Examining the Notion of a Developmental State Making a Case for a Developmental Capable State

politics economy human development
Tuesday, 23 October, 2012 - 09:54

This article focuses on role of the development state and how a ‘capable state’ could contribute to improving the lives of the people

The goal of a democratic state is to establish a society in which citizens are intellectually, socially, economically and politically empowered. In order to achieve this noble goal, certain conditions need to be met in to mobilise social, economic and political forces, and to capacitate the state to galvanise productive forces that would ensure that these goals are achieved.
                   
There are two schools of thought that suggest mechanisms through which these productive forces can be galvanised. The first school requires the reorientation of the state as a developmental state; thereby unleashing sufficient forces to advance industrialisation (Chang, 1999, pp 181-206). The other school focuses on the development and facilitation of a capable state, and this notion is rooted around the capabilities of state institutions and relations between the state and its citizens (Marwala, 2005, pp 58-60).

De Onis (1999) defines a developmental state as a state where government is intimately involved in macro- and micro- economic planning in order to grow the economy. This and many other definitions of a developmental state place emphasis on the active role the state plays in guiding economic development and in using the resources of the country to meet the needs of the people (De Onis, 1999, pp 137 - 143).

In its Strategy and Tactics (2007) document the African National Congress (ANC) defines the notion of a developmental state as being an approach premised on people-centred and people-driven change, sustained development based on high growth rates, restructuring of the economy and socio-economic inclusion. The ANC lists four key attributes of a developmental state as the following; economic growth, capacity to lead and define a common agenda, its ability to organise in ensuring that structures and systems facilitate the common agenda, as well as the state’s technical capacity to translate broad objectives into programmes.

The ANC’s definition of a developmental state remains rather loose and broad. This is understandable considering that the concept of a developmental state derives from a very particular history very different from South Africa’s history. It traces its origins from twentieth century scholars who used the term to refer to the phenomenon of state-led macroeconomic planning in East Asia. In this model, the state has more independent, or autonomous political power, as well as more control over the economy. A developmental state in this context was characterised by strong state interventions in the economy as well as extensive regulation and planning.

Critics of the notion of a developmental state argue that in East Asia and North-East Asia emphasis on the attainment of a developmental state had been responsible for producing repression rather than development and economic progress. Critics also claim that the common thread in the East Asian and North-East Asian developmental experience pertains to the autonomy of the state’s role as partner with the private sector in the national industrial transformation.

Towards the attainment of a developmental state, the state acts as a catalytic agency and establishes incentives and disincentives to facilitate economic growth. An often cited criticism has been that the Japanese and Korean experiments have resulted in rampant corruption as industrial policy was commonly used to promote vested interests over national development. In this context, the developmental state was a paradise for big business. The combination of a lack of transparency, close ties between the state, banks, political parties and corporations, government-directed lending, high corporate debt-to-equity ratios, and national industrial policies focused on establishing globally competitive sectors may foster corruption and irresponsible corporate investments. Critics of a developmental state drew upon these attributes of the developmental state model, particularly that of South Korea, and blame crony capitalism, bad governance and government interference as causal factors for the regional meltdown (Hall 1973, Woo- Cummings 1999, and Ryang 1997).

The ANC’s definition of a developmental state takes its cue from the East Asian definition. Looking at the capability, context and developmental challenges of South Africa, it is highly debatable if the Japanese and Korean vision of a developmental state ought to be what the country strives for at this present point in time. The vision of a developmental state calls for a bigger and a more interventionist approach to economic development with the state partnering heavily with the private sector but taking the lead. This would be well and good if South Africa’s private sector had the requisite capacity to be able to facilitate such intervention from the state.

The cadre deployment policy of the ANC unfortunately has severely compromised and weakened the public sector. The policy ensures that the ANC retains certain key positions in government for its own cadres. Sometimes this is done regardless of whether the cadres have the requisite skills and experience. As a result, within the public sector there are high levels of corruption, critical shortages of skills, a poor work ethos, poor service delivery and generally poorly performing public institutions. As a result, there is an impatient citizenry that regularly takes to the streets to voice their grievances because formal processes meant for effective dialogue and engagements bear little fruit.

With all this in the background, the National Planning Commission (NPC) in its National Development Plan (NDP), released for public comment in 2011, presented for the first time the notion of a capable state. The NDP presented a 30-year vision for South Africa along with the institutional arrangements and policy considerations that were necessary to achieve it. Quite surprisingly, the NPC did not rehash the ANC’s adopted vision and notion of a developmental state. Instead it began to put in the public domain a new idea to ponder upon, that of the capable state. The biggest shortcoming of the NDP is that it fell short of narrating in detail the characteristics of a capable state in terms of the economic reforms necessary, and the state/business interaction which is at the core of a developmental state. Instead, it highlights the state in which the public sector ought to be in order to facilitate the emergence of a capable state. In an attempt to trace the origins of the notion of a capable state we draw on the work of scholars in the development discourse. We have already noted in detail above that within a developmental state, the state serves as an economic player in and alongside of the market. Scholars in support of the notion of a capable state argue that the multiple crisis of economy, environment and governance have brought the state back to the centre of the political discourse. They argue that the notion of a developmental state has largely lost legitimacy, overtaken by a need to revitalise the relationship between the people and the state, in relation to the discourse on human development and democracy. This is viewed as central towards the attainment of a capable state.

