ABSTRACT
The rapid growth of East Asian economies since the end of World War II has fundamentally altered the distribution of global wealth and political power. In the scholarly community, the economic ascendence of East Asia has received intense attention and aroused heated debates in recent years.1 Social scientists have attempted to explain the causes of the dramatic economic transformation of East Asia, and their efforts have spawned a vast (and still growing) literature on the political economy of East Asia.2 The most influential argument, eloquently articulated in the works of Chalmers Johnson, Alice Amsden, and Robert Wade, questions some of the basic tenets of neo-classical economic theories and focuses, instead, on the effectiveness of state intervention in the economy through industrial policy, credit control, and investment targeting. Such state intervention is found to be especially prominent and efficacious in Japan and the first-generation newly-industrialized countries (NICs) in East Asia (Korea, Taiwan, and Singapore). It has also been further argued that these countries were able to adopt export-oriented industrialization strategy with active participation by the state primarily due to the “insulation” of the state (especially the economic bureaucracy) from societal rentseeking groups.
