie Lenway, and Jeffrey Hart, Managing New Industry Creation: Global Knowledge Formation and Entrepreneurship in High Technology (Stanford: Stanford University Press, 2001). While they stress the centrality of learning by doing in the competition to produce flat panel displays, they do not explore the government’s role in work force training in Korea and Taiwan. 93. Elements of this strategy are described in Andrew Schrank and Marcus Kurtz, “Credit Where Credit is Due: Open Economy Industrial policy and Export Diversification in Latin America and the Caribbean,” Politics & Society 33:4 (2005): 671–702. 94. See Ha-Joon Chang, Kicking Away the Ladder: Development Strategy in Historical Perspective (London: Anthem, 2002); Linda Weiss and Elizabeth Thurbon, “The Business of Buying American: Public Procurement as Trade Strategy in the USA,” Review of International Political Economy 13:5 (2006): 701–724. 95. For a strategy to end poverty, see Fred Block and Jeff Manza, “Could We End Poverty in a Postindustrial Society?: The Case for a Progressive Negative Income Tax,” Politics & Society 25:4 (1997): 473–511. Fred Block teaches sociology at the University of California at Davis. His books include The Origins of International Economic Disorder, Revising State Theory, Postindustrial Possibilities, and The Vampire State. In 2007, he published “Why is the U.S. Fighting in Iraq?” Contexts (Summer 2007) and “An End to Solidarity? The Case of the United States,” in European Solidarities: Tensions and Contentions of a Concept, eds. Lars Magnusson and Bo Strath.