The developmental state in the 21st century

The ‘developmental state’ is a highly debated notion in development literature, having evolved from the extraordinary experience of late industrialising countries in East Asia. In this Discussion Paper we join a growing number of scholars to argue that changing global conditions call for a revitalisation of the debate on the role of the state in social and economic transformation in the 21st century. We focus on three main global challenges for economic development in the 21st century: climate change and environmental degradation; increased digitalisation (the increasingly ‘bit-driven’ economy); and changed policy space for individual states as a result of globalisation. These evolve simultaneously and reinforce each other. We argue that the global context calls for a change in the social contract that underpins structural economic transformation, by placing a stronger emphasis on cultivating inclusive state-society relations oriented towards promoting economic growth within planetary boundaries. Such emphasis is, in our view, currently under-represented in the emerging literature on a developmental state in the 21st century. For this reason, we consider it relevant not only to elaborate on the historical conditions that shaped the role of the state in industrial policy in late industrialising countries, but also on current challenges that call for a changing perspective on the role of the state in emerging and developing countries.