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8/20/2019 16 Brown j World Aff 203
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Role odels and
Policy Rights
ALICE
AMSDEN
Professor
Massachusetts
Institute
of
Technology
FASTER ECONOMIC DEVELOPMENT WAS ONCE associated with a good theory but
in
the
prosperous Golden Age that
followed
World
War
II from roughly
1947 to
1980 poor
countries
tended to
learn from each other
not from
abstractions.
They
experimented
with policies and institutions based on those
of
an outstanding role model.'
As
this form
of learning evolved, economic growth rates in
nearly all
Third World
regions
reached
unprecedented
heights. For
the first time
in modern
history Third World economies
grew
faster
than
First
World
economies,
as
seen
in
Table
1
Then
in
the
counter-age
of
203
economic
Liberalism, from 1981
to
the
2000s,
when
developing
country policymaking
became tightly tied to theories
of
market behavior growth rates in
almost
all regions
fell.2 Intolerance
of non-market provisions in the areas of
trade
industry ownership
and employment
became a
hallmark of
a new globalism,
as the former
colonial
pow-
ers returned to
their ideal of
universalism, a one-policy
agenda
for
rich
and poor
countries alike no matter how many or diverse;
this
was the only cost-effective way to
govern them. Yet
the survival of
role models
depends
on policy rights, or the freedom
against possible foreign opposition from
Washington
to
the World
Bank to choose
the policies that role models
themselves
once followed,
towards foreign
investment
and
capital
controls
or
trade
agreements
and
job
formation.
Given
their thirst
for diversity
in
a
world
celebrating
one particular set
of
market policies
for all, the question arises
of
whether or not
role
models
have
been
left in limbo
and
with
them an empirically
grounded deductive way of
thinking about
economic growth?
ALICE AMSDEN is the Barton L. Weller Professor
of
Political
Economy in the
Department of Urban
Stud-
ies
and
Planning at
the
Massachusetts Institute
of Technology. She was recently appointed
by
the
United
Nations
secretary-general
to
a
three-year seat on the UN Committee on Development Policy.
Her work
focuses on
issues
of development and poverty eradication.
Copyright @ 2 9 by
the Brown
JournalofWorld ffairs
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ALICE AMSDEN
Today's
global
culture
celebrates electoral
rights,
education
rights,
human
rights,
housing
rights,
health
rights and women's
rights-anything
but country-specific policy
rights.
Developing countries
discovered role models
among their
peers, in geographical
proximity. This
tendency
gave rise
to
two
regional
clusters of
role
models,
with pure
theory left to influence
mostly
fiscal and monetary policies-even so,
countries
like
Brazil, China and India tend to follow
fiscal
and monetary policies based on their ow n
histories,
not
abstract theories.
The Organization of the Petroleum Exporting Countries OPEC) is associated
with a price cartel.
But
the
OPEC
development model also revolves around a profes-
sionally managed state-owned
oil
company,
which
was formerly a private multinational
concession,
nationalized after
political
independence. In East Asia,
import-substitution
industrialization
ISI) became
the basis of
a
role model radiating from
Japan,
in
which
domestic
markets
were
seized from
foreign
companies, and
then exports
were
extracted
from import substitutes to enter foreign markets. Latin America, with both oil wealth
and
manufacturing experience, combined the two
models.
Africa,
without
manufactur-
ing experience or oil-until recent
discoveries-could not
break into
either circle.
The
shift in the
cognitive
approach
to
economic development, away from de -
ductive market
theories towards
inductive
role
models,
was an
integral
part
of
the de-
204 colonization
process that followed World War II, starting in 1947 with India's
political
independence.
A
culture
of
anti-imperialism pushed independence beyond
politics
into
economics,
in
what became a novel nationalist approach
to
late development, with
nationally owned and controlled companies (private or public) at
its
core.
The
edge
of the envelope was the
Latin
America
missed
the
cathartic
effectb
Chinese Revolution 1927-1949) that ex
of twentieth-century
decolonization.
propriated
not
only
foreign governments
but
also foreign firms, as did India
using
tamer
tactics, such as acquiring British firms,
exhausted from
depression and war, at firesale
prices.
Korea and Taiwan inherited
the investments of
Japanese-owned zaibatsu when
Tokyo
conceded
military
defeat.
