POL101Y1 Lecture Notes - Rent-Seeking, Public Choice, Invisible Hand

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Published on 13 Apr 2013
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Feb 4 Readings
Dependency and Development
Imperialism as a Special Stage of Capitalism- Lenin
very high stage of capitalism
imperialism: monopoly stage of capitalism
finance capital
Predatory, Developmental and Other Apparatuses: A Comparative Political
Economy Perspective on the Third World State- Evans
public choice theory: incumbents are rational maximizers
sphere of state action should be reduced to the minimum and bureaucratic
control should be replaced by market mechanism wherever possible
neoutilitarianism highly problematic
application of other arguments to traditional societies or communist states
would require substantial extension and revision
while most of the argument 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 say
debate best moved forward by comparing third world states
Predatory-> Zaire
Neoutilitarian logic: preoccupation of the political class with rent seeking has
turned the rest of society into prey
Bureaucratization lies at the heart of the problem
It is not bureaucracy that impedes development so much as the lack of
capacity to behave like a bureaucracy
Developmental States- Taiwan and Korea
Strong internal bureaucracies
Strong external ties
The “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: combining Weberian bureaucratic
insulation with intense immersion in the surrounding social structure
Dynamics of Developmental States
Al began post WWII with long bureaucratic traditional and considerable
experience in direct economic intervention
Embedded autonomy depends on historical experience and an organized set
of private actors who can provide useful information
Embedded autonomy will be its own gravediggers- the developmental states
will have to deal with problems of intial success
An intermediate case- brazil
Massive source of jobs, populated on basis of connections rather than
Political leaders created “pockets of efficiency” unable to transform the
bureaucracy as a whole
Lack of a stable bureaucratic structure makes it harder to establish ties with
the pirvate sector of the “administrative guidance” sort
Bureaucracy lacks the corporate coherence of the developmental ideals type
Comparative Conclusions and Future Agendas
The differential effectivenss of Third World states as agents of industrial
transformation can in fact be connected to differences in their internal
structures and external ties
Most effective states characterized by embedded autonomy which joins well
developed, bureaucratic internal organization with dense public-private ties
Least effective states combines undisciplined internal structures with
external ties ruled by the “invisible hand”
Intermediate states occasionally approximate embedded autonomy, but not
sufficiently to give them the transformative capacity of developmental states