State-Directed Development: Political Power and Industrialization in the Global Periphery (review)

The neoclassical orthodoxy in political economy equates state intervention in developing economies with rent seeking, trade distortions, and welfare losses.¹ "Statist" scholars have challenged this orthodoxy by showing the crucial role of "developmental states," and the nature of state-society coalitions, in the successful cases of development.² Situated squarely in the statist camp, Kohli's book goes beyond the success stories to ask why certain "late-late" developing countries industrialize more rapidly and successfully than others. This puzzle leads the author to trace the historical origins of the organization of state power. Kohli's provocative work is both empirically rich and historically engaged.

Kohli identifies three historical patterns of state organization and intervention in the global periphery that are consequential for the rate and pattern of industrialization. His first ideal-type is the growth-advancing "cohesive capitalist state"—for example, South Korea or Brazil under military rule—which wields centralized and penetrating coercive authority, an alliance of profit with the private sector, and the repressive disciplining of labor in a single-minded pursuit of growth. On the other end of the spectrum is state-directed development in such corrupt, neopatrimonial states as Nigeria, where elites routinely appropriate public resources for personal gain. Between these extremes lie the middling performers, the "fragmented, multi-class states," such as postcolonial India and Brazil under democratic rule, where state authority is fragmented, and the power to pursue economic development is trumped by populist concerns.

Where does the variation in the organization of state power come from? In Kohli's comparative-historical framework, colonial legacies exert powerful, almost determining, effects on state construction. Simply put, the distinct nature and scope of colonial encounters create the institutional foundations for the paths of economic development pursued by the "late-late industrializers." Kohli also makes the counterintuitive claim that the more brutal and penetrating the colonial state, the more likely it is to jolt a country out of its premodern straitjacket, or as Moore would say, to find a "final solution" to the problem of traditional social and political organization.³ A country like South Korea, colonized by a "transformative" colonizing power like Japan, is likely to inherit a rational-authoritarian state that allies itself with the dominant capitalist classes and demobilizes the lower classes (18). In contrast, a country like Nigeria, where the British "ruled on the cheap" while maintaining the "traditional" social order, is likely to become a "personalistic" and "patrimonial" state (18). In short, state power to direct economic development is constrained by inherited institutional structures that thrust different countries along different trajectories beyond the manipulative control of state and party elites.

Kohli's attempt to show that the state can be an effective agent of development is generally persuasive despite competing arguments about the state's inability to withstand the pressures of globalization. But Kohli's state is repressive. His "cohesive-capitalist state" as the economic agent of choice is empirically problematical because his main success story—South Korea—merely suggests that given certain historical pre-conditions, right wing, growth-obsessed states are better able to stimulate and direct industrialization than soft democratic ones. What it fails to convey is that both economic and political development can go awry under authoritarian rule, Pakistan being a case in point. Pakistan registered rapid growth in the early 1960s, often surpassing South Korea. But by the late 1960s, the neo-fascist military state imploded in a civil war which culminated in the creation of Bangladesh.

Arguably, such cases of failed cohesive capitalism weaken Kohli's state-centered analysis and point to the importance of social structures in strategies of development. The choices of state elites are not shaped just by pre-ordained state power or nationalist ethos of development. In India, the choice to practice democracy within a federal framework to deal with ethnic demands for autonomy might have hampered the state's economic capacity, but it also averted the disasters that often...