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Laos: a state coordinated frontier economy

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  • Andriesse, E.

Abstract

This paper assesses the current variety of capitalism in Laos using Hall and Soskice’s (2001) comparative approach and the emerging body of knowledge on Varieties of Asian Capitalism. In addition to a systematic discussion of the traditional capitalist elements proposed by Hall and Soskice (the financial system, industrial relations, internal structure of the firm, education and skills formation and inter-company relations), this paper also takes into account foreign direct investments, social and environmental sustainability. The available evidence suggests that Laos can be categorised as a State Coordinated Frontier Economy in which elites and foreign investors accumulate wealth at the expense of small firms, villagers and the natural environment. The government is particularly present in the spheres of finance and inter-company relations. A continuation of this variety of capitalism is likely to result in excessive inequality and severe environmental degradation. The task for Laos is now to foster more inclusive forms of state coordination and balance economic growth with ameliorative policy initiatives catering to the natural environment, displaced villagers, ordinary employees and small business owners. This will be a difficult endeavour as there is still a profound mismatch between prevailing economic institutional complementarities and historically informed cultural institutions.

Suggested Citation

  • Andriesse, E., 2011. "Laos: a state coordinated frontier economy," ISS Working Papers - General Series 522, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
  • Handle: RePEc:ems:euriss:22973
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    File URL: https://repub.eur.nl/pub/22973/wp522.pdf
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    References listed on IDEAS

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    1. Andersson, Magnus & Engvall, Anders & Kokko, Ari, 2007. "Regional Development In Lao Pdr: Growth Patterns And Market Integration," EIJS Working Paper Series 234, Stockholm School of Economics, The European Institute of Japanese Studies.
    2. Andersson, Magnus & Engvall, Anders & Kokko, Ari, 2009. "In The Shadow Of China: Trade And Growth In Lao Pdr," Working Paper Series 2009-4, Stockholm School of Economics, China Economic Research Center.
    3. Michael Carney & Eric Gedajlovic & Xiaohua Yang, 2009. "Varieties of Asian capitalism: Toward an institutional theory of Asian enterprise," Asia Pacific Journal of Management, Springer, vol. 26(3), pages 361-380, September.
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    Cited by:

    1. Michael Louis Troilo, 2014. "Adoption Of Technological Innovation In A Developing Country: An Empirical Analysis Of Enterprises In Lao People'S Democratic Republic," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 19(03), pages 1-15.

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