Return of the State: Globalization, Capital, Coercion and Development

We often are made to believe that in this era globalization, states are less important than the impersonal markets in promoting develop the necessary role of the state in providing a cushion of safety to the most vulnerable segments of the population in the face of rapidly moving market trends has been underemphasized by both liberals and neo-liberals. After the fall of the berlin wall the intellectual campaign in the West to dismantle or reduce many of the earlier state participation in the economies of the developing world has produced much misery and poverty. In the Return of State, Satya R. Pattnayak shows the critical importance of several state variables in neutralizing the potentially negative effects of foreign investment and foreign debt on the overall growth rate of a country. By virtue of a series of statistical analysis on country-level data during 1965-2000, he argues that although specific state variables have registered greater beneficial effect on development in some regions than in others, the role of the state continues to be constructive and pivotal in societal transformation. If anything, this role has become more important now than ever before in the increasingly globalized world of capital markets and information exchange. The findings apply to all of the developing countries of Asia, Africa, and latin America.