Do Weberian Bureaucracies Lead to Markets or Vice Versa? A Coevolutionary Approach to Development

Abstract

Are Weberian bureaucracies a precondition for capitalist markets or is it the other way around? According to the developmental school, state bureaucracies organized along Weberian precepts is necessary for successful state-led growth. Yet some level of economic wealth also appears to be necessary for achieving such desirable institutions. Departing from conventional linear approaches to development, this essay develops and applies a coevolutionary approach that traces the mutual adaptation of bureaucracies and markets among local states in China. My analysis demonstrates that the particular features of bureaucracy that promote growth vary over the course of development, even among locales within a single country. More surprisingly, I find that the bureaucratic forms that initially sparked growth actually defied Weberian norms of technocratic specialization and impersonality. In other words, in rethinking the relationship between markets and institutions, we must distinguish between market-building and market-preserving institutions. Conventionally good institutions like Weberian bureaucracies are necessary to preserve markets after they have already emerged; however, it is the adaptive refashioning of preexisting “weak” institutions that build markets in the first place.