Financial Power and the Developmental State

Abstract

This chapter develops the theoretical framework that guides the empirical analysis. To this end, it first characterizes the political economy of the developmental state. In a second step, it examines if China falls into the category of the developmental state. It then introduces the concept of the instrumental developmental state to account for the crucial differences between China’s political economy and the political economy of the classic developmental states of Japan, South Korea and Taiwan. In a third step, it develops a typology of financial power and provides an overview of the implications of the political economy of the developmental state for its financial power potential.