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Conceptualizing the state, the market and the relationship between states and markets
cannot abstract away from the spatio-temporal specificity of state society relations.
Critically examine this statement in light of relevant literature.
The retrenchment of the state activity in terms of intervention and regulation guided by
mercantilism was rejected by the classical economists in order to allow for the functioning of
free market. Markets are artificially created players, functions in the presence of producers,
wholesale traders, retailers, and consumers abide by the rule of free market. In this process, the
government has to play an important role to encourage the organized functioning of the market
under prescribed laws and regulation. Thereby, the free market mechanism can only operate in
the realm of effective government (Otsuka et al. 2010). Market failure can be the result in failing
of the supply of public goods and due to the pursuit of private goods. However, the intervention
by any government is the need of the hour in case of market failure.
Hirschman (1958) suggests for governmental intervention to counteract the polarization
effects of free-market forces in order to mitigate the misfortune of the backward regions.
States monopoly over coercion, justified by jurisdiction and legitimized by the people use it for
the governed in the interest of the governing. Drawing on Lockes theory of the social contract, if
governments were for the interests of the governed, this means that government is created by
individuals to solve problems that they alone cannot solve. Governments are supposed to
mitigate market failure to improve the overall welfare of the society (Otsuka et al. 2010).
Late 1950s until the mid 1970s, the term state disappeared from the professional academic
discourse. The state reappeared in the literature of Marxist scholars made a self conscious,
theoretically grounded effort to develop a theory of the capitalist state (Peters et al. 2007 : 428) .
Peter Katzenstein developed a typology of weak and strong states. Theda skocpols States and
social revolution talked about the political conditions, both domestic and international,
associated with major social revolutions. Alfred Stepons The state and Society in the Peru
investigated both the organic statist intellectual tradition and corporatist political structures that
gave the state a major initiative role in Peruvian and other Latin American political systems.
However, recent literatures concerned with two major issues. One, the extent of state autonomy

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and second the degree of congruity between the state and its environment (Peters et al. 2007 :
428). The issue of autonomy is viewed in the framework of state as an exogenous variable.
Roger Benjamin and Raymond Duvall argue that the following conceptualizations have appeared
in the literature regarding the state: (Peters et al. 2007 : 429)
a. State as government
b. State as public bureaucracy or administrative apparatus in an institutionalized legal ordor
c. State as ruling class
d. State as normative order
Eric Nordlingers On the Autonomy of the Democratic State adopts the state as government
conceptualization, and Clifford Geertzs Negara views state as a normative order. Characteristics
of statist literature as mentioned by Theda Skocpol can be substantiated as
1. Statists approach see politics more as a problem of rule and control than as one of
allocations; concerned with preserving orders
2. Emphasized that the state can be treated as an actor in its own right as exogenous or an
intervening variable. State cannot be understood as a reflection of societal characteristics
or preferences. (Peters et al. 2007 : 429)
3. Emphasized upon institutional constraints, both formal and informal, on individual
behavior.
Clifford Geertz was concerned with the symbolic attributes of the state as a unifying element for
the entire social community. However, Nordlingers basic objective is to demonstrate that even
in democratic politics public officials can autonomously determine public policy (Peters et al.
2007 : 430). Joel Migdal begins to say that from Weber to Gramsci to Almond and Verba and
Scokpol, their concern centered on
a. Why people obey?
b. What structures facilitate obedience and conformist behavior?

