ABSTRACT
Even though the Asian financial crises of 1997–1998 considerably dampened our enthusiasm about, and interest in, East Asian growth, that region as a whole has recorded unprecedented rapid growth since the end of World War II. The World Bank (1993) called the growth “the East Asian Miracle.” In fact, the crisis-afflicted economies have already rebounded quickly (except Japan, which has been mired in an economic slump for more than a decade ever since the bursting of the asset bubble of 1987–1990). One dominant explanation for the region’s supergrowth is that the region adopted outward-oriented, export-propelled industrialization (EPI) strategies—instead of the import-substituting industrialization (ISI) approach that was once intensively pursued by Latin America until the late 1980s. (An exception was Chile, which switched from ISI to EPI in 1976 and began to grow rapidly.) The general consensus derived from these two regions’ contrasting performances is that EPI is growth promoting, whereas ISI is growth stunting.
