Latecomer’s Disadvantage in Development

Rapid catch‑up by imitating foreign technology can breed overconfidence in interventionist institutions that later hinder innovation. Zhang, echoing Yang Xiaokai, warns that a state‑directed reward system dulls entrepreneurial judgment and misallocates capital once easy gains end. — It cautions that copying China’s early‑stage playbook or doubling down on industrial policy can trap economies in post‑catch‑up stagnation without institutional reform toward market discovery.