Analysis Developmental states and threat perceptions in North- east Asia Tianbiao Zhu The study of Northeast Asian develop- the developmental state came about if we ment has long been associated with that are to comprehend what part it played in of the developmental state.The current Northeast Asian development and how it literature on the developmental state has evolved since the early 1980s.It tends to focus on state economy and argues that a particular kind of threat state-business relations.In particular,it perception,namely that of an extremely concentrates on how the developmental intensive and long-term threat,played a state engineered economic success in key role in creating the developmental Northeast Asia,whether it played a states of Northeast Asia.Later,changed better role than the free market in threat perceptions provided the environ- promoting industrialisation,and what ment for the decline of such states. difficulties it encountered in the 198os and 1990s.Very few studies,however, Tianbiao Zhu is a Postdoctoral Fellow in the Research take the developmental state as a histori- School of Pacific and Asian Studies at the Australian National University.He received his MPhil from the cal phenomenon and assess its origins University of Cambridge and his PhD from Cornell and possible demise.This paper suggests University.His main interest is the political economy that it is crucial that we understand how of development in China,South Korea and Taiwan
Analysis Developmental states and threat perceptions in Northeast Asia Tianbiao Zhu The study of Northeast Asian development has long been associated with that of the developmental state. The current literature on the developmental state tends to focus on state economy and state–business relations. In particular, it concentrates on how the developmental state engineered economic success in Northeast Asia, whether it played a better role than the free market in promoting industrialisation, and what difficulties it encountered in the 1980s and 1990s. Very few studies, however, take the developmental state as a historical phenomenon and assess its origins and possible demise. This paper suggests that it is crucial that we understand how the developmental state came about if we are to comprehend what part it played in Northeast Asian development and how it has evolved since the early 1980s. It argues that a particular kind of threat perception, namely that of an extremely intensive and long-term threat, played a key role in creating the developmental states of Northeast Asia. Later, changed threat perceptions provided the environment for the decline of such states. Tianbiao Zhu is a Postdoctoral Fellow in the Research School of Pacific and Asian Studies at the Australian National University. He received his MPhil from the University of Cambridge and his PhD from Cornell University. His main interest is the political economy of development in China, South Korea and Taiwan
Introduction Northeast Asian development has entered an interesting period.For many years, Japan,South Korea and Taiwan were held up to the rest of the developing world as a model for successful industrialisation.The economic problems that they con- fronted in the 199os,however,cast doubt on their developmental experience.At the heart of an analysis of Northeast Asian development is the notion of the develop- mental state.The current literature has focused on state economy and state- business relations in creating economic successes and problems in Northeast Asia, and very few studies have gone beyond those relations to investigate the origins and possible demise of the developmental state.This paper argues that we must understand how the developmental state came about if we are to comprehend what part it played in Northeast Asian development and how it has evolved since the early 198os. The inquiry begins with a simple question:what is the developmental state?In his 1982 book,Mrrt and the Japanese miracle,Chalmers Johnson coined the term the capitalist developmental state,and used it to describe the Japanese state in relation to bureaucratic autonomy,administrative guidance for industrial development and selective intervention in the economy.Other scholars later extended this idea to describe the Taiwanese and Korean states.In fact,the very name,'capitalist develop- mental state,tells us much about the basic characteristics of this type of state:it has to be 'capitalist,it has to be'developmental'and,with a few clarifications,it has to be 'cohesive'. By 'capitalist,I mean that the state has to commit itself to some basic values of capitalism,such as private property rights and market mechanisms.This study,like many others,discusses the developmental state in a capitalist world,so its'capital- istic'character will not be a focus but an assumed constant.By'developmental,I mean that the state has to have a consistent commitment to industrialisation.In order to establish this consistent commitment,the state should not be subordinate to any special business interests.This point is directly connected to the third charac- teristic of the developmental state,its'cohesiveness,meaning that the state has to be a unified force in dealing with business groups.Peter Evans argues that internal coherence,corporate identity and cohesive organisation are key elements of the developmental state.These elements contribute to state cohesiveness,which,in turn,guarantees that selective economic intervention by the developmental state will not be severely disrupted by special interests
