I am interested to share with you an excerpt from Asian's Next Giant: South Korea and Late Industrialization by Alice Amsden . The author of the book has an interventionist stance and end of the text continues writing about how countries like South Korea distorted relative prices in the "right" way to create investment opportunities that generate economic growth. It reminds me a lot of Bad Samaritans by Ha-Joon Chang in the line of argument. Hope you like it.
development processes are enormously complex, but one can say as a first approximation that (1) the initiation of economic growth has tended to be delayed by the weakness of the state to act and (2) if industrialization occurs and accelerates, so at the initiative of a strengthened state authority.
The reasons why some countries in the twentieth century have found themselves behind others in terms of income and wealth can be tentatively grouped into 4 categories: possession of natural resources, population, market forces and factors institutional. The explanation of natural resources can be discarded. The association between resource endowments and income per capita is visibly weak, Korea and Japan are cases in point. The allocation of the excess population subderrollo has also been pretty well discredited today. The population explosion is not currently considered as the causes of the failure of industrialization, but the consequence of such failure.
Restan, therefore, two opposing visions: the market and the institutional. The explanation of economic development based on the market, presents the latter as the major source of the last 200 years of economic progress. However, although no one could deny the important role in accelerating market growth, one must distinguish between the market and market mechanisms. The first be referred to the tool to satisfy the demand and supply. The latter are the rules for allocating resources. All industrialized countries have made use of the markets. However, the challenge of the market mechanism does not explain why late industrializing countries took so long to begin its expansion and no adherence to them may explain why eventually succeeded in growing.
countries stories "behind" are quite varied, although the typical case of late industrialization in the twentieth century was at one time or another a colony of one of one of the Great Powers (excluding Japan). .. . Basically, the colonies were free trade policies and exploiting their comparative advantages in agricultural commodity markets. Its growth, therefore, could not have been delayed because they were not guided by market mechanisms. ...
These leads us to the final explanation, one related to institutions, and not least of all: the State. Simply, industrialization took to reach the "backward" countries because they were too weak to mobilize the necessary forces to launch economic growth and to reject a flood of foreign aggression that began in the second half of the twentieth century. His weaknesses, also came from social conflict. Such conflicts prevented the central authority powerful enough power to repudiate the invasions and foreign interventions, or the catastrophic loss of statehood.
