Dissertation Titel der Dissertation Quo vadis, developmental state? A comparative analysis: Japan and Croatia Verfasserin Mag.rer.soc.oec. Maja Šoštarić Angestrebter akademischer Grad Dr.phil. Wien, im April 2009 Studienkennzahl lt. Studienblatt: A 092 300 Studienrichtung lt. Studienblatt: Politikwissenschaft Betreuer: Univ. Prof. Dr. Ulrich Brand To my mother and my very best friend, who made me believe that “there’s no such place as far away” Preface and acknowledgements Although I am a graduate in economics, I have always been interested in political science and international affairs. After having graduated in June 2007, I was admitted to Diplomatic Academy of Vienna. Moreover, during summer 2007, I first considered enrolling into a doctoral programme in political science in order to broaden my knowledge in international politics and international relations. Still, I have never wanted to write exclusively about a subject in the field of political science, but rather, my wish was to link the dissertation subject to the knowledge of economics I had already acquired. Actually, political economy caught my interest during my undergraduate studies. I heard about the notion of developmental state for the first time while studying for a Magister in economics, during a class on international economics and development. I knew immediately that I wanted to know more about it. At the same time, I started learning Japanese in 2006 and was absolutely fascinated by the language, and, generally, by Japan’s politics, economics and culture. Hence, for my dissertation topic I decided to merge all subjects I am passionate about in a unique study: political science, economics, Japan, and finally, my own home country, Croatia. Therefore my expression of thanks goes firstly to Professor Ulrich Brand, who did not hesitate to accept the supervision of my doctoral thesis, although I was new at the Institute of Political Sciences. Professor Brand’s valuable advice, helpful assistance and very detailed comments were of great help for me. Moreover, I want to thank Professor Minoru Sawai from the Department of Economics, Osaka University, who was at my disposition for all information I needed during my doctoral research in Osaka in summer 2008. Of course, I must not forget the Japan Foundation in Kansai that selected and fully sponsored me during a two-month programme for young researchers in summer 2008. Both the Japanese language course and the assistance for the doctoral research offered by the Japan Foundation were unmatched and superb. Additionally, I want to mention the Paris Dauphine University, where I spent an exchange semester in 2008/09, and where I was gratefully given permission to use a library designed for the Dauphine master and doctoral students only. Finally, if it had not been for the constant moral and financial support of my mother, I would have never learned what I know today, I certainly would not have seen as much of the world as I did, and, consequently, I would have never written this doctoral thesis. TABLE OF CONTENTS INTRODUCTION ............................................................................................................... 11 PART I: SUMMARIZING THEORIES OF THE STATE............................................... 19 CHAPTER 1: DEMYSTIFYING THE STATE ................................................................ 21 1.1 THE MAIN CLASSIC THEORIES OF THE STATE ........................................... 21 1.1.1 THE NEW RIGHT ................................................................................................................. 25 1.1.2 ELITE THEORY ........................................................................................................................ 28 1.1.3 MARXISM AND NEOMARXISM....................................................................................... 32 1.1.4 PLURALISM AND NEO-PLURALISM ........................................................................... 36 1.2 ENDOGENIZING STATE POWER.......................................................................... 42 1.2.1 STATE CAPACITY OR STATE CAPACITIES? ....................................................... 45 1.2.2 STATE CAPACITY IN VIEW OF ECONOMIC TRANSFORMATION........... 54 1.3 CONCLUSION: THE STATE, GLOBALIZATION AND THE FRAMEWORK OF NEO-PLURALISM ............................................................................................................. 57 CHAPTER 2: FROM THE DEVELOPMENTAL TO THE POST-DEVELOPMENTAL STATE................................................................................................................................. 61 2.1. DEVELOPMENTAL STATE: THE NOTION.......................................................... 62 2.1.1 THE STATE: BUREAUCRACY AND POLITICS...................................................... 