The East Asian Model of Economic Development and Developing Countries

This paper examines the debate on the East Asian model of economic development in light of the different approaches undertaken by different groups of countries (economies) in Northeast Asia and Southeast Asia. The common strengths and weaknesses shared by the East Asian countries (economies) have helped to reinforce the misconception that there is a single East Asian model of economic development. There are, however, significant differences in economic structures as well as development experiences among the East Asian economies, especially between the economic development paradigms of Southeast Asia and Northeast Asia. Nonetheless, one single common thread underlies the differences in development strategies and experiences among the East Asian economies—the role of the government. The governments of East Asia have recognized the limitations of markets (or market failures) in the allocation of scarce resources in the economy, and have used government interventions to promote economic development. The recent Asian crisis hardly signifies the end of the so-called East Asian model of economic development.