The East Asian industrial policy: a critical analysis of the developmental state

In the times of discrediting neo-liberalism as the preferred guiding doctrine in economic policy and systemic arrangements, the industrial policy, understood as a set of state interventions to supervise the process of developmental advancements, may come back to the fore as a favoured instrument. It is the East Asian industrial policy which brought by far the most spectacular developmental results in the second half of the twentieth century. In the scholarly literature on the so-called East Asian miracle, this success is explained by the concept of the developmental state. This paper examines the main threads of the East Asian industrial policy and tackles the issue of its contemporary applicability. It starts with the explanation as to why industrial policy as such is becoming more popular. It then examines the history of the formation of the concept of the developmental state. It analyses its most important elements, mainly, the strategy of imitating and innovating, the targeting of industrial sectors for development, the trade policy and the utilisation of subsidies. In conclusion, it is claimed that the provisions of the East Asian industrial policy may well be employed contemporarily, despite the fact that the concept of developmental state is primarily seen as a historical phenomenon.