IDSA01 Chapter 7 Notes.docx

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International Development Studies
Leslie Chan

IDSA01 Introduction to International Development Chapter 7-State of the State: Does the State Have a Role in Development What is the State? The Legacy of Colonialism  the Eurocentric definition of the state defined it as “an entity with monopoly over the means of force within a designated territory that it controls, enjoying legitimate support for that monopoly from the majority of the population residing in the territory and recognitions its control by other sates, and is empowered by the population with making public decisions”  states in the European context developed a historical identity over thousands of years with slow political centralization and reflect natural geographic communities, share a common language, and cultural and religious identity  in the developing world there was no such evolution, states were carved out through European conquest and division, national identities and states were forged over short periods of time  the states set up by colonizers still use control of the means of force and have the ability to make public decisions but they lack a strong sense of legitimacy in terms of support among the population  colonial economies were set up under a system called mercantilism to serve the interests of the colonizing or “mother” country, they provides raw materials to the colonizing country and received the home country’s finished goods in return, were banned from selling directly to other countries including colonies within the same system  even though the colonist and mercantilist system collapsed, economies still exhibit these patterns, the continuing reliance of many countries on commodity exports and on external technology and investment and imports have hindered development and growth Defining the State’s Role in Development  nature of the state:  “compradorial” describes the ties of the developing state to external interests, whether foreign government, investors or military and to the local resource-owning and internally oriented capitalist class—post-colonial state as continuing to be colonial in nature run by an elite and/or in alliance with foreign interests  Weberian view emphasizes the rational-purposeful nationalism of a modern state, regardless of its origin—any country can develop a government that is purposeful, rational and legitimate State Capacity and Autonomy  state capacity suggest that developing states may not be as capable of weighing technical decisions as their counterparts in the North due to budgetary, training restrictions, etc.  state autonomy refers to the degree of insulation that a state enjoys from social and external forces—most developing states are overrun with political pressures leading to decisions that may be politically apt rather than based on merit  autonomy can backfire as well, in that insulation can mean greater opportunity for corrupt and incompetent administration  embedded autonomy: states that develop strong ties with foreign and domestic elites yet manage to retain some degree of autonomy for the pursuit of national interest Central Debates About the Role of State in Economic Development The Push for Early Industrialization  post WWII when many independent African and Asian states were created, the lack of natural industrialization led the adoption of Keynesian-oriented policies that advocated the strong role of state in managing the economy  in the 1960s, industrialization became one of the central goals of developing states to modernize, industrialization would help to diversify exports, reduce the commodity and other dependency aspects of post-colonial economies and create a middle-class domestic market of highly skilled workers  at the time the Soviet Union seemed to be experiencing rapid industrialization and many countries following the Soviet model and later Chinese model (socialism) set out on industrialization hoping for a more equitable nation that would correct the inequities rooted in colonialism and capitalism  however the gap between the rich and poor didn’t seem to change and as it became discovered how the Soviet Union and Chinese repressed rebellions and had their own elites within the sate, industrialization shifted and began to occupy a middle ground between market and state  structuralism emerged in which the state was needed at least to destroy the bottlenecks that prevented a market-based economy from developing naturally—“import substituting industrialization” (ISI)  Prebisch-Singer hypothesis: since commodity prices were volatile and earned less, over time than industrial goods, developing economies needed industry to be able to reach the same standard of living as northern economies  too many states rely on outside technology, they need to develop their own technology to avoid being left behind and have to adapt it to local conditions and need to develop a strongly functional financial system and educational system that can created viable middle-class-based economies  for a deve
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