Cover -- Half Title -- Title -- Copyright -- Contents -- List of figures -- List of tables -- List of boxes -- Introduction -- 1 An overview: evolutionary history and translative adaptation -- 2 The Edo society: preparing conditions for industrialization -- 3 Transition from Edo to Meiji -- 4 Importing and absorbing technology -- 5 Development of key industries -- 6 Budget, finance and the macroeconomy of Meiji -- 7 World War I and the 1920s -- 8 The banking crisis of 1927 -- 9 The 1930s and the war economy -- 10 Postwar recovery 1945-49 -- 11 The high growth era -- 12 Economic maturity and slowdown -- 13 The asset bubble and prolonged recession -- Questions and answers -- Bibliography -- Index.
This book proposes a new, pragmatic way of approaching economic development which features policy learning based on a comparison of international best policy practices. While the important role of government in promoting private sector development is being recognized, policy discussion often remains general without details as to what exactly to do and how to avoid common pitfalls. This book fills the gap by showing concrete policy contents, procedures, and organizations adopted in high-performing East Asian economies. Natural resources and foreign aid and investment can take a country to a certain income level, but growth stalls when given advantages are exhausted. Economies will be caught in middle income traps if growth impetus is not internally generated. Meanwhile, countries that have soared to high income introduced mindset, policies, and institutions that encouraged, or even forced, accumulation of human capital – skills, technology, and knowledge. How this can be done systematically is the main topic of policy learning. However, government should not randomly adopt what Singapore or Taiwan did in the past. A continued march to prosperity is possible only when policy makers acquire capability to formulate policy suitable for local context after studying a number of international experiences. Developing countries wanting to adopt effective industrial strategies but not knowing where to start will benefit greatly by the ideas and hands-on examples presented by the author. Students of development economics will find a new methodological perspective which can supplement the ongoing industrial policy debate. The book also gives an excellent account of national pride and pragmatism exhibited by officials in East Asia who produced remarkable economic growth, as well as serious effort by an African country to emulate this miracle.
This book proposes a new, pragmatic way of approaching economic development which features policy learning based on a comparison of international best policy practices. While the important role of government in promoting private sector development is being recognized, policy discussion often remains general without details as to what exactly to do and how to avoid common pitfalls. This book fills the gap by showing concrete policy contents, procedures, and organizations adopted in high-performing East Asian economies. Natural resources and foreign aid and investment can take a country to a certain income level, but growth stalls when given advantages are exhausted. Economies will be caught in middle income traps if growth impetus is not internally generated. Meanwhile, countries that have soared to high income introduced mindset, policies, and institutions that encouraged, or even forced, accumulation of human capital – skills, technology, and knowledge. How this can be done systematically is the main topic of policy learning. However, government should not randomly adopt what Singapore or Taiwan did in the past. A continued march to prosperity is possible only when policy makers acquire capability to formulate policy suitable for local context after studying a number of international experiences. Developing countries wanting to adopt effective industrial strategies but not knowing where to start will benefit greatly by the ideas and hands-on examples presented by the author. Students of development economics will find a new methodological perspective which can supplement the ongoing industrial policy debate. The book also gives an excellent account of national pride and pragmatism exhibited by officials in East Asia who produced remarkable economic growth, as well as serious effort by an African country to emulate this miracle.
Authored by eminent scholars, the volume aims to generate interest and debate among policymakers, practitioners, and researchers on the complexity of learning and catch-up, particularly for twenty-first century late-late developers. The volume explores technological learning at the firm level, policy learning by the state, and the cumulative and multifaceted nature of the learning process, which encompasses learning by doing, by experiment, emulation, innovation, and leapfrogging. Why is catch-up rare? And why have some nations succeeded while others failed? What are the prospects for successful learning and catch-up in the twenty-first century? These are pertinent questions that require further research and in-depth analysis. The World Bank estimates that out of the 101 middle-income economies in 1960, only thirteen became high income by 2008. This volume examines how nations learn by reviewing key structural and contingent factors that contribute to dynamic learning and catch-up. Rejecting both the one-size-fits-all approach and the agnosticism that all nations are unique and different, the volume uses historical as well as firm-level, industry-level, and country-level evidence and experiences to identify the sources and drivers of successful learning and catch-up and the lessons for late-latecomer countries. Building on the latecomer-advantage perspective, the volume shows that what is critical for dynamic learning and catch-up is not learning per se but the intensity of learning, robust industrial policies, and the pace and direction of learning. Equally important are the passion to learn, long-term strategic vision, and understanding the context in which successful learning occurs.
The West and the East approach economic development differently. The Europeans and Americans stress free and fair business climate, promoting private activities generally without picking winners, and improving governance. East Asia is interested in achieving concrete results and projects rather than formal correctness, prioritizing a few sectors for industrialization, and eventual graduation from aid. The West mostly shapes shifting strategies of the international donor community while the East has in reality made remarkable progress in industrial catch-up. The two approaches cannot be merged easily but they can be used in proper combination to realize growth and economic transformation. This book proposes more dialogue and complementarity between the two in the development effort of Africa and other regions. In this collected volume, contributed by experts and practitioners from both East and West, the need to introduce Eastern ideas to the global development strategy is emphasized. Analysis of British and other Western donor policies is given while Japanese, Korean, and other Asian approaches are also explained with concrete examples. The concept of governance for growth is presented and the impact of rising China on development studies is contemplated. The practices of industrial policy dialogues and actions assisted by East Asian experts are reported from Tunisia, Zambia, Ethiopia, Rwanda, and others. The book should be applicable to all donors, institutions, NGOs and business enterprises engaged in development cooperation.
The malignancy of the Asian crisis comes from its characteristics as twin financial crises: currency crisis (external) and banking crisis (internal). It is a capitalaccount crisis combined with domestic credit contraction, as distinct from the traditional current-account crisis. The new nature of the crisis calls for policy responses entirely different from the conventional ones. The traditional current-account crisis is caused by the deterioration of domestic macroeconomic performance, such as price inflation, fiscal deficits and low saving rates. For this type of crisis, conventional policies such as tight money, fiscal consolidation, structural reforms, and output- and expenditure-switching exchange rate policy are appropriate. However, economic performance of pre-crisis developing Asia was quite good as measured by conventional macroeconomic variables. The critical question is: what consequences will result if the policy prescriptions for the traditional current-account crisis are adopted against the Asian-type capital-account crisis which hits even economies without serious macroeconomic imbalances. We argue that such policy misapplication is likely to transform the initial twin crises into something far more serious, namely the collapse of real economic activity. This paper attempts, first of all, to identify the nature and mechanism of the capital-account crisis. The capital-account crisis is characterized by a massive international capital inflow greatly surpassing the underlying current-account deficit, as well as by the composition of such an inflow being dominated by short-term, foreign currency denominated loans. The resultant double mismatches in both currency and maturity in the balance sheets of domestic financial institutions are responsible for the subsequent twin financial crises: currency precipitation accompanied by international liquidity crisis on the one hand and domestic banking crisis leading to credit contraction on the other. Second, we show how and why policy prescriptions for the traditional current-account crisis, if applied to the capital-account crisis, will exacerbate the problems already inherent in such a crisis. Mounting non-performing loans and abrupt financial disintermediation play key roles in this process. Third, we present alternative policy responses for resolving the twin financial crises which must be implemented by both the governments of the crisis-hit countries as well as the international financial community.
