The Analytical Framework and the Two States

Abstract

How have developing states managed the new challenges posed by economic globalization, and what are the prospects for development-oriented state actions? Those are the key questions posed in this book. The discussion in the two preceding chapters has provided some analytical distinctions that may help to clarify and provide guidelines for the analysis. Economic globalization has posed significantly new challenges to developing countries in at least three areas: the realm of industrial production, the realm of financial flows and the realm of international rules governing the global economy. Within these three areas, an account of the management by the selected case countries — India and Brazil — will form the mainstay of the next chapters. An explanation of the variations in the economic outcomes achieved will then be sought through an investigation into the nature and development of state-business interactions during the period of study. How precisely the state, the private business sector and their interrelationship may be constructed in order to successfully manage the challenges of economic globalization remains an open question to be answered only after an analysis of the empirical evidence. This way the two theoretical themes — globalization challenges and developmental states — will be combined in order to provide an understanding of the conditions for economic success of developing countries in the age of globalization.