Seminar by Associate Professor Andrew Fischer at Jawaharlal Nehru University, New Delhi
On 12 October 2017, Andrew Fischer will give a seminar on The Dialectic of Developmentalism and Dependency: the external constraints of post-war late industrialisation, at Jawaharlal Nehru University in New Delhi, India.
With the revival of interest in developmentalism and the consolidating literature on the developmental state, a contrast is often made between developmentalism and dependency as two antonyms, or as opposing outcomes of different development trajectories followed in the post-war period of the twentieth century. Accordingly, national developmentalism is posed as the solution to dependency, requiring various degrees of delinking.
However, this binary view obscures the main point that emerged out of earlier analyses of dependency in Latin America, which explored the interdependence rather than antithesis of developmentalism and dependency, to the extent that scholars such as Cardoso or Evans explicitly tied these two terms together in their respective examinations of the right-wing developmentalism of the Brazilian military regime.
This paper explores this dialectical understanding by examining the manner in which developmentalism has always engendered a structural dependency on external finance, which has played out in quite distinct systemic patterns in different geopolitical regions and continues to be played out today.
This is analysed empirically through a comparison of the external account histories of South Korea and Brazil throughout the entire post-war era, China from 1982 onwards, and Zambia from 1978 onwards.
The first three cases clearly exhibit the dependence on external finance that late industrialisation has typically engendered, although not necessarily for the reasons emphasised by orthodox theory. This also stands in contrast to the contemporary advocacy by neo-developmentalist scholars against reliance on external finance, which is an option that has never actually been observed among late industrialisers in the post-war era.
Instead, the more successful case of South Korea is distinguished by the strong role of official external lending, particularly from the mid-1960s onwards, but not by the intensity of external indebtedness. The heavy reliance on such debt, in combination with other supportive external factors related to the country’s exceptional geopolitical circumstances, allowed it to run deep trade deficits throughout its industrialisation efforts right up to the mid-1980s.
In contrast, similar industrialisation strategies in Brazil were consistently undermined by reliance on private sources of finance. These imposed a punitive constraint on trade deficits even in the early post-war period. From the late 1960s onwards, they similarly exacerbated the pro-cyclical nature of Brazil’s external accounts and limited the extent to which net financial inflows could be absorbed for developmental purposes, even in the context of substantial industrialisation.
These two classic cases (and similar insights from Taiwan) are then contrasted with the more contemporary experience of China and Zambia.
The original contribution of this study is to put these insights from each case into systemic and comparative evidence, thereby highlighting the interaction of external finance with national developmentalist strategies and wider geopolitical considerations, with the argument that this dialectic continues to be crucial for understanding the constraints facing contemporary development in emerging and developing economies.