Industrial Transformation in the Developing World

OXFORD GEOGRAPHICAL AND ENVIRONMENTAL STUDIES General Editors: Gordon Clark, Andrew Goudie, and Ceri Peach INDUSTRIAL TRANSFORMATION IN THE DEVELOPING WORLD Editorial Advisory Board Professor Kay Anderson (Australia) Professor Felix Driver (United Kingdom) Professor Rita Gardner (United Kingdom) Professor Avijit Gupta (Singapore) Professor Christian Kesteloot (Belgium) Professor David Thomas (United Kingdom) Professor B. L. 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Bakker Manufacturing Culture The Institutional Geography of Industrial Practice Meric S. Gertler Thailand at the Margins Internationalization of the State and the Transformation of Labour Jim Glassman Industrial Transformation in the Developing World Michael T. Rock and David P. Angel 1 3 Great Clarendon Street, Oxford ox2 6dp Oxford University Press is a department of the University of Oxford. It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide in Oxford New York Auckland Cape Town Dar es Salaam Hong Kong Karachi Kuala Lumpur Madrid Melbourne Mexico City Nairobi New Delhi Shanghai Taipei Toronto With oYces in Argentina Austria Brazil Chile Czech Republic France Greece Guatemala Hungary Italy Japan Poland Portugal Singapore South Korea Switzerland Thailand Turkey Ukraine Vietnam Oxford is a registered trade mark of Oxford University Press in the UK and in certain other countries Published in the United States by Oxford University Press Inc., New York ß Michael T. Rock and David P. Angel 2005 The moral rights of the authors have been asserted Database right Oxford University Press (maker) First published 2005 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, or under terms agreed with the appropriate reprographics rights organization. Enquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above You must not circulate this book in any other binding or cover and you must impose the same condition on any acquirer British Library Cataloguing in Publication Data Data available Library of Congress Cataloging-in-Publication Data Rock, Michael T. Industrial transformation in the developing world/Michael T. Rock and David P. Angel. p. cm. — (The Oxford geographical and environmental studies) ISBN 0-19-927004-X (alk. paper) 1. Industries—East Asia. 2. Industries—Environmental aspects —East Asia. 3. Industries—Developing countries. 4. Industries— Environmental aspects—Developing countries. I. Angel, David P. II. Title. III. Series. HC59.7.R573 2005 338’.09172’4—dc22 2005018649 Typeset by SPI Publisher Services, Pondicherry, India Printed in Great Britain on acid-free paper by Biddles Ltd, King’s Lynn ISBN 0-19-927004-X 978-0-19-927004-0 For Maggie and Jocelyne Editors’ Preface Geography and environmental studies are two closely related and burgeon- ing Welds of academic enquiry. Both have grown rapidly over the past few decades. At once catholic in its approach and yet strongly committed to a comprehensive understanding of the world, geography has focused upon the interaction between global and local phenomena. Environmental studies, on the other hand, have shared with the discipline of geography an engagement with diVerent disciplines, addressing wide-ranging and signiWcant environmental issues in the scientiWc community and the policy community. From the analysis of climate change and physical environmental processes to the cultural dislocations of postmodernism in human geography, these two Welds of enquiry have been at the forefront of attempts to comprehend transform- ations taking place in the world, manifesting themselves as a variety of separate but interrelated spatial scales. The Oxford Geographical and Environmental Studies series aims to reXect this diversity and engagement. Our goal is to publish the best original research in the two related Welds, and, in doing so, to demonstrate the sign- iWcance of geographical and environmental perspectives for understanding the contemporary world. As a consequence, our scope is deliberately international and ranges widely in terms of topics, approaches, and methodolo- gies. Authors are welcome from all corners of the globe. We hope the series will help to redeWne the frontiers of knowledge and build bridges within the Welds of geography and environmental studies. We hope also that it will cement links with issues and approaches that have originated outside the strict conWnes of these disciplines. In doing so, our publications contribute to the frontiers of research and knowledge while representing the fruits of particular and diverse scholarly traditions. Gordon L. Clark Andrew Goudie Ceri Peach Preface Issues of resources and the environment have manifestly always been ‘of the economy’. And yet few would dispute that the environment is now visibly part of the contested dynamics of industrial change in a way not seen in the recent past. The most evident shift is simply an increased awareness of, and concern for, resources and the environment, and an attendant tendency for Wrms, regions, and national economies to come under greater pressure to address environmental concerns. And yet what perhaps is most notable about the past two decades is not so much the elevated concern for the environment as the opening up for scrutiny and analysis of basic processes of economic and industrial change. During the 1960s and 1970s, environmental protection was constituted largely as an external mandate to Wrms and industries, leaving the dynamics of investment, production, and technology change outside of the regulatory regime as a reactive black box of economic change. What is now under way is a more direct engagement with economic processes, both by Wrms themselves, and by policy makers concerned with the relationship between economic growth and the environment. Such processes as technology development, innovation and learning, subcontracting relations, foreign direct investment, and trade are being examined in relation to, and through the lens of, pollution and resource use. The insights gained about these economic processes provide the foun- dation for this book. Nowhere is this shift toward a more direct engagement with the economy– environment interface of greater signiWcance than in the industrializing economies of the developing world. Within many developing economies during the 1970s and 1980s environmental mandates simply went unfulWlled as priority was given to growth and economic development. In the absence of a substantive understanding of how processes of innovation, technology transfer, and investment might be harnessed to diVerent development and environmental ends, environmental protection was typically positioned pol- itically as in opposition to the search for poverty-reducing, industry-led economic growth. It is this policy dilemma that provides the starting point for our book. We examine in theoretical and empirical terms the institutional, governance, and policy structures that might support a turn in the trajectory of industrialization to patterns of development that are both viii Preface poverty-reducing and less energy, resource, and pollution intensive. In tack- ling these questions, we necessarily confront the signiWcant changes that are under way within the global economy, from trade and investment liberaliza- tion to the emergence of new forms of domestic and international governance of economic change. Our analysis begins with basic processes of investment, production, and trade—with Xows of capital and technology, and with processes of learning and innovation within Wrms and industrial economies. Only on the basis of an understanding of these economic processes, we argue, can the questions of reducing energy, resource, and pollution intensities be addressed. We make this argument on both conceptual and political grounds. In theoretical and empirical terms, we need to understand the structure and dynamics of industrial change within the contemporary global economy as a basis for identifying institutional forms and points of policy intervention that are likely to be eVective in shaping environmental performance. In political and pragmatic terms, any institutional and policy analysis that is not prem- ised upon a prior commitment to understanding how to achieve durable, poverty-reducing industrial growth is unlikely to succeed. We pursue the research as a

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