5

The East Asian Miracle Revisited

HONG KONG – Almost two decades ago, the World Bank published its landmark study The East Asian Miracle, analyzing why East Asian economies grew faster than emerging markets in Latin America, Africa, and elsewhere. These economies, the study concluded, achieved high growth rates by getting the basics right, promoting investment, nurturing human capital, and opening up to export manufacturing.

But that was not all. The World Bank also acknowledged, grudgingly, that governments intervened – systematically and through multiple channels – to foster development, including in specific industries in specific locations via subsidies, tax incentives, and financial repression.