The Developmental State, High-Value Added Activities and Gradual Liberalization as Foundations for Economic Development: Recalling and Analyzing the Anglo-American Developmental Dynamic to Guide the Role of the State and Markets in Achieving Sustained Economic Growth in Developing Countries

Abstract

Hoy en día, las teorías de desarrollo dominantes globalizadas gravitan en torno a los conceptos que Adam Smith y David Ricardo introdujeron hace más de doscientos años. No obstante, estas no siempre fueron tan relevantes y apreciadas. Antes de la compleja dicotomía polarizadora entre las ideologías de derecha e izquierda, parecía haber un fuerte consenso sobre el camino correcto hacia el desarrollo económico basado en conceptos que contradicen en los actuales ideales del libre mercado. Históricamente, las actuales naciones desarrolladas ignoraron gran parte de las teorías de Smith y Ricardo y siguieron los conceptos de economistas del desarrollo comúnmente olvidados como Antonio Serra, Robert Walpole, Alexander Hamilton, Friedrich List, Joseph Schumpeter, John Maynard Keynes, entre otros. Estos economistas abogaron por tres reglas básicas para alcanzar niveles de altos ingresos: 1) la promoción de la industrialización, la diversificación hacia bienes de alto valor agregado y el abandono de una economía basada en los recursos naturales. 2) Para lograr esto, estaban convencidos de que no era a través de la economía “laissez-faire”, sino a través de una activa presencia del Estado. 3) Aunque se reconoció la importancia del comercio internacional, era esencial proteger a las industrias locales durante sus etapas iniciales y de aprendizaje, adoptando un enfoque de liberalización gradual. Irónicamente, aquellas naciones que no siguieron una liberalización agresiva y emularon lo que hicieron naciones como Gran Bretaña y EE. UU durante sus primeras etapas de desarrollo (tres reglas), son las que tuvieron o han tenido mejores resultados, como Alemania, Japón, los Tigres asiáticos, Irlanda, Finlandia y, por supuesto, China.

Today, globalized mainstream development theories gravitate around the concepts that Adam Smith and David Ricardo introduced more than two hundred years ago. Nonetheless, the theories of both economists were not always as relevant and appreciated as they are today, especially in the developed world. Before the complex polarizing dichotomy between right and left ideologies, there seemed to be a strong consensus about the right path towards economic development based on concepts that largely contradict free-market ideals. Historical evidence shows that today’s developed nations disregarded much of Smith’s and Ricardo’s theories and followed the concepts of forgotten developmental economists such as Antonio Serra, Robert Walpole, Alexander Hamilton, Friedrich List, Joseph Schumpeter, John Maynard Keynes, among others. These economists advocated for three basic convictions in order to achieve high-income levels. First, promotion of industrialization, diversification of high value-added goods and the abandonment of a natural resources-based economy. Second, to achieve this successfully, they were convinced it was not through laissez-faire economics, but through a strong and active presence of the State. Last but not least, although the importance of international trade was acknowledged, it was essential to protect local industries from international competition during their early and learning stages and that long-term success was tied to gradual liberalization. Disregarding and even criticizing these concepts, the strong economic liberalization and globalization policies of the last four decades have not been successful in turning poor or middle-income countries into high-income advanced ones, condemning the latter group to keep depending on natural resources and on the imports of technology from developed nations. Ironically, those nations that did not follow aggressive liberalization and emulated what nations such as Britain and the U.S did during their early development stages (three convictions), are the ones that did or have been doing better such as Japan, the Asian Tigers, Ireland, Finland, and of course, China.