China’s economic success—it is the world’s second-largest economy—did not simply happen : the state played a critical role in this rapid expansion
Although “pioneered by Japan,” professor of international economics and politics Dr. Mark Beeson observed the economically interventionist model of the developmental state was adopted by several other states in Asia, including India, Indonesia, Japan, Malaysia, the Philippines, South Korea, Taiwan, Thailand, and Vietnam.
Is China a developmental state? China’s economic success—it is the world’s second-largest economy—did not simply happen.
The state played a critical role in this rapid expansion, but many question the level to which this intervention was institutionalized. Others have questioned whether China’s economic expansion earns it a spot among states that developed earlier, and in far different global economic and political environments.
As University of Oxford economics Professor John Knight explains, deciding China’s status as a developmental state has been difficult because scholars can’t agree on a definition of the developmental state.
China enjoys stability under the Chinese Communist Party, which functions relatively independent of the public. Political leadership in China focuses on the economy and carries out extensive investment in education, healthcare, and infrastructure. But the question remains whether the state has established adequate institutions and policy to guide its economic development programs.
While China has long lacked policy and state-led institutions tasked with coordinating public-private partnerships (PPP), it has recently begun to establish a framework to support its developmental policies and goals.
Ultimately, the formal foundation that is emerging will support expansion of PPP within China while also confirming the country’s status as a developmental state.
Defining the developmental state
The concept of the developmental state was first introduced by Chalmers Johnson in 1982. Johnson identified four intrinsic characteristics of a developmental state:
- A state must be led by elites capable of constructing and implementing economic policy without giving into the demands of the public, which could undermine development.
- Investment in educational opportunities for all people is necessary. Johnson explained investment and policy should foster “the equitable distribution of wealth created by high-speed growth.”
- The government must recognize the value and necessity of interventionist economic policies that respect, rather than interfere, with the economy’s price mechanism.
- There must be coordination of PPP by a state-led institution.