The State as Problem and Solution: Predation, Embedded Autonomy, and Structural Change
The chapter examines some of the inconsistencies in the neoutilitarian vision of the state, some of the insights of the classical comparative institutioanlist literature for clues that might help in building an analysis of effective state structures. ---Comparative analysis of more and less successful states, focus is on the efforts to promote industrial transformation over the course of the post WW2.
• Postwar development theorizing began in the 1950s and 1960s with the assummption that state apparatuses could be used to foster structural change. The state’s principal charge was to accelerate industrialization, but it was also expected to play a role in modernizing agriculture and providing the infrastructure necessary for urbanization.
• The new image of the state as the problem arose because it failed to perform the tasks set out by the earlier agenda. In at least some cases the state had fostered substantial structural change, opening the way toward greater reliance on local industrial production.
• Shifts in the development agenda and negative appraisals of past performance interacted with changes in the ideological and intellectual climate to bring to the forefornt of the developmental question of whether the state should even try to be an active economic agent.
• Minimalist theories of the state that emphatically limited the scope of effective state action to the establishment and maintenance of private property relations returned to prominence, bolstered by an impressive neoutilitarian analytic apparatus. Neoutilitarian theories of state fit well with orthodox economic prescriptions for managing problems of structural adjustment. By the mid 1980s the combination was hard to resist and a third wave of thinking on the role of the state was beginning to crystalize. (Kahler: pointed out that orthodox policy prescriptions, despite their disdain for he wisdom of politicians, contained the paradoxical expectation that the state would somehow be able to become the agent that initiated and implemented adjustment programs.
• State remains central to the process of structural change, even when change is defined as structural adjustment. Recognition of the state’s centrality leads to back to questions of state capacity. Recoginition of the importance of state capacity, not simply in the sense of the prowess (kahramanlık, cesaret) and persipicacity (anlayışlı) of tecnocrats within the state apparatus but also in the sense of an institutional structure that is durable and effective, is characteristic of the third wave of thinking about the state and development.(Callaghy: his analysis of the adjustment process assumes that the ability to deal with specific problems like stabilization and adjustment is rooted in diffuse general characteristics of the state apparatus and its relation to surrounding social structures and that these in turna re consequences of long term processes of institution change.)
• This study reexamines the state’s role in the earlier developmental agenda-industrial transformation- and tries to provide an analytical portrayal of the institutional characteristics that seperated states which were more successful at this task from those that were less successful. African states that failed to implant local industries have been equally unsuccessful in securing growth through a program of structural adjustment. The East Asian cases that were most successful in implementing programs of industrial transformation have also been most successfu at dealing with the issues of adjustment.
Perspectives on the State:
• Theories of development that privilege the market as an institution have always recognized that “the existence of the state is essential or economics growth” but the essential state was a minimal one “restricted largely to protecting individual rights, persons and property and enforcing voluntarily negotiated private contracts”.
• The exchange relation between incumbents and supporters is the esence of state action. Incumbents require political supporters to survive and supporters in turn must be provided with incentives sufficient to prevent their shifitng support to other potential officeholders. Incumbents(memurlar) may etiher distribute resources directly to supporters through jobs, contracts etc. or use their rule making authority to create rents (rant) for favored groups by restricting the ability of market forces to operate. It is also hypothesized that competition for entry into government service is a competition for rents.
• State’s sphere should be reduced to the minimum, and bureaucratic control should be replaced by market mechanisms where ever possible in order to escape the deleterious effects of state action. Rent seeking, conceptualized more primitively as corruption has always been a well known facet of Third World states. These states’ apparatuses are legitimately called predatory. (yağma ve soygunla geçinen)
• Neoutilitarian view captures a significant aspects of the functioning of most states, perhaps the dominant aspect of the functioning of some states. This view should even be considered an improvement on the traditional neoclassical vision of the state as neutral arbiter. But strict adherence to a neoutilitarian logic makes the existence of state difficult to explain. (Sayfa 145te ilk 2 paragrafı okuyun isterseniz, özetlenecek gibi değil pek)
• Markets are embedded in a matrix that includes both cultural understandings and social networks composed of polyvalent individual ties. This is the position of the classic tradition of comparative institutionalists which emphasized the essential complementarity of state structures and market exchange in the promotion of industrial transformation. (Polanyi -146-: the road to free market was opened and kept open by centrally organized and controlled interventionism, Weber’s argument: capitalism and bureaucracy have found each other and belong intimately together.)
• For Weber, the state was useful to those operating in markets precisely because the actions of its incumbents obeyed a logic different from utilitarian exchange. The state’s ability to support markets and capitalist accumulation depended on the bureaucracy being a corporately coherent entity in which individuals see furtherance of corporate goals as the best means of maximizing their individual self interest.