Proponents of the capable state suggest a move away from an emphasis on the market as the key driver of development. They claim that the economic crisis – resulting from lack of regulation and state oversight of finance capital markets – has affected the less developed countries and poor people more than others. They claim that continued overemphasis on the market would reduce available resources for development in less developed economies. The notion of a capable state therefore is about reclaiming the position of the state at the centre of the discourse on democratic governance. It involves a transformative agenda that goes beyond the top-down technical fixes of the market model to a more contextual political economy perspective that recognises the value of people in terms of analysing and addressing issues related to governance and human development.

The notion of a developmental state recognises the value of sound relations between citizens and the state institutions that would facilitate the interface between the two. In this context, a capable state provides enabling conditions for market and civil society to thrive. Both civil society and actors in the market are important stakeholders in the process of development. The state as the more concrete and evolved form of social contract has the most legitimate role in ensuring human development and human rights, with equity, sustainability and peace (Samuel, 2010).

The legitimacy of a capable state is derived from the origin of power as well as the exercise of power. The effectiveness of a capable state is to a large extent based on the responsiveness and performance of its institutions. A discussion on the notion of the capable state in the context of democratic governance draws attention to the outcomes of state action and not only the process related to the government and the state. According to Samuels (2010) the normative principle of inclusiveness has dimensions of people’s participation, non-discrimination, human rights and women’s rights. The principle of responsiveness implies transparency, accountability, and delivery and quality of services.

Therefore a capable state in this context is one with capable institutions to effectively and efficiently raise and manage resources as well as the capacity to deliver human development and ensure equity, sustainability and peace. Presented in this paper are two sides of the coin: a developmental state on the one hand with its underpinning ideology, and a capable state on the other along with key supporting and opposing views of both notions. The aim is to assist one to make an informed decision about which of the two notions they would rather South Africa aspired to achieve - the ANC’s notion of a developmental state, or the NPC’s vision of a capable state. I would argue that we go with neither of the two but rather create a combination of both. Looking at where South Africa is today, still faced with acute levels of poverty, extreme levels of inequality, increasing levels of violent crime, an underperforming education system to name but a few, the country needs a multi-dimensional approach. It would take the formulation of a vision that is not one-sided – not an ‘either or’ – to be able to assemble a multi-faceted response to the country’s challenges.

This would require leadership from the state and a more interventionist approach to achieve necessary economic growth and key and critical partnerships with the private sector (elements of a developmental state), coupled with an intensive effort to ensure that the state institutions are able to manage resources as well as capacity to deliver human development and ensure equity (which is key in a capable state). The vision which I advocate in this paper is of a ‘capable developmental state’, a mix of the best of both worlds. The notion of a capable developmental state in my view requires as its bedrock active citizens and a common purpose. It requires active engagements by the people with the process of government in all its forms, beginning with the very local. This paper calls for civil society to stand up against the powers that be that continue to decide on its behalf which side of the coin they ought to be, and to inform the agenda.

It goes without saying that to attain the vision of a capable developmental state, some things would have to give. Cadre deployment for one, and such other ‘destructive’ practices (‘policies’) would have to be abandoned as they work against the development of effective and efficient public institutions. For obvious reasons though, the ANC would not voluntarily give up this policy.

What the NPC had done was to create a platform for engaging on the common vision towards which we are working. It put in the spotlight the notion of a developmental state and forced us to think deeper about what it implies. By introducing the notion of a capable state in the NDP, the NPC forced scholars and developmental practitioners to look at alternatives to the vision of a developmental state. Whatever alternatives there are to offer, it is only active citizens that can ultimately win the battle against the “animal in the room”.

References:

Chang M.J., 1999, Expansion and its discontents: The formation of Asian American Programs in the 1990s. The Journal of Asian American Studies, 2(2), pp 181 – 206
De Onis M., 1999, Battle Hymn of the model minority: myth, poverty and policy analysis; Journal of Social Sciences, 37 (2), p
Samuel G., 2010, World Economic Situation and Prospects: The Global Outlook, United Nations Report
Ryang S., 1997, North Koreans in Japan: Ideology and identity; Boulder, Colo; Westview
Tshilidzi M., 2005, The National Democratic revolution, technology and a developed economy. Umrabulo, Vol 22, pp 58-60
Woo-Cummings M., 1999 ed, The Development State, Ithaca, New York, Cornell University Press
Wo-Cummings M. et al, 1999, Between Neoliberalism and Democracy: The Transformation of the developmental state in South Korea; Development and Society Vol 35(1) pp 1 - 28
The African National Congress Strategy and Tactics (2007) accessed from http://www.anc.org.za/docs/discuss/2010/buidlingz.pdfaccessed on 04th July 2012
The National Development Plan accessed from http://www.poconline/ medialib/dowloads/home/NPC%20National%20Development%20Plan%20Vision%202030%20-lo-res.pdf on 03rd March 2012

- Nontando Zintle Ngamlana is executive director at Afesis-corplan. This article first appeared in the July/August/September 2012 edition of Transformer.

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