ABSTRACT
The main explanations o f the Asian crisis are couched in terms o f serious policy errors committed by national governments. The purpose o f this paper is to explain the dynamics o f these errors. The Asian crisis has already triggered an avalanche o f works on economic crisis. Sophisticated models have been developed to explain the high growth, high savings and high risks economies o f East Asia (see Bai and Wang, 1999). It has been widely discussed whether or not these elements turned on efficiency (Krugman, 1994; Young, 1995). The sharp downturn o f some these economies point to the possibility that they were exposed to high risks. The quality o f governance has also been highlighted in this context.
