ABSTRACT
By now it is customary to attribute the economic success of East Asia to the special role played by the state in the development process. Here we follow Rueschemeyer and Evans’ conception of the state as ‘a set of organizations invested with the authority to make binding decisions for people and organizations juridically located in a particular territory and to implement these decisions using, if necessary, force’ (1985, p.47). It is argued that in contrast to the Anglo-American model of regulatory states which play a refereeing role only in the economy, East Asian states are directly involved in the economy and have a significant influence on private decisions. Even the World Bank, long a bastion of free market philosophy, has recently admitted that the state could play a larger role than neo-classical economics would call for. Its 1993 report on the Asia-Pacific observes that: ‘More selective interventions – forced savings, tax policies to promote (sometimes very specific) investments, sharing risks, restricting capital outflow, and repressing interest rates – also appear to have succeeded in some HPAEs (High Performing Asian Economies) especially Japan, Korea, Singapore, and Taiwan, China’ (World Bank, 1993, p.242).
