Proposal preview

Theory and empirical performance

THEORY AND EMPIRICAL PERFORMANCE.
Economic Paradigm and performance in the long run (18th to 21th century):
To what extent are European development-theories on industrialization valid from a World point of view?

One of the major issues of economic history has been theories of industrialization and development. Most of them have been suggested during the 1950s and 1960s by authors such as K. Polanyi (1944), A. Gerschenkron (1952), W. W. Rostow (1960) or Raymond Aron (1963), all with the claim of a world-wide reach. The second issue these theories have in common is their “European” origin (“Europe” defined as Europe plus its Anglo-Saxon offshoots, such as the USA, Australia, etc.). There are at least four good reasons to re-visit these theories: During the ca. 50 years, which have elapsed since their publication, many former developing countries today count into the well-advanced or even the developed ones. Here we mention only Brazil, China, India, South Africa, South Korea, Spain or Turkey.

Former predictions will be evaluated in the light of real development.
1.1/ Earlier theories claimed world-wide reach, but Geert Hofstede and others showed that identical incentives lead to different reactions in different cultures. Thus: can non-European development be sufficiently explained by European-based theory?
1.2/ The theories are of above all macro-economic character, while our approach is primarily microeconomic oriented. We ask actor-based about performance of countries.
1.3/ The combination of contributions from developed and newly developed countries may lead to the demand for a non-European based theory on development or underline the validity of the existing ones – including all variations in between these two possibilities.

Format:
In order to prepare the session, we have scheduled the following four pre-conferences:
2.1/Rio de Janeiro, Brazil, August 17th and 18th, 2017 at Federal University of Rio de Janeiro. Local organizer: Luiz Carlo Delorme Prado, Professor, IE-UFRJ, Institute of Economics, Federal University of Rio de Janeiro
2.2/ Beijing, China, October 21st & 22nd, 2017 at Renmin University of China. Local organizer: Huang Chun and Wang Jüe, both of Renmin University of China
2.3/ Tokyo, Japan, November 15th & 16th, 2017 at Waseda University. Local organizer: Yago Kazuhiko, Waseda University.
2.4/ Paris, France, March 29th, 2018 at Académie des Sciences d’ Outre-Mer with the support of the University Paris – Sorbonne (Paris IV) and the CNRS (National Center for Scientific Research). Local organizer: Dominique Barjot, University Paris – Sorbonne (Paris IV)

This panel will follow a standard format (180’), with a general report issued of the four preparatory conferences (15 to 20’), nine papers and two discussants. If possible, the papers will be pre-circulated. Each panelist will have 10 minutes for presentation. The presentation of different papers will be followed by a general discussion and Q&A (70’) including a brief intervention of other organizers than D. Barjot and H. G. Schroter. We plan to have papers on port cities of the Atlantic and Indian Oceans and of the Mediterranean and other seas. Each paper will explore one or more issues/inquiries outlined above with an overall objective to develop a global comparative perspective.

Organizer(s)

  • Dominique Barjot Université Paris Sorbonne dominique.barjot@paris-sorbonne.fr France
  • Harm G. Schroeter University of Bergen harm.schroter@uib.no Norway
  • Yago Kazuhiko Waseda University yago@waseda.jp Japan

Session members

  • Louis Galambos, Johns Hopkins University
  • Norma Silvana Lanciotti, National University of Rosario/ National Scientific and Technical Research Council
  • Martín Schorr, National University of San Martin
  • Gustavo García, National University of Rosario
  • Olivier Feiertag, University of Rouen-Normandy
  • Grietjie Verhoef, University of Johannesburg
  • Mehmet Bulut, Istanbul Sabahattin Zaim University
  • Rui Sun, Renmin university of China
  • Qing Wang, Renmin university of China
  • Chun Huang, Renmin university of China
  • Jue Wang, Renmin university of China
  • Franck Michelin, Teikyo University
  • Martin Shanahan, University of South Australia
  • Luiz Carlos Delorme Prado, Federal University of Rio de Janeiro
  • Pierre Lanthier, Université du Québec à Trois-Rivières

