Alice H. Amsden

Why isn't the whole world experimenting with the East Asian model to develop?: Review of the East Asian miracle

Abstract Like Narcissus, the World Bank sees its own reflection in East Asias success. It attributes the East Asian miracle to macroeconomic basics–high saving and investment rates, expenditures on education, and exports–but in reality, these are anchored in micro-institutions that exhibit pervasive state intervention. East Asia created competitiveness by subsidizing learning, whereas Bank policy emphasizes methods that effectively cut real wages. The Report is rich in empirical data, but they do not support the Banks dismissal of industrial policy as “ineffective,” and they are presented in a way that makes it difficult for students to corroborate Bank findings. The greatest disappointment of the Reports market fundamentalism is a failure to study seriously how elements of the East Asian model can be adapted to suit conditions in other countries.

A new approach to assessing the technological complexity of different categories of R&D (with examples from Singapore)

Abstract This paper attempts to develop a set of generic questions the answers to which allow any given R&D activity to be correctly classified in one or another conventional R&D box—basic, applied, development, etc. Such systematic pigeon-holing allows latecomer countries to gauge the distance of their R&D activity from the world frontier, and how policies may be designed to overcome the hurdle that divides applied research and developmental research.

Say's Law, Poverty Persistence, and Employment Neglect

Abstract Grass roots methods of poverty alleviation will fail unless jobs are created or stimulated by governments (whether central or local). In the presence of high unemployment at all levels, improving the capabilities of job seekers (making them better fed and housed and educated) will only lead to more unemployment and not to more paid employment or self‐employment above the subsistence level (call this the ‘Kerala Effect’). To believe that improving only the supply side of the labor market is enough to reduce poverty without also improving the demand side, and investing in jobs, is logically flawed and subject to the same error as Say’s Law — that ‘supply creates its own demand’. Healthcare and other benefits provided through grass roots anti‐poverty programs may improve the quality of life (measured by rising life expectancy). But as population growth rises, diminishing returns sets in, in Malthusian fashion, and poverty does not fall, as shown by the data provided in the article.

South Korea's 1980s financial reforms: Good-bye financial repression (maybe), hello new institutional restraints

Abstract South Koreas financial reforms in the 1980s have been consistent with high rates of savings and financial deepening, but they have not followed liberal reform lines. The Korean financial system operates under the umbrella of an industrial policy, and economic goals have been attained by means of investments in institutions rather than by exclusive reliance on the price mechanism.

Big business and urban congestion in Taiwan: The origins of small enterprise and regionally decentralized industry (respectively)

Abstract Two pillars of Taiwans economy that are regarded as models for other developing countries to follow are small- and medium-size enterprises (SMEs) and regional decentralization of industry. This paper suggests that the historical roots of both phenomena make the policies necessary to reproduce the Taiwan model elsewhere less straightforward than is typically supposed. By the mid-1960s the major factor behind regional decentralization was urban congestion. Big business seems to have been instrumental in the growth of SMEs.

Manufacturing output, employment and real wages in the 1980s: Labour's loss until the century's end

During the 1980s most developing countries experienced sharp declines in manufacturing output and real wages, whilst their manufacturing sectors were supposedly ‘restructured’ or made more competitive by having to confront market forces. This article examines the extent to which macroeconomic adjustment and industrial restructuring policies succeeded in achieving their objectives.

The Bark Is Worse Than the Bite: New WTO Law and Late Industrialization

In spite of (or because of?) the successful industrialization of leading latecomers under a set of institutions that had deviated from free-market norms, by the 1990s the global economic order had formed around rather orthodox neoliberal principles. At close examination, however, the new rules of the World Trade Organization, a symbol of neoliberalism, are flexible and allow countries to continue to promote their industries under the banner of promoting science and technology. The success formula of late industrialization—allocating subsidies in exchange for monitorable, result-oriented performance standards—is still condoned. The problems bedeviling latecomers today are not formal legal constraints but informal political pressures exerted by North Atlantic economies in favor of radical market opening. Latecomers lack a vision to guide them in responding to this pressure.

Scientific publications, patents and technological capabilities in late-industrializing countries

Investments in learning in late-industrializing countries have began to include outputs in the form of scientific publications and patents. We examine the patterns which these outputs take by correlating their growth rates with foreign investment, capital formation, R&D expenditures and other variables. We also analyze the scientfic fields of Publications. Where possible, we compare the patterns of latecomers with those af advanced countries, and try to assess whether there has been convergence or divergence in the number of patents and scientific publications over time.

Borrowing Technology or Innovating: An Exploration of the Two Paths to Industrial Development

Great Britain, and then the USA and Germany, became world industrial leaders by generating pioneering technology. They either invented new products and processes or were the first to commercialize them on a large scale. By contrast, late-industrializing countries in the twentieth century have evolved as ‘learners’, by borrowing and improving technology that had already been commercialized by experienced firms from more advanced economies.

China's macroeconomy, environment, and alternative transition model

Abstract Chinas rapid economic growth since the initiation of market reforms raises interesting questions about less successful transition policies in Eastern Europe, about how China managed to evade binding growth constraints related to savings, foreign exchange, and public sector revenues, and about the environment. These issues provide the focus of a review of Chinas medium-term macroeconomy.