Lamothe and colleagues view the nonprofit sector as being intentionally engineered or designed by government to create specific behaviors in the economy. This chapter examines the ways in which government and legal structures envision desirable outcomes in the broad economy and develop laws and policies intended to yield specific institutional state-sanctioned outcomes in the private market. Drawing on the Korean context as an example, the authors explore what government design of the social sector says about not only the strong-state context present in the global East, but also how this lens helps us to reinterpret our understanding of the legal underpinnings of the nonprofit sector elsewhere.

Chapter 4 focuses on the political dynamics that shaped the EPRDF’s development strategy from 1991 to the death of Prime Minister Meles Zenawi in 2012. Despite military dominance, the EPRDF was vulnerable due to its lack of a political base outside Tigray. The new government sought to consolidate control of the ethnically diverse peasantry through a dual strategy: establishing federalism that provided for ethnic self-determination; and a broad-based development strategy to secure compliance through mass distribution. From early on, however, the government recognised that the main form of distribution – land access – would be undermined by population growth, necessitating industrialisation and mass employment creation to maintain mass acquiescence. During the early 2000s, the EPRDF leadership experienced a series of crises that resulted in increased elite cohesion and a shared sense of the threat facing the ruling elite. The result was Ethiopia’s ‘developmental state’ model, comprising infrastructure development, industrialisation and agricultural commercialisation to deliver the economic transformation required to meet the mass distributive challenge facing the regime.

As empires fragmented after the second world war, politicians in the Global South finally had the opportunity to determine the economic policies of their newly independent states. As many of these countries were relatively poor, developmental ideas came to the fore once more. This is true both in sub-Saharan Africa as well as in Asia. Nationalist movements in these regions combined their nationalist economic ideas with a variety of complementary ideologies. In sub-Saharan Africa, politicians such as Kwame Nkrumah and Julius Nyerere turned to socialism, which they interpreted as a developmental system. In Japan, South Korea and Taiwan, governments espoused free market economics, which they supplemented with an activist state that promoted exports. Argentina and Egypt, on the other hand, saw the rise of populist regimes. These provide another important type of economic nationalism. Populists such as Juan Perón and Gamal Abdel Nasser associated international integration with enrichment by domestic elites Because they opposed these elites, populists sought to cut links with the world economy and espouse isolationist economic systems.

The first half of the twentieth century witnessed the rise of the state sector of the Chinese economy. The rise of the state sector manifested in the development and expansion of central state enterprises and regional state enterprises and resulted from the ideology and policy of the developmental state. This chapter traces the emergence and evolution of the ideology and policy of the developmental state, describes the development and expansion of central state enterprises and regional state enterprises, and addresses the issue of change and continuity across the 1949 divide.

Economists and political scientists tend to explain China’s rapid rise from the institutional perspective. There are two contrasting schools of thought: the free market school and the active government school. Both schools acknowledge that market reform has been a key factor in China’s rapid economic growth, but the active government school also attributes it to China’s strong government and its active economic intervention. These two contrasting institutional views are evaluated in Chapter 3. The short conclusion is that neither view can properly explain the Chinese growth puzzle. The free market view cannot because China’s market is not much freer than that of most developing countries. The active government view cannot either because China is not particularly well ranked in terms of government effectiveness. There are many other institutionalists who hold more fine-grained views than the above two schools. Some of these views are also evaluated in the chapter, which concludes that institutional and policy factors may be important contributors to China’s economic growth, but they are not the differentiating factors that have made China grow faster than all other countries.

Chapter two examines how postcolonial states respond to ethno-nationalism in general and minorities in particular. I argue that nationalist ruling elites conceive of the postcolonial state itself as an ‘ideology’, claiming that the unified national state, its liberal constitutional structure, and the developmental agenda will end the troublesome ethnic parochialism and, therefore, solve the problem of minorities. The ideological making of the postcolonial state not only obscures and glosses over the real reasons for the problem, but also shift attention to issues that help maintain asymmetric power relations. To substantiate this argument, I first explain John Thompson’s notion of ‘ideology’ as a set of ways in which ideas and meanings help create and sustain relations of domination. I then develop my argument that the ideology of the postcolonial state functions in three different forms: the postcolonial ‘national’, ‘liberal’, and ‘developmental’ state. Working through these three ideologies, the postcolonial state demands the submission of the minority cause to the greater ‘national’, ‘liberal’, and ‘developmental’ interests of the state, thereby legitimising the oppression of minorities. I demonstrate these ideological functions of the postcolonial state with historical examples: the discourse used in Indian Constituency Assembly debates to discuss minority rights.

This chapter sets up theoretical framework for the entire book. The effectiveness of China’s own development and its engagements in Africa cannot be plausibly explained by the existing theories on the China Model. Researchers’ efforts to define tenets and patterns of “Beijing Consensus” all fail to grasp the dynamic complexity in practice. By analyzing the implication of Chinese pragmatism in the market reform, this chapter points out that the essence of modern development, in the form of industrial capitalism, lies in shifting from traditional cultural and religious values to the pursuit of sustainable productivity growth. The change of societal targets requires comprehensive sociopolitical transformation to enable sophisticated division of labor and massive market distribution. However, the simultaneous changes of numerous factors in a society tend to create a chicken-egg dilemma, hindering smooth structural transformation. China was able to escape this trap by having the whole country experiment flexibly and gradually to achieve synergism of development. The coevolutionary pragmatism has also been adopted in China’s cooperation with Africa. Aiming at achieving overall economic growth for partners, Chinese government and enterprises do not stick to definite models, but have open attitude to promote commercial practices in Africa’s diverse conditions.