Discussant(s)

  • Albert Carreras Universitat Pompeu albert.carreras@upf.edu
  • Irina Potkina Institute of Russian History, RAS ivpotkina@gmail.com

Papers

Panel abstract

To what extent are European development-theories on industrialization valid from a World point of view? One of the major issues of economic history has been theories of industrialization and development. Most of them have been suggested during the 1950s and 1960s by authors such as K. Polanyi (1944), A. Gerschenkron (1952), W. W. Rostow (1960) or Raymond Aron (1963), all with the claim of a world-wide reach. The second issue these theories have in common is their “European” origin (“Europe” defined as Europe plus its Anglo-Saxon offshoots, such as the USA, Australia, etc.). There are at least four good reasons to re-visit these theories: During the ca. 50 years, which have elapsed since their publication, many former developing countries today count into the well-advanced or even the developed ones. Here we mention only Brazil, China, India, South Africa, South Korea, Spain or Turkey.

1st half

To what extent are european development-theories on industrialization valid from a world point of view (18th to 21th century)?

Dominique Barjot

To what extent can these traditional theories be meaningfully applied to non-European countries? Traditional theories on the World’s development, especially industrialization, have a Western Europe-biased design Consequently, it is valuable to mobilize the recent achievements in business history and of microeconomic research on companies, the state and consumers. The purpose is evaluating the role of business, both large and small, in the growth dynamic of both industrialized and emerging nations, by exploring their performance, strategies and types of organization, together with the social, cultural and environmental implications of their behaviour as actors. The issue of the emergence of globalization bears upon many fundamental questions: the growth of mass consumption and Americanization; public policy, both cyclical and structural; firms’ investment policies and, more broadly, operational and strategic decisions, taking into account transaction costs; the interaction of social networks and/or techniques, spatial dynamics (industrial districts, local productive systems and clusters); path dependency.

To what extent can these traditional theories be meaningfully applied to non-European countries? Traditional theories on the World’s development, especially industrialization, have a Western Europe-biased design Consequently, it is valuable to mobilize the recent achievements in business history and of microeconomic research on companies, the state and consumers. The purpose is evaluating the role of business, both large and small, in the growth dynamic of both industrialized and emerging nations, by exploring their performance, strategies and types of organization, together with the social, cultural and environmental implications of their behaviour as actors. The issue of the emergence of globalization bears upon many fundamental questions: the growth of mass consumption and Americanization; public policy, both cyclical and structural; firms’ investment policies and, more broadly, operational and strategic decisions, taking into account transaction costs; the interaction of social networks and/or techniques, spatial dynamics (industrial districts, local productive systems and clusters); path dependency.

Are European development-theories on industrialization valid from a world point of view? Harm G. Schröter

Harm G. Schröter

Major theories of industrialization have been suggested after WWII by authors such as Polanyi (1944), Gerschenkron (1952), Rostow (1960) or Aron (1963), all with the claim of a world-wide reach. Common to all theories is their “European” origin (“Europe” including offshoots, such as the USA etc.). There are at least three reasons to re-visit these theories: 1) During the 50 years after their publication many former developing countries today count into the developed ones (e.g. China, South Korea or Spain). Former predictions need evaluation in the light of real development. 2) Theories claimed world-wide reach, but Hofstede showed that identical incentives lead to different reactions in different cultures. Can non-European development be explained by European-based theory? 3) We confront the macroeconomic theories with a microeconomic.

Major theories of industrialization have been suggested after WWII by authors such as Polanyi (1944), Gerschenkron (1952), Rostow (1960) or Aron (1963), all with the claim of a world-wide reach. Common to all theories is their “European” origin (“Europe” including offshoots, such as the USA etc.). There are at least three reasons to re-visit these theories: 1) During the 50 years after their publication many former developing countries today count into the developed ones (e.g. China, South Korea or Spain). Former predictions need evaluation in the light of real development. 2) Theories claimed world-wide reach, but Hofstede showed that identical incentives lead to different reactions in different cultures. Can non-European development be explained by European-based theory? 3) We confront the macroeconomic theories with a microeconomic.

