Richard Doner, Gregory Noble, and John Ravenhill's The Political Economy of Automotive Industrialization in East Asia is welcome news for researchers of development studies and especially in East Asia. There has always been a suspicion that the East Asian cases of rapid economic development in the twentieth century were exceptions—anomalies of late-late industrialization that had limited utility for theory-building or policy recommendations to other late-late-late developing countries. This book makes important contributions by analyzing seven countries in East Asia with varying political and economic contexts of economic development both at the national and international/global levels. Drawing on the domestic literature on each country, the authors focus on the automobile industry, which has critical importance for both backward- and forward-linkages in the era of Third Industrial Revolution. In doing so they provide a rich comparative analysis of institutions and the relevant politics, thus approximating a true causal analysis.
In particular, this book has helped to bring institutions back into the analysis of economic development, with a major refinement in thinking about auto-industry development as “intensive” vs. “extensive” in nature. The book advances the developmental state literature by focusing not only on state institutions, but also on private associations/institutions as well as public-private institutional networks and coordination across firms, including in the development of skills. The book also brings politics back into the analysis, including existential security threats that enabled political leaders to pursue intensive development of the auto industry.
The limitations come when we take the studies and extend them to policy recommendations for these countries, and most importantly, for other countries aspiring to develop their own automobile industry or other sectors critical in the era of the Fourth Industrial Revolution (digital transformation).
External security threats are a major contributing factor to political leaders’ decisions to adopt institutions and policies necessary for “intensive” development of the industry, which has been critical for countries to succeed. Resource scarcity is also discussed as another key condition that has pushed countries to pursue industrial policies and promote institutions necessary to build the automobile industry. Yet these structural factors present a rather deterministic analysis of development. If a country is faced with few or no security threats, is it doomed to failure? If a country is resource-rich, is the likelihood of intensive growth limited? How do we think about the prospects of regions such as the resource-rich sub-Saharan African nations in their ability to move successfully with “intensive” development?
If these structural factors have strong causal effect, we are left with a quandary about whether future late-late-late industrializing countries can learn from these East Asian cases. What institutions are needed, but more importantly, how can the state move forward with the right institutional and industrial policy mix when the circumstances appear on the surface to be more favorable—in relatively peaceful neighborhoods and/or in a resource-rich context—but which in fact are portrayed here as disadvantages?
Another related but separate question lies in the choice of sector. The auto industry was crucial to the industrial revolutions of the twentieth century. But what industries will be key for the Fourth Industrial Revolution or digital transformation of this century? If it is not the automobile industry, which had critical backward- and forward-linkages to the nation's development, what is the linchpin industry of the future? Although this may be outside the book's focus, it is a relevant question to ask for future late-comers. If, for example, it is artificial intelligence (AI), the empirical evidence from the Global North vs. Global South suggests an even more daunting task for late-late-late industrializers of today. The question, then, is what are the key factors that would enable the AI industry to be developed in the Global South? Are they necessarily the same as those that permitted intensive development in autos?