Incentives within the political system during the 1985–2018 period made exceedingly difficult a shift toward either a more effective developmentalism or a more liberal market economy. Among the political institutions that drove this equilibrium were: 1) an electoral system that fragmented political party representation; 2) coalitional presidentialism, whereby a strong president sought to overcome fragmentation by providing incentives to coalition partners. Many of the 3) president’s tools of coalition formation were derived from the developmental state apparatus, including appointments and fiscally opaque instruments. The fragmentation of party life, alongside the many veto players engendered by coalitional presidential system, enabled 4) the emergence of both pluralist and corporatist forms of interest representation. The complementarities between these four political institutions had concrete effects: a resolute political system, in which change was slow and incremental, marked by long-term reciprocal relations between private firms and public actors, defensive parochialism, weak checks and balances, and weak controls on the developmental state apparatus.

Between 1985 and 2018, Brazilian economic well-being stagnated, with lackluster growth and regressive public policies destroying citizens’ life opportunities. There is considerable consensus about the sources of this low-level economic equilibrium, including low savings, low investment, and modest human capital improvements. Despite this consensus, and despite decades of reform, however, the overall institutional equilibrium changed only marginally. Drawing on the study of varieties of capitalism, this chapter describes how institutional complementarities drove actors’ incentives toward a collectively suboptimal equilibrium. Complementarities within and across five domains sustained the equilibrium: 1) the macroeconomy of a middle-income developmental state, 2) the microeconomy of firm organization; 3) the coalitional presidential political system; 4) the weak control mechanisms this political system set in place; and 5) an autonomous bureaucracy that permitted incremental reform but in consequence, may have moderated demands for more dramatic reforms while deepening fiscal constraints and impelling policymakers to preserve the tool kit of the developmental state.

The Brazilian developmental state changed significantly after 1985, with new rhetoric about equality, a commitment to fighting inflation, and a three-pronged policy set combining fiscal responsibility, a floating exchange rate, and inflation targeting. Yet many elements of the “old” developmental state remained intact, including a large state role, a complex monetary regime, muscular industrial policies, low economic integration, and a segmented labor market. The fight against inflation generated incentives for politicians to employ “fiscally opaque” policy instruments drawn from the tool kit of the developmental state. The fiscal imperative combined with fiscally opaque instruments contributed to the high cost of credit and low investment, driving firms to demand state succor. The fiscal imperative and the power of interest groups meant that the burden of balancing the fiscal accounts fell disproportionately on the less well-off. The ensuing demand for social spending meant that economic growth, by default, became a residual.

This chapter analyzes China’s impact on the global governance of export credit. For decades, the OECD Arrangement has been held up as a successful example of liberal trade governance, with its system of disciplines proving highly effective in preventing a destructive, competitive spiral of state subsidization via export credit. I show, however, that the rise of China has profoundly altered the landscape of export credit and disrupted its governance arrangements. China has emerged as the world’s largest provider of export credit, but China has refused to join the Arrangement and it has persistently thwarted efforts to negotiate a new set of international rules. China has little incentive to agree to disciplines on its use of export credit, which plays a central role in its development strategy. Despite considerable US pressure, China has refused to capitulate and subject itself to international disciplines that it views as fundamentally against its interests. China has shown that it has sufficient power to stand up to the US in defending its development interests. Yet the result, I argue, is that China’s rise is undermining the liberal regime for governing export credit by eroding the efficacy of existing disciplines and blocking efforts to construct new ones.

Building on Gerschenkron’s (1962) theory of late development, this chapter explores how the timing and context of political economic development among East Asian “late developers” shaped the construction of their citizenship regimes and, later, their immigration policies. I identify the formation of distinct civic legacies that emerged from nationally specific trajectories of citizen-making: local, grassroots movements in Japan; national, rights-based movements in South Korea; and ethnicity-based coalitions in Taiwan. This chapter thus seeks to highlight the macro-level foundations for the development of citizenship and non-citizenship in East Asian democracies that, I argue, are rooted in political economy rather than in cultural traditions. In contrast to dominant approaches that take a dichotomous view of citizenship and non-citizenship or that assume that citizenship is universal and democratic, this book treats citizenship as a contested institution and set of practices negotiated by state and non-state actors to demarcate formal membership in a nation-state that are tied to patterns of mobilization and exclusion in a country’s political economic development.

South Korea is a success story in terms of institutional development. Not only did the country build a high-capacity ‘developmental state’ in the early second half of the 20th century but, towards the end of the 20th century, Koreans also witnessed the replacement of autocratic rule by a liberal democratic regime. The sequencing of these development stages seems to support ‘stateness first’ arguments, which claim that succesful democratization requires certain degrees of infrastructural capacity and citizen agreement. And, in fact, the ‘developmental state’ significantly facilitated the survival and rooting of South Korea’s democracy. However, as this chapter show, the process of state-building under autocratic rule left behind institutional legacies that continue to hinder democratic consolidation – in particular an under-institutionalized party system and a weak civil society. More generally, the chapter shows that the state-democracy nexus can be subject to path-dependent effects.