robert wade, east asia's economic success

(274): neoliberals think 'intervention' is responsible for E. Asian take-off only insofar as it was intervention to remedy the effects of previous intervention (so, 'less intervention')

(274): they assume technology away

(276): list of qualifications for S. Korean success -- pollution, repression, male-female wage gap, economic importance exaggerated vs. japan

(276-279): but four key indicators of success

1. gain in relative command over world resources (Korea and Taiwan reduced income gap with core in 80s)
2. trade perfomance
3. industrial transformation -- not as % of GDP, which can be misleading, but as ability to produce at world-competitive prices
4. removal of poverty--took about 100 hours to produce 100kg of wheat between 1400 and 1880, in Europe; in Korea/Taiwan this was about 150-200 hrs in 1950s, down to 40-60hrs in early 80s; in Indian village, 230 hours; in US at minimum wage about 15 hrs

(283): vs. notion that Third World was better off in the 'laissez-faire' world of 1900-1950

1. evidence that living standards fell in India; in Africa, no good evidence one way or the other
2. colonial governments were hardly laissez-faire
3. most economies grew successfully in dirigiste 50s and 60s
4. other factors explain poor performance in 2nd half, beyond gov't intervention

(285): four features of Korea, pace Amsden

1. State as entrepreneur, banker, shaper
2. distortion of price structures through subsidies, protection, price controls--different industrial structure than would otherwise have been generated
3. large, diversified business groups mean much economic activity is not on the market, but intrafirm
4. State disciplines firms with subsidies, rewards firms that do well on the export market

(286): late industrialization: handicaps experienced by market-based economies when there are technologically advanced firms on the market

(287): Amsden's central point is that investment needs to be directed to areas where there is low profitability and lots of work to be done. private firms will avoid this, unless the State can step in.

(288): the way in which firms borrow ('management' and 'learning') is as important, if not more important, than the actual act of innovating.

(289): subsidies have to be 'reciprocal', rather than unidirectional (as in, they need to reward and sanction, rather than be free handouts). State has to discipline firms (market is not sufficient, nor is pressure of technological competition [how different?])

(291-302): weaknesses in Amsden

1. getting prices 'wrong' -- not proven well, possibility that the State was just intervening to make the FM work b/c of market failures [confusing, though, since this seems her main, clearest point]
2. nothing about how the State was organized
3. could the success of industry be a scale effect, rather than a productivity effect (Korea's endowments already suited manufacture--no n. resources, basically skilled workforce, etc.)
4. didn't Korea just follow its comparative advantage? Amsden not disproving this well, either [also confusing]
5. learning is not adequately operationalized -- actually it is three concepts, and maybe even a 'frame of mind'

(303-304): Haggard's argument about why LA turned to ISI phase 2 (production of capital goods) and EA turned to export of consumer goods (and then export of capital goods?). has to do with:

1. external pressures: declining US aid in SK; balance of payments deficits
2. domestic coalitions: balance of class forces--landed elites imp in Brazil + agro-exporters
3. political institutions: authoritarian regime in SK; politicians in Brazil
4. ideas: technocrats' ideas [stupid] in SK; influence of Prebisch

(306): Haggard's argument explains 'irrational' policies in LA as a product of these factors.

(306-310): two weaknesses

1. is it true that this difference is the critical factor that explains divergence? maybe there are antecedent factors, like different endowments, that better explain this
2. description of politics is very thin, and argument is functionalist -- inferring the existence of coalitions from the fact of shared interests

(311): key--Wade wants to stress w-systemic opportunities: US buyers were looking for low-cost suppliers, but didn't turn to LA (because natural resources provision of export receipts disincentivized a turn to manufacture--'Dutch Disease'), and there was no 'basically skilled' population (either low skilled or highly skilled). LA was unlikely candidate for cheap labor manufactured exports, as a result. in EA case, they had all this, and the benefit of Japan close by ['flying geese'?]

(315): importance of authoritarianism -- not vote-seekers...

(316): imp--the importance of these w-systemic factors means that the chances for contemporary Third World states are 'slimmer' than is otherwise thought

(317): neoliberalism popularizes the myth of the 'harmony of interests' at precisely the time when the world is showing increasingly fierce competition

---

[1] significance of WTO sanctions becomes obvious from this description of E. Asian success