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11.491J
Industrial Development and Policy Analysis
Fall 1999
Monday, 9:00 - 12:00, Room 3-401
Emine Z. Kiray
The focus of this course is on government policy in the
transformation of post World War II "late industrializing"
countries.
The questions of analytical interest are: why the role of government in
industrial transformation has grown over the last two centuries;
what theories, if any, explain such a change and intervention
generally; why such intervention is politically and
intellectually controversial; how specific policies have
influenced industrial development; and why some governments have
performed better than others in-implementing policies.
The fields of policy intervention that are examined include:
foreign trade, investment and industrial promotion; regional
planning and land and natural resource use; privatization; and
technology development.
Case material is drawn widely from Eastern Europe, Latin
America, Africa, and Eastern and Southeastern Asia.
Entries followed by [ref] are for reference only.
Most other readings will be available in a "reader" that will be
available in Rotch Library.
1.The Growing Breadth and Depth of Government Intervention.
Taylor, Arthur J. 1972. Laissez-faire and State Intervention:
Nineteenth-century Britain, Macmillan (pp. 1-77).
Gerschenkron, Alexander. 1962. Ch. 1: " Add " in Economic
Development in Historical Perspective, Harvard UP, pp. 5-30.
Lee, W. R. 1988. "Economic Development and the State in
Nineteenth-Century Germany," Economic History Review, 2nd ser.,
XLI, 3, pp. 346-367.
Chandler, Alfred D. Jr. 1980. "Government Versus Business: An
American Phenomenon", in John T. Dunlop (ed.), Business and
Public Policy, Harvard UP, ch. 1, pp. 1-11.
Faulkner, Harold U. 1961. The Decline of Laissez Faire.
1897-1917, Vol. VII, The Economic History of the United States,
Holt, Rinehart and Winston [ref].
Brinkley, Alan. 1989. "The New Deal and the Idea of the State",
in Steve Fraser and Gary Gerstle (eds.), The Rise and Fall of
the New Deal Order, 1930-1980, Princeton UP. [ref]
[U.S.] Council Economic Advisers. 1994. ch. 5. "Microeconomic
Initiatives to Promote Efficiency and Productivity," in Economic
Report of the President, USGPO. [ref]
Shonfeld, A. 1965. Modern Capitalism: The Changing Balance of
Public and Private Power, Oxford UP. [ref]
Sheahan, John. 1963. Promotion and Control of Industry in
Postwar France, Harvard UP. [ref]
Scott, Bruce R. and Audrey T. Sproat. 1983. National Industrial
Planning: France and the EEC, Course Module Series, Harvard
Business School. [ref]
Johnson, Chalmers. 1982. ch. 3: "The Rise of Industrial Policy,"
in MITI and the Japanese Miracle: the Growth of Industrial
Policy. 1925-1975, Stanford UP., pp. 83-115.
Moreno, Juan Carlos and Jaime Ros. 1994. "Market Reform and the
Changing Role of the State in Mexico: A Historical Perspective,"
in A.K. Dutt, K.S. Kim, and A. Singh (eds.), The State, Markets
and Development, Edward Elgar., pp. 107-143.
Shapiro, Helen and Lance Taylor. 1990. "The State and Industrial
Strategy," World Development, Vol. 18, No.6, pp. 861-878.
Amsden, Alice H. 1985. "The State and Economic Development in
Taiwan," in P. Evans, D. Rueschemeyer, and T. Skocpol (eds.),
Bringing the State Back In, Cambridge UP.
2. A. Why more Government?: "Market failure", "transaction cost"
and "competitive asset" approaches.
Case, Karl E. and Ray C. Fair.1989. Principles of Microeconomics,
Prentice Hall. Ch.12; or any general equilibrium/ welfare economics
chapter of an introductory or intermediate micro textbook. [ref]
Williamson, John. 1983. The Open Economy and the World Economy,
Basic Books, Ch.3; or any Heckscher-Ohlin Model chapter of an
international economics textbook.[ref]
Arrow, Kenneth. 1985. "The Potentials and Limits of the Market
in Resource Allocation," in George R. Feiwel (ed.), Issues in
Contemporary Microeconomics and Welfare, SUNY UP. [ref]
Stiglitz, Joseph E. 1989. "Markets, Market Failures, and
Development," American Economic Review, Vol. 79, No. 2, pp.
197-203 (May).
Itoh, Motoshige. 1991. ch 3: "Industrial Policy and Changing
Industrial Structure;", pp. 31-39 ch. 4: "Theories of Infant
Industry Protection: An Overview;", pp. 40-49; ch. 5: "Industrial Setup Costs and
Marshallian Externalities;", pp. 50-62; ch. 6 "Scale Economies
and Information;" pp. 63-74; ch. 7: "Choice of Industrial Structure and Economic
Welfare", pp.75-88, (exclude appendix), in Economic Analysis of
Industrial Policy.