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Unlike most pre-modern structures, the state has aimed to impose uniform conformity on social
life within its boundary. Michael Manns article The Autonomous Power of the State: Its
Origins, Mechanisms and Results describes state in two essential parts i.e., centrality and
territoriality in relation to two types of state power, termed here despotic and infrastructural
power (Mann 1984 : 53). He argues that the state autonomy of both despotic and infrastructural
forms flows principally from the states unique ability to provide a territoriality centralized for,
of organizations (Mann 1984 : 53).
Institutional view of the state can be defined as; (Mann 1984 : 65)
a. A differentiated set of institutions and personnel, embodying
b. Centrality, in the sense that political relations radiate outwards from a centre to cover a
c. Territorially demarcated area, over which it exercises
d. A monopoly of authoritative binding rule-making, backed up by a monopoly of the
means of physical violence.
Mann says that State is a source of social power. Scokpol, unlike others argues that state
functions independent of other actors and in an autonomous manner and has its function of their
own. State as an independent actor takes care of different kinds of activities. She is basically
trying to problematize the autonomy of the state by Mann. She further says that there are
constitutional constraints also so what does autonomy mean to the state. Stephan Krasner begins
his thesis by arguing that the state is an autonomous institution. Manns thesis of institutional
elitism talks about the legalizing of all functioning of elitist model in an institutional manner.
Mann was wrong to say that state acts completely in an autonomous manner as various actors
constitute states. State is always in the process of making and breaking and different social
classes play crucial role in variations of the nature of the state. Mann talks about despotic and
infrastructural power. Despotic Power depicts the states ability to benefit the people by using its
resources and Infrastructural Power includes personnel and institutions of the respective state.
Mann also talks about different types of states having different interests group. State is thus, not
a homogeneous monolithic concept. Charles Tilly talks on state formation and refers that
European states emerged out of coercion. The emphasis was on defining the states as coercion

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building organization and distinct from household, tribal groups, kinship groups; thereby enjoy
clear priority over any given groups in a territory. State enjoys priority over all other institutions.
Joel Migdal starts with explaining variations in the nature of third world countries, and their state
capability, i.e., how state penetrate into society and how come a powerful state force the society
to behave in accordance with the interest of the state, and how does a state do it?? Is it called the
state capability? How to regulate social relationships in any given condition of state-society
relationship?
Mitchell tries to understand the conception of state and society. He argues that if we understand
the state as the powerful, metaphysical arising from internally varied distinction in both state and
society, may lead to some kind of formulation. The state must be treated as a concept, as law and
as product of the unique historical circumstances. The relationship between state and society has
been longstanding problem in theorization among scholars from pluralist, elite, Marxist schools (
Bendix et al. 1992 : 1008). One cant understand the state without referring to society and the
major problem in understanding the state and society lays down to Hegel for whom civil society
remain a domain of private interest and state a universal domain with the sense of Kantian duty.
However, for Marx such kind of formulation is problematic because when state serves the
interest of the bourgeois, who remained a dominant class in civil society rather than state plays
an instrumental role in both. State as a law or popular sovereignty grounded in society. Modern
sovereignty implies both older supreme power and new legitimization through constitutionalism.
Hence, social groups are interior to the states and gain its legitimatization from society. Mitchell
argues that the state and society is a part of larger political order and state-society boundary
remains a structural issue that identifies structure contributes society and which state. Mitchell
draws conclusion that the state and society are not distinct, state-society boundary should be the
point of focus in modern world political order, treating state as the centre of policy making.
The modern state is the outcome of the enlightenment ideas (not as a homogeneous thought). But
the basic premise on which the enlightenment rests is that the complete detachment from external
authority and a move towards the adulthood where the authority is held with the individual as a
self-defining being. It conceives consciousness as given to the human being. This is the

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epistemological shift in the understanding of human being who prior to this was conceived as
being guided by the external authority like God. The theorists who proposed such an idea of
human being in the modern state are Hobbes (arguably), Locke, Rousseau, Hegel. Among all
these thinkers Hegel best represented the idea if modern self as a self-defining being and the
formation of the modern state as all inclusive. The enlightenment saw human being endowed
with sovereignty as individual is the self- defining being. This sovereignty is the basis of the
formation of the modern state (Held 1989) For Hegel, social institutions are not the barriers to
individual development and freedom. State is the arena where the alienated self-overcomes from
the self-estrangement to self-recognition. Marx is opposed to this idea of Hegel. For Marx,
conflict in human society was not primarily a conflict of individual interests but a conflict of
classes- and it is this class conflict that calls forth the state. To maintain this relation of
domination and exploitation, the state came into being - not as a means to resolve and reconcile
conflicts between individuals but as a means to maintain the subordination of one class and the
dominance of the other (Clarke 1991). In modern societies, a capitalist mode of production is
dominant, and the state is an instrument of domination of the bourgeois ruling class, possibly in
tandem with landowners, and of subordination of the laboring class. Marx in his communist
manifesto held that the executive of the modern state is but a committee for managing of the
common affairs of the whole bourgeoisie. Keeping this in view there are two main strands in
the Marxist conception of state. They are (Held 1989)
1. the state generally and bureaucratic institutions in particular, may take a variety of forms and
constitute a source of power which need not be directly linked to the interests or under the
unambiguous control of the dominant class in the short term,
2. The second strand held that state and its bureaucracy are its class instruments which emerged
to coordinate a divided society in the interests of the ruling class
Keeping this in view one must not forget that state action may run counter to the immediate
economic interests of some or all of the capitalists provided only that the overriding aim of
preserving the system intact is promoted (Kennedy 2006: 183). This is the arena where the
concept of the relative autonomous of state becomes important. The idea of relative autonomy

