Fairy Tales of Western Development (Political Economy)
Term
Fairy Tales of Western Development (Political Economy)
Idea level
☐ Others / Decolonizing critique
Definition
Fairy Tales of Western Development is a decolonizing critique introduced by Yuen Yuen Ang in 2025: it challenges idealized, selective narratives in mainstream political economy that attributes Western development to democracy and “good” institutions, highlighting instead the role of non-democratic or extractive factors such as colonial expropriation, taxless finance, and corruption (access money).
Sources
First formal articulation:
Ang, Y.Y. Fairy Tales of Western Development: The Non-Democratic Origins of Fiscal Capacity in Britain, the US, and China. Chapter in Political Economy Rebooted (2026); posted on SSRN (2025).
Earlier articulations:
Ang, Y.Y. “The 2024 Nobel Laureates Are Not Only Wrong About China, But Also About the West.” The Ideas Letter, October 31, 2024.
Ang, Y.Y. How China Escaped the Poverty Trap, Chapter 7. (2016).
Genealogy
[Paradigm] AIM (Adaptive, Inclusive, Moral Political Economy)
→ [Pillar] Moral — interrogating normative bias, power, and positionality in dominant political-economic narratives
→ [Decolonizing critique] Fairy Tales of Western Development: Critique canonical theories that attribute Western development and state capacity to liberalism while downplaying historical contingency and unflattering factors.
→ [Application] Revised historical narratives about fiscal capacity building in 17-18th century Britain and 19th-century America, with parallels in post-1990s China.
[Related Concept] Adaptive Fiscal Capacity (generated under AIM’s adaptive pillar)
Analytic Implications
Exposing Fairy Tales of Western Development enables analysts to:
Expose how power shapes canonical narratives and theory construction, including which facts are highlighted, normalized, or omitted.
Conduct comparative analysis objectively, instead of treating Western cases as “normal” and China as “exceptional / abnormal.”
Decolonize political economy by rewriting history, rather than merely critiquing the literature.
Recognize why policy prescriptions inspired by “fairy tales” about Western development fail in contemporary developing countries.
The concept of Adaptive Fiscal Capacity, revealed by Ang’s retelling of Western history, shifts the focus of fiscal capacity beyond just tax collection to portfolio management of both taxes and taxless finance.
Quotes
“It would be too simplistic to equate democracy with good institutions and to draw a linear causal arrow from democracy itself to capitalist success… American history presents a story about a collective of politicians and people who learn to make democracy work, not a statement that democracy always and by itself works.
– Ang, How China Escaped the Poverty Trap (2016), p. 232
“Upon closer examination, the econometric and historical evidence for AJR’s claim that inclusive, non-extractive institutions caused Western prosperity is actually shaky, if not cherry-picked… Insisting that an obvious competing explanation—extraction—isn’t important ‘for our story’ doesn’t make it go away.”
– Ang, The 2024 Nobel Laureates (2024).
“By exposing the partial ‘fairy tales’ that have long anchored Western narratives of state-building and development, this article demonstrates how to decolonize political economy in practice.”
“To reboot political economy for a multipolar era, we must recover the real histories of Western state formation, not the sanitized myths that celebrate its liberalism and then project those fairy tales onto fiscal policies and field experiments in developing countries today.”
“With that history in mind, why has it been so difficult for developing countries to replicate Europe’s supposed path of “democracy → social contract → fiscal capacity”? The short answer: that was not the path Europe actually took… Partial fairy tales about former empires cannot produce meaningful policy lessons for postcolonial nations.”
- Ang, Fairy Tales of Western Development (2026)