ABSTRACT
Chapter 1 briefly examined how economic theory and empirical evidence support the proposition that a strategy of openness leads to high rates of economic growth and poverty reduction. In the case of East Asia, optimal resource allocation was initially undertaken for unskilled and semi-skilled laborers (i.e., those most likely to be poor). Thus, the de:velopment of outward-looking, export-oriented industries resulted in rapid income growth, and a reduction in poverty during the 1980s and 1990s.