Indonesia
acquired
Dutch
companies
when the Dutch
government fled after a long nationalist
struggle.
In contrast, the Philippines was one
of
the first of
its generation
to
gain political independence,
from the United States, but
never
showed
the
door to U.S.-owned
firms.
A
large
stock
of
inward foreign investment
was
also
true of
Latin America,
which
missed
the cathartic effect of
twentieth-century
decolonization. Multinationals that
arrived
in
Latin America
before World
War
Tw o
simply remained, although some electric
power
industries and railroads
were
national-
ized.4 With implacable foreign firms, there was crowding out
of
private nationally
owned
companies
in
industries
like automobiles.'
By
this
account,
fast-growing
East
THE
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Role oded
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i hts
Asia
(excluding the Philippines) is more nationalist than Latin America.
The
Middle
East, by appropriating
the
concessions
of the
world's largest oil
companies,
named the
Seven
Sisters, shows
a
degree
of
nationalism
that is easily equal to that of
East
Asia.
By
the
same
reckoning, both
East
Asia
and the Middle
East enjoy
more
policy
rights
than Latin America, or more freedom to decide, against foreign opposition, if any,
which
nationalist economic measures to introduce. The strength
of
role models today
thus depends on the
strength
of heir policy rights. The
greater
their rights, the greater
their latitude
to choose
the policies
best
suited
to raising
their global
competitiveness,
income and wealth to the
level
of
their
role model.
If the two great role models
of the
late-twentieth century, OPEC and ISI
had
failed, if they had not raised
national
incomes and
spread
to
other
countries, then as
the world
returned
to an open-market
system
after
1980 policy rights
would probably
have
expired. But they
did
not fail,
and
that
did
not
happen.
Washington,
the World
Bank, and
the
World Trade Organization are quick
to
label
the
role models
of
the Far
East
and
Middle East
s failures.
After
the
East
Asian financial crisis of 1997 Asia's role
model
was pronounced
dead, and once
oil
was discovered
outside the Middle East, the
OPEC
cartel,
let
alone the
OPEC development
model, was
relegated to
the
dustbin
of history. True, income growth
in
the Middle East and Asia slowed under neo-liberal
policies, but hardly to a crawl, and
not
at all
in
ndia and China,
whose
reforms, like
the policy framework of the
two
role
models themselves,
were
a
mixture of market 205
and
state,
and
whose
demand
for
raw
materials,
2000
through
2008
created
a
boom
in Third World mineral
economies.
Instead of failing, the
East
Asian role model
has
adapted
import substitution
to mature high-tech industries.'
The OPEC development
model, apart from
the
OPEC cartel, has
inspired
the Bolivaristas
Venezuela, Ecuador,
Bolivia, and a
total
of eleven Latin
American
countries), the resource-rich BRICs (Brazil,
Russia, India and
China),
and
40 poor
oil-producing countries
(about one-third of
the developing world still at the
bottom
of the hydrocarbon value chain. The top
ten
companies
in oil and gas reserves are all
state-owned,
and
from the
developing world.
National oil companies threaten to do to the U.S. oil, g s and petrochemical industries
what Japanese factories-and now
Korean
and Chinese
factories-once
did
to
the
U.S.
car and
electronics
industries.
National role
models
have
survived the return to
power
of a theory-driven global
regime
because
this regime, however monolithic in
appearance,
is being fractured in
practice
by
its own institutional
wear and
tear.
It started to
unravel once
the
de-colo-
nized generation
began to compete
in world markets.
As developed countries
felt
the
heat of new competition, they ran helter-skelter, seeking more
leeway
in
setting their
own policies to strengthen industries back home. The upshot is a large underground,
or
demimonde,
where
countries promulgate
free
trade
by
day
but
practice
state-pro-
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motion of industries by night.
acktracking
is
most evident in international trade, the backbone of globalism.
Protective
tariffs remain low, but trade is no longer
free, s
theoretically defined. De-
spite the
rhetoric,
regional
trade agreements
like
NAFTA
favor
member
countries
over
non-members, the antithesis of
a evel
playing field.
As
India
noted openly at
a
WTO
meeting, it is
well
documented that
Regional
Trade Agreements are proliferating
and
most
of
global
trade isconducted on preferential terms. ' The World Trade Organization
itself,once a
bastion of
transparency, is opaque in its governance.
