The Endogenous State and Economic Development : A Survey

Much of the analysis of the role of the state in economic development has been in terms of targets and means while the state itself has been treated like benevolent outsider that intervenes for the benefit of the citizens. Emphasising East Asia, this paper elaborates on some ideas about the developmental role of the state as an endogenous agent in the economy. This may help understand why policies sometimes appear irrational and counterproductive. The basic explanation is that if these policies benefit groups or individuals with a leverage on the state they may be pursued despite making the society as a whole worse off. To facilitate the analysis, stylised types of state are characterised and their behaviour is discussed. Perceivable transition paths between different types are also dealt with