After World War II, a large number of colonial and semi-colonial countries in Asia, Africa, and Latin America gained independence as new nation-states and embarked on modernization. Latecomer countries generally face numerous disadvantages inherent to their position, compounded by the need to achieve multi-dimensional transformations and address multi-layered challenges within a relatively short period. Consequently, their modernization requires the state to assume crucial responsibilities and play an active role. In this article, state autonomy and state embeddedness are identified as key factors in national modernization. Their role in latecomer modernization is analyzed from two perspectives: whether the state removes barriers to the free flow of resources, and whether it pools resources to support strategic industries.

In this context, “autonomy” is primarily understood at the domestic level. High autonomy means that the state is largely capable of making decisions according to its own judgment, will, and preferences, while also informing, transforming, and regulating society, so that individual citizens, organizations, and social forces implement state policies regardless of their willingness. Low autonomy, in contrast, means that the state lacks both final decision-making authority and effective means and capacity to ensure policy implementation across society. “Embeddedness” refers to the state’s ability to overtly or subtly maintain communication, dialogue, and consultation with society through institutional or non-institutional channels, allowing it to collect information and opinions from individuals, organizations, and various social groups, as well as guide social transformation and development.

States with low autonomy and high embeddedness: In these states, resources are typically not pooled; rather, they are either dispersed or directed to less productive industries. This configuration is typically observed in latecomer countries where political democratization began relatively early, often with two main consequences: first, the state fails to concentrate its limited resources on priority industries due to political fragmentation and turbulence or high public demand for welfare. Second, entrenched interest structures remain intact, preventing the establishment of a market environment in which resources can flow freely to higher-return industries. Low autonomy and high embeddedness hinder both the state’s ability to integrate society and society’s capacity for self-driven integration via market forces.

States with low autonomy and low embeddedness: In these states, resources are concentrated in the hands of powerful or rent-seeking groups. Political elites succumb to economically powerful groups or deep-rooted rent-seeking groups, such as prominent families, plutocrats, tribal forces, religious groups, and conglomerates. Greatly constrained by those groups, the state can hardly serve the broader society. These powerful economic forces either control vast amounts of resources and even vital industries of their country, or exert extensive social power and political influence. Driven by the goal of maximizing their own interests, their business activities concentrate in sectors that rapidly generate profits, rather than in advanced and critical industries. Additionally, when political power is extremely fragmented, the state both struggles to extract sufficient resources from society and lacks the capacity to formulate and implement decisions—a situation prevalent in regions where modern state-building remains incomplete.

State with high autonomy and low embeddedness: In these states, resources tend to accumulate within bureaucratic and coercive organizations. Such states can be further divided into two groups. The first group formulates policies not for economic development and social progress but to maximize resource extraction for its own purposes; only companies aligned with and providing benefits to the ruling regime can gain the privileges necessary to survive. The second group of states controls the sale of resources and the distribution of revenue, leaving society with little bargaining power vis-a-vis the state.

States with high autonomy and high embeddedness: In these states, resources are directed toward strategic and advanced industries. High autonomy enables the state to maintain a neutral stance, free from the sway of interest groups, allowing it to adopt a long-term perspective centered on broader national priorities. Latecomer countries often suffer from capital shortages and dispersed resources, and high autonomy allows the state to concentrate these scattered resources on building physical infrastructure. State intervention and reforms are even more essential to developing non-physical infrastructure such as institutions, laws, and market regulations. High embeddedness enables the state to access information from diverse sources, gather collective wisdom, and garner the will to help society overcome challenges.

It should be noted that modernization is a multifaceted process that cannot be fully captured by an analysis of industry and resource allocation. The state autonomy and state embeddedness of latecomer countries are determined not only by internal factors, such as social structures, policy systems, history, and culture, but also by external factors such as geopolitics.

Sun Daiyao (professor) and Diao Weiqi are from the School of Marxism at Peking University.