Conflict, Security & Development 2:1 2002 6 Introduction Northeast Asian development has entered an interesting period.1 For many years, Japan, South Korea and Taiwan were held up to the rest of the developing world as a model for successful industrialisation. The economic problems that they confronted in the 1990s, however, cast doubt on their developmental experience. At the heart of an analysis of Northeast Asian development is the notion of the developmental state. The current literature has focused on state economy and state– business relations in creating economic successes and problems in Northeast Asia, and very few studies have gone beyond those relations to investigate the origins and possible demise of the developmental state. This paper argues that we must understand how the developmental state came about if we are to comprehend what part it played in Northeast Asian development and how it has evolved since the early 1980s. The inquiry begins with a simple question: what is the developmental state? In his 1982 book, and the Japanese miracle, Chalmers Johnson coined the term the ‘capitalist developmental state’, and used it to describe the Japanese state in relation to bureaucratic autonomy, administrative guidance for industrial development and selective intervention in the economy.2 Other scholars later extended this idea to describe the Taiwanese and Korean states.3 In fact, the very name, ‘capitalist developmental state’, tells us much about the basic characteristics of this type of state: it has to be ‘capitalist’, it has to be ‘developmental’ and, with a few clarifications, it has to be ‘cohesive’. By ‘capitalist’, I mean that the state has to commit itself to some basic values of capitalism, such as private property rights and market mechanisms. This study, like many others, discusses the developmental state in a capitalist world, so its ‘capitalistic’ character will not be a focus but an assumed constant. By ‘developmental’, I mean that the state has to have a consistent commitment to industrialisation. In order to establish this consistent commitment, the state should not be subordinate to any special business interests. This point is directly connected to the third characteristic of the developmental state, its ‘cohesiveness’, meaning that the state has to be a unified force in dealing with business groups. Peter Evans argues that internal coherence, corporate identity and cohesive organisation are key elements of the developmental state.4 These elements contribute to state cohesiveness, which, in turn, guarantees that selective economic intervention by the developmental state will not be severely disrupted by special interests
My explanation of the rise and decline of the developmental state in Northeast Asia is directly concerned with two of its basic characteristics:its cohesiveness and its consistent commitment to industrialisation.I argue that the Northeast Asian states had a particular kind of perception regarding external military threats-viewing them as extremely intensive and long term-and that this was a primary factor in creating cohesive states and ensuring their consistent commitment to industrialisa- tion.In other words,this particular kind of threat perception gave rise to the dev- elopmental state in Northeast Asia.I also contend that changed threat perceptions in the 198os and 199os provided the environment for the decline of the developmental state.The first part of this study discusses the analytical link between threat,threat perception and the developmental state,and alternative arguments concerning the rise of the developmental state.The second and third parts of the study provide evidence of the relationship between the particular kind of threat perception and the rise and decline of the developmental state in Northeast Asia. With few modifications,this argument could apply to the Japanese case(especially Meiji Japan).However,limited space means that this study concentrates on South Korea and Taiwan.It should also be noted that the aim of this paper is to explain the rise and decline of the developmental state rather than economic growth or indus- trialisation.A country's economic performance is determined by multiple factors,of which its form of state in relation to economic management is but one. Towards a threat perception-centred argument State and state interest This investigation into the relationship between threat perception and the rise and decline of the developmental state in Northeast Asia begins with the concept of the state.In particular,the study addresses how it has been treated in the famous state- versus-market debate,which has dominated the academic field of Northeast Asian political economy since the early 198os.By introducing different images of the state from this debate,the state and state interest are problematised on an analytical level. The paper then shows how an external military threat may solve the analytical prob- lem of the state and state interest,and thereby provides a framework for examining the rise and decline of the developmental state in Northeast Asia. The state-versus-market debate is essentially about the role of the state in Northeast Asian development.Those who focus on the positive role of the state-for simpli-
Developmental states and threat perceptions in Northeast Asia 7Analysis My explanation of the rise and decline of the developmental state in Northeast Asia is directly concerned with two of its basic characteristics: its cohesiveness and its consistent commitment to industrialisation. I argue that the Northeast Asian states had a particular kind of perception regarding external military threats—viewing them as extremely intensive and long term—and that this was a primary factor in creating cohesive states and ensuring their consistent commitment to industrialisation. In other words, this particular kind of threat perception gave rise to the developmental state in Northeast Asia. I also contend that changed threat perceptions in the 1980s and 1990s provided the environment for the decline of the developmental state. The first part of this study discusses the analytical link between threat, threat perception and the developmental state, and alternative arguments concerning the rise of the developmental state. The second and third parts of the study provide evidence of the relationship between the particular kind of threat perception and the rise and decline of the developmental state in Northeast Asia. With few modi fications, this argument could apply to the Japanese case (especially Meiji Japan ). However, limited space means that this study concentrates on South Korea and Taiwan. It should also be noted that the aim of this paper is to explain the rise and decline of the developmental state rather than economic growth or industrialisation. A country’s economic performance is determined by multiple factors, of which its form of state in relation to