Giuseppe Gabusi

‘The reports of my death have been greatly exaggerated’: China and the developmental state 25 years after Governing the Market

ABSTRACT The year 2015 marked the 25th anniversary of the publication of Robert Wades seminal book Governing the Market (GTM). In his book, Wade elaborates an approach stressing the role of the state in economic development. As the consequences of the Great Recession are forcing many governments and the International Financial Institutions themselves to put into question their ideological stance on unfettered free markets, the anniversary marks the occasion to review the concept of the developmental state (DS) through Wades GTM approach and re-assess its validity in the twenty-first-century global political economy. Are policy measures historically implemented by the DS still feasible (and desirable) in a globalized era dominated by global value chains? With an eye to the peculiar Chinese experience in the past decades, the paper argues that the key principles in GTM – as properly understood – are still useful as policy prescriptions, as they show how developing countries could successfully start their economic take-off.

“Crossing the River by Feeling the Gold”: The Asian Infrastructure Investment Bank and the Financial Support to the Belt and Road Initiative

Chinas Belt and Road Initiative (BRI) is, above all, a connectivity project. As connectivity requires financial support, in the past few years China has undertaken several institution-building activities at the national and international level, mainly in the financial and economic sector, showing a new propensity to influence global economic governance. In particular, the establishment of the Asian Infrastructure Investment Bank (AIIB) has drawn attention worldwide. How does this institution-building process connect with BRI? Are these institutions just a vehicle for exporting Chinas capital and overcapacity, or do they signal a potential wider challenge to the post-World War II liberal international order? By analyzing the first loans approved by the bank, the present paper argues that far from representing a China-led challenge to the Western-led liberal order, the AIIB, while promoting Chinese commercial and geopolitical interests, shows the resilience of the global financial regime created by the West.

State, Market and Social Order: Myanmar’s Political Economy Challenges

Since the beginning of the latest and most convincing phase of transition, Myanmar has emerged as the new possible frontier of economic development in Southeast Asia. Investors, political analysts, businessmen and NGOs alike have all rushed to the country in search of a new El Dorado. Are these hopes justified? Can Myanmar—one of the poorest countries in Asia—start a new phase of economic development which would not only benefit the owners of global capital, but also lift Myanmar’s population from poverty? Drawing on the literature on the political economy of institutions and some field research, the paper assesses whether policy choices made by the new government are heading the country in a direction which could generate a ‘new miracle’ in East Asia. To this purpose, domestic institutional constraints and the system of patronage are examined. Looking beyond the democracy vs dictatorship debate, the paper finds that Myanmar could well start a new phase of economic growth, provided that the government builds a strong vertical and horizontal institutional capacity. However, a more open political environment, and the consequent multiplication of economic interests, could hijack the reform plan the government has adopted, unless these stakeholders are inserted into a coordinated framework revolving around a transformational project of national development.

The Hubris of the West in a Fragmented World: Global Economic Governance at Risk

Bibliography: Gabusi, Giuseppe: The Hubris of the West in a Fragmented World: Global Economic Governance at Risk, ERIS, 2-2015, pp. 94-107. https://doi.org/10.3224/eris.v2i2.20682