Research on national development in developing and newly industrializing countries (NICs) has focused on issues of economic growth and social change independent of each other, without paying much attention to the way the two elements relate to each other and to the conditions that could lead to their simultaneous occurrence. This paper argues that explanations of how economic growth with — or without —‘positive social change’ can occur require attention to changing state‐society relations. This research investigates the cases of Argentina and Taiwan, where economic growth in the 1990s has not translated into positive social change. By analyzing changing state‐society relations, this research shows that relations of power within societies have a clear effect on national development; it also reveals how different social actors may be able to influence a state’s developmental strategies. This paper re‐evaluates traditional views of the state and society in Argentina and Taiwan by examining the fluctuating composition of the societal base of the state and the changing relations between the state and its societal coalition. The analysis reveals the processes under which economic growth without social change is occurring in both countries, and provides general insights into the way dynamic state‐society relations can influence national development in other contexts.