While political theorists like Max Weber and Crude Dependency theorists were largely pessimistic about the development prospects for late developers, Country X’s development story has established a base for an alternative argument (Weber, Grosfoguel). Country X’s journey from having half the GDP per capita as that of Country Y in 1950, to twice that of Country Y in 2010 has challenged perspectives. I argue that Country X’s fast-paced development was plausibly a result of a period of state-led development under authoritarian rule because a strong bureaucracy helps to mobilize limited resources towards critical industries and keeps the economic elites and core nations from exploiting the resources of the country to their own advantage. In the following paper, I will analyze the conditions in Country X that must have stimulated the establishment of an authoritarian, interventionist regime, which plausibly served as the base for a strong bureaucracy necessary to ensure proper allocation of the state’s resources and protection from exploitation.
Country X plausibly had an authoritarian regime whose establishment was encouraged by conditions such as extreme poverty and geopolitical pressure to develop quickly, along with an international demonstration effect from richer countries. As explained by Gerschenkron, being relatively backward as compared to other industrialized and militarily developed countries in the twentieth century led to a sense of insecurity among the poorer nations as they were in a vulnerable position (5-30). This situation of urgency called for rapid economic development and industrialization. Relative backwardness does not measure how economically backward a country is in absolute terms but in relative terms to its neighbors.
When a country is relatively backward, the citizens of the country compare their lifestyle to that of the citizens of developed countries and aspire to be like them. This phenomenon is known as international demonstration effect, by virtue of which the citizens of country X were motivated to desire economic development even more strongly than before (Gerschenkron 5-30). This meant that there was not only geopolitical pressure internationally but also domestic pressure from the citizens of country X to achieve quick development. Such pressure to develop quickly calls for state-led development. According to Gerschenkron, while early developers like England had market-led and middle developers like Germany had bank-led courses of economic development, late developers like Russia, with a need to catch up to its competitors quickly, embarked on state-led industrialization (5-30). The interventionist role of the state becomes imperative to achieving economic development quickly. A combination of the international demonstration effect and the geopolitical pressure to industrialize rapidly plausibly made the people of Country X more inclined towards an authoritarian regime.
The spirit of authoritarianism is difficult to encompass in a country with relatively richer conditions or one where fast-paced industrialization isn’t seen as a necessary requirement. Country X would likely not have become authoritarian if the necessary conditions like extreme poverty, relative backwardness or international demonstration effect did not exist. Consider a country where the individuals are relatively richer, and the country is not under immediate geopolitical threat from its industrialized or militarily developed neighbors. Such countries generally have a market-led development because they do not have a set urgent timeframe within which they are expected to industrialize. Such was the case with England when it was industrializing, and this led to England developing a liberal democracy with minimum interference of the state in the market or the process of development (Gerschenkron 5-30). Country Y was likely not affected by geopolitical pressure or international demonstration effect because it was already relatively rich. Industrialization must have been seen as a slow and time taking process and not something to be achieved immediately. As such, Country Y probably never felt the need to lean towards authoritarianism. Gerschenkron explains this concept as the political ideology or political developments being the product of prevailing economic conditions (5-30). A need to rapidly industrialize pushes a country towards authoritarianism while wealth keeps it from it.
Even the Dependency theorists, who advocated for dependent development, believed that the course of industrialization of late developers would be distorted from that of the path of the early developers in the sense that it would generally be authoritarian and state led (Grosfoguel 347-374). It is important to note that both these theories demonstrate that late developers with an urgency to industrialize would be dependent on authoritarian regimes, whose establishment is directly associated with factors such as poverty, international demonstration effect and geopolitical pressure to develop quickly. This causality clearly suggests that an absence of these factors would lead to the establishment of a more liberal and democratic political ideology. This has been seen in the case of early developers like England and the United States, both of which are liberal democracies. Country X’s GDP per capita was half that of Country Y in 1950. This makes it plausible to believe that the extreme poverty conditions in Country X, along with the domestic and international pressure led to an authoritarian regime. Considering that Country Y was relatively much better off than Country X, it can be assumed from our analysis that authoritarian conditions never prevailed in Country Y.
An authoritarian regime lies at the base of a strong bureaucracy because the leaders are not faced with a constant threat of losing power and can thus establish an autonomous state insulated from domestic pressures (Johnson 136-164). In a democracy, the government is elected by the people, so it becomes difficult for the state to enact long term economic policies that might at first prove a sacrifice for some people even though they might be for the greater good of the state in the long run. The periodic elections whose results often depend on communal divides in society keep the bureaucracy busy in trying to appease the masses in preparation for the next election. The coalition governments and the permanent threat to power never grant the rulers a sense of absolute power. Although such democratic settings encourage civil rights, they often prove inefficient in terms of economic policy decisions.
Members of the government opposed to each other on issues never allow the path to a robust and long-term economic policy decision. The bureaucracy is ineffective and inefficient and often divided. In an authoritarian setting, however, the ruler has absolute power and no fear of losing position; it becomes easy for the ruler to implement policies which are beneficial for the state in the long run while remaining insulated from domestic pressures (Johnson 136-164). As explained by Johnson, an autonomous state has a strong bureaucracy stemming from politicians’ hold on power and protection from individual pressures while making policy decisions (136-164). It is plausible that Country X’s authoritarian regime structure helped it develop a strong and rigid bureaucracy, which played a critical role in its developmental path.
