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How did the rich countries really become rich? In this provocative study, Ha-Joon Chang examines the great pressure on developing countries from the developed world to adopt certain 'good policies' and 'good institutions', seen today as necessary for economic development. His conclusions are compelling and disturbing: that developed countries are attempting to 'kick away the ladder' with which they have climbed to the top, thereby preventing developing countries from adopting policies and institutions that they themselves have used

Review

Friedrich List, the nineteenth-century German economist, once observed that “when anyone has attained the summit of greatness, he kicks away the ladder by which he has climbed up, in order to deprive others of the means of climbing up after him.” Ha-Joon Chang’s Kicking Away the Ladder takes that accusation and turns it into a sprawling, meticulously sourced indictment of the international development policy establishment. The book’s central claim is stark: the now-developed countries did not become rich by practising the free trade and good governance they now prescribe. They used infant-industry protection, state-owned enterprises, export subsidies, industrial espionage, and systematic violations of intellectual property — the very “bad” policies today’s World Trade Organisation and International Monetary Fund forbid. When they reached the top, they rewrote the rules. Chang’s case is historical rather than theoretical, and it is the sheer weight of the historical record that makes the book so difficult to dismiss.

The conventional narrative, shared even by many critics of the Washington Consensus, holds that Britain industrialised under free trade and the United States under laissez-faire. Chang dismantles this myth across four chapters. The introduction sets out the paradox with admirable clarity: “The developed countries did not get where they are now through the policies and the institutions that they recommend to developing countries today. Most of them actively used ‘bad’ trade and industrial policies, such as infant industry protection and export subsidies — practices that these days are frowned upon, if not actively banned, by the WTO.” What follows is not a theoretical critique of comparative advantage but an empirical assault, built on the tradition of the German Historical School and its insistence that economic truth is found in the archives, not in deductive models. Chang’s methodology is openly polemical — he is writing a brief for the prosecution — but it is backed by an extraordinary range of primary and secondary sources across eleven now-developed countries, from Defoe’s 1728 account of Tudor wool policy to Bairoch’s comparative tariff tables.

The empirical core of the book is its second chapter, a country-by-country survey of industrial, trade, and technology policies used by the now-developed countries during their catch-up phases. Britain, the supposed pioneer of free trade, was in fact an aggressive infant-industry promoter from the fourteenth century onward. Chang quotes List’s own summary of that history:

Having attained to a certain grade of development by means of free trade, the great monarchies [of Britain] perceived that the highest degree of civilisation, power, and wealth can only be attained by a combination of manufactures and commerce with agriculture. They perceived that their newly established native manufactures could never hope to succeed in free competition with the old and long-established manufactures of foreigners… Hence they sought, by a system of restrictions, privileges, and encouragements, to transplant on to their native soil the wealth, the talents, and the spirit of enterprise of foreigners.

Walpole’s 1721 reforms — import duty cuts on raw materials, duty drawbacks, export subsidies, quality regulation — were, Chang argues, a package that prefigured postwar East Asian industrial policy. Britain shifted to free-trade advocacy only after it had achieved industrial supremacy, and even then the shift was partly a weapon: Richard Cobden, the leading free-trade campaigner, admitted that repealing the Corn Laws was designed to discourage continental industrialisation by raising the relative cost of British food and thus lowering the price of British manufactures. Chang quotes him saying that the factory system “most certainly could not have flourished, as it has done, both in these states, and in France, Belgium, and Switzerland, through the fostering bounties which the high-priced food of the British artisan has offered to the cheaper fed manufacturer of those countries.” Free trade, in this reading, was not a universal principle but an instrument of “free-trade imperialism.”

The United States receives perhaps the book’s most devastating treatment. Chang calls it “the mother country and bastion of modern protectionism.” From Hamilton’s 1791 Reports — which set out the infant-industry argument before List — through the high Civil War tariffs championed by Lincoln and the protectionist decades that followed, the US maintained average manufacturing tariffs of forty to fifty percent for most of the period between 1816 and 1945. Chang notes that the fastest twenty-year spells of US growth, the 1870s to 1890s and 1890s to 1910s, occurred during the most protectionist decades. The Smoot-Hawley tariff of 1930, routinely cited by orthodox economists as an act of anti-trade folly, was no radical departure from established US practice. Meanwhile, federal investment in public education — rising to roughly eighty percent public funding and ninety-four percent literacy by 1900 — and massive defence R&D after the Second World War functioned as a hidden industrial policy. Chang’s point is not that tariff protection alone caused growth, but that the historical record flatly contradicts the notion that the US developed through laissez-faire.

