The Challenge of Reclaiming Policy Space for Development: Revisiting “Kicking Away the Ladder”

This is the first review in a series on Political Economy in collaboration with the AUC project Pathways Beyond Neoliberalism.

In his book “Kicking Away the Ladder: Development Strategy in Historical Perspective”, economist Ha-Joon Chang revisits the paths that developed countries took to achieve economic development, asking how these countries became wealthy. Through a historical approach, Chang exposes the gap between the policies and institutions these countries adopted during their own development and those they now pressure developing countries to embrace as the “good policies and institutions” deemed necessary for development. He warns that developed countries are attempting to “kick away the ladder” they climbed to reach their current position.

How does Nada Elkamary^[1] read this book, and what does its argument reveal about the policies presented to developing countries today as a ready-made recipe for development?

There has been a revival of interest in industrial policy within academic and policy spaces in recent years, even from institutions like the World Bank, following decades of controversies. This encourages us to revisit foundational critiques that expose the contradictions and hypocrisy of mainstream rhetoric on how economic development happens. Ha-Joon Chang’s book Kicking Away the Ladder (2002) remains a crucial contribution on that front.^[2] Chang’s book is often credited for opening the debate about the unfair economic rules stifling developing countries from implementing industrial policies in the neoliberal era since the 1980s.

Ha-Joon Chang’s central argument is that all today’s developed countries in the Global North, especially the United States and Britain, used industrial policies such as trade protectionism and infant-industry promotion to grow their economies during the eighteenth, nineteenth, and early twentieth century. Then, they switched to more liberal free trade policies when they became competitive enough and no longer needed such policies. In that sense, one can read the contemporary revival of industrial policy as a strategic response from the Global North towards a series of geopolitical crises, great power rivalries, supply chain disruptions, trade routes blockade, and the collapse of the rules-based order – conditions that made state intervention more necessary for the Global North.

After World War II, developed countries started preaching, and even pressuring, developing countries to implement neoliberal reforms -– promoting trade liberalization and minimal state economic planning as the only “good policies” necessary for growth and development. In his book, Chang re-reads the history of capitalism in today’s rich countries to problematize the historical ground of these so-called “good policies.” He argues that there is a significant gap in our understanding of how developed nations industrialized. In his view, exposing the myth and misconceptions behind how developed countries industrialized is important so developing countries could make informed decisions about the policies and institutions that may be more appropriate for them.^[3]

Methodologically, Chang adopts a historical approach and relies on narrative qualitative and descriptive quantitative analysis. He criticizes how contemporary neoclassical and development economics scholarship have been limited to technical quantitative analysis while becoming largely ahistorical. Theoretically, Chang draws heavily on the ideas of the German economist Friedrich List (1789–1846), whose work provided one of the most influential defenses of infant-industry protection and the strategic role of the state in promoting industrial development. In fact, Chang’s book title is inspired by the following quote from List that summarize the industrial experience of developed countries:

“Any nation which by means of protective duties and restrictions on navigation has raised her manufacturing power and her navigation to such a degree of development that no other nation can sustain free competition with her, can do nothing wiser than to throw away these ladders of her greatness, to preach to other nations the benefits of free trade, and to declare in penitent tones that she has hitherto wandered in the paths of error, and has now for the first time succeeded in discovering the truth”.^[4]

The first part of the book provides a historical overview of industrial policies adopted (with varying degrees) by today’s rich countries like the United States, Britain, Germany, Sweden, Belgium, and France in earlier times. These policies, which are very different from the neoliberal policies prescribed to developing nations by international financial institutions (IFIs), included tariffs and import substitution to shield domestic infant industries from foreign competitions. An example from Britain is the Wool Act (1699) that banned the import of superior products from its then colonies in India and Ireland, and the Corn Laws (1815) that increased agricultural protection. Other industrial policies included export subsidies, establishing state owned enterprises, directing state investments in infrastructure and education, and refusing to enact patent laws until the early 20th century, such as in Switzerland and the Netherlands, allowing them to copy advanced technologies from countries like Germany without legal repercussions. 

In the third Chapter, Chang challenges the idea that having certain institutions transplanted from the Global North is a precondition for economic development. He argues that it is unrealistic and historically inaccurate for IFIs to pressure developing countries to first adopt the package of “good institutions” such as democracy, a clean bureaucracy, strict intellectual property rights, and a well-developed financial system within a matter of five or even ten years, or face sanctions, isolation, and financing rejections. Chang argues that while institutions are important, they should not be treated as a precondition for economic development and definitely should not be imposed on developing countries within a relatively short period of time.