Development Theory and American Industrialization

Louis Galambos

Historians and economists are interested in the same subject but they approach that subject from different perspectives and with different objectives. As one might expect, they come to different conclusions about the long-term process of economic development that took place during industrialization. Although they are approaching their subject from a national perspective, most American historians stress individual actions of entrepreneurship that are time and place particular. They look as well to the culture that makes it likely that these actions will be copied and their impact spread through a region and ultimately the entire society. In both history and in development theory, there is recognition that financial support is essential to innovators, but the economists stress aggregates and the historians look to the varieties of institutions and individuals who have backed entrepreneurs from Samuel Slater to Steve Jobs. Theory and history are both useful so long as their differences are...

Historians and economists are interested in the same subject but they approach that subject from different perspectives and with different objectives. As one might expect, they come to different conclusions about the long-term process of economic development that took place during industrialization. Although they are approaching their subject from a national perspective, most American historians stress individual actions of entrepreneurship that are time and place particular. They look as well to the culture that makes it likely that these actions will be copied and their impact spread through a region and ultimately the entire society. In both history and in development theory, there is recognition that financial support is essential to innovators, but the economists stress aggregates and the historians look to the varieties of institutions and individuals who have backed entrepreneurs from Samuel Slater to Steve Jobs. Theory and history are both useful so long as their differences are understood.

When theories don’t fit: Rethinking the theories of economic development for South America. Argentina and Brazil 1945-2015

Norma Silvana Lanciotti, Martín Schorr, and Gustavo García

In the mid-1940s, debates on economic development re-entered the field of economic studies. Two distinct approaches were then formulated. On the one hand, those who supported the Ricardian principle of comparative advantages (Rosenstein-Rodan, Nurkse, Lewis and Rostow), based on the Harrod –Domar economic growth model, emphasized that private investments coordinated by the Government could modernize the underdeveloped economies to achieve a "balanced economic growth". On the other hand, economists like Myrdal and Hirschman questioned the idea of "balanced growth" and proposed instead that Government should actively protect domestic markets, support industrial activities, promote productive linkages and coordinate the sectoral distribution of investments. Also did Raul Prebisch, founder of Latin American economic structuralism. The Economic Commission for Latin America and the Caribbean (ECLAC) emphasized that the specialization in the production of primary products for export of Latin American economies was an obstacle to economic development. Only Government’s structural reforms aimed at...

In the mid-1940s, debates on economic development re-entered the field of economic studies. Two distinct approaches were then formulated. On the one hand, those who supported the Ricardian principle of comparative advantages (Rosenstein-Rodan, Nurkse, Lewis and Rostow), based on the Harrod –Domar economic growth model, emphasized that private investments coordinated by the Government could modernize the underdeveloped economies to achieve a "balanced economic growth". On the other hand, economists like Myrdal and Hirschman questioned the idea of "balanced growth" and proposed instead that Government should actively protect domestic markets, support industrial activities, promote productive linkages and coordinate the sectoral distribution of investments. Also did Raul Prebisch, founder of Latin American economic structuralism. The Economic Commission for Latin America and the Caribbean (ECLAC) emphasized that the specialization in the production of primary products for export of Latin American economies was an obstacle to economic development. Only Government’s structural reforms aimed at the diversification of the productive structure, the progressive distribution of income and the expansion of domestic markets could contribute to the development of Latin American countries. Since the end of the 1990s, neo-developmentalism assigned a leading role to Governments to promote economic diversification, but following mainstream economic standards of budget balance, public savings and free trade. The paper proposes to evaluate the results of development theories and policies in two Latin American countries, Argentina and Brazil, focusing in the diversification of the economy and the role of foreign firms in the top 100 companies. At first, we review the main arguments of developmentalist theories and government policies from the 1950s to 2000. Then, we examine the evolution of the top 100 companies in Argentina and Brazil from 1944 to 2015 to identify the changes in the sectoral distribution of the activities controlled by the largest companies, their export share and the presence of foreign multinationals in each period. The business structure of both countries will be compared during the period of industrialization led by the State, in contrast to the period of the new global economy from the 1990s to 2015.

