East Asia—currently one of the most dynamic and powerful regions globally—has historically experienced substantial economic development. Dwight Perkins's book East Asian Development: Foundations and Strategies provides a unique comparative account of economic development in ten East and Southeast Asian economies that achieved rapid economic growth in in the second half of the twentieth century.
Perkins clearly says that this book does not attempt to define an “East Asian model of economic development,” because no single model accurately describes what the ten most successful economies in the region did to achieve this transformation (p. 201). The book does not explore an ideal model; instead, Perkins provides interesting and detailed stories based on his “direct experience in working with governments in the region” for a substantial period as an advisor on economic policies and performance (p. 12).
The book attempts to answer important research questions: Why have several of the East and Southeast Asian economies achieved rates of growth seldom witnessed elsewhere? Why have some economies in the region performed better than others? Lastly, why have all the richest economies eventually slowed their growth (p. 5)? To solve these questions, Perkins classified the ten economies into three groups based on per-capita GDP growth rates. The first group includes Japan, South Korea, Taiwan, Hong Kong, and Singapore, all of which grew rapidly until they reached over $13,000 GDP per capita and then slowed their growth. The second group includes Malaysia, Thailand, Indonesia, and Vietnam, all of which achieved sustained periods of high growth that have increased per capita incomes by factors of five to eight followed by economic difficulties that have slowed growth. The third group includes only China, the size of which is larger and the population of which is nearly twice as large (over the past three decades) than those of the other nine economies put together.
At this juncture, the author emphasizes that no single economic policy has been effective in this region. Reflecting history, each country has its own version of economic policymaking. Perkins mentions a metaphor used to describe the role of government in economic development—the “flying geese pattern” (p. 11)—where Japan's state interventionist industry policy is seen as the leading goose and other nations form the V shape of followers, such as South Korea and Taiwan. However, such interventionist policies did not work well in Malaysia, Thailand, or Indonesia. Meanwhile, Hong Kong is pursuing a pure laissez-faire economy, relying mostly on the private sector even for the provision of much of its infrastructure, whereas Singapore has many state-owned enterprises. China and Vietnam, which first dismantled Soviet-style economic systems, are now actively introducing market-oriented economies. Perkins indicates that one of the negative effects stemming from such drastic reform is that China is currently one of Asia's most unequal economies.
In reading the book, I was particularly interested in Perkins's emphasis on education, which, according to him, plays a significant role in supporting economic development in this region. Perkins argued that people in Northeast Asian economies and Singapore, Vietnam, and the overseas Chinese communities in Southeast Asia all shared a Confucian reverence for education. This was reinforced by indigenous commercial development at a level that further encouraged the need for basic literacy. In other words, people's zeal for investing in education has greatly contributed to human capital development, which is necessary for economic success.
Regarding the overall structure of the book, the introduction provides the reader with a general overview of the argument. Chapter 1 presents a historical overview and the contemporary consequences of the regional economy and politics that Perkins discusses. Chapter 2 provides a review of the various quantitative studies of economic growth, which involve cross-country comparisons of the world's economies. Chapter 3 moves toward the core analysis of how the ten economies were managed, focusing on the role that the government played before, during, and after the periods of high GDP growth rates. This chapter further discusses experiences in Northeast Asia, shedding light, in particular, on South Korea, where Perkins accumulated substantial experience as an economic advisor. Meanwhile, chapter 4 discusses his experiences in Southeast Asia. Chapter 5 reviews the cases of China and Vietnam, and chapter 6 expands his argument on China as a conclusion, where he forecasts that China's GDP growth rate will drop from the nearly double-digit growth rates of the past three decades, although no precise data can be provided until it actually happens (p. 174).
Perkins's focus in this book is primarily on South Korea, where he has had substantial experience, and China, the current second-largest economy in the world. Meanwhile, Japan, which is the third-largest economy in the world, and which was second until recently, gets more limited coverage. As to why Japan's economy has performed so poorly for two decades, Perkins simply attributes this trend to the weakness of the Japanese financial system. Although he cites the 1974 Oil Shock, GDP deceleration at the time cannot be explained by the financial sector's problems or by policy mistakes by the Japanese government. Furthermore, it cannot be explained by the rise in oil prices in 1973 and 1978, because those prices dropped by the mid-1980s. He ends by stating that “[s]omething more fundamental was going on” (p. 156). For a Japan specialist, this explanation felt incomplete; I wished to hear more on the issue from such an established scholar in Asian political economy.
In summary, the book provides a very comprehensive account of economic development in Japan, China, South Korea, and Southeast Asian countries. For students and scholars who are interested in Asian economic development, this book should be on their reading list.
