One common criticism this blog has been getting has to do with its rural focus. “Sure,” people argue, “most of the very poorest live in the countryside. But, overwhelmingly the way they get less poor is to move to a city.”
This is true. Urbanization has been a key feature of every fast development experience there’s ever been. So, in terms of grand strategy, why would you waste your time messing with rural producers?
In Taiwan and South Korea, the cities had to compete for rural people to want to move there.
That’s what I thought too until I read Diane Davis’s remarkable Discipline and Development: Middle Class Prosperity in East Asia and Latin America. (You can read the brilliant intro online here.)
Davis’s book is a perfect little counterpoint to Robert Bates’s classic Market and States in Tropical Africa, (which it really helps to have read before you dive into it.)
For Bates, the political economy of the post-colonial African state was pretty simple: they were machines for extracting rents from farmers and transferring them to urban constituents. Through a series of institutional mechanisms handed down from the Colonial past (chief among them, the dreaded Agricultural Marketing Board), African states systematically looted the countryside, underpaying for products, undersupplying services, and spending the proceeds on a series of industrial boondoggles in town. It…wasn’t a very successful development model, in large part because it created powerful incentives for industrialists to specialize not on running profitable industries, but on pressuring the state to extract rents from rural people and hand them over.
Bates’s book is the stuff of a thousand undergrad syllabi, I think most people in the development game have at some point come across the argument. What I find dismaying is that Davis’s book, which is at least as good (for my money, way better), is…not as often read. What she shows is that some of East Asia’s fastest developers of the Tiger years turned the political economy of African states on its head.
Davis shows how in Taiwan and South Korea – which, in the 1950s, were just as poor as Uganda or Nigeria – land reform produced a class of prosperous, independent, middle-class rural producers. The producers – mostly rice farmers in South Korea, a mix of rice and sugar-cane farmers in Taiwan – were politically powerful. Powerful enough to resist any thought industrialists might have had to finance industrial expansion on their backs.
If anything, it was just the opposite: rural people put the heat on the government to squeeze the industrialists for surpluses. In this narrative, Taiwanese and South Korean industrialists’ export orientation was forced on them by a political dynamic where they were relatively weak, and under strong pressure to perform.