"Rethinking the East Asian Miracle"

edited by Joseph E. Stiglitz and Shahid Yusuf

Reviewed by Takahiro Miyao

Review:

This is a volume based on a workshop that took place at the World Bank. The authors are first-rate researchers on East Asian development, trade and finance, and have contributed an excellent set of research papers on the miracle, crisis and recovery of the East Asian economy up to date.

Especially, one might be interested in reading Takatoshi Ito's chapter on "Growth, Crisis, and the Future of Economic Recovery in East Asia" and Tetsuji Okazaki's chapter on "the Government-Firm Relationship in Postwar Japan." The former chapter discusses the weak financial sectors in East Asian countries and offers several suggestions for strengthening financial systems (See Takatoshi Ito's article, "Financial Consolidation: Merits and Problems" on the GLOCOM Platform in February, 2002 at http://www.glocom.org/opinions/essays/200201_ito_financial/). The latter chapter deals with the success and failure of the Japanese economy, focusing on industrial policy and government-business relationships in Japan, where the key concept is "bureau pluralism," which is discussed in detail in Stanford Professor Masahiko Aoki's article, "Beyond Bureau Pluralism" on the GLOCOM Platform in September, 2001 (http://www.glocom.org/opinions/essays/200109_aoki_beyond/).

The following is a brief introduction of this volume, posted in the publication list at the World Bank website: http://publications.worldbank.org/ecommerce/catalog/product?item_id=310908

"This volume provides illuminating, analytic perspectives on key facets of the East Asian economies. It discusses weaknesses in the financial sector, corporate governance, exchange rate and trade policies, regulatory capability and proposes solutions. Several papers in the volume also discuss the complex political economy of development in East Asia and show how interaction among government, business, and the banking system must evolve to minimize the risk of periodic crisis."

A list of contents:

1. The East Asian Miracle at the Millennium
   Shabid Yusuf
2. Growth, Crisis, and the Future of Economic Recovery in East Asia
   Takatoshi Ito
3. Technological Change and Growth in East Asia: Macro versus Micro Perspectives
   Howard Pack
4. Chinese Rural Industrialization in the Context of the East Asian Miracle
   Justin Yifu Lin and Yang Yao
5. After the Crisis, the East Asian Dollar Standard Resurrected: An Interpretation of High-Frequency Exchange Rate Pegging
   Ronald I. McKinnon
6. Industrial and Financial Policy in China and Vietnam: A New Model or a Replay of the East Asian Experience?
   Dwight H. Perkins
7. Government Control in Corporate Governance as a Transitional Institution: Lesson from China
   Yingyi Qian
8. The Government-Firm Relationship in Postwar Japan: The Success and Failure of Bureau Pluralism
   Tetsuji Okazaki
9. Miracle as Prologue: The State and the Reform of the Corporate Sector in Korea
   Meredith Woo-Cumings
10. Trade and Growth: Import-Led or Export Led?: Evidence from Japan and Korea
    Robert Z. Lawrence and David E. Weinstein
11. Emergence of an FDI-Trade Nexus and Economic Growth in East Asia
    Shujiro Urata
12. Rethinking the Role of Government Policy in Southeast Asia
    K. S. Jomo
13. From Miracle to Crisis to Recovery: Lessons from Four Decades of East Asian Experience
    Joseph E. Stiglitz