Why States Matter in Economic Development

Jawied Nawabi is Associate Professor of Economics, Sociology, and International Studies at the City University of New York–Bronx Community College.

• 1: Introduction 2: Methodology and Definitions 3: The Lessons of European State Formation for the Developing Countries 4: The Socioeconmic Origins of South Korea’s Developmental State and Its Agro-Industrial Path to Development 5: Brazil’s Stunted Development: Neither Enough Order Nor Progress 6: India: Only a Developmental State Can Provide Roti, Kapada, and Makaan (Bread, Clothes, and Shelter) for the Nation 7: Conclusion and Transferrable Lessons

"What enables nations to become wealthy has been the subject of inquiry at least since the publication of Adam Smith's 1776 magnum opus. The matter remains unresolved, especially with regard to the role of the government, but now Nawabi (CUNY) proposes to argue, compellingly and with empirical evidence, that states are indispensable in the effort to promote economic development. This book goes beyond the shibboleths of good governance, inquiring into the conditions that are likely to engender an effective administration."S. Paul, Elizabethtown College, USA, writing in CHOICE Reviews, February 2025 Vol. 62 No. 6. "Drawing on insights from comparative historical analysis, Jawied Nawabi argues convincingly that major land reform initiatives are indispensable for those developing nations that seek to build effective developmental states. Along the way, he explains why the neoliberal policies of the last half century have failed miserably."Fred Block, Research Professor of Sociology, University of California, Davis, USA."Finally, a book on states and development that recognizes the role of power imbalances! This fascinating book provides a fresh and persuasive argument on why and how some states have been more effective in furthering economic development: the relationship between initial wealth inequalities (particularly of land) and the state bureaucracies that form in consequence. Must-read for anyone interested in the development process."Jayati Ghosh, Professor of Economics, University of Massachusetts Amherst and Jawaharlal Nehru University, New Delhi, India."In this excellent and historically grounded book, Jawied Nawabi reveals the truth of the following maxim: “strong landed elites, no socioeconomic development.” Nawabi shows how states across diverse contexts have used agrarian reform to weaken powerful agrarian actors, and how this weakening in turn has fostered successful development projects. Highly recommended."James Mahoney, Professor of Sociology and Political Science, Northwestern University, USA."While the literature on developmental states has a long pedigree stemming back to the 1980s, nevertheless, this superb book imparts refreshing, novel and vitally important insight. Most significantly, Nawabi addresses the elephant in the room within this literature – empire. What happens when we factor in the legacy of empire on the question of development and the appropriate role of the state in the economy? By looking at three postcolonial states, this book shifts our gaze to considering how and to what extent states are able to overcome the centrifugal forces and blockages to development that strong agrarian elites which flourished under empire entail. Only once this is achieved and with the activist state girded with the right amount of institutional autonomy together with it becoming subsequently embedded within civil society more broadly can successful development be achieved. While this book also provides an excellent introduction to the neo-statist literature, nevertheless, even for all those who think they know this literature inside-out, it would be entirely remiss not to read this book."John M. Hobson FBA, Professor of Politics & International Relations, University of Sheffield, UK."Nawabi focuses on the key factors for achieving development through an insightful historical comparative analysis of the process of economic development of three well-chosen countries in both the global north and south. The reader gains insights into the requirements for an effective developmental state which is able to design and implement a sustainable development process. I particularly commend Nawabi for stressing not only that states matter but also that radical land reforms matter in countries dominated by rent-seeking landlords."Cristóbal Kay, Emeritus Professor, International Institute for Social Studies (ISS), Erasmus University, Rotterdam, The Netherlands. "This richly-detailed, compelling, comparative institutional study of Brazil, India and Korea analyzes a vexing development conundrum: Agrarian power blocs frequently forestall state-led national projects designed to implement necessary structural changes, including land redistribution. Constraining entitled landholders’ entrenched autonomous power requires rarely-encountered countervailing developmental state capacities to transcend adverse colonial/postcolonial legacies."James M. Cypher, Doctoral Program in Development Studies, Universidad Autónoma de Zacatecas, Mexico."Professor Nawabi has produced an important study of the importance of the state and the underlying class relations in the process of economic development using a historical comparative method of analysis. He emphasizes the importance in which pre-capitalist agrarian elites were incorporated in modern societies, not to discuss the roots of authoritarian and democratic regimes as in Barrington Moore’s classic study, but to understand the emergence of efficient developmental states. This is an essential reading for those interested in the role of developmental states in understanding the wealth of nations."Matías Vernengo, Professor of Economics, Bucknell University, USA."The building of an effective state is critical to the processes underpinning economic development. In this important new book, Jawied Nawabi identifies a rigorous relationship between effective states and wealth equality, particularly with regard to land. The implications are stark: the transformation of land-based agrarian relations remains fundamental to the formation of state capacity. The many insights of this book make it essential for all students, scholars and practitioners of economic development."Haroon Akram-Lodhi, Professor of Economics and International Development Studies, Trent University, Peterborough, Canada.