Leadership, Political Regime,and Economic Development
Kenichi Ohno, GRIPS & VDF

Leadership is Crucial
 Top leader with proper vision and decisive action

is crucial for development.

 Not all strong leaders are effective leaders.

Economic literacy is the key requirement.

 A good leader is the primary force in institutionalchange, because he/she can build othernecessary conditions and systems.

WeakleadersThis presentation is based on GRIPS Master Course on Policy Formulation in
Developing Countries, Autumn 2006 (Lecture no.3)
See www.grips.ac.jp/teacher/oono/hp/newcourse/index.htm

Typology of State
Robert Wade’s lecture at GRIPS (May 2006)

In many developing countries, the private sector is weak, andgovernment is also weak (can’t become a development initiator).

STEPS FOR CATCHING-UP
Weakpolicies

2. Fragmented-multiclass state (populism, soft state)
Public & private domain are separated, but power base isdiverse and decisions are fragmented.

Wade argues that 2 and 3 can implement industrial
policies, but not 1-- static analysis?

Effective
leaders

Development Trap

1. Neopatrimonial state
No separation of public & private domain, leaders andofficials use state power to enrich themselves.

3. Cohesive-capitalist state (developmental state, hardstate)
Authority is centralized, power base is narrow (serves
capitalists only), and state power penetrates deeply.

Strongleaders

0. Development trap
1. Create “imagined community”(cohesive nation & government)
2. Prepare institution, humanresources, infrastructure

Social crisis

Economicstagnation

How to break the vicious circle andstart the development process?

3. Industrial policy for rapid growth
and reducing growth-caused evils
4. End of catching up, liberalizationand deregulation(K Ohno 1996)

East Asia’s Solution

Why Power Concentration is Needed?

Adopt Authoritarian Developmentalism (AD) during
the take-off (for a few decades) Growth requires a critical mass of mutually

Key ingredients of AD Powerful and wise (=economically literate) top leader Development as a supreme national goal (obsession) Technocrat group to support leader and executepolicies
 Legitimacy derived from successful development
 Popular support (because of rising income)enforcing policies. A free hand of the state isneeded to mobilize resources quickly and flexibly.
 Private dynamism is weak in most developing
countries. The state must lead initially.
 If broad participation is allowed, policies are too
slow and can’t achieve critical mass due to:--Power struggle, party politics, interest groups, etc.
--Processes which require patience and compromise,
including parliamentary debate and consensus building--Some groups refuse to cooperate with state purposes

The leader, as the primary force of change, creates theother four conditions.

1Authoritarian Developmentalism in East Asia
1945

5055

60

65

7075

8060 61

Park Chung-hee

Chun Doo-hwan4975

Nationalist Party

Taiwan4648

53

QuirinoPhilippines

61

Marcos

55

46 48

Ramos

EstradaWahid

Lee Kuan-yew
7076

UMNO / Rahman

Razak

63

73

Sarit

Goh Chok-tong

MahathirHussein
75

77

80

88

Thanom

91

97

Prem
76

Chuan

Kriangsak

 AD emerges through election as well as a coup.
 AD is more likely to rise when the nation’s

existence is threatenedExternal enemy
Internal ethnic/social instability
 Incompetent and corrupt leader
 The rise and fall of AD is conditional mainly on the81

development stage of each country, butinternational environment also influences them.
Eg. Cold War – reduced global criticism of AD

ChatichaiVietnamese Communist Party

Labor Party
62

U Nu

Habibie90

People'sAction Party

48

Myanmar98

9951
Indochina
Communist Party

92

65

57 58

PhibunThailand

ChenShuibian

Lee Teng-hui

AquinoEmergence of AD

Kim Dae-jung

Suharto57

Malaysia

2000

97

Macapagal

59

LaborParty

Singapore95

Kim Young-sam

88

86

SkarnoIndonesia

90

87 88
92
Noh Taewoo

Chiang Ching-kuo

65

GarciaMagsaysay

Vietnam

78

Chiang Kai-shek

57

85

79

Rhee Syngman

Korea

88

Burma Socialist Programme Party / Ne Win

SLORC

Source: Akira Suehiro, Catch-up Type Industrialization , Nagoya University Press, 2000, p115.

