INTRODUCTION State plays an important role in the economic growth of a nation.  However, it has been an issue of contestation, as the states tend to direct and interfere in the markets of the country. After the Second World War, several theories regarding the economic development by the government have arisen. As many countries got independence after the war. The development of democracy also increased the debate on the government's intervention in economic development.  EXPLANATION Developmental state refers to the phenomenon of state-headed macroeconomic plan in East Asia in the twentieth century. In this form of capitalism, a state has more power, and control over the economy of the country. The main feature of a developmental state is the strong intervention of the state, and extensive ruling and planning. Chalmers Johnson is responsible to develop the concept of the developmental state. He defined it, as a state that is determined to develop the economy of its country, and in order to fulfill this objective, it takes proper policy measures. He contended that Japan's economic development had much to do with visionary intervention by bureaucrats, mainly by the Ministry of International Trade and Industry. There is some weakness of the developmental state, some of them are as follows: In this system, private enterprises and businesses are under the guidance of the state. It does not denote that the state reinstates private ownerships directly, but, it tries to intervene and direct private sectors according to the national strategies The economic system is vulnerable and there are structural deficiencies. The developmental state gives more priority to economic growth and not to the political reform in a particular country. Its main objective is the economic development in a country. The developmental state has a strong central government. The Policy mechanisms are created by a small group of elites in economic policy bureaucracy. The is unsustainable economic development or growth. Many thinkers consider the situation of East Asia as the same.  It is also said that the developmental states produce crony capitalism, which is harmful in the long run. The modern development theory can be seen as the complete body of knowledge which deviates, reinvents, re-interprets the views of neoclassical theory, which dominates the view of development. The Modern theories of development broadly comprise 3 related thoughts. First is the new growth theory it focuses on the increasing returns to knowledge is the key to growth. Next is the institutional approach it lays emphasis on the rules of the game that allows progressive economic behavior. Next is the capabilities approach, which says that individual freedom is the most significant functioning to develop individual capabilities and achieve development. A common idea behind these ideas is that the neoclassical is concerned with material prosperity, as the desired end for development is rejected. Considering the view of development under these theories, many flaws are observed in the model of development state for economic growth. Some of the strengths of the developmental state concept are as follows: Economic nationalism is an important feature, observed in a successful developmental state. The developmental state usually lays emphasis on technical education and it helps with skilled laborers in the economy. The economic policy bureaucracy comprises a political network that presents adequate space in initiative-taking and efficient operation. There are very few examples of countries with developmental state properties, because of the lack of political and economic space for states in low and middle-income countries to plan their own free pathway to industrialization and structural transformation in the economic order. For instance South East Asia like Indonesia, Malaysia, and Thailand.  These countries have a strong economy in the 1960s -1990s. However, after the financial crisis of 1996, economic growth dropped in these countries and failed to recover and achieve its older self. Hence, the developmental states often fail because of unsustainable economic development. On the contrary, the developmental states work in some cases as it has a strong central government that regulates the economy of the country by keeping in mind the common people and the business class.   Question: So what is the conclusion from article above?

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INTRODUCTION

State plays an important role in the economic growth of a nation.  However, it has been an issue of contestation, as the states tend to direct and interfere in the markets of the country. After the Second World War, several theories regarding the economic development by the government have arisen. As many countries got independence after the war. The development of democracy also increased the debate on the government's intervention in economic development. 

EXPLANATION

Developmental state refers to the phenomenon of state-headed macroeconomic plan in East Asia in the twentieth century. In this form of capitalism, a state has more power, and control over the economy of the country. The main feature of a developmental state is the strong intervention of the state, and extensive ruling and planning. Chalmers Johnson is responsible to develop the concept of the developmental state. He defined it, as a state that is determined to develop the economy of its country, and in order to fulfill this objective, it takes proper policy measures. He contended that Japan's economic development had much to do with visionary intervention by bureaucrats, mainly by the Ministry of International Trade and Industry.

There is some weakness of the developmental state, some of them are as follows:

  • In this system, private enterprises and businesses are under the guidance of the state. It does not denote that the state reinstates private ownerships directly, but, it tries to intervene and direct private sectors according to the national strategies
  • The economic system is vulnerable and there are structural deficiencies.

  • The developmental state gives more priority to economic growth and not to the political reform in a particular country. Its main objective is the economic development in a country.

  • The developmental state has a strong central government. The Policy mechanisms are created by a small group of elites in economic policy bureaucracy.
  • The is unsustainable economic development or growth. Many thinkers consider the situation of East Asia as the same. 
  • It is also said that the developmental states produce crony capitalism, which is harmful in the long run.

The modern development theory can be seen as the complete body of knowledge which deviates, reinvents, re-interprets the views of neoclassical theory, which dominates the view of development. The Modern theories of development broadly comprise 3 related thoughts. First is the new growth theory it focuses on the increasing returns to knowledge is the key to growth. Next is the institutional approach it lays emphasis on the rules of the game that allows progressive economic behavior. Next is the capabilities approach, which says that individual freedom is the most significant functioning to develop individual capabilities and achieve development. A common idea behind these ideas is that the neoclassical is concerned with material prosperity, as the desired end for development is rejected. Considering the view of development under these theories, many flaws are observed in the model of development state for economic growth.

Some of the strengths of the developmental state concept are as follows:

  • Economic nationalism is an important feature, observed in a successful developmental state.

  • The developmental state usually lays emphasis on technical education and it helps with skilled laborers in the economy.

  • The economic policy bureaucracy comprises a political network that presents adequate space in initiative-taking and efficient operation.

There are very few examples of countries with developmental state properties, because of the lack of political and economic space for states in low and middle-income countries to plan their own free pathway to industrialization and structural transformation in the economic order. For instance South East Asia like Indonesia, Malaysia, and Thailand.  These countries have a strong economy in the 1960s -1990s. However, after the financial crisis of 1996, economic growth dropped in these countries and failed to recover and achieve its older self. Hence, the developmental states often fail because of unsustainable economic development. On the contrary, the developmental states work in some cases as it has a strong central government that regulates the economy of the country by keeping in mind the common people and the business class.  

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So what is the conclusion from article above?

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