The Developmental State Theory: A Recipe For Sustained Economic Growth

2.1. The Developmental State Theory
2.1.1. A Recipe for Sustained Economic Growth
Proliferation of literatures on comparative development studies revolving around the DS paradigm are attributable to rise of the East Asian countries known for their success in sustaining high economic growth over a long period of time coupled with a relatively stable political regime taking a proactive approach in its economic development initiatives. Indeed, this East Asian Miracle has frequently been cited as a strong empirical evidence supporting the DS approach (Leftwich 1995; Wade 1990; Onis 1991; Johnson 1982). Within the literature (Dadzie 2013; Leftwich 1995; Block 2008; Joshi 2012; Weiss 2000; Onis 1991; Wade 1990) it has generally been agreed that the
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Although not much can be derived from the literature concerning this topic, Indonesia has had a mixed record within the discourse (Stubbs 2009, p.7; Hayashi 2010, pp.51–55). Vu (2007, pp.44–47) contends that Indonesia can be regarded as a DS due to the state developmental structures. This notion is also supported by a number of other scholars (Gainsborough, 2009:1318; Leftwich, 1995, 2010) albeit with some caveats. Hayashi (2010, p.54) for example, focused on the political transition period from Sukarto to Suharto (1965-1966) that is followed by economic turbulence in Indonesia which ultimately lead to the direct intervention by the Suharto regime to develop a coherent plan to pursue economic development as a mean to legitimize the New Order government. However, although Indonesia was seen as interventionist, its failure to contain the influence of the international financial market and its “crony capitalism” due to insufficient institutional strength suggested that Indonesia could not be regarded as a DS (Johnson, 1998:653-654; Stubbs, 2009:7; Weiss, 2000:37). Indeed, Hayashi (2010, pp.54–55) has further noted that the notion that Indonesia is following the DS model is debatable due to its weaker-than-expected economic performance in comparison to other states with the DS attributes. Furthermore, not only have these analyses provided mixed records on whether Indonesia could be regarded as a DS or not, they have also, all …show more content…
Furthermore, Indonesia has had a shift in how its government views its development agendas, as seen from both its medium term and long term national development plan (details in the next section). A close analysis on what is incorporated into the development plan and how the government will pursue these goal will enable us to look at an alternative way in which the state pursues its development objectives, especially in non-economic terms. Hence, an Indonesian Model of Developmental State is proposed based on the Indonesia’s development experience after the New Order to fill the literature

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