Policy Mix of AD

Guaranteed Failure of Development?

 Developmental policies to accelerate growth

Samuel P.Huntington and Joan M. Nelson, No Easy Choice: Political Participationin Developing Countries, Harvard Univ. Press, 1976.

Development vision, plan & strategies, HRD, technology,
infrastructure, FDI attraction, SME promotion, policy finance,
subsidies, entry restriction, etc.

Technocratic Model Supplemental policies to solve growth-inducedproblems

Pollution, urbanization, migration, inequality (income & wealthgap), asset bubble, corruption, crime, drugs, HIV-AIDS,
materialism, decline of traditional/communal values, etc.

E.Asia’s Authoritarian Developmentalism
Economic growth
START
Developmental policies

New social problems(inequality, crime, pollution...)Political stability
END

A few decades later(checked)
Supplementingpolicies

Exit to a richer & more democratic society(examples: Korea, Taiwan)

Equalization

STARTSTART

Politicalsuppression(authoritarianism)

Both policies are required:--Growth policy without solving new problems leads to instability--Social policy without growth leads to stagnation and aid
dependency

Populist Model

Economic
growthRisinginequality

Increased
participation(democracy)

Political
instability

Politicalinstability

END

END

Socialexplosion!!!

Political
suppression!!!

Exit of AD

Economicstagnation

Catching-up
period(AD useful)High income
society
Democracy
Pluralism

Low
incometrap

 AD is a temporary regime of convenience, needed

only to push up the country to a higher level.

 Once a certain level is reached, AD becomes anobstacle to further development.

 Watanabe (1998) argues that successful AD meltsaway automatically through social change anddemocratic aspiration.

“if development under authoritarian regime proceeds successfully, it
will sow the seeds of its own dissolution” [improved living standards
and diversified social strata]

2

Exit of AD – A Less Optimistic View

Opponents of AD

 However, there are also barriers to exit: stubborn

 Many people oppose AD for lack of democracy.

leader, bureaucratic resistance, interest groups.
Therefore, leadership, policy and struggle arealso needed for an exit.
 Succession problem--strong leaders often refuse
to step down because they will be revenged,
jailed and even executed after transition, withmost (all?) of their policies denied and reversed.

“I do not subscribe to the idea that you need to delay
democratization just so that you can actually have growth orthat you can have democracy only when you can afford it.”(Dani Rodrik, 2006)
 Some argue that freedom, equality, participation,

empowerment are required for development.

“Expansion of freedom is viewed… both as the primary end andas the principal means of development.” (Amartya Sen, 1999)

Î For a smooth exit, political maturity must
accompany economic growth (difficult, but notimpossible)

Proponents of AD Others recognize AD as a useful, temporary

regime for latecomer development.

“The economic success of East Asia is largely attributable tothe adoption of developmentalism, i.e., the ideology thatplaces highest priority on economic development.” (ToshioWatanabe, 1995)“the institutional characteristics and requirements fordevelopment [accumulation, change] and for democracy[accommodation, compromise] pull in opposite directions…
democracies have great difficulty in taking rapid and farreaching steps to reduce structural inequalities in wealth”(Adrian Leftwich, 2005)

Millennium Development Goals (MDG), pro-poor growth,endogenous development, human security

Another View on AD
Ikuo Iwasaki, The Perspective on Asian Politics: From
Developmental State to Civil Society (2001), Japanese.
 The age of AD (1970s) is over; democracy took

over in the 1980s and 90s--except Singapore &Malaysia.
 Military regimes initially rose to restore orderand national unity. Later, the goal was switched
to development, without dismantling AD.
 AD fell because it lost legitimacy [not because of its
success as a booster rocket, as Watanabe argues]

 Civil society is needed for proper functioning ofdemocracy, but not necessarily for initialinstallation of democracy

Cf. Form vs. substance of democracy

History of South Korean Politics

Korean Experience
N.T.T.Huyen “Is There a Developmental Threshold forDemocracy?: Endogenous factors in the Democratization of SouthKorea” (2004)“Democracy as an advanced form of politics is notindependent from socio-economic development.”