Germany, despite its reputation as the birthplace of infant-industry economics, turns out to have had relatively low tariff protection. The real action was in the Prussian state’s direct involvement: state investment, model factories, industrial espionage, and the work of administrators like Peter Beuth, whose Gewerbeinstitut trained a generation of engineers and managers. Silesia was developed to near-parity with British technology by 1842 through these means. France, against its dirigiste image, was more laissez-faire than Britain for most of the nineteenth century; protectionism was lower between 1821 and 1875, and the post-Revolutionary century of weak governments and conservative technocrats saw relative industrial stagnation until the postwar turn to indicative planning. Sweden combined strategic tariffs after 1892 with pioneering public-private cooperation — the Iron Office, state railways, the firms that would become Ericsson and ASEA — and the postwar Rehn-Meidner solidaristic wage policy that squeezed low-productivity firms and forced industrial upgrading. Even Switzerland and the Netherlands, the apparent free-trade exceptions, were at or near the technological frontier and could afford openness; both, tellingly, refused to grant foreign intellectual property rights for decades — Switzerland had no general patent law until 1907 and excluded chemicals until 1978, while the Netherlands abolished its patent law from 1869 to 1912. Chang illustrates the IPR hypocrisy with a characteristic vignette: a German firm exporting sewing machines to England labelled them “Singers” and “North-British Sewing Machines” and placed the Made in Germany stamp in small letters underneath the treadle, so that “half a dozen seamstresses might combine their strength to turn the machine bottom-upwards, and read the legend: otherwise it would go unread.”

The chapter then shifts to the tactics by which the leader country, Britain, held back followers. Colonies were prohibited from manufacturing that competed with the metropole — the 1699 Wool Act, the ban on Indian calicoes, the suppression of Irish wool and American hats. Chang cites the Indian cotton textile industry, which was dealt “a heavy blow in the eighteenth century by the British ban on cotton textile imports from India (‘calicoes’), even when the latter’s products were superior to the British ones.” By 1873, forty to forty-five percent of all British cotton textile exports went to India — a captive market created by coercion. Semi-independent countries from Latin America to China, Japan, Siam, Persia, and the Ottoman Empire were forced into “unequal treaties” that bound their tariffs at around five percent, precisely the low-uniform-tariff prescription Chang sees modern free-trade economists and the World Bank recommending. Competitor nations were subjected to bans on skilled-worker emigration and machinery exports. The followers, in turn, responded with industrial espionage, worker poaching, patent circumvention, and counterfeiting — the very practices now criminalised by the TRIPS agreement. Chang’s parallel between the nineteenth-century unequal treaties and contemporary WTO rules is uncomfortable, and he means it to be.

The third chapter turns from policy to institutions, applying the same historical-inductive method to the “good governance” agenda. The findings are just as subversive. Democracy, the chapter shows, was overwhelmingly an outcome rather than a precondition of development in the now-developed countries. None granted universal suffrage below roughly two thousand dollars per capita income in 1990 international dollars. The franchise was long restricted to propertied males; reversals were common, from the disenfranchisement of black voters in the American South between 1890 and 1908 to Saxony’s three-class voting system and Spain’s post-1936 dictatorship. As Chang notes, “In France between 1815 and 1830, for example, the franchise was granted only to males above 30 who paid at least 300 francs in direct taxes, which meant that only 80,000–100,000 people out of a population of 32 million (that is, 0.25–0.3 per cent of the population) could vote.” Bureaucracies were characterised by sale of office, spoils systems, nepotism, and tax farming. Professional civil services came late — the US Pendleton Act of 1883, Britain’s mid-century reforms, and even later in Italy and Spain. The judiciary suffered from political influence, narrow recruitment, “class justice,” and lack of legal training.

Property rights, the centrepiece of contemporary institutional reform, were not unambiguously good for development. Chang catalogues the beneficial violations: English Enclosure, the recognition of squatter rights on the American frontier, and postwar land reform in Japan, Korea, and Taiwan that expropriated landlords in the name of productive efficiency. The international patent regime, now enforced by the WTO, simply did not exist when the now-developed countries were industrialising. The Netherlands abolished its patent law; Switzerland refused one; the United States did not recognise foreign copyright until 1891. Central banking, limited liability, securities regulation, competition law, permanent income tax, child-labour regulation, and working-hour limits all emerged late, often after decades of resistance, and were riddled with enforcement failures. Chang’s comparative tables show that when the now-developed countries were at the income levels of today’s developing countries, they had virtually none of the institutions now demanded of Pakistan or Bolivia. And yet, he shows, today’s developing countries are already institutionally more advanced: “no NDC granted universal suffrage below the level of $2,000 per capita income… but most of the wide selection of currently developing countries featured in table 3.2 did so well below that level of development.” Demanding instant “global standard” institutions is, in this light, a second form of ladder-kicking.

The final chapter draws the threads together and makes the contemporary accusation explicit. Chang presents what he calls an apparent paradox:

So we have an apparent “paradox” here — at least if you are a Neo-Liberal economist. All countries, but especially developing countries, grew much faster when they used “bad” policies during the 1960–1980 period than when they used “good” ones during the following two decades.

The numbers are striking: per capita GDP growth in developing countries fell from 3.1 percent annually in the earlier period to 1.4 percent in 1980–2000, even as institutional indicators improved. The transition economies collapsed; only Poland had exceeded its 1989 GDP by 1997. Chang concedes that this is correlation, not proof of causation, but he argues that the burden of proof has shifted: if the policies that actually worked are now forbidden, their proponents owe an explanation that the historical record does not provide. The chapter addresses objections — that developing countries must follow the rules of the powerful, that international investors demand liberalisation, that global standards have legitimately risen — with a mix of realpolitik and counter-example. China’s success despite flouting the Washington Consensus is the obvious retort to the investor-confidence argument. The fact that the now-developed countries took generations to build their institutions, with frequent reversals, makes the five-to-ten-year transition periods demanded of developing countries look punitive rather than supportive.

