Ha-joon Flashcards
(10 cards)
What is Ha-Joon Chang’s main argument?
Chang argues that today’s rich countries used protectionism and state intervention to develop, but now deny those tools to others by promoting neoliberal policies—a process he calls “kicking away the ladder.”
Why does this argument matter?
It exposes the hypocrisy of developed nations and challenges the idea that free markets alone lead to development. It supports alternative strategies like industrial policy and strategic protectionism in the Global South.
How did Britain and the U.S. develop historically?
Despite being portrayed as free-market champions:
Britain used high tariffs (1721–1860) and poached skilled workers.
The U.S. had the highest tariffs in the world post-Civil War.
Both violated today’s neoliberal norms while industrialising.
What is the “institutional development lag” argument?
Chang shows that rich countries developed institutions like patents, democracy, and central banks only after industrialising—not before.
🔸 Example: Switzerland introduced women’s suffrage in 1971 and patents in 1907.
What evidence does Chang give for neoliberalism’s failure?
After adopting neoliberal reforms:
Growth fell from 3% (1960–80) to 1.1% (1980–2009) in developing countries.
In the 2008 financial crisis, rich countries used bailouts and subsidies—tools they deny to the Global South.
What are the key solutions Chang proposes?
Reform WTO rules to allow tariffs and subsidies for industrialisation.
Reject “one-size-fits-all” models (e.g., strict IP or central bank rules).
Expose historical double standards to empower developing nations.
What is meant by “kicking away the ladder”?
Developed countries used protectionist tools to climb the ladder of development, but now pull that ladder up—denying others the same methods.
What are key stats or examples from the book?
Growth Rate Drop:
1960–1980: 3% average annual growth
1980–2009: 1.1% under neoliberalism
🧠 Institution Lag:
UK in 1820 had worse institutions than India today, yet industrialised under protectionism.
What are common critiques of Chang’s argument?
Neoliberals argue that protectionism leads to inefficiency and corruption (e.g., Latin America’s ISI stagnation).
Chang focuses on East Asian successes (like Korea), but critics point to state-led failures (e.g., Venezuela).
What is the broader significance of Chang’s thesis?
It challenges global economic orthodoxy, reshapes development discourse, and supports economic sovereignty—arguing that the rules of global capitalism are historically biased against late-developing countries.
