Statist theory Historical background –Challenge to dependency theory, which could not explain the rise of the East Asian NICs (newly industrialized countries) –Also note role of state in Peter Evan’s Dependent Development

Premises of Statist Theory States have the potential to promote development within their own borders –(not simply “externally conditioned”) States have autonomous interests (from society) in promoting development because they are responsible for national security; they must compete militarily and economically in the international state system Ability of states to promote development depends on the nature of state institutions

Key elements of Statist Theory Institutional level of analysis Focus on nature of state institutions –Developmental vs. predatory

Statist theory Characteristics of developmental state bureaucracy –Merit/skill-based recruitment –Performance-based rewards –Belief in bureaucratic mission –Insulated from societal pressures –Empowered to formulate and implement policy

Statist Theory Developmental state bureaucracy can alter market behavior through the exercise of industrial policy Tools of industrial policy include –Trade controls (e.g. tariff barriers, esp’ly pre-WTO) –Tax incentives (what Johnson calls “targeted tax breaks”) –Selective credit allocation –Public enterprise (what Johnson calls “government corporations)

Statist Theory Charateristics of predatory state bureaucracy –Recruitment based on patron-client ties –Policy based on personal benefit not mission –Not insulated from societal pressures –Lacking in ability to formulate good policy –Lacking in authority/power to implement policy

Statist Theory: Predicted Outcomes Economic: Developmental state institutions  wealth Predatory state institutions  poverty

Statist Theory: Predicted Outcomes Political: Developmental state institutions  stability  capacity  democracy  can create preconditions for democracy  enlightened state elites can create top-down openings for democracy Predatory state institutions  instability  incapacity  authoritarianism

Example from Iraq: Baker-Hamilton Report (Iraq Study Group) Governance –“The Iraqi government is not effectively providing its people with basic services: electricity, drinking water, sewage, health care, and education. In many sectors, production is below or hovers around prewar levels. In Baghdad and other unstable areas, the situation is much worse. –“There are five major reasons for this problem.

Baker-Hamilton “First, the government sometimes provides services on a sectarian basis… “Second, security is lacking… “Third, corruption is rampant… –Iraq has a functioning audit board and inspectors general in the ministries, and senior leaders have identified routing out corruption as a national priority. But too many political leaders still pursue their personal, sectarian, or party interests. There are still no examples of senior officials who have been brought before a court of law and convicted on corruption charges.

Baker-Hamilton “Fourth, capacity is inadequate. –Most of Iraq’s technocratic class was pushed out of the government as part of de-Baathification. –Other skilled Iraqis have fled the country as violence has risen. –Too often, Iraq’s elected representatives treat the ministries as political spoils. –Many ministries can do little more than pay salaries, spending as little as percent of their capital budget. They lack technical expertise and suffer from corruption. –Inefficiency, a banking system that does not permit the transfer of moneys, extensive red tape put in place in part to deter corruption, and a Ministry of Finance reluctant to disburse funds. “Fifth, the judiciary is weak.