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POLI1003

Making Sense of Politics

Dr. Lam Wai-man

Dept. Politics & Public Administration

November 29, 2010

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Learning outcomes

(I) Analyze the (a) market-led and (b) state-led economic development model

(II) Understand a broader view ofdevelopment and its value

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(I) Models of economic

development Market-led or state-led?

State-led: requires authoritarian rule?

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(Ia) Market-led economic

development Adam Smith: The Wealth of Nations

Self-interests and advantages

Free market and invisible hand

The price mechanism: production based on what iswanted, and anticipation of wants for production

plans

Government: public goods, infrastructure,stability, prevent or eliminate price distortion,

improve the market, help the poorest for meeting

the basic needs

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(contd)

Examples of success

Post World War II Japan

Hong Kong Chile

Washington Consensus (1989)

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(contd)

Corporatism: alliances of government, business

corporations, and coopted social groups

Performance based legitimacy

Soft authoritarianism, illiberal democracy

The price: rights and freedom, corruption and

inefficiency

Beijing Consensus (2004)

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(II) A broader view

Development is not merely economic growth

Expansion of peoples fundamental

freedoms

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(contd)

Sustainability Development requires the removal of major sources

of unfreedom Economic poverty A denial of political and civil liberties

5 types of freedom (1) political freedoms (2)Economic facilities (3)Social opportunities (4)Transparency guarantees (5) Protective security

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(contd)

Freedom is central to the process ofdevelopment

(1)The evaluative reason Values in the choice of priorities

E.g., Confucianism (6th century B.C.): tobe decided by those who live today

(2)The effectiveness reason: achievement ofdevelopment is dependent on the free

agency of people Freedom: a principal determinant of

individual initiative and social effectiveness

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(contd)

Poverty: a deprivation of basiccapabilities (rather than merely as lowincome) unemployment, inequalities,social exclusion

(3)These freedoms are among theconstituent components of development

Culmination outcomes approach: purely oneconomic growth (GDP growth) without carof the means versus

Comprehensive outcomes approach: takenote of the processes through whicheconomic growth comes about