The developmental state model is a method of capitalism in which the state has more independence and power over the economy. Of late, it has been referred to as a democratic developmental state in some quarters. Intense planning and government regulation is a feature of this model of governance.
Towards the end of the twentieth century, East Asia largely adopted this model of capitalism in an attempt to revamp their economic situations. As opposed to regulatory states, there is little governmental ownership of industries. However, privately owned companies are regulated and monitored by government elites.
Contrary to extensive criticism of the model, it is still extensively applied in East Asia. An example of a state that applies this model is China. Elements of the developmental state still persist even in Japan as a result of industrial inertia. Japan, Singapore, South Korea and Taiwan are still said to be developmental states.
One very important area where this is applied is in the education system which contributes to national development for these countries especially as an element for skill formation. Due to the models capacity to promote development and growth, it has also widely been adopted in some African states. One such state is Botswana.
The model is also extensively applied in the industrial sector of many countries to regulate private firms that manufacture industrial goods. The process involves a scenario where the government allows numerous investments by private institutions.
The investors are free to exploit the industrial market but under strict rules and regulations enforced by government proxies. In African states, the respective governments allow foreign investors to invest their capital in the counties thereby earning revenue and creating employment in the process.
Another sector which is a beneficiary of the developmental state model is the agricultural industry. Farmers are contracted to grow agricultural products for governmental plants. Specific requirements are set to be met by the farmers to grow and supply to the respective plants usually under contract bound by the government.
Due to exploitation of the local market by foreign industries, countries that have adopted the developmental state model protect local industries from being phased out. This is carried out by means of providing incentives and government support hence shielding the local industries from exploitation by international firms that have huge funding as well as the capability to phase out the domestic industries.
White stated that developmental states have adopted corporatism which involves division of labour into groups such as scientific, business as well as agricultural, based on common interests (White, 98). White further elucidated that one major type of corporatism is fiscal tri-partism which involves negotiations between corporate, labour and specific state interest groups in order to establish economic policies (White, 102).
In a synopsis, it is quite evident that the developmental state model has been applied in many sectors of various economies in the East Asian states. Contrary to some (popular) belief that the model is dead, it is in fact is a very reasonable means of measuring and explaining East Asia’s economic success.
In the previous years’ Eastern Asia countries success has largely been attributed to use of the developmental state model. The countries have been doubling their economies in ten year periods. Therefore it is right to conclude that the developmental state model is still extensively applied in various sectors of the economy.
Work Cited
White, Gordon. Developmental states in East Asia. Hampshire: Palgrave Macmillan, 1988. Print.