The Economic Freedom of Asian Tigers - an Essay on Controversy

Abstract

The "tigers" are a group of 4-5 east Asian countries, which have joined the rich western countries after a period of 30-40 years of "miraculous" growth. Large controversies surround the attempt to explain how they did it. The paper briefly surveys the discussion. The economic freedom index allows an analysis of the main controversy: the role of the state in their rapid growth. After a discussion of the likely biases the data are considered. Three of the 5 countries have a level of regulation much like the west European countries while 2 are as close to laissez-faire as any country in the world. All are much more "market friendly" than the ldc's they left behind only 40 years ago. It is also concluded that the extent of laissez-faire can be only one aspect of the miracle.

Keywords: East Asian Miracle, economic freedom, regulation, NIC

JEL Classification: H5, O1, P57