• Gerschenkron and Hirschman extended Weber’s vision of state’s role. G: Late industrializers confronting production technologies with capital requirements in excess of what private markets were capable of amassing were forced to rely on the power of the state to mobilize the necessary resources. Instead of simply providing a suitable environment, the state was now actively organizing a crucial aspect of the market. H: entrepreneurship (willingness to risk the available surplus by investing it in productive activities) as the missing ingredients for development. He argues that capital is not the principal ingredient that is lacking in developing countries.
• States that succeed in undertaking the tasks that G and H as well as Weber outline are called developmental. They extract surplus but they also provide collective goods.
ZAIRE: Exemplary case of predation
• Zaire is a textbook case of a predatory state in which the preoccupation of the political class with rent seeking has turned society into its prey(av). Callaghy emphasizes the patrimonial qualities of the Zairian state: mixture of traditionalism and arbitrariness that Weber argued retarded capitalist development. Control of the state apparatus is vested in a small group of personally connected individuals.
• Market relations dominate administrative behavior in Zaire. President Mobutu says “everthing is for sale, everything is bought in our country”. The country confirms that it is not the bureaucracy that impedes development so much as the absence of a coherent bureaucratic apparatus. Weakness at the center of the political economic system undermines the predictability of policy required for private investment.
• State is incapable of formulating coherent goals and implementing them, and since policy decisions are up for sale to private elites, the state might be seen as completely lacking in autonomy. This lack of autonomy permits rent seeking to prevail. Zaire is also unconstrained by society and not derive its goals from the aggregation of societal interests.
By the end of the 1970s, the economic sucess of the major East Asian newly industrialized countries, Korea and Taiwan, was increasingly interpreted as depending on the active involvement of the state. These states are paradigmatic cases of both rapid local industrialization and effective adjustment to changing international markets.
The Japanese Model:
• In the capital scarce years following WW2, Japan acted as a surrogate for weakly developed capital markets, while including transformative investment decisions. State institutions were crucial in getting the needed investment capital to industry.
• There is a Weberian aspect to the Japanese developmental state. Officials have the special status that Weber felt was essential to a true bureaucracy. They follow long term career paths within the bureaucracy and operate generally in accordance with rules and established norms. All descriptions of the Japanese state emphasize the indispensability of informal networks to the state’s functioning. Internal networks tie among classmates at the elite universities from which officials are recruited, are crucial to the bureaucracy’s coherence. These networks give the bureaucracy an internal coherence and corporate identity that meritocracy could not provide alone.
• External networks connecting the state and private are more important. Japanese industrial policy depends on the ties that connect Ministry of International Trade and Industry and major industrialists.
Korea and Taiwan
• They have different state structures linked to different social bases of support, different patterns of industrial organization and different policy strategies. However their policy initiatives that facilitated industrial transformation was rooted in coherent, competent bureaucratic organization.
• Despite Korea’s chaotic 20th century political history, the bureaucracy has been able to pick its staff from among the most talented members of the most prestigious universities. (Sayfa 155-156-157’de Park ve Rhee dönemindeki bürokrasi ve devleti uzun uzun anlatıyo, bana önemsiz geldi, isterseniz okuyun)
• In Taiwan, as in Korea, the state has been central to the process of industrial accumulation, channeling capital into risky investments, enhancing the capacity of private firms to confront international markets, and taking on entrepreneurial functions directly through state owned enterprises. In Taiwan, as in Korea, the ability of the state to play this role depende on a classic, meritocratically recruited, Weberian bureaucracy, crucially reinforced by extra bureaucratic organizational forms.
• The Kuomintang regime is built on a combination of longstanding tradition and dramatic transformation. KMT regime had been largely predatory, riddled with rent seeking and unable to prevent the particular interests of private speculators from undermining its economic projects. The party remade itself (freed of its old landlord case and aided by the fact that the most egregiously corrupt and harmful members of the capitalist elite did not follow Chiang Kai Sek to the island, the KMT was able to completely rework its ties with private capital. A corrupt and faction ridden party organization came to approximate the Leninist party state that it had aspired to be from the beginning, providing the state bureaucracy with a reinforcing source of organizational cohesion and coherence more powerful and stable than could have been provided by military organization alone.
• Comparing Taiwan with Korea and Japan, what is striking is the extent to which the Taiwanese private sector has been absent from economic policy networks. The Taiwanese state unquestionably operates effectively with a less dense set of public private network ties than the Korean and Japanese versions of the developmental states. The role of state autonomy in preserving market relationship is also crucial in Korea and Japan, but it is most apparent in the case of Taiwan.
