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    Hedia Ayuningrum
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    The document discusses different perspectives on the role of the state in development: 1) Development economics emerged in response to theories that free markets alone could not address issues like excess labor and low productivity in developing countries. This led to policies like import substitution that aimed to build domestic industry behind trade barriers. 2) In the 1980s, neoliberalism and the "Washington Consensus" promoted free markets and liberalization as the solution, weakening the role of the state in development. 3) However, developmental states like those in East Asia in the 1980s demonstrated that an activist government role focusing on export-led growth could also effectively promote development. This challenges the view that markets alone can drive growth

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    7. KULIAH 7 INDEV 2012

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    The document discusses different perspectives on the role of the state in development: 1) Development economics emerged in response to theories that free markets alone could not address issues like excess labor and low productivity in developing countries. This led to policies like import substitution that aimed to build domestic industry behind trade barriers. 2) In the 1980s, neoliberalism and the "Washington Consensus" promoted free markets and liberalization as the solution, weakening the role of the state in development. 3) However, developmental states like those in East Asia in the 1980s demonstrated that an activist government role focusing on export-led growth could also effectively promote development. This challenges the view that markets alone can drive growth

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    12 views8 pages

    Kuliah 7 Indev 2012

    Uploaded by

    Hedia Ayuningrum
    The document discusses different perspectives on the role of the state in development: 1) Development economics emerged in response to theories that free markets alone could not address issues like excess labor and low productivity in developing countries. This led to policies like import substitution that aimed to build domestic industry behind trade barriers. 2) In the 1980s, neoliberalism and the "Washington Consensus" promoted free markets and liberalization as the solution, weakening the role of the state in development. 3) However, developmental states like those in East Asia in the 1980s demonstrated that an activist government role focusing on export-led growth could also effectively promote development. This challenges the view that markets alone can drive growth

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    of 8

    STATE AND DEVELOPMENT

    KULIAH VII PEMBANGUNAN INTERNASIONAL PENGAJAR: ANDRE ARDI

    Tuesday, October 23, 12

    STATE VS MARKET DEBATE


    The

    Rise of Development Economics of Neoliberalism of Developmental State

    The Triumph

    The Theory

    Tuesday, October 23, 12

    THE RISE OF DEVELOPMENT ECONOMICS


    Neoclassical Economics inapplicable to LDCs excess labor and low productivity in the agricultural sector mainly exporters of commodities Because the LDCs special conditions

    LDCs could not escape vicious circle without a strong interventionist state and signicant international assistance

    market failures

    trade could not serve as an engine of growth


    Tuesday, October 23, 12

    Import Substitution

    Trade Protection build an industrial structure behind high tariff walls

    undermined the belief in free trade and open markets.


    The industrialized economies were judged so strong that LDC rms could not possibly compete against them

    Policy solution

    RAUL PREBISCH UNCTAD

    Tuesday, October 23, 12

    Gunnar Myrdal
    their industries were inefcient and uncompetitive

    LDCs were very poor

    Vicious Circle of Poverty

    low investment rates.

    r t nce ffo ta d e ssis le l a ate ona St ti r na te In


    Tuesday, October 23, 12

    low rates of national savings.

    Big Push Theory

    Paul RodensteinRodan

    that the state had to play a much more activist interventionist role in the economy

    development economics and the policies it advocated suffered a severe defeat in the 1980s

    Tuesday, October 23, 12

    TRIUMPH OF NEOLIBERALISM
    The late 1970s and early 1980s witnessed the defeat of both development economics and the LDC strategy of importsubstitution

    raised oil prices in 1973 & 1978 1980s International Debt Problem (Latin America) The Washington Consensus Conditionality Privatization Fiscal Austerity

    US, IMF, WB Structural Reform Liberalization

    The unholy trinity became known as the bad guys, and was subjected to severe
    Tuesday, October 23, 12

    The Success story of new industrial states in East Asia 1980-1990

    The government central role

    Theory of Developmental State

    Export-led Growth

    Alliance Capitalism

    Government

    Local Banks

    Industry

    Developmental State Crony Capitalism ? Neoliberal Irrational Investor?


    Tuesday, October 23, 12

    East Asian Crisis 1998

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