Systemic Vulnerability and Sustainable Economic Growth

Systemic Vulnerability and Sustainable Economic Growth

Skills and Upgrading in Southeast Asia

Bryan K. Ritchie

For many developing countries, economic growth is an elusive quest. Both economists and policymakers have long known that issues such as education, investment and infrastructure are necessary ingredients for development and yet only a very small number of countries seem to be able to come up with the right mix of these ingredients. Bryan Ritchie demonstrates how political relationships among government, business, academic and labor leaders create different incentives for economic actors to make key decisions to promote economic upgrading and sustainable development.

Chapter 5: Coalitions and Initial Decisions During State-Building

Bryan K. Ritchie

Subjects: asian studies, asian development, asian economics, development studies, asian development, development economics, economics and finance, asian economics, development economics


Beginning with the invasion of China in the early thirteenth century, Genghis Khan and the Mongolian army conquered a vast territory that extended across Persia, Russia and into much of Eastern Europe. But while possessing great equestrian and military skills, Genghis Khan was less adept at state-building. Instead of building institutions that would perpetuate Mongolian language, politics, economics and culture, he established tributary mechanisms to extract wealth from the existing societies. Without underlying Mongolian institutions, the territories quickly returned to former or new forces soon after Genghis’s death. Forming institutions associated with building states is, as Genghis discovered, difficult. And yet creating institutions as part of state-building is necessary and has far-reaching impacts on subsequent capacities and performance of the state. The conclusion is that initial policy decisions as the precursor to institutions are critical to subsequent outcomes. In Malaysia, Singapore and Thailand, coalitional bargaining and interactions impacted four important policy decisions made during the formation of education and training systems during periods of state-building. These four decisions were: language of educational instruction; level of fragmentation in the education and training bureaucracy; the extent to which labor is included in education and training; and the level of focus on technology and science in the education and training system. All four decisions depended heavily on how coalitions prioritized economic expansion as opposed to political or redistributive outcomes. In Thailand, narrow, patronage-based coalitions bent on consolidating political power preferred an education and training system that reinforced social and political norms and behavior....

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