State, Market and Social Order

In: European journal of East Asian studies, Volume 14, Issue 1, p. 52-75

Abstract

Since the beginning of the latest and most convincing phase of transition, Myanmar has emerged as the new possible frontier of economic development in Southeast Asia. Investors, political analysts, businessmen and NGOs alike have all rushed to the country in search of a new El Dorado. Are these hopes justified? Can Myanmar—one of the poorest countries in Asia—start a new phase of economic development which would not only benefit the owners of global capital, but also lift Myanmar's population from poverty? Drawing on the literature on the political economy of institutions and some field research, the paper assesses whether policy choices made by the new government are heading the country in a direction which could generate a 'new miracle' in East Asia. To this purpose, domestic institutional constraints and the system of patronage are examined. Looking beyond the democracy vs dictatorship debate, the paper finds that Myanmar could well start a new phase of economic growth, provided that the government builds a strong vertical and horizontal institutional capacity. However, a more open political environment, and the consequent multiplication of economic interests, could hijack the reform plan the government has adopted, unless these stakeholders are inserted into a coordinated framework revolving around a transformational project of national development.