Peer-Reviewed Journal Details
Mandatory Fields
Huff, WG;Dewit, G;Oughton, C
2001
April
World Development
Credibility and reputation building in the developmental state: A model with East Asian applications
Published
13 ()
Optional Fields
ECONOMIC-DEVELOPMENT POLITICAL-ECONOMY LESSONS GROWTH CRISIS
29
711
724
We use a game-theoretic model to analyze the role of credibility, reputation and investment coordination in a developmental state. Our model focuses on why a "soft" slate serving narrow social groups so often obtains in less-developed countries and under what conditions a "hard" or developmental state can emerge. The model highlights the dilemma that although state and private sector alike may want economic growth, both must simultaneously invest to achieve it. But the equilibrium outcome-analogous to the prisoner's dilemma-is investment by neither. Even when initial conditions are favorable and a state is potentially developmental with the genuine capability to elicit private sector investment, this may not materialize and an equilibrium of low, or no, investment will prevail. To avoid this deadlock and foster growth, the successful developmental state must demonstrate commitment by promoting its "developmental" credentials through a process of reputation building. A. consequent incentive to act "tough" together with seeming advantages of authoritarianism in implementing the developmental state may help to explain why it is often associated with an authoritarian political system. (C) 2001 Elsevier Science Ltd. All rights reserved.
OXFORD
0305-750X
Grant Details