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of the state belongs to the debate between Ralph Miliband and Nicos Poulantzas. Miliband
argues (a) that in contemporary western societies there is a dominant ruling class which owns
and controls the means of production, (b) that the dominant class has close links to powerful
institutions, political parties, the military, university etc. and (c) that it has a disproportionate
representation at all levels of the state apparatus, especially in the command positions (Held
1989). The instrumentalist view did not hold good because it reduces the social classes or groups
to the interpersonal relations and considers that the state is reducible to the interpersonal relations
of members of the diverse groups that constitute the state apparatus, and finally the relation
between the social classes and state is itself reducible to interpersonal relations of the
individuals composing social groups and individuals composing state apparatus (Aronowitz et
al. 2002). However, the structural approach to relative autonomy is by far the suitable way to
demonstrate the welfare character of state (Paulantzas 1969). It gives us an important tool to
understand that the compromise made by the state in terms of progressive legislations is helpful
for the bourgeoisie in the long run.
Leftwich in his article Bringing Politics Back in: Towards a Model of the Developmental State
argues that the developmental state has some element of relative autonomy which varies
accordingly i.e., the nature of elites and the influences that they carry on the state and the extent
to which state shields itself from those pressures. Relative autonomy means that the state has
been able to maintain insulation from special interest, but it does not mean that state do not
accommodate the diverse and plural demands, however, not at the cost of national interest. Also,
relative autonomy does not mean isolation from elite interest or dominant class interest. They
have more or less become, what Evans Says, embedded in progressively dense web of ties with
both non-state and other sate actors through which state co-ordinates its economy and
implements development process.

In case of non-developmental state the major source of

relative autonomy is the seizure of state power and modernizing elite. Leftwich mentions that
many atimes relative autonomy flows from the dominance of single ruling party, for eg.
Singapore and Botswana. However, less dependence on social elite helps in building the internal
autonomy of the state. Further, the significant role of economic bureaucracy in developmental

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state manages the interaction between state and economy by the creation of specific institution
where these people have significant power, competence, authority and insulation.
Peter Evans takes the pain to describe how states in newly industrializing countries encourage
private enterprises. it musters insights from both political and economic sociology about the
nature of state power and the relations between states and society that inform a serious attack on
rational-choice theories that view the state as an inhibitor rather than facilitator of economic
development (Campbell 1998: 103). Evans emphasizes upon what kind of state intervention is
essential for development.

Also, this question can be successfully answered through

comparative institutional analysis and state-society relations (Campbell 1998: 103). His theory is
based upon GMT (Governed Market Theory) and policy networks theory. According to him,
developmental outcomes depend on the surrounding social context and the involvement of
political elites. For example, Japan, Taiwan, and other developmental states have more mature
bureaucracies enjoying greater autonomy enabling to promote development sufficiently, unlike
predatory state like Zaire which lacks bureaucratic institutions, thus undermining any kind of
autonomy and derailing states effort to promote development and formulate policy in national
interest (Campbell 1998: 103). States are embedded in a network of social ties that enable
political elites to negotiate goals, policies, and implementation strategies with business actors.
States must exercise the embedded autonomy to provide the appropriate incentives to compete
effectively in global market place. Joel Migdal stresses that a strong society undermines state
capacity, however Evans argue for a strong society. Evans uses the concept of State-society
synergy to elaborate upon this as according to him state-civil society relations enhance state
capacity and a strong state and strong society is mutually beneficial to national development. The
state undergoes some kind of ties with civil society and associates with community norms,
formal and informal.
Vivek Chibber investigates the reason behind the failure of Indian State but the successful of
South Korean state in its industrialization. He delves into the failure of the postcolonial sate
building into a developmental state. He begins to say that the reason behind lingering industrial
growth in Indian state is the quality of intervention in the process of industrialization i.e., to say

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the variance in the internal structuring of it and also the quality in terms of its mechanisms and
functioning. Chibber, in context of India argues that the capitalists in India hijacked the planning
process of in their favour, drained the state resources and monopolized production in an
uncompetitive and heavily protected Indian economy (DCosta 2005 : 488) the capitalist class
in India garnered the states planning efforts by demobilizing organized workers which paved
the way forward for state-society relationship in case of India.

