The 29th Annual EAEPE Conference 2017

The 29th Annual EAEPE Conference 2017

The role of the State in Economic Development.
State Capacity, State Autonomy and Economic Development

Development studies provide a variety of strategies and models that various states used for their catching-up and convergence. The concepts usually included strongly articulated state policies (intervention) to accelerate growth, establish solid institutional background, support business development, create potent innovation system and good quality education. The actual implementation depended on the world economic environment. Historically, successful cases were less frequent than failures. The good examples of Germany, Japan, South Korea, Finland and Ireland more recently and some other countries served as benchmark for others.

The latecomers who copied the elements of successful models of developmental state were usually less successful yet, in some cases good progress could be achieved with significant amendments or case specific combinations of these elements. The question could be put to what extent existing good practices could be copied? Another important question was the extent of state intervention. Was success achieved due to state guidance of development or was it rather a lucky coincidence of autonomous factors and Hayekian criticism on excessive state influence is due? Were development failures simply the result of mismanaged public policies, or were they due to the misinterpreted role of the state, along with a lack of expertise, capacity and autonomy for managing the process of catching-up?

These questions always received new attention when world economic setting changed. We are witnessing such fundamental changes today. The questions about the results and efficiency of existing development models under the circumstances of globalization emerge in a new light. What happened to Japan or South Korea? Have their “miracles” faded out because they reached their development targets of catching up, or are there inherent tensions in the models that were amplified by the process of globalization? What are the determinants of the new development success stories of China, Indonesia, India or Viet-Nam? What about their applicability in other countries and regions? How about the transition process in Central and Eastern Europe? Did these countries choose appropriate solutions? Was their development mode coherent?

What is the proper response of states to economic globalization, a process that transforms the world economy into an organic system? To what extent can the state still be a formative (f)actor in the era of constantly deepening economic interdependencies? Can the state be the main driving force for economic development by facilitating the integration of the national economy into the global market on the one hand and by moderating the vulnerability of certain sectors and actors of the national economy in a globalized world economy on the other? States are certainly not obsolete, but to what extent are they effective and capable in promoting economic development? And how have changes in technology, capital and communication transformed the state–society relationship in both successful and unsuccessful transformers? The several decades-old question on state capacity and state autonomy, i.e., whether these are prerequisites to a successful development or are they merely a consequence of successful catching up, is back again and is more relevant than ever.

Legacies and current options of avenues of economic development and catching-up offer substantial variety of topics and research methods. Scholars are encouraged to join the discussion of active state policies fostering economic development and opportunities, as well as the limitations of their applicability.

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