The book’s intellectual lineage is explicit and well-chosen. Chang situates himself in the German Historical School tradition of Roscher, Knies, and Schmoller, and more broadly in the historical-inductive method that informed the founders of development economics — Lewis, Rostow, Hirschman. The title metaphor comes from List, but the argument also draws on Gerschenkron’s late-development thesis, Polanyi’s insistence that markets are politically constructed, and Bairoch’s revisionist economic history. Chang’s targets are equally clear: Adam Smith and the classical free-trade economists, whom List accused of disguising British national interest as cosmopolitan truth; the Washington Consensus as formulated by John Williamson; the WTO’s restrictions on tariffs and subsidies; the World Bank and IMF’s “good governance” conditionalities; and the work of Jagdish Bhagwati and Douglass North, both of whom Chang takes on directly. He dismisses Bhagwati’s characterisation of Smoot-Hawley as anti-trade folly and attacks North for relying on a single biased source to dismiss the role of US tariffs. These confrontations are bracing, though they sometimes shade into caricature. Smith emerges as a mere apologist for British hegemony, which understates the analytical content of The Wealth of Nations. The Washington Consensus is treated as a coherent, imposed programme rather than the contested, often internally inconsistent thing it was in practice.

This points to the book’s principal weakness. Kicking Away the Ladder is a prosecutorial brief, and it does not seriously engage with the most sophisticated defences of the position it attacks. Chang ignores the post-2000 “New New Trade Theory” and the growth-economics literature on institutions associated with Acemoglu, Johnson, and Robinson, which attempts to identify causal mechanisms rather than mere correlations. The book’s central empirical claim — that protectionism was positively related to growth in the now-developed countries — rests heavily on the work of Bairoch and O’Rourke, but the causal inference is thin. The correlation between high tariffs and fast US growth in the late nineteenth century could equally reflect other factors: the opening of the trans-Mississippi West, immigration, massive infrastructure investment, and the second industrial revolution. Chang acknowledges this limitation but does not resolve it. The claim that the post-1980 growth slowdown was caused by liberalisation faces the same problem; the period coincided with debt crises, collapsing commodity prices, and the end of Cold War patronage that had previously supported authoritarian developmental states. The book’s prescription — rewrite WTO rules, allow activist industrial policy — is plausible, but the historical record it marshals does not by itself distinguish between policies that worked because they were protectionist and policies that worked in spite of protectionism, sustained by other factors that Chang also documents, such as education, infrastructure, and institution-building.

Yet these limitations are, in a sense, the price of the book’s virtues. Chang is not trying to produce a balanced econometric assessment; he is trying to correct a historical amnesia that has allowed policy advice to float free of evidence. And on that score, Kicking Away the Ladder succeeds decisively. It shows, with an accumulation of detail that verges on the overwhelming, that the now-developed countries did not practise what they now preach. It demonstrates that the institutional demands of the “good governance” agenda are ahistorical — that they demand of Mali and Bangladesh a state capacity that nineteenth-century Britain and the United States did not possess. It exposes the hypocrisy of an intellectual property regime that criminalises the very practices by which German, Swiss, and American industry caught up with Britain. It names, repeatedly and with evidence, the imperial violence that accompanied the rise of the first industrial nation: the Opium War, the calico ban, the unequal treaties, the suppression of colonial manufacturing. These are not arguments that can be dismissed by pointing to a selection bias; they are facts, and they have been systematically excluded from the policy discourse Chang targets.

The book’s most unsettling implication is that the ladder-kicking may be done not out of malice but out of “genuine misinformed goodwill.” The officials and economists who design conditionalities, who write WTO rules, who demand rapid liberalisation, may sincerely believe they are helping. Chang’s response is to place the evidence before them and let the reader judge. He ends with a set of prescriptions that are modest in form but radical in their implications: rewrite the rules to allow developing countries the policy space the now-developed countries enjoyed, give realistic transition periods — decades, not years — for institutional reform, and target institutions that match a country’s stage of development rather than an Anglo-American template designed for societies already at the frontier. The book does not promise that these changes will produce another East Asian miracle. It insists only that the historical record demands them, and that the alternative — continuing to impose policies that have demonstrably coincided with growth collapse — is neither scientific nor defensible.

What Chang has written is not a balanced work of scholarship. It is a polemic, and it should be read as one. But it is a polemic armed with evidence, and its target is a set of policies that have shaped the lives of billions of people. For the developing-country policymaker being told to cut tariffs and strengthen patent protection while the rich world maintains agricultural subsidies and erects new technical barriers to trade, Kicking Away the Ladder offers something more valuable than theoretical sophistication: it offers the historical truth that the rules were not always this way, that the rich countries themselves wrote them differently when they were poor, and that the ladder was kicked away only after they had climbed.