economic management is but one. Towards a threat perception-centred argument State and state interest This investigation into the relationship between threat perception and the rise and decline of the developmental state in Northeast Asia begins with the concept of the state. In particular, the study addresses how it has been treated in the famous stateversus-market debate, which has dominated the academic field of Northeast Asian political economy since the early 1980s. By introducing di fferent images of the state from this debate, the state and state interest are problematised on an analytical level. The paper then shows how an external military threat may solve the analytical problem of the state and state interest, and thereby provides a framework for examining the rise and decline of the developmental state in Northeast Asia. The state-versus-market debate is essentially about the role of the state in Northeast Asian development. Those who focus on the positive role of the state—for simpli-
city,let us call them 'the statists'-argue that selective state intervention allowed investment to be directed to key industries,which would not have occurred under normal market operations.The state,therefore,was responsible for the economic success of Japan,South Korea and Taiwan in the post-Second World War period.3 By contrast,neoclassical economists attribute Northeast Asian success to the free market.They acknowledge a positive role for public policies(and hence for govern- ment),but believe that the proper role of government is to facilitate market opera- tion rather than to alter it.?In explaining the 1997 financial crisis and subsequent economic decline in Northeast Asia,some neoclassical economists have been quick to link the region's problems with past state intervention.They argue that an excess- ively close relationship between state and business promoted special interests and thereby distorted the free market. I believe that the essential difference between these two perspectives lies in their different levels of analysis.The statists,like many other political scientists,take the state and its development interests as given,and perform their examination at the state-society level or above.Consequently,it is normal for them to treat the develop- mental state in Northeast Asia as a unitary actor dealing with social forces,which is thus able to manage state-business relations in the pursuit of economic develop- ment.Meanwhile,the neoclassical economists question the statist concept of the state and the state's interest.If the state is comprised of rational individuals,how can those individuals stick together,let alone pursue a common goal of industrialisation? Politicians and bureaucrats are self-interested human beings who seek to maximise their own economic wealth and political power.Rent-seeking theorists,in particular, argue that heavy state intervention necessarily leads to rent-seeking activity.0 Some statists,though,do acknowledge and even use the rent-seeking image of the state in their analyses.For example,Evans classified developing countries into three categories.At one extreme are developmental states,such as Japan,South Korea and Taiwan;at the other extreme are rent-seeking states like the former Zaire.In between,there are'intermediate'states like Brazil and India.However,these three types of state are the starting point of Evans'assessment of different levels of economic performance.The aim of his study is not to explain what gives rise to different types of state and how they may change.The developmental state as a unitary actor and its development interests continue to be assumed. It is not my intention to address the state-versus-market debate in detail,but the analytical differences concerning the state do raise a crucial question regarding the
Conflict, Security & Development 2:1 2002 8 city, let us call them ‘the statists’—argue that selective state intervention allowed investment to be directed to key industries, which would not have occurred under normal market operations. The state, therefore, was responsible for the economic success of Japan, South Korea and Taiwan in the post-Second World War period.5 By contrast, neoclassical economists attribute Northeast Asian success to the free market.6 They acknowledge a positive role for public policies (and hence for government), but believe that the proper role of government is to facilitate market operation rather than to alter it.7 In explaining the 1997 financial crisis and subsequent economic decline in Northeast Asia, some neoclassical economists have been quick to link the region’s problems with past state intervention. They argue that an excessively close relationship between state and business promoted special interests and thereby distorted the free market.8 I believe that the essential difference between these two perspectives lies in their different levels of analysis. The statists, like many other political scientists, take the state and its development interests as given, and perform their examination at the state–society level or above. Consequently, it is normal for them to treat the developmental state in Northeast Asia as a unitary actor dealing with social forces, which is thus able to manage state–business relations in the pursuit of economic development.9 Meanwhile, the neoclassical economists question the statist concept of the state and the state’s interest. If the state is comprised of rational individuals, how can those individuals stick together, let alone pursue a common goal of industrialisation? Politicians and bureaucrats are self-interested human beings who seek to maximise their own economic wealth and political power. Rent-seeking theorists, in particular, argue that heavy state intervention necessarily leads to rent-seeking activity.10 Some statists, though, do acknowledge and even use the rent-seeking image of the state in their analyses. For example, Evans classified developing countries into three categories.11 At one extreme are developmental states, such as Japan, South Korea and Taiwan; at the other extreme are rent-seeking states like the former Zaire. In between, there are ‘intermediate’ states like Brazil and India. However, these three types of state are the starting point of Evans’ assessment of different levels of economic performance. The aim of his study is not to explain what gives rise to different types of state and how they may change. The developmental state as a unitary actor and its development interests continue to be assumed. It is not my intention to address the state-versus-market debate in detail, but the analytical differences concerning the state do raise a crucial question regarding the