Chang, Ha-Joon. 1994. ch. 3: "The Political Economy of
Industrial Policy," in The Political Economy of Industrial
Policy, St. Martin's Press, pp. 55-90.
Amsden, Alice H.in process. "Learning-Based Theory of Catching
Up", in The Rise of the Rest: Late Industrialization Outside The
North Atlantic Region, ch 2, 74 pp.
B. What is controversial?: Analytical issues, Bretton Woods
conditionality and Neoliberalism
Special Section: "The World Bank's The East Asian Miracle:
Economic Growth and Public Policy," Alice H. Amsden (ed.), World
Development, 22, 4 (April 1994), pp. 615-670.
Symposia: "The State and Economic Development," Journal of
Economic Perspectives, 4, 3 (Summer 1990), pp. 3-74.
3. Foreign trade, foreign investment, and industrial promotion
A. Trade policy
Gillis, Malcolm, Dwight H. Perkins, Michael Roemer, and Donald R.
Snodgrass. 1992. Economics of Development, 3rd ed. W.W. Norton &Co.
Chs. 15-17.[ref]
Baldwin, Robert E. 1977. "The Case Against Infant-Industry
Tariff Protection," Journal of Political Economy. 77, 3 (June).
[ref]
Brander, James A. 1987. "Rationales for Strategic Trade and
Industrial Policy," in Paul R. Krugman (ed.), Strategic Trade
Policy and the New International Economics, MIT. [ref]
Bhagwati, Jagdish N. 1985. ch 5 "Export Promotion as a
Developmental Strategy," in Toshio Shishido and Ryuzo Sato
(eds.), Economic Policy and Development: New Perspectives,
Auburn House (Croon Helm), pp. 59- 67.
Tybout, James. 1992. Linking Trade and Productivity: New
Research Directions," World Bank Economic Review. Vol 6, No.2.,
pp. 189-210.
Helleiner, G.K. 1994. "Introduction" in G.K. Helleiner (ed.),
Trade Policy and Industrialization in Turbulent Times,
Routledge., pp. 1-65
Sato, Kazuo. 1986. "Externalization of Domestic Macroeconomic
Performance: Export-Led Growth or Growth-Led Export?" in Michele
Schmiegelow (ed.), Japan's Response to Crisis in the World
Economy, M.E. Sharpe., pp. 181-208.
Fishlow, Albert. 1991. "Some Reflections on Comparative Latin
American Economic Performance and Policy," in Tariq Banuri
(ed.), Economic Liberalization: No Panacea: The Experiences of
Latin America and Asia, Clarendon., pp.149-170.
B. Foreign investment
Fritsch, Winston and Gustavo H. B. Franco. 1992. "Foreign Direct
Investment and Patterns of Industrialization and Trade in
Developing Countries: The Brazilian Experience," in Gerald K.
Helleiner (ed)., Trade Policy, Industrialization, and
Development: New Perspectives, Clarendon., pp. 187-224.
Shapiro, Helen. 1991. "Determinants of Firm Entry into the
Brazilian Automobile Industry, 1956-68", Business History
Review, 65, 4 (Winter). [ref]
Shapiro, Helen. 1993. "Automobiles: From Import Substitution to Export Promotion
in Brazil and Mexico" in David Yoffie (ed.), Beyond Free Trade:
Firms, Governments and Global Competition. Harvard Business
School Press., pp. 193-248.
Paus, Eva. 1989. "Direct Foreign Investment and Economic
Development in Latin America: Perspectives for the Future,"
Journal of Latin American Studies, No. 21., pp. 221-239.
C. Industry Promotion
Amsden, Alice H. and Ajit Singh. 1994. "The Optimal Degree of
Competition and Dynamic Efficiency in Japan and Korea,"European
Economic Review. 38., pp. 941-951.
D. Industry Cases
Steel
Baack, Bennett D. and Edward John Ray. 1973. "[American] Tariff
Policy and Comparative Advantage in the Iron and Steel Industry"
1870-1929," Explorations in Economic History, 11,l (Fall). [ref]
Sheahan, "Steel: Planning in Practice" in Sheahan (see # 1) .
Yonekura, Seiichiro. 1989. "The Long and Winding Road: The
Postwar Japanese Iron and Steel Industry---Continuity and
Discontinuity," Institute of Business Research, Hitotsubashi
University., pp. 1-67.
Howell, Thomas R., et. al. 1988. ch. 5: "The Developing
Countries," in Steel and the State: Government Intervention and
Steel's Structural Crisis, Westview., pp. 251-369.
Aerospace
Samuels, Richard and David B. Friedman. 1992. How to Succeed
Without Really Flying---The Japanese Aircraft Industry and
Japan's Technology Ideology, MIT Japan Program, Ql80.J3.M22, No.
