ABSTRACT
Until the 1990s, speculation of a coming Pacific Century, dominated by Japan, did not seem altogether unreasonable. The Japanese and many East Asian economies were experiencing rapid economic growth and there was nothing uncommon about the coming shift in the center of economic gravity. Hegemonic transitions are a historically recurrent pattern. If, however, the idea of a Pacific Century was at all unpalatable it was because Japan and East Asian economies represented a significantly different model of domestic and international political economy, with an extensive role for governments in industrial policy and trade development. The role of governments in East Asia extended well beyond simple counter-cyclical economic interventions. Japan's postwar economic success is often attributed to successful state intervention in industrial development and this was a model that was emulated by many East Asian countries in replicating the Japanese growth experience. The developmental state model was a contrast to the largely market dominant Anglo-American model. The West seemed unable to keep up with competition from Japan and East Asia. Yet, just as the long run of economic growth and prosperity was remarkable, so too was the quick descent into economic stagnation. Few had anticipated that the trend lines would fall away so suddenly.