According to the Ma-
laysian
delegate,
Well,
[the WTO]
issupposed
be democratic-it
ismember
driven,
and
every
member has
a
vote
So it has all the elements of
a
democratic
institution,
on
paper at least... In
practice,
there
have been complaints
that the
agenda
is
dictated
very
few
powerful countries. '
The usiness tandardof India reported that a demand
from
the
WTO s then director, Mr.
Pascal
Lamy,
for a 30
percent
pay
hike at
a
time
of
global
wage
deflation, was
not
handled democratically
by
the WTO s budgetary com-
mittee, but was decided
against
by rich
members
behind closed
doors.'o
In the milieu
of
the demimonde, where ll policymakers enjoy a
degree of
free-
dom,
role models
survive.
The
practical
question
is how
effective are
they likely
to be
in
running
an
underground pro-industry policy?
We would
argue
that the effectiveness of
nformal
policymaking depends on two
2 6
rather disconnected influences: first, the quality of
key government economic bureau-
cracies;
and
second,
their
relationship
to
the
grassroots
anti-poverty
movement, which
attempts to return decision- making
power
to local people.
The
higher
the quality
of
national universities, national civil service entrance exams; and the greater the national
orientation of high government officials, measured by the geographical locus of their
tertiary
degree,
then the better
will
be policy coordination. The more cooperative
rela-
tions
are between anti-poverty activists
and government economic planners (most
now
democratically elected), the more effective policy implementation will be.
Below we discretely draw
the curtain on the demimonde, show
some
data on
the education of top economic bureaucrats (in the BRICs), and finally,
note
the need
for a stronger alliance between bureaucrats
and
activists.
NOBODY GAvE
DAMN
The
first generation ofpost-Independence leaders
was
able to en joy nearly
unrestrained
policy
rights
because, s Richard
Nixon observed,
nobody
gave a
damn.
The de-
veloping
economies
were
less
interesting to
Wall
Street
or Washington than Western
Europe, the target
in
the 195 s of American
multinationals, just
s
Meiji
Japan
was
less
interesting to
investors
than
Reconstruction profiteering
after the
American
Civil
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Role
oded
and
Policy Rights
War.
1
But s
Japan
recovered from military defeat and
its
exports boomed, and s com-
petition from the whole
Japanese role model aureole commenced,
everything
changed.
Suddenly the United States gave a big damn.
Today's regional
trade
agreements
signal
the tensions
of
universalism,
of
a
shoe
that
is
too
tight
for too
many
feet.
TH
MIMON
Poor countries were
divided over
the WTO's
formation in
1994-some gained,
some
lost,
so
no
consensus emerged
over
what to do.
Instead,
dissatisfied countries
sought
autonomy with subterfuges.14
As
they descended into
a
demimonde, the
habituees
they
rubbed shoulders
with
were none other than the
advocates
ofopen markets. Hypocrisy
in any demimonde is
r nk
One
American subterfuge was
the
military
industrial
complex-a
term
in
President
Eisenhower's 1961 farewell address.'
The United
States Department of Defense
and
National Institute
of Health are
mainstays
of
U S
private manufacturing, subsidizing
industries ranging
from batteries and aerospace to bio-tech and agriculture. Manufactur-
ers and
the military
bonded after
the American Revolution.
Ironically, modern factory
management
had
its genesis in the
United
States (the most pro-market
country
in
the
world in
the Government Springfield
Armory in
Massachusetts.
Defense industries are
not adjudicated
under
WTO
rules, and
so governments
are
free to promote
them. 7
Despite big
armies
in
Russia,
India and
China,
developing countries invented
different subterfuges. They used
both piecemeal
artifices s well s
multi-billion
dollar
science
parks to undertake the technological and organizational experimentation neces-
sary
to move into higher skilled industries. The difference between the military-indus-
trial complex model and the
science
park model is that the former builds
technologies,
while the
latter builds
technologies
with, inter-connectedly,
specific nationally
owned
firms. R D
is
also
not
adjudicated
by
the
WTO,
so
science
parks
can
promote new
industries and firms so long s there is money.
