ABSTRACT
The East Asian Miracle is generally regarded as one of the most successful development paradigms in the 20th century. In the making of the miracle, Japan, Korea and Taiwan – among other nations – experienced rapid transformations from rural to urban societies based on industry rather than agriculture as their main sources of income. During the takeoff periods large fractions of the rural population moved off the farm into urban manufacturing jobs, fueling sharp rises in productivity and incomes. Almost as important, during their industrialization and urbanization phases leaders were able to reduce poverty among those left in rural areas and maintain a healthy agricultural sector, thereby attenuating trends towards increased inequality (Johnston, 1970). The ability to increase or at least maintain the income and asset levels of those left behind in rural areas during and after the initial waves of migration played a key role in giving the rural population the means to sustain the drive to modernization. The process of rapid urbanization and industrialization depended in no small way on the human capital and other investments made by rural households.
