inostrani kapital kao faktor razvoja zemalja - Ekonomski fakultet u ...

decoding of spilled knowledge etc. All this in turn depends on the ability and the
motivation of local firms to engage and invest in learning and imitation activities,
to absorb foreign knowledge and skill, and melt it with existing local knowledge 13 .
But no less important are the qualities and the aims of the public administration,
which has to provide accurate and appropriate government supervision when
markets are less than perfectly competitive, and create contestable markets by
allowing free access to all, whenever possible. Yet, most ‘transition economies’ did
endorse, in the last decade, the first point of view, and thus adopted various forms
of incentives to encourage foreign owned companies to invest in the country, to
speed up the ‘market friendly’ sequence we mentioned above 14 . The result was a
series of policies that are now blamed for having distorted the ‘market’ rather than
avoided Markey failures […]
3. Developmental States
The discussion on what kind of State, and which set of economic policies are
best suited for economic development is too vast to be treated here. Yet one can
take the grand debate that took place in the previous decade about the so-called
‘East Asian Miracle’ as a point of reference. In that occasion a clear case was made
in favor of a particular set of policy measures, institutional building and economic
sequencing that, contrary to conventional belief, allowed eight East Asian
countries 15 to perform the fastest and longest economic development of history as
we know it.
In interpreting that miracle, the World Bank proposed a well-known frame of
reasoning, labeled as ‘Market Friendly’ (Figure 1). Reading Figure 1 by columns 16 ,
from left to write, the argument goes as follows. Given (first column) good
fundamentals and moderate selective policies, to discriminate among sectors and
firms, a good and accountable bureaucracy set up a leveled playing field between
‘free’ market forces’ and the ‘administrative coordination’ that the local context
was able to supply (second column). The result was (third column) a rapid
accumulation of key factors (physical capital, human capital), that were efficiently
allocated and technologically up-graded, to end up (forth column) in an
extraordinary export-led industrial growth. This is why the population can now
enjoy better social indicators and a considerable reduction of poverty. In arguing
against this way of reasoning, a number of economists noticed that, despite being
13 Tiberi Vipraio and Hodgkinson (2000).
14 These included, to mention the most important: fiscal incentives (such as tax holidays and lower
tax rates for foreign investors), financial incentives (such as grants and preferential loans to MNE),
as well as ‘market preferences’, infrastructure free of charge, sunk costs reimbursements, and
even monopolistic rights (Pennings, 2001).
15 Namely Japan, South Korea, Taiwan, Honk Kong, Malaysia, Singapore, Indonesia and Thailand.
16 Full arrows between squares express cause-effect transmission, dotted line express feed-back
mechanisms.
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