Piecemeal policies in the demimonde may
have
failed in
droves,
but
some
were
highly effective in raising skilled
employment. The
Indian government allowed
the In-
dian-owned pharmaceutical
industry
to violate foreign product
patents, but not
pro ss
patents, which contributed
to e fficient
manufacturing and cheap
drugs (the adjudica-
tion
of
healthcare
industries
under
the
WTO is ambiguous).
Besides pharmaceuticals,
developing
countries have called for
the
relaxation of
intellectual property rights on
climate
friendly technologies under
the United
Nations Framework
Convention on
Climate Change-all industries
related
to the environment
can
be state-supported.
Regarding foreign capital flows, while financial liberalization was the
primary
factor
behind
East
Asia's
1997
financial
crash, Korea
was
forced to
keep
its
financial
markets
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open
after an IMF bailout. The Finance Ministry
responded
by using modern technology
to monitor
every
financial flow on a minute-to-minute basis to reduce risk and quicken
government
response,
in
effect, closing markets after hitting a ceiling. To reduce export
dependence on the
U S
market,
Korea offered subsidies to
companies
that
exported to
other destinations
(in
distress, countries can protect their
balance
of payments).
Thus, WTO members are themselves responsible for weakening their own ba n
on subsidies by agreeing not to
adjudicate
large
chunks of
what was once
called indus-
trial policy.
One of the fastest
growing
sectors
in
the world economy
is energy
and
the
environment, and any
country
with money can
vigorously
promote
them without being
taken
to
court for
violating
WTO provisions.
Chinese
government research subsidies
are increasing
rapidly
for electric car designs, for example; and
tax
credits are planned
for consumption
of
alternative energy
vehicles.
The
world
over, states
and municipali-
ties can offer
perks to
businesses
to influence
their location
decisions. Poor
regions
in
Thailand
use
subsidies
to attract automobile assemblers. The U S state
of
Massachusetts
bankrolls
the
movie business and
the
life
sciences, and allows not-yet-profitable
start-ups
to
convert
tax credits into
cash.
Subsidies
can flow
to
science
parks, R&D
institutes,
high-tech industries, and small-scale enterprise-without
these exceptions,
probably
no
developed country
would have joined the WTO. Planners can use land
grants
to
promote regional
development,
and
government
procurement
officers
can
attach
condi-
208
tions on firms that
compete
for public contracts:
when Korea built a
high-speed rail,
it
insisted
that
every
bidder
transfer
enough technology
to enable Korean
companies
in their
own
right to
bid
on
overseas
high speed
rail
projects.
Hyundai
Rotem, Korea's
premier high-speed
rail
manufacturer now has contracts
to
build commuter
rail
systems
in
Canada, Turkey, and
the
United
States.
American trade officials viewed China's
export tax rebates
as a form
of
protection,
but, surprisingly,
tax
rebates
did not violate
World Trade Organization
provisions. '6
To
avoid
a clash,
both giants
agreed
to
offer developing
economies S20
billion
in sub-
sidized
export
credits to help them buy
more Chinese
and American goods, flagrantly
violating
the
WTO equal
treatment principle for
all other
countries.
If
anyone says neo-liberalism lives,
they
are
right
insofar
as that is the law.
they
say,
neo-liberalism is
dead,
that is right, in
a
sense, as well-the law is increas-
ingly
evaded.
NATIONAL BUREAUCRATS
If
a
country
pursues
free market policies, its chief
economic bureaucrats
must
be
trained in a U S or British economics department. If by contrast, a country's policies
are
role
model
driven,
then
its
bureaucrats must
be experienced in
building heterodox
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Role oded
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institutions-those
deviating from free
market
prescriptions-and implementing
them in national contexts. The
latter
type
of
bureaucracy,
t
turns out,
has
survived in
at
least
Korea and the BRICs, despite
5 years of
liberal attempts at taking the state
back out.
The orientation of top economic civil servants may be proxied by
where
they
earned
their
graduate degree,
if any. If top officials in
the
ministry
of
finance, industry
and central bank all
study for
their masters or Ph.D
degrees in
leading U.S.
econom-
ics
departments, t is
reasonable to expect
that their
policy
preferences will
fall
on
the
orthodox side.
By
contrast, countries whose
civil
servants
must pass rigorous
exams, and
whose local universities are
able
to train them at world standards, are likely to
operate
successfully
with an activist state.