rise and decline of the developmental state in Northeast Asia.Under what conditions can the neoclassical image of the state transform into the statist image of the state, and vice versa?To what extent can self-interested rational politicians and bureaucrats act as one,and what conditions can produce such group solidarity and push these politicians and bureaucrats to engage in the consistent pursuit of industrialisation? Or,to put it simply,what creates a developmental state? External military threats can serve as a bridge between the neoclassical and statist images of the state.Concerning the genesis of co-operative institutions,sociologist Michael Hechter argues that crises,such as wars and natural disasters,lead to co- operation among self-interested individuals;the more serious the predicament, the greater the desire for co-operation.Ibelieve that a security crisis in which an external military threat jeopardises national survival is the most serious predicament, since the personal wealth,political power and even lives of the politicians and bureau crats of the threatened country are in great danger.Such an external threat should provide the strongest incentive for self-interested rational politicians and bureaucrats of the threatened country to put group(security)interests ahead of all others and to co-operate and behave as a unitary actor.In this way,state cohesiveness is forged. Hechter also contends that this co-operative institution is likely to produce addi- tional goods because it has the advantage of being organised.So it is possible for the cohesive state to produce'not only national security,but also industrialisation, especially in the long run,as economic power is the ultimate foundation of military power.Consequently,an external military threat may strengthen the state and prompt it to commit to industrialisation.This general point is supported by Erich Weede's statistical analysis of 31 developing countries during the 197os,which found that an external threat could restrict rent seeking in the threatened country.4 By problematising the state,a framework is provided that hypothesises the relation- ship between military threat and the rise and decline of the developmental state in Northeast Asia.It suggests that external military threats gave rise to the develop- mental state by forging state cohesiveness,generating a commitment to industrialisa- tion and by limiting rent-seeking activities.But later,as such threats declined,group solidarity weakened and the commitment to industrialisation became inconsistent. This opened the door to rent seeking,which ultimately led to the decline of the developmental state in Northeast Asia. Having analysed the concept of the developmental state,the next step is to take a closer look at the external military threat on which this framework hinges.Obviously
Developmental states and threat perceptions in Northeast Asia 9Analysis rise and decline of the developmental state in Northeast Asia. Under what conditions can the neoclassical image of the state transform into the statist image of the state, and vice versa? To what extent can self-interested rational politicians and bureaucrats act as one, and what conditions can produce such group solidarity and push these politicians and bureaucrats to engage in the consistent pursuit of industrialisation? Or, to put it simply, what creates a developmental state? External military threats can serve as a bridge between the neoclassical and statist images of the state. Concerning the genesis of co-operative institutions, sociologist Michael Hechter argues that crises, such as wars and natural disasters, lead to cooperation among self-interested individuals; the more serious the predicament, the greater the desire for co-operation.12 I believe that a security crisis in which an external military threat jeopardises national survival is the most serious predicament, since the personal wealth, political power and even lives of the politicians and bureaucrats of the threatened country are in great danger. Such an external threat should provide the strongest incentive for self-interested rational politicians and bureaucrats of the threatened country to put group (security ) interests ahead of all others and to co-operate and behave as a unitary actor. In this way, state cohesiveness is forged. Hechter also contends that this co-operative institution is likely to produce additional goods because it has the advantage of being organised.13 So it is possible for the cohesive state to ‘produce’ not only national security, but also industrialisation, especially in the long run, as economic power is the ultimate foundation of military power. Consequently, an external military threat may strengthen the state and prompt it to commit to industrialisation. This general point is supported by Erich Weede’s statistical analysis of 31 developing countries during the 1970s, which found that an external threat could restrict rent seeking in the threatened country.14 By problematising the state, a framework is provided that hypothesises the relationship between military threat and the rise and decline of the developmental state in Northeast Asia. It suggests that external military threats gave rise to the developmental state by forging state cohesiveness, generating a commitment to industrialisation and by limiting rent-seeking activities. But later, as such threats declined, group solidarity weakened and the commitment to industrialisation became inconsistent. This opened the door to rent seeking, which ultimately led to the decline of the developmental state in Northeast Asia. Having analysed the concept of the developmental state, the next step is to take a closer look at the external military threat on which this framework hinges. Obviously