A strong bureaucracy is essential to ensure that natural resources are mobilized for the development of critical industries. Late developers often had huge natural resources but lacked the technology to produce manufactured products with them. The labor wages in such poor countries was generally much lower than that in the developed nations. This gave the poorer nations a “comparative advantage” in the form of lower cost in the extraction of natural resources. However, as Crude Dependency theorists suggest, exporting natural resources to and importing finished goods from core nations leads to a form of dependency trap for the poorer nations (Grosfoguel 347-374). A weak government would remain trapped and lose its resources. Although Neo Classical Economists like Dornbush support free markets, in this case, a developmental state with a strong bureaucracy can help to break away from this dependency trap by forcing natural resources to be used in the development of critical industries like steel and technology instead of export (69-85; Johnson 136-164). Key industries can be supported through explicit bank financing and tariffs and taxes on foreign competitors.
Although this means that the poor country would have to give up its comparative advantage, it serves beneficial in the long run as the country becomes self-sufficient and technological advanced. Johnson, in his East Asian State-Centered Model focuses on Taiwan, South Korea and Singapore, all of which practiced a similar state interventionist policy (136-164). He enlists autonomy from society, economic interventionism and business-friendly policies as the core characteristics of a developmental state (Johnson 136-164). A strong bureaucracy with an aim to rapidly industrialize encapsulates all these qualities. Autonomy from society implies insulation from domestic and societal pressures while making decisions. State intervention in industrialization should be through long term and business-friendly policies such as no cost loans, sponsoring research and discouraging unions (Johnson 136-164).
The lack of a strong bureaucracy will lead to economic exploitation of natural resources by economic elites and richer countries to their own advantage. When making decisions in the process of industrialization, it becomes necessary to keep the long-term economic goals of the country in mind. Powerful interest groups and lobbyists, large landowners and trade unions should not exert influence over economic policies. Policies should be created by bureaucrats insulated from special interests of the electorates and not by outside groups pressuring the state to pursue goals favorable to their interests (Johnson 136-164). Johnson requires that in order to achieve this, states must have a highly professional bureaucracy staffed by educated people with a common interest to reach a goal of development (136-164). With a weak government in place, economic elites in society can easily exploit laborers and natural resources to their own advantage. It becomes easier to buy off politicians and economic benefits accrue only to the elites. When late developers export natural resources and import finished goods, often the value added in production becomes more than the original value of the resource and the poor nations end up paying more for the finished goods than they had earned from exporting the resources.
Crude Dependency theorists call this an Unequal Exchange in International Trade. Declining Terms of Trade denote how the richer countries increase the prices of their goods steadily and significantly while the poor nations cannot raise the prices of the natural resources as they would then lose their comparative advantage. Such a situation leads to economic exploitation of the poor nation at the hands of the core nations (Grosfoguel 347-374). A strong bureaucracy can prevent this drain of resources and wealth by regulating foreign trade and foreign investment. As seen in Johnson’s East Asian Model, Taiwan and South Korea limited the amount of freedom foreign corporations had when trading in the country (136-164). They often forced joint ventures with domestic companies which aided the transfer of technology to the poor nation. Moreover, strong governments can enact policies such as Import Substitution Industrialization and Export Oriented Industrialization to further strengthen the economy of the country (Johnson 136-164). Crude dependency theorists suggest that when a country is controlled by corrupt and inefficient governments, richer nations can easily exploit it as the weak leaders of the country are not able to negotiate advantageous deals with the foreign nations (Grosfoguel 347-374). A strong bureaucracy must have created a significant difference in Country X’s industrialization as seen in Johnson’s Model (136-164).
A robust system of investment in critical industries and export-oriented policies along with protection from exploitation backed by a strong bureaucracy can help a country quickly industrialize in the face of geopolitical pressure. As is clear from our analysis of Countries X and Y, a state-led, authoritarian government in Country X helped it industrialize much faster than Y. The significance of authoritarianism in the rapid development of a nation has been recognized by all three authors in our study. Gerschenkron talks about how an authoritarian, state-led development with an emphasis on heavy industry, aided by borrowing technology from richer nations can invoke rapid development (5-30). Johnson, in his model, demonstrates how an autonomous state with pro industrial policies and emphasis on the development of critical industries can catapult a poor nation into industrialization (136-164).
Dependent Development theorists also point out that such rapid industrialization is bound to be less egalitarian and more authoritarian (Grosfoguel 347-374). It is thus a mix of factors such as authoritarianism, a strong bureaucracy, long term economic policies and protection from exploitation that helped Country X develop so quickly, while Country Y lacked such characteristics which kept it from developing at the same pace. However, this raises moral questions about whether authoritarianism is justified on ethical grounds just because it enables quicker development, or whether fast-paced development cannot be achieved without authoritarianism at all? Although it is difficult to answer, this analysis seems to be the most convincing theory for the given situation and serves as a helpful tool for comparison in future studies.
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