Following
World
War
II, little public money existed
in
the
de-colonized world
for sending promising public
officials
abroad for
schooling.
Even today, civil
servants
in poor countries, even India, are just beginning
to
have foreign
degrees,
while
national
universities still suffer
from
financial
hardship;
this is evidence
of
poverty
rather
than
nationalism.
The role
model
for a
national
orientation is perhaps Korea, because
of
its
mix
of local and foreign degrees, made
possible by
the high quality of its
own
universi-
ties (as in all the
BRICs ,
where civil servants can get a
first-rate
education,
not
just in
economic
modeling but also in national economic and diplomatic history.
Korea
now gives the
appearance of
being wholly
Americanized.
Japan's
popula-
209
tion
is
about three-times
that
of
Koreas,
but
since
at
least
1970,
Koreans
outnumber
Japanese earning economic
Ph.Ds in
the United States:
in
2000, the ratio of A-TKFs
(American-trained Korean economists) to A-TJEs (American-trained Japanese
economists) was
39 to 16.1
Nearly 100 percent of
the tenured faculty in the
econom-
ics
departments
of
the best Korean universities is U.S.-trained, and about
9
percent
of economists in
a leading
macroeconomic think-tank, Korea Development
Institute,
hold U.S.
degrees.
Nevertheless,
unlike Koreas
a
universities which lack
diversity
its
economic
bureaucracies are
more balanced.
In
2009, a orientation
is
perhaps
Korea.
typical pattern
of
foreign
and local degrees was
evident
in
Korea's
Ministry of
Strategy
and
Finance:
the Minister
and two
Vice Ministers all held higher degrees from
both
foreign and local universities, suggesting a mixture of influences.
In Brazil, nearly all high-level officials in
the
Ministry
of
Finance and Ministry
of
Planning
hold Brazilian Ph.Ds; the
one U.S.
degree
is
from
a radical
U.S.
university
(New
School
for Social Research).
In
Russia, not
only do
the
economics
ministries
not
have
foreign-trained economists, they probably do not
have
any
economists. Ex-
plains one researcher, most senior officials would actually be engineers, scientists, and
mathematicians, with
degrees
from the
Soviet's
best universities. 2
0
India's
economic
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ministries,
like
Russias, have
ahigh ratio of domestic to foreign
degrees,
although
this
is changing, as more money is available
for
study abroad.
Despite
China's
rapid
West-
ernization,
its finance ministry and National
Development and
Reform Commission
are
almost
totally
run
by
elites
from
China's
own
best
universities.
There is thus a well-educated national
civil
service in the BRICKs
(including
Korea) to coordinate a later stage
of
development policies, those that
have
gone
un-
derground.
TH UNDERGROUND
AND
THE GRASSROOTS
As
governmental organizations were marginalized,
non-governmental
organizations
(NGOs)
mushroomed, part
of a
vast grassroots
anti-poverty
movement
that
has
come
to unite World
Watch,
for
example,
amonitor of the environment,
the
World Bank,
the Ford Foundation and other elite bodies with large field offices, and unpaid vol-
unteers
in
the thousands, including students,
scientists
and engineers, working with
local counterparts to improve how poor people are
clothed,
housed and fed.
Activists
are
politically
diverse
(witness the November 1999
Seattle demonstrations
against the
WTO , yet elite aid networks are generally hostile towards
state
activism, and want a
redistribution
of
power over poverty from top-down to bottom-up. Amartya Sen, a
21 Nobel economics laureate, described the top-down
approach
as
fierce,
meaning
tough
on
the
poor,
and the
grassroots
approach,
to which
he
has
contributed
so
much,
as
friendly ( congeniality
is
exemplified
by
such things as mutually beneficial exchanges
[of which Adam Smith spoke eloquently], or by the working of
social
safety
nets,
or
of political
liberties, or
of
social
development ).