67 2.1.2 STATE-LED INDUSTRIAL DEVELOPMENT........................................................... 75 2.1.3 THEORY OF SOCIAL CAPITAL ...................................................................................... 86 2.2 THE POST-DEVELOPMENTAL STATE................................................................. 89 2.2.1. THE NEOLIBERAL WASHINGTON CONSENSUS ............................................. 90 2.2.2 A FAILURE OF THE CONSENSUS: ARGENTINA................................................ 95 2.2.3 FROM THE POST-CONSENSUS TO THE NEW ECONOMIC CRISIS ..... 98 8 2.2.4 ARGUMENTS CALLING FOR A NEW REVISION OF THE CONCEPT OF DEVELOPMENTAL STATE......................................................................................................... 100 A. ‘IRON TRIANGLES’.................................................................................................................... 100 B. STATE AND BUSINESS AND... WELL, THAT’S IT.................................................. 105 2.3 CONCLUSION: DEVELOPMENTAL STATE - ACTORS AND THEIR POWER, NOW AND THEN ............................................................................................................ 108 PART II: CASE STUDIES .............................................................................................. 111 CHAPTER 3: JAPAN, DOKUJI NO MODERU ........................................................... 113 3.1. BIRTH OF THE JAPANESE DEVELOPMENTAL STATE: A SHORT HISTORY ............................................................................................................................................ 114 3.1.1. THE TOKUGAWA (EDO) PERIOD (1603-1868)................................................. 114 3.1.2. THE MEIJI RESTORATION (1868-1912) ............................................................... 121 3.1.3 FROM THE MEIJI INTO THE WARS: 1912-1945 ............................................... 128 3.1.4. AMERICAN OCCUPATION (1945-1952) UNTIL TODAY .............................. 133 3.2. JAPANESE DEVELOPMENTALISM.................................................................... 138 3.2.1. APPRAISAL OF JAPANESE ECONOMIC DEVELOPMENTALIS ............ 139 3.2.1.1. ANGLO-SAXON CAPITALISM VS. JAPANESE DEVELOPMENTALISM: THEORY AND PRACTICE........................................................................................................... 140 3.2.1.2. MARXISM VS. JAPANESE DEVELOPMENTALISM.................................... 143 3.2.1.3 CHALMERS JOHNSON AND HIS “SCHOOLS OF THOUGHT” ............. 147 3.2.2. ELEMENTS OF THE JAPANESE DEVELOPMENTAL STATE.................. 149 3.2.2.1. JAPANESE BUREAUCRACY................................................................................... 150 A. BUREAUCRACY AS THE PART OF AN “IRON TRIANGLE”.......................... 152 B. BUREAUCRACY AS PILLAR OF PILOT AGENCIES ............................................. 157 3.2.2.2 THE JAPANESE POLITICIANS ................................................................................ 162 3.2.2.3. BIG BUSINESSES AND THEIR RELATION TO LABOUR ....................... 168 3.3 CONCLUSION: JAPAN, MISUNDERSTOOD? ................................................... 174 9 CHAPTER 4: CROATIA, RELIQUIAE RELIQUARIUM?........................................... 177 4.1 SHORT REVIEW OF THE MODERN HISTORY OF CROATIA ....................... 179 4.1.1 CROATIA UNTIL WORLD WAR I................................................................................. 179 4.1.2 CROATIA IN THE FIRST YUGOSLAVIA UNTIL THE WORLD WAR II... 191 4.1.3 CROATIA IN THE SECOND YUGOSLAVIA........................................................... 199 4.1.4 FROM THE HOMELAND WAR TO THE EU-CANDIDACY............................ 207 4.2 ECONOMY OF YUGOSLAVIA, 1945-1990 ........................................................ 210 4.2.1 SHORT HISTORY OF THE YUGOSLAV ECONOMIC MODEL .................. 210 4.2.2 CHARACTERISTICS OF YUGOSLAV ECONOMY............................................ 217 A. POLITICAL AND LEGISLATIVE FRAMEWORK ........................................................ 217 B. BUREAUCRACY AND SOCIAL PLANNING ................................................................ 220 C. SELF-MANAGEMENT.............................................................................................................. 226 4.3 ECONOMIC TRANSFORMATION OF CROATIA AFTER 1990....................... 234 4.4 CONCLUSION: NEITHER SELF-MANAGEMENT NOR WILD CAPITALISM? ............................................................................................................................................ 239 PART III: RETHINKING THE DEVELOPMENTAL STATE ...................................... 243 CHAPTER 5: AND HOW ABOUT TODAY?...............................................................