• Choose a category
• All
• Classic-Fiction

The combined effect of rent protection and dissipation is the coexistence of aggregate inefficiency, financial deterioration, and insider corruption, as illustrated by the three case studies in Chapter 3. In other words, a self-destructive logic is embedded in a gradualist reform strategy adopted by an authoritarian regime obsessed with survival. As proponents of gradualism have argued, such a strategy may make a lot of sense, especially given the historical contexts marking the transition to a market economy in former socialist countries. Such a strategy assumes, however, that agent opportunism will be held in check, although literature on gradualism has not specified how. In reality, agent opportunism—the main reason for rent dissipation by insiders—is a common problem in transition economies. In the context of gradualism under autocratic rule, state or regime opportunism further encourages agent opportunism as the policies of the authoritarian regime provide its agents with the chances to appropriate rents. Because the authoritarian regime relies on the same agents to maintain its power, it becomes almost powerless in combating agent opportunism and containing rent dissipation.

A Question of the State: Developmental or Predatory

The sustained economic development achieved under authoritarian rule in Singapore, Taiwan, Hong Kong, and South Korea from the 1960s to 1980s has provided the factual basis for the claim that a neoauthoritarian mode of development—state-guided rapid economic growth under authoritarian rule—is a superior and proven strategy.53 To be sure, in the Western academic community, the concept of an East Asian model is a subject of debate, especially because of the controversy over the efficacy and degree of state intervention in East Asian countries. For some scholars, the East Asian experience is proof of the centrality of state intervention in the rapid growth of late-developers.54 For others, right public policies were the key to East Asian success.55

Unfortunately, most leading scholars of East Asian political economy have skirted the issue of regime and development. Only Robert Wade, author of one of the most influential studies on the role of the state in East Asia’s economic development, explicitly identified the development “of effective institutions of political authority before the system is democratized” as a key to East Asia’s success.56 Within the Chinese political and intellectual elite, the East Asian model has been essentially reduced to a simple formula: strong government authority + promarket policies = superior economic performance. It has further been argued that strong government authority would be difficult to obtain under democratic political systems.57 In fact, when asked about his views on neoauthoritarianism by Zhao Ziyang in a private conversation in 1988, Deng admitted that such a strategy, “relying on a political strongman to maintain stability and develop the economy,” was exactly what he was advocating even though “it is not necessary to use the term (neoauthoritarianism).”58

Such a preoccupation with the efficacy of the state in the context of economic development overlooks one crucial issue: the relationship between economic growth and the predatory behavior of the state. In other words, the real East Asian puzzle is not how sustained rapid economic development occurred under strong states, but why and how the predatory, practices of the state were held in check. Based on the assumption of the state as a “helping hand,” much of the literature on the political economy of development in East Asia has all but ignored the possibility that a strong state can also be a “grabbing hand.”59 Peter Evans’s influential Embedded Autonomy:States and IndustrialTransformation may be the only exception. By identifying the nature of the state as the critical variable in explaining the variations in the success of industrialization in developing countries, Evans shows that a predatory state is incapable of