But
redistribution, however friendly has
been
a
disaster
in
fact:
extreme
poverty
has
not fallen at
all
in
many
developing
regions
in
th
l st
5 years f course,
things
might have
been
worse if the
grassroots
had
not
grown, but by the same logic,
things
might have
been much
better if governments
hadn't been
squeezed out of irrigation,
rural
electrification (China excels as a role model), and industrialization (to
create
paid
workers
instead of
volunteers .12
As
seen
in
Table 2,
based on World Bank
data
for
1981 to 2 5 and
established
estimation
techniques,
abject
poverty has
not fallen in
Latin America or Africa,
despite
the enormous effort and
energy
directed there.21 The
welfare
of
the poor may
have
increased, leading to a
rise
in life expectancy. But the
failure
of poverty rates
to
fall suggests
that higher
life
expectancy increases
population
growth rates which,
in Malthusian
fashion,
lead
to diminishing
returns. The
poor
live
longer but don't consume more.
The failure to reduce abject poverty
can
be
traced
to an abstraction, a strong belief
that supply
creates
its
own
demand. 24
Like
Say,
grassroots
activists
imagine
incorrectly
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that what awaits a supply of better clothed, housed, and fed workers is the demand
to
employ
it
at
a
living
wage.
Yet if unemployment already exists, then to invest more
in
workers' capabilities may
create
more unemployed job seekers, not more
jobs.
2
5
Call
thiw
the
Kerala
Effect,
after the
South
Indian
state
which
has
experienced
rising
educational attainments
but not
decreasing poverty. With sluggish demand, people
may simply be forced
to hire themselves
at
starvation
wages, and enter into mutually
beneficial exchanges as Sen puts it at
near subsistence
rates of
return.
While education
and
development
are
closely
linked
if
more
money
is poured
into tertiary
education,
graduates
are likely
to add to the
educated unemployed, or the
exodus of talent
abroad.
For one,
educated
unemployment in Indonesia
is
estimated
to
have
exceeded 787 800
in 2007.26 Thus,
jobs
do not necessarily make an
appearance
simply
because
the supply
of qualified
jo seekers improves as a result
of grassroots
activism. The demand
side
must
also
be
improved,
and this
requires
the government.
CONCLUSION
Amidst the paroxysms
that
accompanied
de-colonization after World War II indepen-
dent countries extended their newly won
political freedoms into
the economic
realm.
They exited the market model and entered adeductive world
where
they learned from
role
models
(the OPEC group
in the
hydrocarbon industries
and Japan
in electronics
211
and
automobiles). They experimented
with
novel
policies and
institutions
to
escape
past failures and to develop,
which
at the time meant increasing
productivity
raising
the number of paid jobs to near full employment, and achieving balance of payments
stability.
As
role models advanced, economic growth in income and per
capita
income
soared
to unprecedented heights see Table
1
To
implement
a
role
model
rather than amarket theory is
to
be
pragmatic,
and pragmatism necessitates policy rights, or the freedom to implement a range
of
development provisions that may
face
foreign opposition on the
grounds
that they
deviate from market theory.
Yet
today's
global culture celebrates
property rights, elec-
toral
rights,
education
rights,
human
rights,
housing
rights,
health
rights
and
women's
rights-anything but
country-specific policy rights,
which the
de-colonized generation
struggled long and hard to achieve.
Does
this
mean
that the role model is ruined as a
cognitive
form of
development,
and
civilization is returning
to
the colonial age,
when
Britain
adopted
a
universalist
economic approach to
govern its
large and diverse empire? Can
heterogeneous role
models survive in today's ideological straightjacket?
The
answer to this question is empirically grounded, like role models them-
selves.
Powerful developing countries,
the
BRICs
and
other
emerging
economies
con-
FALL/WINTER 2 9 VOLUME XVI ISSUE I
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ALICE AMSDEN
tinue
to implement heterodox economic policies in
a
dense demimonde,
rubbing
shoulders
with
developed
countries,
all searching for clever new ways to promote their
own
industries-a
competition which is arguably
healthy
compared to protectionism
using
tariffs.
To
coordinate underground
policies, these
countries
still have
what
it
takes:
an able national economic bureaucracy, locally trained and tested. The big challenge
is poverty alleviation and adding a top down
angle
to the grass roots
approach,
which
failed in the
last
5 years to decrease
Africas worst
indigence see Table
2).
fwe
gingerly
look 5 years out, and
imagine
what the world economy will look
like, we already know twill not conform to the
classification
t followed after
World
War
II where countries belonged either to the First
World,
Second World (Soviet countries ,
or
hird
World.
