Paper short abstract:

This paper examines industrial policies and debates in two late developing states – Ethiopia and Vietnam. It focuses on discussions regarding the loss of policy space under neoliberalism and argues against excess pessimism about prospects for structural transformation under current conditions.

Paper long abstract:

This paper examines industrial policy and domestic debates regarding industrialization in two late developing states - Ethiopia and Vietnam. It offers a critique of what it identifies as the heterodox development literature's tendency toward pessimism about prospects for economic development under contemporary conditions of global neoliberalism. The conditionalities of the Bretton Woods Institutions; rules within multilateral, regional and bilateral trade and investment agreements; and global market changes in the areas of production and finance, are all often said to have cumulatively so narrowed the scope for policies directed at structural transformation, that the 'policy space' for developmental polices (such as those used by East Asian developmental states) has all-but closed. This paper explores the problematic assumptions underlying such pessimism and argues that all of these are contested political, as well as economic processes, that do not have uniform effects on developing states. An analysis of the political economy of industrial policy in Ethiopia and Vietnam shows how the uneven architecture of the global neoliberal order impacts, and is in turn understood and resisted by, two late developing countries in the course of their industrialization efforts.