2 - Muddling Through: Development under a “Weak” State

Summary

Recent studies on the political economy of the Asia-Pacific countries have focused on the role of the state in fostering rapid economic growth. In the wake of the stunning success of the newly industrializing countries (NICs), picturesquely acclaimed as the Dragon and Tiger economies, this refocusing of research was almost predictable.

Notwithstanding the diversity of political arrangements and the resulting mixed patterns of state engagement in the economy, the regional landscape appeared to confirm that growth required a strong or “hard” state, capable of pursuing objectives unhampered by powerful social classes and specific economic interests (Searle 1999, p. 241). In the successful models in East and Southeast Asia, this strength derived from the dominant control exerted through the military establishment or through a one-party political system. Strong states received credit not only for containing the destabilizing forces released in the process of decolonization, but also for coping with the challenge of transnational competitors in the global trading arena.

The extent to which the invisible hand, subtly guiding private interests towards the collective good under a liberal market system, needed a boost from the more muscular arm of government is a matter of some dispute. But whether the achievement was the adoption of correct policies that liberated benign market forces or the crafting of strategies to achieve national economic goals, a robust state apparatus appeared necessary. Effective macroeconomic management to attract investments, the conscientious nurturing of the educational system to provide skilled manpower, the reorientation of policy to favour exports — all required skilled, coherent, and sustained government direction.

The discussion of the role of the state in embedding capitalism does not often include the Philippines. Other countries in the region offer more directly pertinent examples of how states intervene to create the conditions for capitalist economic development. Since the stimulus for the interest was the outbreak of the Asian economic “miracle”, the omission of the Philippines was understandable.