The state should play a central role in economic development. The fact that there was a noticeable congruence among the early economists that economic development needs an effective state was clearly visible in their writings. Simon Sunset (1955) believed that the ‘political system’ governing a state might turn out to be an economic variable while explaining economic growth. According to him the state should allow for trickle down of the benefits from rapid growth which would increase per head income.
Paul Rosenstein Radon while laying down The Big Push Theory identified that the role of the state is crucial for large scale investments, especially In social overhead capital as private Investors would not do so as they are driven by profit motives. While Paul Barn emphasized that the reason behind the underdevelopment of most countries was Nonexistence of a naturalistic developmental state. On similar grounds Myriad argued that absence of a ‘hard state’ leads to economic stagnation.
Crosschecking has argued that latecomers need a ‘centralized’ approach to advance towards industrialization and economic growth. (Change, 1999). Also there has been an idea related to ‘structuralism’ development theory that market failure In underdeveloped countries can be rectified through state Intervention and with other policies such as the Import Substitutions Industrialization during late ass’s and earl ass’s realized the importance of the state in economic development (Onions, 1991 ). Consequently, there has been substantial literature developed on the notion of developmental state.
Loosely speaking a developmental state is a state where government is strongly involved in extensive regulation and planning, where economic development is defined in terms of growth ND productivity and rapid industrialization Is the primary objective of the state. It Is somewhere positioned between a centrally planned economic system and free market capitalist system (Boletus, 2012). Japan, Korea and Taiwan are the most appropriate examples of the classical developmental state model. It has been generally noticed that developmental states progress much faster than other regulatory states.
For example it took USA 50 years approximately while England around 60 years to double their respective economies. On the other hand it took only Widen, 2000). Historically, the first sense of Developmental State can be traced back in the sixteenth century, northern parts of the Spanish Netherlands. In case of Japan the notion of developmental state emerged from the period of Mejia restoration, a period that restored imperial rule in Japan and led to enormous changes in its political and social structure (Beaching, 2003).
One’s (1991) described two factors which explained that how growth became a long term single minded priority for several East Asian countries or how they move towards what we call them today ‘The Developmental States’. The first factor that these countries followed this path was cause of the unusual degree of external threat faced by the East Asian states during the postwar period. The extremely weak resource base and shortage of raw materials in their economies made the security threat more severe, particularly the case of Taiwan which faced an immediate threat from the mainland China.
Also the fact these nations were under direct Communist impact entails that they had to struggle for their existence and build their own regimes and ideology. Hence the aggravated security concern confronted by the East Asian states helped them to organize their nationalistic vision. This pressure for existence evolved their unique commitment to the long-term improvement of the economy and ignores equitable income redistribution and social welfare. Second fact is that these countries experienced a relatively egalitarian base in term of income redistribution during the post war period.
In case of Japanese, the devastating effect of the war was such that all of them got equally poor. While In the cases of Taiwan and Korea, extensive land reforms at the time of colonial rule not only made them equal but also removed certain troublesome social groups such as large landlords. Cummings (as cited by One’s, 1991) saw Japanese and American rule as one of the major influence. Under the Japanese rule in Koreans, large industrial and infrastructural investment provided a base for economic growth.
