ABSTRACT

This chapter focuses on a key theme in international political economy (IPE) literature: the question of how to interpret the role of the state in Asia's remarkable economic growth. In exploring the developmental state literature, the chapter attempts to equip students with a basic orientation to different approaches to political economy. The different schools of thought in IPE may be broadly classed as realist, liberal and radical, or neo-Marxist. While political economy studies the relationship between economic and political processes, each school differs on the nature of this relationship. The dependency school of thought is concerned with developing a political economy focused on the power asymmetry between the developed and developing countries. In effect the government partially liberalized capital markets, and began to undo the close relationship between banks and industry that had characterized the economy.