Initial Conditions and Miraculous Growth: Why is Southeast Asia Different from Taiwan and South Korea?

Abstract

The 1990s saw an explosion of work on the fast-growing economies of East and Southeast Asia, by individual scholars as well as international development institutions. Influential books, by Amsden (1989) and Wade (1990), as well as the work of Johnson (1982, 1995), have explored the nature of the East Asian developmental state, and especially the role of government in determining the allocation of resources to particular industries, in building infrastructure and in the development of the educational system. The widely discussed report published by the World Bank (1993a) on the East Asian ‘Miracle’ endeavoured to draw lessons, not just from the experience of Japan, Taiwan and Korea, but also from four fast-growing economies in Southeast Asia-Singapore, Indonesia, Malaysia and Thailand. The recent growth experience of China was also discussed. This report and the large literature which it generated have tended to convey the impression that the huge area of the world which the term ‘East Asia’ embraces have all experienced rapid economic growth over the last three decades, and that from their experience, a coherent set of ‘lessons’ can be drawn for less successful economies in other parts of the world.¹