1. East and South East Asian NICs: class 2

2. Alternative perspectives on the East Asian Miracle ( I recommend : John Brohman. 1996. Postwar development in the Asian NICs: Does the neoliberal model fit reality?)

3. The Neoliberal Interpretation A market regulation thesis –eliminated restrictions on international trade –deregulated financial sector –privatized state enterprises –created unregulated labor market export-oriented industrialization –based on comparative advantage of low cost labor

4. Criticisms of the Neoliberal Interpretation Except for Hong Kong, there was substantial state intervention –Taiwan: state ownership –Singapore: public monopolies and parastatals –Korea: encouragement of chaebol guided market economies (like Japan) substantial initial protection of strategic industrial sectors

5. 2. Ignores key historical factors Role of Japan in early 20th C role of U.S. in mid 20th C –much assistance –tolerated early import substitution policy role of Japanese corporations in 1970s

6. The Perspective of Paul Kuznets Focus on proximate determinants

7. Fertility research parallel Breastfeeding practices Contraceptive usage Marital patterns Fertility decline Assorted economic, social and cultural factors

8. High investment ratios Small public sectors Export orientation Labor market competition Government intervention Rapid economic growth Paul Kuznets’ model

9. 1. High investment ratios Emphasis on investment in human capital modest investment in residential building supported by high personal savings rates

10. Limited consumer credit Limited social security Real income growth High investment ratio High personal savings Rapid economic growth The causal sequence

11. 2. Small public sectors Despite high defense spending in Korea and Taiwan role of cultural and social values stressing family responsibility form of government Family values Not federal governments Small public sectors Rapid economic growth

12. 3. Competitive Labor Markets Measures to limit organization of labor leads to low wage growth

13. 4. Export Expansion Export growth rates 1973-83 –Korea: 15% per year –Taiwan: 12% per year role of exchange rate depreciation and export promotion measures timing good. Why does export orientation promote above average growth???

14. 5. Government Intervention Role of industrial policy stable government Stable governments Long-term industrial policy

15. Perspective of: World Bank. 1993. The East Asian Miracle

16. Budget deficits inflation external debt exchange rates Selective intervention Market- based competition Contest- based competition

17. Campos and Root, 1996. The Key to the Asian Miracle: Making Shared Growth Credible Theme: the importance of “shared growth”

18. Shared Growth Rapid Growth (Cooperation) Wealth-sharing mechanisms

19. Shared Growth Land reform and rural development Investment in education Promotion of small and medium-sized businesses Developing rural infrastructure