An Enquiry into the Asian Growth Model

This preliminary chapter is prefatory and lays down the foundation of this book. It is intended to prepare the readers for an in-depth discussion on the so-called Asian growth model. Interest of students, researchers, public policymakers and decision makers in the world of international business in Asia’s effervescent growth performance and the Asian growth model has been high. There are many unassailable reasons for that. The most important reason is the dynamic economic performance of several Asian economies, including that of the region. A group of Asian economies underwent arguably the most remarkable economic transformation in history. They succeeded in achieving rapid growth with low levels of inequality. The fundamental question is why some economies were able to sustain rapid growth while others languished and remained mired in poverty.

The focus of this chapter is that rapid and sustained growth achieved by a group of Asian economies made researchers, policymakers and decision makers in the world of international business search for a plausible and unique Asian model of growth. This issue has been examined from different pertinent angles in this chapter, and the conclusion is that no such sure-fire miracle growth model exists for the high-performing economies of Asia. This is not to deny that high-growth Asian economies, mutatis mutandis, adopted certain common strategies. Industrial policy, role of the government and developmental state are some of the important issues covered in this chapter. This chapter revisits the debate on the ‘Beijing consensus’ vis-à-vis the ‘Washington consensus’. Old and new structuralist theories are also dealt with in detail in this chapter.

The objective of this chapter is to explore what Asia did to unleash its potential. It focuses on interconnected and mutually dependent policy issues, such as the role of government in markets. It sheds light on the policy mix that was instrumental in their economic growth. This chapter examines some of the more recent explanations of rapid growth in Asia provided by Justin Yifu Lin, Joe Studwell and the several contributions of Michael Pettis. Justin Yifu Lin held the coveted position of the chief economist of the World Bank (2008–2012). During his tenure a lot of rethinking of development theory and policy took place. His research logically focused on this important theme.

The objective of this chapter is to conduct a literature review of the Asian economic development model and its related strategic and supportive policy strands. To this end a meta-analysis has been attempted in this chapter. Its scope is broad and covers the developments in the Asian growth model during the post-World War II period. This chapter emphasizes that, in the process of implementing the export-led growth model, these dynamic Asian economies initiated liberal and market-oriented macroeconomic policy reforms. This strategy was responsible for trade expansion being regarded as an ‘engine of growth’. Under this model of economic growth, trade policy played a central role. It gradually became accepted wisdom that growth prospects for developing economies greatly improved by adopting outward-oriented trade regimes and fairly uniform incentives for production across exporting and import-substituting goods. The term ‘export-led growth’ can be interpreted as growth driven by net exports.