In reviewing Ha-Joon Chang’s book “Kicking Away the Ladder: Development Strategy in Historical Perspective,” it is worth noting that despite the fact that it was first published over two decades ago, it nevertheless remains significantly relevant in the discussion about the history of development. Many global milestones have happened in the last two decades, notably; the 2008 global financial crisis, expansion of the European Union to include former communist countries of Eastern Europe, the continued strengthening of the BRICS economies, as well as the growth of developing countries solely based on sustained demand for their raw materials mainly by China. These developments, along with the ongoing debate about the potency of the United Nations development agenda post-2015, make Chang’s book an interesting read, because it provides very insightful conclusions and lessons on all these discussions.
In this book, Chang generally puts the history of the now-developed countries (wealthy nations) in perspective, analyzes the approaches that they (developed nations) now preach towards development and what lessons developing countries can draw from the current approaches. The book aims to expose the discrepancies in the policy prescriptions of the Washington Consensus towards the development of developing countries, which according to Chang, are clearly ill-intentioned because developed countries, during their own growth period, pursued development policies that they now deem unacceptable and thus push developing countries to use policies that they (the developed countries) did not apply in their own growth period. Chang adopts a phrase from Fredrick List ‘kicking away the ladder’ to describe the deliberate attempts by the developed world to frustrate developing countries from achieving real and sustained development.
Chang uses the first part of his chapter 1 in the book to provide an introductory outlook into the Washington Consensus with its highly restrictive policies such as international trade and investment liberalization, bureaucracy, privatization and deregulation, judicial independence, protection of private property, market-driven corporate governance and independence of institutions like the central bank, fronted as the ‘good policies’ for developing countries to use in their development agenda. He asserts that what is today described as ‘bad’ or ‘undesirable’ policies which the Washington Consensus has endeavored to get rid of, are in fact the very policies that developed world pursued in their development. He uses the second part of the chapter to expound on the ideas of German economist Fredrick List, who focused on historical development patterns, the theories that explain their consistence and how to apply those theories to today’s contemporary development challenges.
In the second chapter, Chang elaborates on the history of industrialization, trade and technological advancements used by the developed countries in their development, challenging the neo-liberal narrative that nations only managed to develop because of laissez-faire policies. He points out that it was only in a narrow period between 1860 and 1880 that the world had liberal trade regimes, and that was mainly because of the imperial policy of the British. Chang argues that protectionist and interventionist policies were used throughout the development journey of all developed countries, starting with Britain, then the US, Germany, France, Switzerland, Korea, Japan, Scandinavian counties and Taiwan, all using policies like tariffs, financial subsidies, protection of infant industries, technological espionage and intellectual property theft, poaching of skilled manpower throughout the 20th century.
In the third chapter, Chang looks at the institutional capacity of developing countries in comparison to those of now developed countries at the same stage in their development process last century, and concludes that judicial independence, democracy, property rights, welfare and labor, as well as financial institutions in developing countries today are more advanced than the now developed countries had at the similar stage in their development journey. Whereas building of institutions in developed countries took a long time and were multi-dimensional, developing countries have learned lessons from this and have taken shaped their institutional exotically rather than let them evolve naturally like the developed countries did, which required a very long time.
In the fourth chapter, Chang summarizes his observations in the second and third chapters as well as provides his conclusions. He points out the need to rethink the economic policies that are fronted by the neo-classical development model because they have largely failed to deliver development in the developing countries. He accurately points out with evidence, that developing countries fared much better during the so-called ‘interventionist’ period (1960s to 1980s) than they have been in the period since neo-liberal reforms were imposed on them. With regards to the push for institutional reform, Chang argues that it could be a positive step if the necessary institutional were spearheaded, but since those being pushed for reforms are the ones that protect the interests of the western world (like the push for intellectual property rights protection), it only results into creation of unnecessary and expensive institutions which do not at all help growth in developing countries but rather curtail it, which in Chang’s opinion, amounts to ‘kicking the ladder’ by those who have used it to get to the top (developed countries).
In today’s debates about the role of governments and institutions and policy frameworks, Chang’s work is very relevant, especially given that the 2008 financial crisis exposed the hypocrisy of the developed country governments when contrary to the non-intervention they preach to developing countries, they did actually intervene with huge stimulus funds to safe several large corporations and banks that were facing collapse. He however points out that institutional capacity is crucial for growth and encouraged developing countries to develop their institutions, whether or not it’s a requirement by neo-liberal reform policies, arguing that if achieved, institutional development would rapidly reduce and eventually eliminate bureaucratic weaknesses by introducing New Public Management concepts among others.
Conclusively, Chang’s book is and will continue to drive and direct debate on global development for years to come. Its historical perspective to the development process, in comparison to what’s being driven today exposes the odd variations that will inevitably continue to stimulate debate. However, Chang fails to adequately explain the shortcomings of the alternative theories in explaining development in developed countries throughout history. To this end, Chang would have justified himself if he provided at least one case of a then independent country whose development process was not at the same level as the other now developed countries, since a comparison of the two cases would have provided an interesting read. Yet despite this analytical gap, important as it may be, has not in any way diminished the relevance of Chang’s work as its critical outlook remains insightful in development theory debates.
References
Amsden, A.H., Kochanowicz, J. & Taylor, L. (1994). The Market Meets Its Match: Restructuring the Economies of Eastern Europe. Cambridge, MA: Harvard University Press.
Chang, H.J. (2002) Kicking away the ladder: development strategy in historical perspective, London: Anthem Press.
Löffler, E. & Vintar, M. (2004). Improving the Quality of East and West European Public Services. Burlington, VT: Ashgate Publishing.
Riggs, F.W. (1964). Administration in Developing Countries: The Theory of Prismatic Society. Boston, MA: Houghton Mifflin.