Dr. Muhannad Talib Al-Hamdi / Professor of Economics and Political Science, Kansas State University, United States of America
National governments have played an important role in the successful development experiences of East Asian countries. However, elsewhere in the world-including countries in Africa, Latin America, and the Middle East and North Africa-the government has often appeared to be an obstacle rather than a catalyst, stifling markets instead of facilitating their role in growth and development. In this chapter, we examine the question of balance and the relationship between the state and markets in the process of economic development. Achieving a balance between private markets and public policies poses a significant challenge. In the early years of development experiences following World War II and the end of the colonial era, the idea that the state is a benevolent supporter of development gained a foothold in public policies, albeit implicitly. However, the history of corruption, poor governance, and the capture of state apparatuses by special interest groups in many developing countries rendered this idea indefensible. More recently, a negative view of the government’s role in development has predominated; yet, this view is theoretically based and has failed to explain the constructive and significant role of the state in numerous successful development experiences, particularly in certain East Asian countries.