Antitrust and Competition Policy in Brazil: A Historical Perspective

Luiz Carlos Delorme Prado

The first Brazilian antitrust law and the public body that was supposed to enforce this law, The Administrative Council for Economic Defense (CADE) were launched 55 years ago, in 1962, in the broad package of the "Basic Reform Program" instituted in the João Goulart Government. However, with the Law 8884/1994, the antitrust law and CADE were, actually, restructured within the framework of the "Liberal Reforms" of the 1990s and a modern system of competition law with an independent antitrust agency was established. This paper studies how CADE was created and how it survives through a period when competition was not considered an important issue in Brazil. It discusses the emergence of a new antitrust law and a modern antitrust authority in the 1990s. Finally it discusses the changes in Brazilian competition policy in the last twenty years and the main antitrust cases that were submit to CADE during those years.

The first Brazilian antitrust law and the public body that was supposed to enforce this law, The Administrative Council for Economic Defense (CADE) were launched 55 years ago, in 1962, in the broad package of the "Basic Reform Program" instituted in the João Goulart Government. However, with the Law 8884/1994, the antitrust law and CADE were, actually, restructured within the framework of the "Liberal Reforms" of the 1990s and a modern system of competition law with an independent antitrust agency was established. This paper studies how CADE was created and how it survives through a period when competition was not considered an important issue in Brazil. It discusses the emergence of a new antitrust law and a modern antitrust authority in the 1990s. Finally it discusses the changes in Brazilian competition policy in the last twenty years and the main antitrust cases that were submit to CADE during those years.

Typologies of Industrialization: lessons from Spain for the world

Albert Carreras

I will survey what do we learn with the various typologies of industrialization (from Clark, Hoffman, Rostow, Gerschenkron, Lewis, Chenery, Adelman, and others to O'Brien, Allen, Prados de la Escosura and Acemoglu and Robison) to understand the pitfalls, disappointments and successes of Spanish industrialization, from the 18th to the 21st centuries. There are, indeed a number of lessons in positive or in negatives. Out of these lessons -or lack of them- for Spain, I will survey what can we learn from the Spanish experience for the rest of the world. The Spanish experience has a lot to say looking at Latin America industrialization, at Middle Eastern countries, at Eastern European countries or at Chinese industrialization, as well as regard Southern European countries.

I will survey what do we learn with the various typologies of industrialization (from Clark, Hoffman, Rostow, Gerschenkron, Lewis, Chenery, Adelman, and others to O'Brien, Allen, Prados de la Escosura and Acemoglu and Robison) to understand the pitfalls, disappointments and successes of Spanish industrialization, from the 18th to the 21st centuries. There are, indeed a number of lessons in positive or in negatives. Out of these lessons -or lack of them- for Spain, I will survey what can we learn from the Spanish experience for the rest of the world. The Spanish experience has a lot to say looking at Latin America industrialization, at Middle Eastern countries, at Eastern European countries or at Chinese industrialization, as well as regard Southern European countries.

Francafrica and Chinafrica two patterns of economic development in West and Central Africa Olivier Feiertag

Olivier Feiertag

The paper aims to compare the capital inflows from France and from China in West and in Central Africa from the 1970s to the Present Time. Data are provided by official sources (Reports on the Franc Zone, Bank of France and Reports of the Finance Ministry of China, Archives of the IMF and the WB). We try to deal with two main issues: to what extent French and Chinese investments in Africa put light on two different patterns of economic development? Which lessons could be drawn from the history of the Franc Zone in Africa? Does it play the role of an optimal currency area or does it constitute only a protectionist device in order to continue the colonial link between France and its former Empire?