90.92-01. [ref]
Baldwin, Richard. 1992. "High-Technology Exports and Strategic
Trade Policy in Developing Countries: The Case of Brazilian
Aircraft," in Helleiner, 1992 , pp. 225-253.(see above).
McKendrick, David. 1991. "Obstacles to "Catch Up": The Case of
the Indonesian Aircraft Industry," University of Texas at
Dallas., pp. 1-39.
Hill, Hal and Pang Eng Fong. 1988. "The State and Industrial
Restructuring: A Comparison of the Aerospace Industry in
Indonesia and Singapore," ASEAN Economic Bulletin, Vol. 5, No.2
(November), pp. 152-168.
E. Country Cases:
South Korea
Amsden, Alice H. 1989. Asia's Next Giant: South Korea
and Late Industrialization, Oxford UP, [ref.]
Stern, Joseph. 1990. "Industrial Targeting in Korea,"
Development Discussion Paper No. 343, Harvard Institute for
International Development., pp. 1-61.
Auty, R.M. 1991. "Creating Competitive Advantage: South Korean
Steel and Petrochemicals," Tidschrift voor Economie en
Sociologie Geografie, 82, No. 1., pp. 15-29.
South Africa
South African Chamber of Business. 1991. A Concept for the
Development of A New Industrial Policy for South Africa,
Johannesburg., pp. 1-63.
Davis, Graham A. 1994. ch. 3: "History of Managed Trade in South
Africa; pp 13-30; ch. 4: "A New Trade Policy: Out of the Pan and
into the Fire", pp. 31-45; ch. 8: "A Search for Unexploited
Comparative Advantage in South African H-O Manufactures;",
89-111, ch. 9: The Empty Economics in South Africa's Industrial
Policy",pp. 111-123; in South African Managed Trade Policy: the
Wasting of a Mineral Endowment, Praeger.
4. Regional planning, land and resource use.
Timmer, C. Peter. 1991. "The role of the State in Agricultural
Development," in C. Peter Timmer (ed.), Agriculture and the
State: Growth, Employment, and Poverty in Developing Countries.
Cornell UP. [ref]
Limerick, Patricia Nelson. 1987. The Legacy of Conquest: The
Unbroken Past of the American West, Norton. [ref]
Pollard, Sidney. 1973. "Industrialization and the European
Economy," Economic History Review, 2nd ser., 26, 4 (November).
[ref]
Nicol William and Douglas Yuill. 1982. "Regional Problems and
Policy," in Andrea Boltho (ed.), The European Economy: Growth
and Crisis, Oxford UP, pg. 411-443.
Kraft, Evan. 1992. "Evaluating Regional Policy in Yugoslavia,
1966-1990," Comparative Economic Studies, No. 3, 4
(Fall-Winter), pp. 11-33.
United Nations Industrial Development Organization. 1990. ch.
IV: "Priority Areas For Industrial Development in the 1980s,",
pp. 21-27, in Industrial Development in Thailand in the 1990s,
UNIDO.
Ranis, Gustav. 1990. "Asian and Latin American Experience:
Lessons for Africa," Journal of International Development, 2.
Amsden, Alice H. 1991. "Big Business and Urban Congestion in
Taiwan: The Origins of Small Enterprise and Regionally
Decentralized Industry (Respectively)", World Development, Vol.
19, No. 9., pp. 1121-1135.
Lee, Jin Soon. 1994. "Korean Land Ownership and Use" in Lee-Jay
Cho and Yoon Hyung Kim (eds.), Korea's Political Economy: An
Institutional Approach, Westview, pp.361-465.
Son, Jae-Young. 1994. "The 'Land Problem' in Korea," in Lee-Jay
Cho and Yoon Hyung Kim (eds.) (see above).
Hoffman, Michael L. and Struyk. 1994. "More Land at Lower
Prices: The Deregulation Alternative," in Lee-Jay Cho and Yoon
Hyung Kim (eds.) (see above).
5. Privatization and Ownership
Frydman, Roman and Andrzej Rapaczynski. 1994. ch. 1: "Markets
and Institutions in Large-Scale Privatization: an Approach to
Economic and Social Transformation in Eastern Europe;" ch. 2:
"Privatization and Corporate Governance: Can a Market Economy Be
Designed?" in Privatization in Eastern Europe: Is the State
Withering Away?, Central European UP, pp. 9-74.
Amsden, Alice H., Jacek Kochanowicz and Lance Taylor. 1994. ch.
5: "Pseudo-Privatization and the World Bank"; ch. 6: "Enterprise
and the State," in The Market Meets Its Match: Restructuring the
Economies of Eastern Europe, Harvard UP, pp. 113-157.
