East Asian Development Experience: The Miracle, the Crisis and the Future by Ha-Joon Chang

Acknowledgements     vii
Introduction     1
Overview of the Debate on East Asian Development Experience
The East Asian Model of Economic Policy     13
Introduction: The Belated Interest in the Diversity of Capitalism     13
Does the East Asian Model Exist?     17
Investment Policy     19
Trade Policy: Infant-Industry Programmes and Export Promotion     29
Industrial Policy     34
The Question of Replicability     47
The End of the East Asian Model?     53
Summary and Conclusion     54
Interpretation of the East Asian Miracle
The Political Economy of Industrial Policy in Korea     63
Introduction     63
A Free Marker?     64
Market-Preserving State Intervention?     67
How Does State Intervention Work in Korea?     75
Why Does State Intervention Work in Korea?     85
Conclusion     100
Explaining 'Flexible Rigidities' in East Asia     109
Introduction: Flexible Rigidities     109
Some Thoughts on Flexibility     117
Explaining Flexible Rigidities in East Asia     125
Concluding Remarks     132
Appendix     134
How Importantwere the 'Initial Conditions' for Economic Development?: East Asia vs. Sub-Saharan Africa     143
Introduction: Origins of the Debate on Initial Conditions     143
Human Resource Endowments     146
Natural Resource Endowments     153
Physical and Social Infrastructures     157
Previous Industrial Experiences     168
Foreign Aid     172
Conclusion     175
1997 Asian Financial Crisis and Its Implications
The Hazard of Moral Hazard - Untangling the Asian Crisis     179
Introduction     179
Moral Hazard and the Development of Capitalism     181
Moral Hazard in the Asian Crisis     184
Summary and Conclusion     201
Interpreting the Korean Crisis - Financial Liberalisation, Industrial Policy and Corporate Governance     207
Introduction     207
Financial Liberalisation: Capital Account Liberalisation and the Debt Crisis     208
Industrial Policy: Over-investment and 'Crony Capitalism'     214
Corporate Governance: Moral Hazard and High Debt     218
Conclusion     223
Looking into the Future of East Asia
Industrial Policy and East Asia - the Miracle, the Crisis and the Future     227
Introduction     227
The East Asian Miracle Report on Industrial Policy: Contributions and Limitations     229
The East Asian Crisis (and the Japanese Stagnation) and Industrial Policy     245
Some Thoughts on the Future of Industrial Policy in East Asia     248
Concluding Remarks     254
The Triumph of the Rentiers?     261
Introduction     261
The Korean Financial System During the High-Growth Period     262
The Historical Precedents     265
The Misunderstood Crisis: 1993 to 1997     268
Institutional Changes After the 1997 Crisis - What Future for Korea?     273
Concluding Remarks     275
Evaluating the Post-Crisis Corporate Restructuring in Korea     279
Introduction     279
A Critical Look at the Standard Analysis of the Role of the Corporate Sector in the 1997 Crisis     280
Restructuring the Chaebols     288
Assessing the Governance Reform Programme     300
The Need for a 'Second-Stage Catching-up System' for the Korean Economy     394
Some Final Thoughts     308