So for him answer lies

somewhere between state and societal actors.

How the state is constituted:
The culturalist perspective: only a limited number of political science works have used this
approach in research on state building or state capabilities. Three related points coming out of
this literature are very important for the study of the state.
a. Everything else being equal. Organizations (especially complex organizations like state)
tend to disintegrate because their parts are pulled in as many different directions.
b. Culture offers a antidote to these centralizing tendencies
c. Rituals associated with the state, often undertaken as ends in themselves rather than
simply as means to increase power, represent much of that cohesive power that culture
offers.
System-dominant structuralist perspective: those who viewed the state from culturalist
perspective remained on the margin of political science. However, they were affected by the
rebirth of realism in international relations. Wallerstein emergence shows this. System dominant
perspective in which structuralist are states as interchangeable to the degree that they expect
them to act similarly if facing the same array of force. Autonomy became a kind of buzzword in
the state-building literature, especially with growing numbers of studies on the success stories of
East-Asia. States suffers when they are hit by three sorts of crisis- a state financial emergency,
severe elite divisions and a potential and propensity for popular groups to mobilize.
Rationalist Perspective: rational choice writers turned their attention to the state, although that
subject was not central to the emerging rational choice paradigm. One of the important book in

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this field is Market and States in Tropical Africa by Bates. He asks a particular question why
African state rulers who know what sort of economic policies will spur growth never chose these
policies. Their precarious political stand dictated to them a path of behavior that left the economy
in shambles. In his subsequent book, Beyond the Miracle of Market, Bates extends his rational
choice analysis by stressing the importance of institutions, particularly political institutions. He
notes that particular institutional milieu within which policy makers find themselves creates the
incentive structure that guides their choice. In other words, politicians preference establish the
goals they rationally aim to achieve are not random. The rationalist approach merged nicely with
the emergence of the state as a subject of study.
The Historical institutionalist perspective: the study of the states has been subsumed under the
heading of historical institutionalism. This perspective is close to structuralist, culturalist and
rationalist perspectives and it absorbs element from all of these.
The limited state: engagement of state and society
The modern state has posed itself as the ultimate authority, standing above society and
demanding obedience. But the engagement with social groups has tempered its authority.
National ideologies create master narratives that may be suited to deal with issues like the
consolidation of powers. Understanding of the state as a state-alone organization with firm
boundaries between it and other social forces leads to inquire that how it is constructed. The
effect is to centralize the state and overstate its capabilities. On this the state and the social
groups get transformed.
Johnathan Unger and Anita Chang (1994) deals with re-conceptualizing the change using
corporatism and also contrasting Chinas case with other East Asian economies, Taiwan,
Korea. China is adopting state corporatist attitude of East Asia and also moving towards societal
corporatism like the East Asian economy.
South Korea, Japan and Taiwan: they adopted strongly authoritarian corporatist structure
directing processes of intensive development. But overtime due to internal and external pressure
they moved towards societal corporatism. All these countries earlier like China today aimed

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rapid development, confronting obstacles for achieving the same by extensive state involvement
which secured competitive edge for industry, strategy adopted by them was export- oriented. All
of them had common advantage in adopting state corporatism- Organized Bureaucracy. They
were also hard states which were autonomous from any kind of group interest pressure. The
important factor that was favorable for state corporatism was Cultural Bias towards coporatism.
Confucianist teaching viewed private interest as selfishness. Greater good through consensus
overcome by moral authority of potential leaders was promoted East Asian government through
the rhetoric of national interest promoted corporatism.

