The State and Industrial Transformation: Comparative and Local Insights

Abstract

This paper explores the applicability of the concept of ‘relatively autonomous’ or autonomous state in the context of developing societies, particularly in the Philippines. It weighs the autonomy of the state not only in terms of its relations with local social classes, but also with foreign actors, i.e., it investigates state autonomy not only from the domestic elite, but also from foreign capital. Thus, the paper assesses the effectiveness of state intervention in the economy, with particular focus on the Philippines, taking into consideration the state’s industrialization strategies, as well as the corporate coherence of the state’s bureaucratic apparatus. The Philippine state is shown to be lacking in autonomy from both the ruling elites and foreign actors—in contention against an entrenched elite based on land and merchant capital and a significant presence of local capital in the domestic market. The lack of a center for economic planning and a tradition of pervasive graft and corruption underscore the weakness of the state prior to the Marcos dictatorship. While the authoritarian regime of President Marcos centralized the formulation of the country’s economic policies, it made the country overly dependent on foreign loans, which kept the state from completely dismantling the power base of its monopolist elite. Thus, even today, the Philippine state remains captured by, instead of embedded in, competing and diverse social interests. In order to become a stronger, more autonomous state, the Philippine government must reform its own key bureaucracies and institutions, as well as construct and nurture a domestic ‘growth coalition’ that will underpin a strategy for the country’s sustainable growth and development.