New Directions for Development: A Latecomer's Guide to Navigating the Regulatory Thicket

For decades, scholars of the sociology of development have investigated how “underdeveloped” countries might be able to “catch up” to what have traditionally been considered the advanced economies. The developmental state literature is one well-established interdisciplinary subfield that emerged to explain development outcomes in newly industrialized countries (NICs) during the second half of the 20th century—a period when development was largely synonymous with industrialization. In the contemporary global economy, attempts to achieve sustainable economic growth have generally shifted from manufacturing towards economic activity centered on knowledge-intensive fields. If, previously, the definition of development focused on the promotion of industrialization, what does development entail today? What are the new strategies that latecomer states and firms can adopt in this ever-evolving context? Today, the accrual and dissemination of intellectual property and the globe-spanning activities of frontier technology firms make the role of the regulatory environment ever more critical for answering these questions. Using a knowledge-intensive sector, pharmaceuticals, in a country often advanced as a paradigmatic successful late developer, South Korea, as a primary case study, the dissertation explores how the regulatory landscape is now a key domain of government action for a developmental state. The dissertation also explores the Argentine agri-biotech industry to provide a point of comparison.
While regulation is by definition an application of state authority, how well a country navigates what I term an interconnected global regulatory chain—a worldwide chain of regulation that impacts many different stages of production processes—is what fundamentally determines its developmental trajectory in the knowledge economy era. Not all states are equally well-positioned to overcome the range of regulatory hurdles this process presents, however, and the difficulties are more pronounced for latecomer states lacking large domestic markets –the case of most late developers, which generally do not have a domestic economy capable of absorbing the bulk of their local production. This leaves them heavily reliant on export, and, therefore, on the global regulatory landscape. That does not mean that countries with little power to contest global standards remain mere passive regulatory-takers; rather, they regularly reorient domestic regulatory frameworks to cope with changing circumstances. By combining the global value chain (GVC) perspective with insights from scholarship on regulation and governance, this dissertation demonstrates that the contemporary developmental state strategically employs available regulatory means, depending on the links or segments in the relevant global value chain the state has the practical ability to affect, with the goal of supporting domestic firms in their efforts to participate in global market. The global regulatory chain perspective, in this sense, provides a new way to conceptualize both the possibilities and challenges that await latecomer states in the global knowledge economy.