The
Second category isalready gone, and the Third category isunlikely
to vanish
in
a
velvet revolution, but
a
big chunk of the
de-colonized
generation,
in
terms of land mass and
population,
is
now floating between worlds.
If
underground
policy making continues, and if government bureaucracies
remain
national
in
orienta-
tion
which is
almost
certain, then the global
economy of
2 35 is
likely
to exhibit a
high degree of
diversity although just
how
much is
not
yet
clear.
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TABLE 1.
GDP
GROWTH RATE
AND GDP P R
CAPITA GROWTH RATE, 1950 2000
Region GDP Growth
Rates
GDP
Per
Capita Growth
Rates
1950-1980 1980-2000 1950-1980
1980-2000
Western Europe 4.20 2.20 3.2
4
2.0
6
United
States
3.47
3.45
1.79
1.93
Japan
7.10 2.65 5.50
2.12
Developed
4.12 2.46 3 0
6
1.97
Countries
Average
astern
urope
5.46 0.41
4.31 -0.85
and USSR
Latin
America
4.75
2.32
2
15 0.55
Asia
East Asia
6.90
5.83 4.11
3.43
South Asia
3.98
5.05
1.21
2.49
Middle
East 8.04
2.03
3.01 0.47
Africa
North
Africa 5.32
Africa, South
of 3.70
Sahara
3.56
2.61
2.30
1.20
1.25
-0.12
Developing
5.06 3.02
2.04 0.75
Countries
Average
Source: World Tables, Johns Hopkins University (1980, 1994) and
WorldDevelopmentIndicdtors
World
Bank
(2002),
http://www.worldbank.org.
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TABLE 2.
POVERTYS PERSISTENCE
IN AFRICA AND
LATIN
AMERICA, 1981-2005
Poverty Gap
index
x100)
Region 1981
1990 1999
2005
East
Asia
and
Pacific
A)
35.5
18.2
10.7
4
Of
which
China
(B)
39.3
20.7
11.1
4
Eastern
Europe
and
Central
Asia
[C]
0 4
0.6
1.6
1.1
Latin
America
and
Caribbean
D)
4
3.6
4.2
3.2
Middle
East
and
North
Africa
E)
1.6
0.9
0.8
0.8
South
Asia
F)
19.6
15.2
11.7
1 3
f
which India
G)
19.6
14.6
11.7
10.5
Sub-Saharan
Africa
H)
22.9
26.6
25.7
21.1
Total
I)
21.3
14.2
10.9
7.6
Percentage
below
1.25 / day
Region 1981
1990 1999 2005
East
Asia
and Pacific
A)
77.7 54.7 35.5 16.8
Of which China
(B)
84
60.2
35.6
15.9
Eastern Europe and
Central
Asia [C]
1.7
2
5.1 3.7
Latin
America
and Caribbean D) 11.5 9.8 10.8 8.4
Middle East and North Africa E)
7.9
4.3 4.2 3.6
South
Asia
(F)
59.4
51.7 44.1 40.3
Of
which India
G)
59.8 51.3
44.8
41.6
Sub-Saharan
Africa H)
53.7
57.9 58.2 51.2
Total
I)
51.8 41.6
33.7
25.2
Source:
Shaohua
Chen and Martin
Ravallion Policy
Research
Working Paper 47 3:
The
Developing
World Is Poorer Than We Thought, But No Less Successful in the Fight against
Poverty,
Policy Research
Working
Paper, no. 47 3 August 2008 ,
World Bank Development Research
Group,
http://go.wxorldbank.
org/BXEZCODA10.
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NOTES
1.
This
article
is
based
on a
book in
progress
entitled, A Farewell to Theory:
Developing From
Role
Models.
2.
As
is
well
known,
growth
rates
in
India and
China
soared
in
the
later
period,
noted
later.
3. In 1938,
Mexico
became the first
developing
country to nationalize its oil industry.
4 Argentina's first
European multinational,
Pirelli, established a subsidiary in 1917 that survives
today'
5. Alice H. Amsden, Escape
from
Empire: e Developing Vorld ourney brough Heaven and Hell
(Cambridge:
MIT Press,
2007).
6.