Jefferson, Gary H. and Thomas G. Rawski. 1994. "Enterprise
Reform in Chinese Industry," Journal of Economic Perspectives,
Vol. 8, No. 2 (Spring), pp. 47-70.
Ramamurti, Ravi. 1987. Part II: India's Experience in Heavy
Mechanical and Electrical Engineering (chs. 2, 3, and 4); and
Part III: Brazil's Experience in Light Aircraft (ch 5) in
State-Owned Enterprises in High Technology Industries: Studies
in India and Brazil, Praeger, pp. 45-211.
D. Himbara. 1994. "The Failed Africanization of Commerce and
Industry in Kenya," World Development, 22, 3 (March).
Singh, Ajit and Ha-Joon Chang. 1991. "Public Enterprises in
Developing Countries and Economic Efficiency: A Critical
Examination of Analytical, Empirical, and Policy Issues,"
Cambridge University. 85 pps.
6. Acquisition of Technological Capabilities
Shishido, Toshio. 1985. "Japanese Technological Development," in
Shishido and Sato (eds) (see #3, Part A)., pp. 199-313.
Sato, Ryuzo. 1985. "Nothing New? An Historical Perspective on
Japanese Technology Policy" in Shishido and Sato (eds)
(see above).
Lall, Sanjaya. 1993. "Technological Development, Technology
Impacts and Industrial Strategy: A Review of the Issues," in
Industry and Development, No.34, pp 1-36.
Amsden, Alice H. 1989. ch. 11: "The World's Largest
Shipbuilder;" ch. 12: "The Triumph of Steel" in Asia's Next
Giant: South Korea and Late Industrialization, Oxford UP,
269-318.
Lall, Sanjaya. 1992. "Technological Capabilities and the Role of
Government in Developing Countries," Greek Economic Review, Vol.
14, No. 1, pp.1-36.
Katz, Jorge M. and Nestor A. Bercovich. 1993. "National Systems
of Innovation Supporting Technical Advance in Industry: The Case
of Argentina," in Richard R. Nelson (ed.), National Innovation
Systems, Oxford UP, pp. 451-475.
7. Policy Implementation
A. State Autonomy
Symposium: "State Autonomy and Business Influence" in
Contention: Debates in Society Culture and Science (Spring
1994), pp. 115-182. [ref]
Evans, Peter B. "Predatory, Developmental and Other Apparatuses:
A Comparative Political Economy on the Third World State,"
Working Paper #11, Center for the Comparative Study of
Development, Brown University.
Hikino, Takashi and Alice H. Amsden. 1994. "Staying Behind,
Stumbling Back, Sneaking Up, Soaring Ahead: Late
Industrialization in Historical Perspective," in William J.
Baumol, Richard R. Nelson, and Edward N. Wolff (eds.) (see
above), pp. 287-315.
Amsden, Alice H. 1992. "A Theory of Government Intervention in
Late Industrialization," in Louis Putterman and Dietrich
Rueschemeyer (eds.), State and: Market in Development: Synergy
or Rivalry? Lynne Rienner, pp. 53-84.
B. Bureaucracy
Johnson, Chalmers. 1982. ch. 2: "The Economic Bureaucracy," in
Johnson (see # 1).
Wade, Robert. 1990. ch. 7: "The Economic Bureaucracy," in
Governing the Market: Economic Theory And the Role of Government
in East Asian Industrialization. Princeton UP, pp. 196-227.
Schneider, Ben Ross. 1991. Politics within the State:Elite
Bureaucrats and Industrial Policy in Authoritarian Brazil.
Pittsburgh UP. [ref]
Chew, David C.E. 1992. Civil Service Pay in South Asia. ILO.
[ref]
Robinson, Derek. 1990. Civil Service Pay in Africa ILO.[ref]
8. Analyzing Policy Failures
Gerschenkron, Alexander. 1977. An Economic Spurt That Failed:
Four Lectures in Austrian History, Princeton UP. [ref].
Dietz, James. 1986. Economic History of Puerto Rico:
Institutional Change and Capitalist Development. Princeton UP.
[ref]
Fitzgerald, E.V.K. 1976. The State and Economic Development:
Peru since 1968. Cambridge UP. [ref]
Loutfi, Martha. 1989. "Development Issues and State Policies in
Sub-Saharan Africa," International Labour Review Vol.128, No. 2,
pp.137-154.
Lewis, P.M. 1994. "Economic Statism, Private Capital, and the
Dilemmas of Accumulation in Nigeria," World Development Vol. 22,
No. 3 (March).
Lall, Sanjaya. 1992. "Structural Problems of African Industry,"
in F. Stewart, S. Lall, and S. Wangwe (eds.), Alternative
Development Strategies for Sub-Saharan Africa Macmillan, pp.
103-144.
9. New Research directions:
Discussion
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