The developmental state: Israel, South Korea, and Taiwan compared

Abstract

The growth performances of the Israeli economy during the years 1948-1973 were excellent by any criteria and are comparable to the 'miraculous' performances of South Korea and Taiwan. Excellent economic performances in the three countries were accompanied by the presence of an autonomous and an interventionist state as well as by strategies of governed development (in the spheres of finance, investment, and international trade). The comparison is used to shed new light on the Israeli political economy as well as on the replicability of the developmental state model across regions, cultures, and political regimes. First, by comparing the three countries and pointing to the similarities in the role and autonomy of the state, the article offers a different interpretation of the Israeli economy from that offered by both neoclassical and neomarxist interpretations of the Israeli political economy. Second, successful cases of development are rare in our world; this should make the study of the Israeli political economy a valuable case-study for the proponents of the developmental state model. By pointing out the similarities in the growth performances and the developmental strategies of Israel, Taiwan, and South Korea, as well as the dissimilarities in their political regimes, their cultural traditions, and their regional settings, this article further strengthens the arguments in favor of state-guided economic development in developing countries.