The paper aims to compare the capital inflows from France and from China in West and in Central Africa from the 1970s to the Present Time. Data are provided by official sources (Reports on the Franc Zone, Bank of France and Reports of the Finance Ministry of China, Archives of the IMF and the WB). We try to deal with two main issues: to what extent French and Chinese investments in Africa put light on two different patterns of economic development? Which lessons could be drawn from the history of the Franc Zone in Africa? Does it play the role of an optimal currency area or does it constitute only a protectionist device in order to continue the colonial link between France and its former Empire?

2nd half

The development of the Ottoman economy from the era of industrial revolution to the present times: political economy, dynamics and paradigm in economic sustainability

Mehmet Bulut

It can be said that the history of Ottoman economy was more complex and uneven than the notion of steady decline would imply. It seems that the Ottomans did not follow the modern western capitalist path to economic growth and development. Because of that according to Eurocentric approach the Ottoman economy failed in transition from a traditional to the modern industrial one. The main aim of this paper is to present a clear picture on the dynamics of the economic growth and development of the Ottoman economy from the nineteenth century onwards. Ottoman economy showed signs of significant dynamism and growth over time. However sustainability and balance are more important than fast change and growth in the Ottoman economic mentality and paradigm. We realise that during the times of the industrial era in the West, the Ottoman economy could well have been much more dynamic and robust than what Eurocentric...

It can be said that the history of Ottoman economy was more complex and uneven than the notion of steady decline would imply. It seems that the Ottomans did not follow the modern western capitalist path to economic growth and development. Because of that according to Eurocentric approach the Ottoman economy failed in transition from a traditional to the modern industrial one. The main aim of this paper is to present a clear picture on the dynamics of the economic growth and development of the Ottoman economy from the nineteenth century onwards. Ottoman economy showed signs of significant dynamism and growth over time. However sustainability and balance are more important than fast change and growth in the Ottoman economic mentality and paradigm. We realise that during the times of the industrial era in the West, the Ottoman economy could well have been much more dynamic and robust than what Eurocentric decline thesis would suggest. Recent research indicate that certain sectors and regions of the Ottoman economy enjoyed considerable economic growth and dynamism during the nineteenth century. We had seen that the priority for the Ottomans was sustainable economic growth and balance in the society over time. Moreover this paper also analyses the dynamics of the economic change and growth in modern Turkey from the establishment of the modern Republic until present times.

South in Africa, metropolitan in culture: industrial development trajectory of South Africa

Grietjie Verhoef

Industrialisation in South Africa followed the resource determined forward and backward linkages in Rostowian fashion. From the nineteenth century agro-industries established the initial foundation of Schumpeterian entrepreneurial changes to agrarian life. The transition into industrialisation occurred within the Polanyian state intervention in the market to drive industrial development. The context of the mineral- agrarian economy determined state mitigation of the high cost structure of the economy. Geographical location, factors of production (labour, capital) and policy directives determined a market intervention. Import-substitution as strategic policy option as proposed by Prebisch, was followed, but the state refrained from full socialism or central market planning. The industrialisation of the South African economy gained momentum since the 1920 under protectionist state industrial policies. Powerful business groups, corporate entrepreneurs, especially from the mining sector, collaborated with state protectionism. The Gerschenkronian latecomer effect indeed played itself out in South African industrialisation, but local human capital developed...

Industrialisation in South Africa followed the resource determined forward and backward linkages in Rostowian fashion. From the nineteenth century agro-industries established the initial foundation of Schumpeterian entrepreneurial changes to agrarian life. The transition into industrialisation occurred within the Polanyian state intervention in the market to drive industrial development. The context of the mineral- agrarian economy determined state mitigation of the high cost structure of the economy. Geographical location, factors of production (labour, capital) and policy directives determined a market intervention. Import-substitution as strategic policy option as proposed by Prebisch, was followed, but the state refrained from full socialism or central market planning. The industrialisation of the South African economy gained momentum since the 1920 under protectionist state industrial policies. Powerful business groups, corporate entrepreneurs, especially from the mining sector, collaborated with state protectionism. The Gerschenkronian latecomer effect indeed played itself out in South African industrialisation, but local human capital developed innovative technology locally to enhance the industrialisation process. The trajectory of South African industrialisation reflects the establishment of a near first-world industrial base, grounded in a mix of scare factors of production (capital, entrepreneurship, skilled labour) and abundant factors of production ( unskilled labour, natural resources). Weberian traits of the Protestant work ethic is a significant driver of economic, and specifically industrial development in South Africa. The specific context of a European minority population controlling the political economy, eventually impacted negatively on the modernisation and progress of the industrial sector in South Africa by the end of the twentieth century. This paper will address the different theoretical explanations for the South African industrial development path.

