Download The developmental state in an era of finance

Bob Jessop (Distinguished Professor in Sociology & Founding Director, IAS, Lancaster University)
Paper title:
Developmental states in an era of finance‐dominated accumulation
Abstract:
The basic idea behind the developmental state dates back at least to Friedrich List’s concern in the mid‐nineteenth century with state policies to promote ‘catch‐up’ competitiveness. It was oriented not just to economic matters but also to questions of national security. One can even trace the concept back to the Renaissance and the mercantilist era before the rise of industrial capitalism. The actual phrase was first applied explicitly to Japan, of course, then adopted for other East Asian economies, and has since been applied to other continents (e.g., Latin America, Europe) and to scales of economic and political organization that are local, regional, or even supranational (e.g., the European Union). Its immediate context was the post‐WW2 era of Atlantic Fordism with catch‐up oriented to the USA and its relevance was already being questioned during the crisis of Atlantic Fordism even as Fordist production methods were still spreading beyond the North Atlantic region. It has been questioned even more vigorously for the post‐Fordist period, in which the knowledge‐based economy was, for a time, the hegemonic economic imaginary. This questioning holds especially for those who advocated neo‐liberalism, with its ambition to roll back the state. But a role for the state remained in promoting Schumpeterian innovation, whether directly oriented to the knowledge‐based economy or not, and this could be understood as a new stage in the pursuit of catch‐up competitiveness policies, requiring some institutional redesign in the architecture of the state. The development of finance‐dominated accumulation also prompted some states to seek a place in a changing world market organized increasingly in the shadow of financialization. Here, too, we could see different kinds of developmental policies, covering fields as diverse as regulatory policy, urban planning, financial literacy, and infrastructural investment. The experience of the IMF (or “Asian”) crisis and, more recently, the contagion effects of the North Atlantic Financial Crisis (sometimes misleadingly labeled the “global financial crisis”) have also shown that there is still an important role for the state, both in defending their economic spaces against financial contagion, and, equally importantly, in positioning their economic spaces in relation to the rebalancing of the world market that has followed the crisis in the North Atlantic region. For all these reasons, then, it makes sense to revisit the concept of the developmental state, to offer a periodization of its stages over the longue durée, to consider its crisis‐tendencies in different periods, and to examine how the developmental state has been re‐interpreted during the last 20, 15, and 5 years in response to economic crises at the national, regional, and global levels. This is the aim of my paper.