Studies in the Political Economy of Public Policy. Basingstoke, UK; New York: Palgrave Macmillan, 2014. xx, 313 pp. (Figures, tables.) US$105, cloth. ISBN 978-1-137-00166-5.
The role of the state in economic development and industrial adjustment has been an ongoing debate since the early twentieth century. On one hand, the idea that the state should play a leading role in economic development was central to early development economics. The neoliberal idea of the state, on the other hand, focused on promoting economic liberalization and minimizing the state’s role in regulating and securing freedom for capital. This edited volume contributes to this debate by analyzing cases of the politics and risks of marketization in Asia, and how it transformed the state’s reach, form, and function in recent years.
Several factors in Asia have combined to make it an interesting case to study. Scholars have long argued that government interventions have been the most divisive factors contributing to dynamic economic growth across the region (Alice Amsden, Asia’s Next Giant: South Korea and Late Industrialization, Oxford University Press, 1989; Chang Ha-Joon, The Political Economy of Industrial Policy, St. Martin’s Press, 1994; Robert Wade, Governing the Market: Economic Theory and the Role of Government in East Asian Industrialization, Princeton University Press, 1990). Meanwhile, economic and institutional circumstances have evolved rapidly and rising inequality in incomes and access to social opportunities have started to threaten social stability and challenge economic growth in the region. This leads us back, then, to the question of the role of the state.
Carroll and Jarvis’s edited volume provides a timely examination of the developmental policies and state-society relations in contemporary Asia, in particular by dealing with the impacts of neoliberalism. They look at how policies now being adopted to promote private sector participation, restructure state entities, and reduce the presence of the state in the provision of public goods and services, are tied to transformations in the notions of state and development in Asia. The global cast of contributors—from the diverse fields of political economy, international relations, sociology, and public policy—offer 12 academic chapters illustrating how neoliberalism has transformed the role of the state and created new forms of socioeconomic risk and vulnerability in Asia.
The book is organized into three parts. Part 1 rationalizes the political economy approach used by the contributors to this volume by bringing back politics into understandings of the economic realities in Asia. From an historical context, Carroll and Jarvis revisit Asia’s developmental narratives and juxtapose neoliberal and statist perspectives on the region’s era of rapid growth. What’s more important, Carroll and Jarvis caution that a deepening of neoliberalism has gained greater momentum across a spate of sectors in Asia and highlight the challenges brought by its ideational evolution. They present a vigorous argument for the need to understand the growing intersection between the globalization of neoliberalism and the region in the post 1997–1998 crisis era.
Part 2 (chapters 2 through 7) takes a deeper view of the current form of neoliberalism and potential forms of risks associated with it. In chapter 2, Cammack starts by identifying key trends within the shifting neoliberal development agenda, including redefining the state’s role as regulatory, emphasizing market building and risk management, and the attempt to construct a global market economy. Drawing on a diverse selection of case studies, ranging from the World Bank’s mining regimes in Laos, the Philippines, and Papua New Guinea to AusAid’s policies and procedures for managing risks, this part consists of detailed analyses of the latest manifestations of increasingly dominant neoliberal development agendas that aim to roll back the state in the name of market building. Despite their differences in focus, all the authors believe that these neoliberal agendas have detracted from a genuine focus on development, while potentially fostering conflicting social relations and vulnerability.
The third part of the book (chapters 8 to 12) presents an assorted collection of articles, which take slightly different angles and offer somewhat contradictory views to the previous chapters—they assume that neoliberal reforms could be preferable and beneficial in promoting growth and development in some circumstances. In chapter 8, for example, Simpson argues that for countries such as Myanmar, the added value of a neoliberal agenda, particularly in the form of social and environmental safeguards and alternative sources of capital, is preferable to its absence. Chapter 10 presents a quantitative analysis of the benefits of market building in Asia. It proves that the total number and values of M&A deals are positively related to features of the institutional environment promoted by neoliberal agendas, including protection of property rights, the enforcement of contracts, and the stability of governance structures.
Overall, this book represents a valuable addition to the expanding literature on the dynamics of neoliberalism and its impact on state society relations in Asia. It draws attention to the increasingly dominant neoliberal agenda and illustrates how it has threatened the “developmental state” that has historically driven Asia’s rapid economic growth.
However, the book might have benefitted from bringing out the highly uneven and complex nature of institutional circumstances and industrialization stages in the region that, to a certain extent, predetermine the range of options faced by the governments and the role that the state should play in the economy. In other words, the neoliberal approach towards the forms and function of the state should not be regarded as a universally proper role for the state. Rather, there is a need to match the capacities and functions of the state to the tasks posed by specific problems of a particular era. MITI’s evolving role in Japan’s economy, for example, is not just a response to pressures from external neoliberal agendas, but also the result of structural changes in Japan’s domestic institutional circumstances. Likewise, certain governmental industrial policies in China, which historically enabled the development of particular sectors, have now become a hindrance for achieving further efficiency and equity, leading to readjustment of the role of government and its policies.
In addition, the book focuses predominately on the state’s influence from the top-down. The huge capability building at the grassroots level and the coordination between the top and grassroots levels in Asian countries should be taken into account. The small and medium enterprises in Taiwan, for instance, played an essential role in driving economic growth through investment in fixed assets, generating exports, and promoting technology assimilation. Undoubtedly, together with a coordinating state, these enterprises have contributed to the success of the Asian stories.
Wei Li
The University of Sydney, Sydney, Australia