Australia’s industrial development: The importance of importing capital and ideas

Martin Shanahan

Australia’s economic development has been described as a form of settler capitalism sans doctrines (Ville and Merrett, 2017) –ie heavily shaped by the need to respond to practical problems. This paper extends this idea to discuss the importance of business influences (both good and bad) imported from a variety of countries. While the influence of the English was important deep into the 20th century, European and Asian influences on industrialisation were also clearly discernible. While industrialisation under the pax Americana revealed the decline in the UK’s impact, contact with Asia now clearly shapes much of Australia’s industrial development. Endowed with a wide range of natural resources, Australia’s mix of imported and locally modified approaches to business, industrialisation and regulation has, to date, resulted in a high standard of living over a sustained period.

Australia’s economic development has been described as a form of settler capitalism sans doctrines (Ville and Merrett, 2017) –ie heavily shaped by the need to respond to practical problems. This paper extends this idea to discuss the importance of business influences (both good and bad) imported from a variety of countries. While the influence of the English was important deep into the 20th century, European and Asian influences on industrialisation were also clearly discernible. While industrialisation under the pax Americana revealed the decline in the UK’s impact, contact with Asia now clearly shapes much of Australia’s industrial development. Endowed with a wide range of natural resources, Australia’s mix of imported and locally modified approaches to business, industrialisation and regulation has, to date, resulted in a high standard of living over a sustained period.

Shibusawa Eiichi and the Rise of the Capitalist Economy in Northern Japan. A Research Project

Franck Michelin

This paper is an introduction to a research project on the role played by Shibusawa in the rise of modern capitalist Japan in Northern Japan in general, and in Akita prefecture in particular. Instead of building an integrated industrial group, he played a crucial role in fertilizing Japanese economy during its transition process to capitalism through his expertise and investments. In Akita, he especially played a role in the development of the banking system, but he also extended his activities to other fields as agriculture, silk and mining industries. At the turn of the twentieth century, his influenced declined. However, his prestige continued to be crucial for local actors. If Shibusawa’s role in the development of the capitalist in Northern Japan is not overwhelming, following his footsteps can help us to understand the main characteristics of the economy in regions remote from the main economic centers

This paper is an introduction to a research project on the role played by Shibusawa in the rise of modern capitalist Japan in Northern Japan in general, and in Akita prefecture in particular. Instead of building an integrated industrial group, he played a crucial role in fertilizing Japanese economy during its transition process to capitalism through his expertise and investments. In Akita, he especially played a role in the development of the banking system, but he also extended his activities to other fields as agriculture, silk and mining industries. At the turn of the twentieth century, his influenced declined. However, his prestige continued to be crucial for local actors. If Shibusawa’s role in the development of the capitalist in Northern Japan is not overwhelming, following his footsteps can help us to understand the main characteristics of the economy in regions remote from the main economic centers

Convergence and Divergence over the Growth Paradigm: the OECD Working Party 2 and Japan’s Doubling National Income Plan (1961-1970)

Kazuhiko Yago

Japan’s postwar economic growth was driven by continuous plans, of which the most famous was the Doubling National Income Plan (1961-1970). This paper tries to reconstruct the visions proposed and debated among the Japanese officials involved in the process of making of these plans as well as the Organization for Economic Cooperation and Development (OECD), especially its Working Party 2 for the Economic Policy Committee in charge of the growth policy. The OECD, soon after its foundation in 1961, set up a growth target for member countries to achieve between 1960 and 1970s a growth of 50% in the real GNP. Japan, upon entering the OECD in 1964, would participate actively in this growth target. Viewing Japan’s growth plan and practice from the OECD point of view (and vice versa), our paper pays special attention to the convergence and divergence over the “growth paradigm” witnessed among the above actors.

