Chapter

Speeding Up

Alice H. Amsden

in The Rise of “The Rest”

Published in print February 2001 | ISBN: 9780195139693
Published online November 2003 | e-ISBN: 9780199832897 | DOI: http://dx.doi.org/10.1093/0195139690.003.0006
Speeding Up

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The developmental state of successful late industrializing countries (the rest) was predicated on performing four functions: development banking; local‐content management (control of performance standards); ‘selective seclusion’ (opening some markets to foreign transactions and keeping others closed); and national firm formation. As a consequence of these functions (the first two are examined in this chapter), the rest finally made the requisite three‐pronged investment to enter basic industry: in large‐scale plants, in hierarchical managements‐cum‐technological skills, and in distribution and marketing networks. Two principles guided developmentalism: to make manufacturing profitable enough to attract private enterprise through the allocation of ‘intermediate assets’ (subsidies), and to induce such enterprises to be results‐oriented and to redistribute their monopoly profits to the population at large. Step by step, governments groped towards a new control mechanism. The new mechanism ultimately shared credit with private initiative for a Golden Age of industrial expansion.

Keywords: development banks; economic controls; industrial development; industrial expansion; investment; late industrialization; local‐content management; Malaysia; manufacturing; manufacturing experience; newly industrialized countries; performance standards; profitability; subsidies

Chapter.  14542 words.  Illustrated.

Subjects: Economic History

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