East Asian Financial and Economic Development
62 Pages Posted: 18 Sep 2017
Date Written: September 12, 2017
Japan, an isolated, backward country in the 1860s, industrialized rapidly to become a major industrial power by the 1930s. South Korea, among the world’s poorest countries in the 1960s, joined the ranks of First World economies in little over a single generation. China now seems poised to follow a similar trajectory. All three cases highlight the importance of marginalized traditional elites, intensive early investment in education, a degree of economic openness, free markets, equity financing, early-stage coordination of firms in diverse industries via arrangements such as business groups, and political institutions capable of curbing the power of families grown wealthy in early-stage rapid development to make way for prosperity sustained by efficient resource allocation to high-productivity firms.
Keywords: Japan, South Korea, China, Big Push, Industrialization, Business Groups, Developmental State
JEL Classification: G0, N25, N35, O1, O16, O53, P1, P11, P5
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