An intriguing subject in the field of economics and related social sciences is how to interpret ‘state-led’ economic development, a phenomenon that has been persistent throughout modern history and remains significant today. By standard economics or mainstream economics, the markets stand for the most efficient method for human societies to coordinate economic activities, thus should work best as well for economically backward countries in their modernization efforts. Yet, in practice, relatively less developed backward economies or latecomers in the world’s development, from Russia in the late nineteenth century to contemporary China, have persistently resorted to the state as a developmental instrument in their economic catching up.
KeywordsNeoclassical Economic Incremental Innovation Asian Crisis Transaction Cost Theory Neoclassical Growth Model
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