Chang backs this argument by evidence showing that when developed countries were growing, they were not democratic, had rampant nepotism and corruption, stole technologies from each other, and even relied heavily on slavery and child labor. He also shows how institutional development in today’s developed countries was an incredibly slow, long, and winding process that took decades, if not centuries, to achieve. Given this, Chang argues that today’s developing countries may actually be performing better in terms of institutional structures than developed countries were at similar stages of economic development. Chang’s critique of “good institutions” is not to discourage institutional development and democracy in developing countries. Rather, to allow developing countries to prioritize the kind of institutions most necessary beyond imposing a fixed set of Anglo-American institutions on all countries.^[5]

Throughout the book, there are comparisons between the policy decisions of developed countries back in the nineteenth century and the policy space available for developing countries in the neoliberal era. For instance, Chang argues that today’s developing countries have far less trade protectionism than once was in developed countries when they were in a similar stage of development. For instance, the United States and Britain had an average tariff rate on manufactured products between 35-55% in 1820.^[6] Therefore, given the contemporary wide income and productivity gap between rich and poor countries, developing countries may actually “need to use much greater tariffs than today’s developed countries had in earlier times, just to get the same protective effect”.^[7]

Critical reflections

Kicking Away the Ladder was not free of criticism, especially from mainstream economics circles. Douglas Irwin (2004) and Eben Macdonald (2025) criticized Chang for selective use of historical evidence, overstating the role of trade protectionism in economic development, not using econometric methods to establish causation between protectionism and economic growth, and the difficulty of translating nineteenth-century protectionism into contemporary policy. This section engages with some of these criticisms and provides a critique from a more heterodox economics perspective.

While Chang seems indeed persistent on the importance of state interventionism and trade protectionism for economic development, he mentions multiple times that tariffs were not the only tool for industrial development in Western nations. Additionally, Chang concludes chapter two by saying there is “no one size fits all model for industrial development.”^[8] In his view, what matters is the ability of a country to adopt a “policy mix” suitable for her stage of development - something that developing countries remain deprived from throughout the past four decades of market fundamentalism and imposed neoliberal reforms.

From a more heterodox perspective, Chang remains largely within a productivist developmentalist framework – limiting development to increased manufacturing and growth. In doing so, Chang pays less attention to how industrialization itself can deepen labor exploitation and resource extraction. In other words, he did not engage with the question of how to ensure that the process of industrial upgrading is socially just and ecologically sustainable? Moreover, Chang frames social welfare institutions only as tools to “reduce social tensions and enhance the legitimacy of the political system, thus providing a more stable environment for long-term investments.”[9] Public provision of education and health is accordingly viewed from a productivist lens of “improving labor quality, raising efficiency, and accelerating productivity growth.”^[10] instead of institutions essential for human dignity and prosperity.

Moreover, one may argue that Chang’s analysis back in the 2000s did not fully capture the complexities of the state itself. While he demonstrates that state intervention played a central role in the industrialization of today’s developed countries and criticizes the failures of neoliberal policy prescriptions, the state is often treated as a largely developmental actor. This leaves limited room for examining how state intervention can also reproduce authoritarianism and exacerbate social inequalities.

Experiences from several developing countries, particularly in the MENA region during the twenty-first century, suggest that a stronger state role in the economy is not necessarily synonymous with developmental outcomes. Post-2011 Egypt, for example, illustrates how an expanded state intervention through mega infrastructure projects did not automatically drive structural transformation in the economy. On the contrary, the industry component of Egypt’s Gross Domestic Product (GDP) declined from 38 percent to 33 percent between 2010 and 2025.^[11] Additionally, the contemporary reality of the state role in developing and emerging economies blurs the rigid boundaries between public and private, where the state is increasingly becoming owners, regulators, and promoters of capital (see previous Al-Zad issue on State Capitalism). Gulf states could be an example, where ruling families, state institutions, and capitalist conglomerates are deeply intertwined.^[12]

Despite the richness of the historical analysis and evidence provided in the book, it tackles the question of “what is to be done?” only in the last two pages. The solutions provided seemed to be less radical when compared to the critical introduction of the book. Chang's concluding vision is that developed countries should “allow” developing countries to also grow and industrialize, as this will increase the trade and investment opportunities for rich countries as well, assuming that a win-win situation could take place, which is historically rarely the case given the decades of imperialist violence, economic sanctions, and unequal exchange.^[13] Lesser emphasis is put by Chang on how developing countries can resist the unequal economic order collectively.

It is worth noting that more recent scholarship has moved beyond merely exposing the contradictions in the policies promoted by international financial institutions. Rather, it criticizes the imperial structures that continue to reproduce uneven development on a global scale.^[14] From this perspective, the shrinking policy space available to developing countries is understood not simply as a consequence of the dominance of neoliberal ideology, but as a structural feature of the global capitalist system. However, these structural constraints should neither be seen as absolute nor eliminate the possibility for policy maneuver.

Kicking Away the Ladder remains relevant because of the pressing need for developing countries to pursue policies suited for their stage of development and to adapt these policies according to changing domestic and international conditions, as developed countries often do. Chang’s critique of international financial institutions’ insistence on “good institutions” also remains pertinent, as institutional development is a long-term process that cannot be imposed through external conditionalities. As Chang argues, “There can be no 'best practice' policy to which everyone should adhere.”^[15]

Overall, while Chang convincingly demonstrates that policy space matters, the more difficult question today is not simply whether states should intervene, but how to ensure that intervention serves broad developmental and social goals rather than reproducing existing inequalities.