ABSTRACT
This survey of the rise of the East Asian NIEs has entailed a long journey through a vast and diverse terrain of issues and debates. The literature seems to be caught in the cross-currents of two competing paradigms. On the one hand, one has to contend with the neoclassical view that East Asian success is largely the outcome of ‘getting prices right’. In particular, this view traces the ascendancy of the NIEs to the policy reforms of the early 1960s, entailing a combination of trade and financial liberalisation. These reforms were in turn buttressed by a well-functioning labour market and prudent macroeconomic management. This neoclassical resurgence has been challenged by the statist ‘counterrevolution’. In terms of this view, one can only understand the policy-making process in conjunction with the underlying political process. The East Asian NIEs have the common institutional feature of a ‘strong, developmental state’. Such a state is insulated from the contending pressures of distributional coalitions which enables policy makers to engage in sector-specific interventions to overcome market failure without the corresponding burden of government failure. The interplay of policies and politics has to be set within the broader sociocultural, historical and strategic context within which the East Asian NIEs have evolved.
