Coordination of innovation policies in the catching-up context: a historical perspective on Estonia and Brazil

International Journal of Technological Learning, Innovation and Development

Volumn 3, Issue 4, 2010, Pages 293-329

  Karo, Erkki ^a   Kattel, Rainer ^a  

^a TALLINN UNIVERSITY OF TECHNOLOGY   (Estonia)

Author keywords

Brazil; catching up economies; Estonia; innovation policy; policy capacity; policy coordination; state capacity

Indexed keywords

EID: 79960856306     PISSN: 17531942     EISSN: 17531950     Source Type: Journal    
DOI: 10.1504/IJTLID.2010.039162     Document Type: Article

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93. The term ‘catching-up’ denotes a general process where less-industrialised countries are moving closer to technological (and socio-economic) frontier (see also Abramowitz, 1986). In this paper we use the term ‘catching-up’ rather flexibly. The aim of the paper is to shed light on different aspects of IP (and its impact on economic development) along historical trajectories of policy-making that spread across different governance regimes and several decades of development. Because the analysis covers both technological and broader socio-economic concerns of IP and the analysis encompasses two countries embedded in different socio-economic and cultural contexts, the term ‘catching-up’ does not imply here the existence of one single catching-up trajectory. Rather, the term is used to describe different periods and trajectories of industrialisation and socio-economic changes through which developing countries seek to move closer to technological (and socio-economic) frontier, that it should be seen as a dynamic horizon [see Figueiredo, (2010), p.1093].
94. The discussions on state capacities are rather broad and dynamic (see also Grindle, 1996) encompassing issues of political, economic, national resources; international relations and power plays; size of the state, etc. Here, we look at state capacity from the perspective of policy and administrative capacity (see Painter and Pierre 2005; Karo and Kattel, 2010a). It is considered here that policy and administrative capacity are conditioned by other variables mentioned above, and thus state capacity is not a simple sum of policy and administrative capacity. State capacity is seen first as legitimacy and second as the ability/capability of the state to intervene in certain societal affairs, such as economic and technological development that is conditioned by different variables.
95. Randma-Liiv (2009) has argued that in the context of catching-up economies these reforms movements lack any substantive logic because the NPM-type reforms have been intended to reform the rigidities and inefficiencies of the Weberian state (too much regulation, too much hierarchy, etc.) but in the case of the catching-up context, the problem is often the lack of basic stability usually created by Weberian principles (thus problems are partly caused by too much bureaucracy in certain policy fields and too little bureaucracy in others).
96. For example, Chibber (2003) offers a comparison between South Korea’s and India’s evolution of state capacity in the 1950s to the 1970s. As he shows, while the post WWII development consensus reached from Asia to Latin America and encompassed national political and business elites in many countries, state capacity evolution took highly differing paths with varying resulting economic fortunes.
97. In PAM literature [Peters, 1998; cited also in Verhoest et al., (2007), p.330]: “coordination in a public sector inter-organizational context is understood as the instruments and mechanisms that aim to enhance the voluntary or forced alignment of tasks and efforts of organizations within the public sector. These are used in order to create a greater coherence, and to reduce redundancy, lacunae and contradictions within and between policies, implementation or management”.
98. Also, given the rather narrow (or one-sided) approach of conventional IP and governance research, it is likely that both fields pre-define coordination problems according to their respective expertise – IP research is more centred on the inter-policy coordination level and governance research on the intra-policy level.
99. In addition, reflecting the changing nature of influence many economic actors can exert under WTO regimes upon developing countries’ policy-makers, the linkages between the state and other stakeholders of IP also becomes an exercise in creating what Galbraith calls countervailing power. As Reinert (2007, 2009) argues, certain economic activities create not simply higher productivity, higher wages and up- and downstream synergies, but also specific kinds of economic elites often interested in enhancing social values such as education and health [see also Reinert et al. (2009) on failed states in this context].
100. While both BRA and EST are obviously catching-up economies, they could not be more different in terms of size (190 million vs. 1.3 million), natural resources (BRA has well-known large oil reserves, EST has some oil shale reserves that are running out within few decades), IP traditions (BRA’s experience reaches back at least to the 1950s/1960s; while EST had an activist state in the 1930s typical of the time and no autonomous economic and conscious technology policy from the 1940s to the beginning of the 1990s; in recent decades, it has used highly liberal policy regimes) and global political status (BRA being one of the very few countries daring to take on the USA for example in WTO and successfully so; EST being a member of the EU and thus having forfeited much of its foreign policy autonomy).
101. They are similar in the sense that their historical legacies include a fight between democratic and authoritarian/un-democratic regimes. BRA ended its last military regime in 1985, EST reestablished independence in 1991. Both countries have experienced high-levels of state control and intervention in economy before the democratisation period. From the start of the democratic period, both countries were subject to strong external pressure to reform the state and economy under the neo-liberal or Washington Consensus agenda.
102. Also, Evans (1995) argued that the concept of ‘embedded autonomy’ that was initially limited to the state and the industrial elite (triple alliance) would have needed to be expanded to include other parts of the society to provide socio-economic transformations. While BRA managed to show impressive technological development and growth indicators before the 1980s, it did not manage to overcome the problems of extreme inequalities faced by the country and to transform industrial development into socio-economic development.