Hence in Japan Meiji restoration

brought government to power and aimed to preserve independence through state- inspired
modernization. In 1930s Japans small business sector was organized into government aligned
associations which controlled their memberships. The aim was to control and co-opt the lower
classes, to prevent them from becoming autonomously organized.
In Taiwan, mid 1940s the exiled Kuomintang government became hostile towards islands
indigenous constituencies and interest groups. It sought to preserve political hegemony by
keeping them subordinate to the state. The state took over farmers associating and made it
quasi- government institutions than body of articulating farmers interests. All other associations
were made hierarchical, exclusive and non-competitive. The purpose was to legitimize through
such powerless incorporations.
The embeddedness in society, market and state plays indispensible role in deciding the failures
and successes of policies related to development. The relationship between society and statemarket can be traced back from dependency theory to globalization. Even in case of tiger
economies the credential for the booming of economy lies with the non-liberal nature of state
and society. As the meaning of society differs depending upon various factors such as the
historicity, culture, language, cohesive understanding, appeal for sustainability, degree of
openness so on and so forth, the meaning of public and private shape itself. As Martinussen
argues that the classical economic theory provides space for the state to play an important role in
maintaining, initiating, and sustaining its growth. The later theories associated with neo-Marxism
deny the state giving such an autonomous role to the capitalist ownership in terms of the control

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of distribution of wealth. In this attempt to understand the role of society on state-market

relationship, Karl Polanyi in his book The Great Transformation illustrates that the economic
rationality idea in any society is the product of historical construct accustomed with some form
market society in past.
The relation which gets affected by spacio-temporal conditions is also linked with what J.P. Nettl
calls stateness in his article State as a Conceptual Variable which mean the idea of state not
with the state. Nettl makes the point that developing country like India does not have a historical
and sociological tradition of stateness (Hasan et al. 2002: 176). Other similar resonating
analysis can be found in G Myrdal formulation of India as a weak State, that basically means
that the idea of state in India is weak that essentially result in the inability of the state to
enforce the laws effectively. In crude words, market system is mode of organizing society in
terms of spontaneously acting orders and efficiency.
Amiya Kumar Bagchi begins to say that it is state that puts economic development as the top
priority of governmental policy and is able to design effective instruments to promote such goal
(Bagchi 2000 : 398). In developmental state state can switch over to market directed to state
directed developmental efforts. In the case of Japanese developmental state in late 1950s, it is
assigned to the regime of Meiji Restoration. The emphasis was put on education primarily and
holistic integration of government planning and business strategies during that regime. Also the
banks and trading houses came closer in Japan in early days of industrialization. Japanese
Developmental State is to a large extent a post-war phenomenon. Japan began to face crisis at the
end of the 1980s, however, the developmental phenomena raised Japan to the position of the
second industrial power globally and allowed the Japanese a standard of living equal to or
greater than those of the Western European countries, like USA, Canada, Australia, and New
Zealand (Bagchi 2000 : 420). South Korea, being a different case than Japan in two ways, firstly
being a colony of an imperial power and secondly, the growth is completely a post-second world
war phenomena. Bagchi says that Korea under Japan had been an abject dependency, and its
maturation into a Developmental State required special geopolitical conditions (Bagchi 2000 :
420). However, Alice Amsden argues that South Korea shares with other late industrializers

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the peculiarity that its industrialization was based on learning from other countries rather than
any innovations in processes or producers (Bagchi 2000 : 420). Bagchi, in case of failure of
developmental state in India, analyses that the socialist ideologies of USSR became one of the
hindrances, the failure of education including primary one, and also the important sectors of the
Indian economy were controlled by foreign capital by inhibiting domestic capital. He continues
to say that democracy acted as a mechanism for arriving at the compromises among various
ruling, upper class strata (Bagchi 2000 : 431).
The most important argument in Bagchis claim is that the spacio-temporal factors such as the
role of nationalism in enabling a state to pursue a cohesive, sustained development-oriented
policy. The ability of the state to pursue such a policy I sin turn contingent on the rapid
accumulation and diffusion of what has sometimes been styled social capital and sometimes
called social construction of economic institutions (Bagchi 2000 : 433).
Summing up, it can be argued that economy cannot be fully disembedded from society as in
words of Bagchi social transformation ending private powers of non-market coercion can
promote both state autonomy and good governance (Bagchi 2002 : 200). Mitchell argues that the
distinction between state and society must be taken not as the boundary between two discrete
entities, but as a line drawn internally within the network of institutional mechanisms through
which a social and political order is maintained. The ability to have an internal distinction appear
as though it were the external boundary between separate objects is the distinctive technique of
the modern political order (Mitchell 1991 : 78).

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