The State's Role in Third World Economic Growth

The emergence of a group of newly industrializing countries has received considerable attention in the scholarly literature today. However, most of the attention has focused on the economic aspects of this phenomenon, for example, changing comparative advantages, utilization of cheap labor markets, and tariff structures. The role of the state in this process of industrial growth has been neglected. The state plays a role in economic growth in various ways: supplying infrastructural needs—transportation and communication—subsidizing development in areas of high growth potential, and entering the economy directly in the form of state enterprises. These forms of state economic activity, as well as an argument for state involvement in the economy, are examined in this article.