• While the government has been deeply involved in a range of sectors, the Taiwanese state is extremely selective in its interventions. The bureaucracy operates as a filtering mechanism focusing the attention of policymakers and the private sector on products and processes crucial to future industiral growth.
The Dynamics of Developmental States
• Corporate coherence gives them the ability to resist incursions by the invisible hand of individual maximization by bureaucrats. Highly selective, meritocratic recruitment and longterm career rewards create commitment and a sense of corporate coherence. They have benefited from extraordinary administrative capacities but they also restrict their interventions to the strategic necessities of a transformative project, using their power to selectively impose market forces.
• Historically deep, informal networks, tightknit party or military organization have enhanced the coherence of the East Asian bureaucracies. The autonomy of the developmental state is of a completely different character from the aimless, absolutist domination of the predatory state.
• East Asian developmental states began the post WW2 period with legacies of long bureaucratic traditions and considerable prewar experience in direct economic intervention in Korea and Taiwan under Japanese colonialism. Aftermath of WW2 provided all these states with unusual societal environments. Traditional agrarian elites were decimated, industrial groups were disorganized and undercapitalized, and external resources were channeled through the state apparatus.
• At the same time, the state’s autonomy was constrained by the international context, both geopolitical and economic. American hegemony on the one side and expansionary Asian communism on the other left them little choice but to rely primarily on private capital as the instrument of industrialization. Commitment to industrialization motivated these states to promote the growth of local industrial capital. Their exceptioanal autonomy allowed them to dominate the formation of the ties that bound capital and the state together.
Brazil and India: Intermediate Cases
• While Japanese pm appoint only dozens of officials, American presidents appoint hundreds, Brazilian presidents appoint thousands. Brazilian state is populated on the basis of connection rather than competence. Unable to transform the bureaucracy as a whole, Brazilian leaders have tried to create pockets of efficiency within the bureaucracy, modernizing the state apparatus incrementally rather than through a broader transformation.(The National Development Bank is a good example of a pocket of efficiency- 168de ayrıntılı olarak anlatıyo NDE’yi)
• The pockets of efficiency strategy has a number of disadvantages. As long as p.o.e. are surrounded by a sea of traditional clientalistic norms, they are dependent on the personal protection of individual president.
• The character of Brazil’s embeddedness makes it harder to construct a project of industrial transformation jointly with industrial elites. Despite the increasing weight of industrial capital in the economy, the persistent legacy of rural power continues to shape the character of the state.(170-171de ekonomi ağırlıklı, özel sektör, bürokrasi ve çeşitli sektörleri inceleyiyo, isterseniz okuyun)
• Embedded autonomy is a partial rather than a global attribute, limited to certain pockets of efficiency. The persistence of clientelistic and patrimonial characteristics has prevented the construction of Weberian corporate coherence. Brazil’s complex and contentious elite structure makes embeddedness much more problematic. It is hardly surprising that embedded autonomy remains partial.
• The Indian state is situated in the space between predatory and developmental than the Brazilian one. Its internal structure resembles the Weberian norm but its critics see it as clearly predatory and view its expansion as perhaps the single most important cause of India’s stagnation.
• At the time of independence the Indian Civil Service then Indian Administrative Service was the apex of a venerable bureaucracy. Assimilation of imperial culture and a humanistic training was an important cirteria of acceptance into ICS.
• From the time of independence, the political survival of Indian regimes has required simultaneously pleasing a persitently powerful rural land owning class and a highly concentrated set of industrial capitalists.
• State investment in basic infrastructure and intermediate goods was a central element in maintaining a respectable rate of industrial growth in the 1950s and early 1960s.
• It might be argued that India suffers from excessive autonomy and inadequate embeddedmess and consequently has more difficulty in executing the kind of sectoral projects.
• Brazil’s and India’s bureaucracies which are not patrimonial caricatures of Weberian structures as in the predatory case, stil lack the corporate coherence of the developmental ideal type.
State Structures and Adjusment
This comparative analysis argues strongly in favor of focusing more on state capacity as an important factor in policy choice and outcomes and helps clarify the structures and processes that underlie capacity. This analysis also suggests that transformative capacity requires a combination of internal coherence and external connectedness that can be called embedded autonomy.
1) Bureaucracy is in under, not over, supply. Even in countries like Brazil that enjoy relatively abundant supplies of trained manpower and a long tradition of state involvement in the economy, predictable, coherent Weberian bureaucracies are hard to find.
2) The state’s ability to perform administrative and other functions must be trated as a scarce good.