This article argues that explaining institutional differentiation requires the incorporation of public preferences and understandings into accounts of state development. Using primary evidence concerning policy discussions and public opinion, it suggests that culture determined the specific features of both the British National Health Service Act of 1946 and the American Medicare Act of 1965, as well as the differences between them. Examining the interaction of institutions and culture inserts democratic standards into the top-heavy Weberian discussions of state autonomy and accounts for the seemingly inexplicable failure of policymakers to ensure cost control over the new health programs.

Before the U.S. invasion of December 1989, Panama experienced one of the longest periods of military rule in the modern-day history of Latin America. While numerous authoritarian military regimes emerged in the region during the 1960s and established for themselves a relatively high degree of autonomy from both domestic and international actors, only those in Panama, Paraguay, and Chile survived until the late 1980s. And of these three surviving military regimes, only Panama's was ended through the application of external military force. For the past several years, there has been considerable discussion of the factors that seem best to account for General Manuel Antonio Noriega's personal ability to resist U.S. pressure from 1987 until 1989 and to largely insulate himself from the political and economic constraints of Panamanian domestic politics. However, much less attention has been devoted to discussion of the factors that explain the long-term maintenance of the military authoritarian regime in existence for fifteen years prior to his assumption of power. This analysis suggests that the long-term maintenance of Panama's military authoritarian regime was due in large part to its ability to acquire substantial amounts of foreign capital. During the 1970s, such capital was preferentially obtained from the international banking community. During the 1980s, it was obtained through illicit activities of various kinds, including participation in the growing international drug trade.

Realists have long viewed uneven rates of growth among states as a major cause of wars. According to strict logic of realpolitik, a declining dominant power should launch a preventive war against a rising challenger as a prudent long-term security strategy. But historically, power shifts have only sometimes resulted in war. Although preventive war has been the preferred response of declining authoritarian leaders, no democracy has ever initiated such a war. Instead, depending on the regime type of the rising challenger, democratic states have chosen accommodation, defensive alliances, or internal balancing to solve the problem of impending decline. In addition to establishing the correlation between preventive war and authoritarian regimes and explaining why democratic states forgo this option, this essay (1) develops a model based on the domestic structures of the leader and challenger that predicts which strategy will be employed by a declining dominant power and (2) tests the propositions against historical survey data and several in-depth case studies.

Neoliberal economists say that growth is easy, provided the state does not obstruct the natural growth-inducing processes of a capitalist economy. They point to the success of South Korea and Taiwan as evidence that this proposition also holds for quite poor economies. Using chapters of Helen Hughes's edited volume by way of illustration, this article shows that the neoliberals ignore so much contrary evidence as to suggest that the neoliberal paradigm has entered a degenerative stage, like classical economics in the years before Keynes's breakthrough and like much Marxist writing of the 1970s.

Two recent books about East Asia offer ways forward. The one by Alice Amsden argues that Korea has done better than other developing countries because it has created a more powerful synergy between a state that aggressively steers market competition and large, diversified business groups whose firms focus strategically on production processes at the shop floor. In conditions of “late development” this synergy is the key to success. Stephan Haggard's book accepts the core economic mechanism of the neoliberals but argues that the choice between sensible export-oriented policies, as in East Asia, or unsensible secondary import-substitution policies, as in Latin America, is determined by a complex conjunction of international pressures, domestic coalitions, political institutions, and ideas.

Both books make important contributions to the debate. But they are weakened by not situating the experience of their case studies within an account of trends in the world system and by not addressing the question of what prevented massive “government failure” in market interventions in the East Asian cases. The last part of this paper takes a short step in this direction.