1960

1970

1980

1990

Minjung Movement
SyngmanRhee(dictator)
Studentprotests“developmental threshold for democracy [is] a point in
the development process beyond which democracy canbe effectively installed and sustained.”

Corrupt &inefficientPark Chung Hee(dictator)
YushinConstitution(1972)

Growth under AD &North threat

Chun Doo
Hwan(dictator)
Kwangju
Massacre(1980)

People’s protest
mounts

RohTaeWoo

Return todemocracy(1987)

Picked by
Chun to beelected3

Korea: Per Capita GDP in 1990 USD
10000
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
1960 62

RulersStudents andprofessionals

Middle
class
38.5%
6466

68

70

72

7476

78

80

82848688909294

Farmers
80%

Political culture

EconomicgrowthSocialmobilization
Urbanization
Industrialization
Modernization

Compromise as common political culture
Active political participation
Values such as equality, moderation

Industrial workers,
peasants, miners
More than 50%

Democracy
Social structure
Rise of workers & middle class
Old classes losing power
Emergence of civil society

Ms. Huyen’s Model

1961

1985

Source: N.T.T.Huyen (2004)

Mild Form of AD?

Components of Democracy Is AD replicable in Africa? Central Asia?

 Human rights and freedom

Elsewhere?
 Can we separate effective resource mobilizationfrom freedom and human rights?
 Countries that do not face serious crisis, military
threat—can they also adopt AD partially toaccelerate growth?
 Countries that already have free election,functioning parliament, political competition,
human rights—can they also adopt elements ofAD without throwing out their politicalachievements?

REFERENCES
Huntington, Samuel P., and Joan M. Nelson, No Easy Choice:
Political Participation in Developing Countries, Harvard
University Press, 1976.
 Iwasaki, Ikuo, Ajia Seiji wo Miru Me: Kaihatsu Dokusai kara
Shimin Shakai e (The Perspective on Asian Politics: From
Developmental State to Civil Society), Chuko Shinsho, 2001,Japanese.
 Leftwich, Adrian, "Democracy and Development: Is There
Institutional Incompability?" Democratization, 12:5, Dec. 2005,
pp.686-703.
 Nguyen Thi Thanh Huyen, "Is There a Developmental
Threshold for Democracy?: Endogenous Factors in the
Democratization of South Korea," in ADB and VDF, Which
Institutions Are Critical to Sustain Long-term Growth inVietnam? Asian Development Bank, 2004 (English andVietnamese).
 Ohno, Kenichi, Shijo Iko Senryaku (Strategy for MarketTransition), Yuhikaku, 1996, Japanese.
 Ohno, Kenichi, and Izumi Ohno, eds, Japanese Views on
Economic Development: Diverse Paths to the Market,
Routledge, 1998.
Rulers and upperbourgeoisie

 Legitimacy (election)
 Rule of law
 Participation
 Public purpose Power decentralization (L-E-J, center-local)ÎOnly some components should be restricted, if at all, toconduct development policy. Amount of restriction
should be reasonable.
ÎRandom, excessive oppression should never be allowed.

Ohno, Kenichi, "The Role of Government in Promoting
Industrialization under Globalization: The East AsianExperience," in ADB and VDF, Which Institutions Are Criticalto Sustain Long-term Growth in Vietnam? Asian Development
Bank, 2004 (English and Vietnamese).
 Rodrik, Dani, "Home-grown Growth: Problems and Solutions
to Economic Growth," an interview with Harvard
International Review, Winter 2006, pp.74-77.
 Sen, Amartya, Development as Freedom, Anchor Books,
1999.
 Suehiro, Akira, Catch-up gata Kogyoka ron (Catch-up TypeIndustrialization), Nagoya University Press, 2000, Japanese.
 Wade, Robert, "The Case for Open-economy Industrial
Policy," paper for PREM conference on the Institutional
Foundation of Growth, World Bank, April 2006, Washington,DC, and GRIPS seminar, May 2006, Tokyo.
 Watanabe, Toshio, Shinseiki Asia no Koso (Designing Asia forthe Next Century), Chikuma Shinsho, 1995, Japanese.
English translation in Ohno-Ohno (1998).
4