Give a discussion on the East Asian political economies…………….
East Asian economies or eastern Asia as known by United Nations consists of most successful economic regions of the world today and is home to large and flourishing economies of China, Japan, Taiwan, Hong Kong and South Korea. I partially agree with the statement provided on the economic development on eastern Asia economies. The Asian economic model is still a live today, Asian miracle and rapid economic growth has not been as a result of governments’ interventions per se but also the result of market forces.
Asian economic model
Asian economic model is not dead and Asian miracle was not a sham contrary to the statements pointed out in this regard. Developmental models which involved massive government interventions to help stimulate economic growth and development of eastern Asia economies, however, their applicability in the current global economy has diminished due to globalization.
Increased globalization in the global economy today has rendered developmental state model in-applicable in many ways in the current international economic and political climate. For instance Japans has embraced political economy different from those of Anglo-American nations with state playing a major role in economic growth and developments, (Johnson, 1995).
According to Hayashi (2010), globalization and free market have greatly changed the role of state in economic developments and the course of developmental model. He therefore says that this model has greatly evolved and should accommodate market powers. However, the model of developmental state is not completely extinct and can be incorporated in economic developments of growing economies because the role of governments in economic growth cannot be underestimated, (Stiglitz, 2005).
Rapid growth and economic miracle
The rapid economic growth experienced in the eastern Asia did not entirely depend on government incentives but also depended on the market forces brought about by globalization. Although government interventions greatly contributed to the economic growth of eastern Asia nations, (Hayashi, 2010), we cannot entirely attribute this growth to these interventions alone but also other market forces that supported this model of economic growth.
Most authoritarian regimes in the southern Asia nations and countries from other parts of the world have employed the state intervention methods in their economy yet they have not managed to achieve similar economic results, an example is Indonesia and South Korea which have failed in using this model. This leads to other underlying factors as having contributed to their economic success, (Hayashi, (2010). Eastern Asian governments’ interventions were limited to some sectors of the economy in order to attain high value additions and technology, yet proactively engaging in global economy and trade. South Korea and Taiwan governments promoted and nurtured local industries whose products were exported into global market.
In Japan, rational business players influenced the policy making processes by the state by way of pressuring the politicians hence played a big role in shaping economic growth miracle that was experienced in this nations. According to Murakami (1996), business- bureaucratic relationships were highly influenced by business class communities during development period.
Globalization and free market economy comes with benefits and failures depending on how they are adopted into the system. Financial crisis of 1990 in Asia are said to have resulted from poor adoption of globalization into the Asian markets. Japan and china ranked among the major world trading countries today and this (global trading) greatly contributed to their economic growth and developments.
According to Hayashi, (2010), the benefits of globalization in eastern Asia far much exceeded the costs and their economic growth were more founded on the globalization rather than government incentives. Integrating globalization and government policies has contributed to the East Asia economic miracle. However careful selection of globalization policies was essential to realize this growth.
World Bank (various years) concludes that financial crisis have and will happen to both free market and state controlled economies. However, china was not adversely affected by the recent global financial crisis yet its it pursues developmental state model. The importance of state to economic growth cannot therefore be ignored, however, careful integration of globalization into economic system is essential to achieve maximum economic benefits.
We learn that government intervention in economic growth and development contributed to the Asian miracle. However, business players and globalization also played an important role to this growth. The financial crisis experienced in the previous support the idea and role of state in economic growth and development.
Integration of countries into global economy is vital for economic growth and developments. Globalization alone is not enough to achieve economic development but requires state intervention as well as was and is the case in the Eastern Asian economies.
Government interventions should be on the selective sectors of economies that will bring desired economic growth and technology, leaving market forces of invisible hand to play its economic role.
Hayashi, S. (2010).The developmental state in the era of globalization: beyond the Northeast Asian model of political economy. Pacific Review, 23(1), 45-69. Doi: 10.1080/09512740903398330
Johnson, C. (1995) Japan: Who Governs?: The Rise of the Developmental State, New York: W. W. Norton & Company.
Murakami, Yasusuke (1996): An Anticlassical Political-Economic Analysis: A Vision for the Next Century, Stanford, CA: Stanford University Press.
Stiglitz, J. E. (2005) ‘the overselling of globalization’, in M.M. Weinstein (ed.)
Globalization: What’s New?, New York: Columbia University Press, pp. 228 – 62.
World Bank (various years) World Development Report, Washington: The World
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