ABSTRACT
Chapter 1 provided an empirical sketch of the phenomenal success of the East Asian newly industrialising economies, while Chapter 2 set the broad historical and strategic context of this ascendency. The purpose of this chapter is to focus on explanations which emphasise the role of internal policy and political factors in the rise of East Asian NIEs. There are two competing paradigms. A well-entrenched view maintains that East Asian success provides a clear demonstration of vigorous market competition and free trade as the twin ‘engines of growth’. The alternative interpretation is that the state in East Asia represents the ‘engine of growth’. The market-oriented explanation is often closely identified with neoclassical economics and, more recently, with neoclassical political economy. The statist interpretation of East Asian success belongs to the genre of new political economy. The dividing line between the two contending paradigms is, however, not always clear cut. There is a significant degree of overlap between the state and the market, suggesting that a broad-based, eclectic approach is more useful in understanding the nature of East Asian economic development. This represents the key message of this chapter and its exposition draws on Islam (1992a, b).