Japan’s postwar economic growth was driven by continuous plans, of which the most famous was the Doubling National Income Plan (1961-1970). This paper tries to reconstruct the visions proposed and debated among the Japanese officials involved in the process of making of these plans as well as the Organization for Economic Cooperation and Development (OECD), especially its Working Party 2 for the Economic Policy Committee in charge of the growth policy. The OECD, soon after its foundation in 1961, set up a growth target for member countries to achieve between 1960 and 1970s a growth of 50% in the real GNP. Japan, upon entering the OECD in 1964, would participate actively in this growth target. Viewing Japan’s growth plan and practice from the OECD point of view (and vice versa), our paper pays special attention to the convergence and divergence over the “growth paradigm” witnessed among the above actors.

Chinese Model and the Path Choice of Economic Development: An Economic History Perspective

Rui Sun, Qing Wang, Chun Huang, and Jue Wang

For a deeper understanding of Chinese model of economic development, we must adopt a historical perspective and be cautious with the social evolution. China had formed a well-developed market with effective self-governance and had enjoyed vigorous foreign trade in the Ming and Qing Dynasties (1368-1911). The labor force in traditional China had always been high-quality but low-paid. The empire had boasted a healthy and well-functioning market economy under a political framework with a relatively centralized power structure. After the Reform and Opening-up in 1978, the model and social structure showed its vitality again. Therefore, it’s necessary to embed the relation between economy and politics into China’s special historical background to understand how it balances a certain degree of flexibility and stability and ultimately promotes China’s rapid economic growth today.

For a deeper understanding of Chinese model of economic development, we must adopt a historical perspective and be cautious with the social evolution. China had formed a well-developed market with effective self-governance and had enjoyed vigorous foreign trade in the Ming and Qing Dynasties (1368-1911). The labor force in traditional China had always been high-quality but low-paid. The empire had boasted a healthy and well-functioning market economy under a political framework with a relatively centralized power structure. After the Reform and Opening-up in 1978, the model and social structure showed its vitality again. Therefore, it’s necessary to embed the relation between economy and politics into China’s special historical background to understand how it balances a certain degree of flexibility and stability and ultimately promotes China’s rapid economic growth today.

The emergence of big business in India after 1991: from Gerschenkron back to Adam Smith?

Pierre Lanthier

After 1991, the Indian big business increased its productive capacity and managed to insert itself among the leading multinational firms. Henceforth, names like Tata, Infosys, Mahindra are well known internationally. In this paper, we examine the first 20 Indian companies according to their revenues. Most of them aren’t new, being state- or family-owned, but they have modernized their equipment and organization. Their multinationalisation has many reasons: new markets, natural resources, acquisition of technological knowhow, etc. However, the evolution of the Indian market remains the main factor for growth: the emergence of a new middle class and the (urgent) need for infrastructure are the prime movers. The companies also benefit from the prevalent informal economy in India and avoid excessive diversification. They also use the financial market generated by globalization. So, do we have the victory of the invisible hand over a strongly interventionist state? Actually, a more complex picture is...

After 1991, the Indian big business increased its productive capacity and managed to insert itself among the leading multinational firms. Henceforth, names like Tata, Infosys, Mahindra are well known internationally. In this paper, we examine the first 20 Indian companies according to their revenues. Most of them aren’t new, being state- or family-owned, but they have modernized their equipment and organization. Their multinationalisation has many reasons: new markets, natural resources, acquisition of technological knowhow, etc. However, the evolution of the Indian market remains the main factor for growth: the emergence of a new middle class and the (urgent) need for infrastructure are the prime movers. The companies also benefit from the prevalent informal economy in India and avoid excessive diversification. They also use the financial market generated by globalization. So, do we have the victory of the invisible hand over a strongly interventionist state? Actually, a more complex picture is emerging.

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