The Catching-up: Lessons of East Asian Development

For more than three decades, the export-oriented East-Asian NICs, or the so-called ‘NICs 4’ — i.e. Korea, Taiwan, Hong Kong and Singapore — grew by nearly 10 per cent per annum on average. Japan also grew at a similar rate during the period between the regaining of her independence in 1952 and the first oil shock of 1973, far exceeding the so-called ‘post-Meiji long-run trend rate’ of 4 per cent, eventually becoming a full-fledged advanced-country by the 1980s. The new NICs — i.e. Thailand, Malaysia, Indonesia and China — have recently begun to reveal similar high growth performance. These East Asian economies are often regarded as unique because they have combined rapid, sustained growth with a relatively equal distribution of income. Be it the result of extraordinary resource mobilization or technological catch-up (i.e. inputs-driven or efficiency-driven à la Krugman, 1994), the very natural questions are how out of more than 150 underdeveloped countries, the catching-up process commenced in these handful of countries and growth dynamism been maintained in these economies over such a long period of time.