Development Strategies in a Post-Debt World

Abstract

Much of the writing about the Third World state in the 1980s and 1990s was about the inability of governments to do their job due to the immense problems associated with international debt. Debt changes the repertoire of what types of policies are available to states who wish to be effective. The debt crisis of the mid-1980s smashed the paradigm of state-led heavy industrialization by wrecking the viability of import substitution, closed border modernization schemes and the state bankrolling of long-term capital intensive heavy industry. Fifty years of thinking on the state and economic development had to be thrown out — and new models had to be developed.