Mature high tech
refers
to innovative products that are already being sold in world markets
but
whose
demand is still growing
fast. Alice H. Amsden and
W W
Chu, Beyond
Late
Development.
Taiwan
LUpgradingPolicies
(Cambridge:
MIT Press, 2003).
7.
Alice
Amsden, Farewell o 7heory: Developing om Role
Wodels
(Cambridge: MIT
Press, 2010),
8. Third
World Network, India submits proposals on
strengthening the WTO,
SUNS
6739
13
July
2009.
9. Fatoumata
Jawara
and
Aileen
Kwa, Behind
the
Scenes
at the
WTO:
The
Real
World ofInternamtional
Trade
Negotiarins(London: Zed Books, 2003).
10. Third World
Network,
WTO
head
Pascal Lamy rebuffed on
own pay
rise
attempt, SUNS
6743
17
July
2009.
11. Alice
H. Ansden,
scape rom Empire:
The Developing Worldi journey brough Heaven
and
Hell
(Cambridge:
MIT Press, 2007).
12. E.
Herbert Norman,
Japan
Emergence
as a Vodern State
(New York:
Institute of
Pacific
Relations,
1940).
13. Alisa di Caprio, 'The Impact ofAsymmetric
Free Trade Agreements on Middle-Technology
Devel-
oping Countries
(doctoral
dissertation,
MIT
Department
of
Urban
Studies
and Planning,
2007).
5
14. Alice
IH.Amsden and Takashi Hikino, The Bark
is
Worse thanrthe
Bite:
New' TO Law and Late
Industrialization,
The
Annalh
of
theAmeran
Academy
ofPolitical
and
Social
Science
570,
no.
1
(2000).
15. The term
is
attributed to President Dwight D. Eishenhower,
former Five-Star
General, in his farewell
address to the American
nation on
17
Januar'
1961.
16. Mark Landler,
Treasury's Lead Role in
China
in Flux,' New York
Times
1
December
2008.
17.
U.S. Fact Sheet: Fifth Cabinet-Level
Meeting of
the
U.S.-China
Strategic
Economic
Dialogue,
U.S.
Treasury Department, 5
December 2008.
18. A
1985
study anticipated the
continuation of state economic interventionism
under a liberal world
economy.
Peter
B.
Evans and Dietrich
Ruescheineyer, Bringing he State
Back In
(Cambridge: Cambridge
UP
1985 .
19. Data are from University of Michigan UMI) statistics on Ph.D. dissertations completed in the
United States. Data were collected by Joo-Young Kwak,
who
used discretion to decide if
a
thesis was writ-
ten
by a
Japanese national,
Korean
national,
or
Korean
American (excluded from
data).
20. Statement by
Yevgeny
Kuznetsov, who collected data
for
Russia. Data were collected
for
other
countries
as
follows: Korea, Joo young Kwak and Kyung-Min Nam; Brazil, Mansueto Almeida; India,
Rajendra
Kumar;
and China,
Jinhua Zhao. All
based
on published or unpublished
government
data.
21.
Amartya
Sen,
Developmentas
Freedom (New York: Anchor Books, 2000): 35-36.
22. Rural Electrification
in China 1950-2004,
Stanford University Program on Energy
and
Sustain-
able Development Working Paper no. 60 (December
2006),
23. Poverty rates fell fastest in
East
Asia,
with few
grass
roots volunteers,
to only
18
percent in
2005
from a level
estimated to have been
80
percent in
1981,
when Asia was the world's poorest region. The
comparison between fierce China and friendly India tells the same tale. The
number
of people in
China
living in poverty
fell
to 207
million
in 2005 from 835
million
in 1981,
while
there
was
an increase
in poverty in India,
from 420 million in
1981
to 455 million in 2005.
24. Jean Baptiste
Say,
a
nineteenth
century
economist
later
discredited
by Keynes,
proposed
a
law, now
called Say's Law, to the effect that under full employment, markets
act
in such a
way
that an economy's
FALL/WINTER 2 9 *
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production will all be
bought,
without any
unsold inventory.
25 Sen.
26.
LO
LABORSTA, http://laborsta.ilo.org.
27.
Alice
H.
Arnsden, Says Law,
overty
Persistence
nd
Employment
Ne
glect,
fourn l
ofHuman
Development
and
apabilities
11 no. 1
2010).
6
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