The Asian Developmental State and the Flying Geese Paradigm

Abstract

East Asian economies have been subject to theoretical debates, especially regarding the principal factors that have contributed to their impressive development performance. Many economists familiar with the region’s institutional particularities believe that their catching-up process has much to do with the role of the neo-mercantilist state, often embedded in the concept of the developmental state. On the other hand, the recent phenomenon of regional industrial dynamism, most clearly after the mid-1980s, has drawn attention to the concept of the Flying Geese paradigm. The question at hand is compatibility between the neo-mercantilist concept of the developmental state based on nationalist sentiment on the one hand, and the neo-liberal concept of the Flying Geese (FG) paradigm based on market rationalism on the other. In a sense, this resembles the old state vs. market debate. The paper contemplates an outlook of the developmental state in the light of growing regionalist drive in East Asia. More specifically, it explores the possibility of developmental regionalism. Developmental regionalism, in our framework, upholds a hybrid of limited liberalism at the national level and protectionism at the regional level. It is also a hybrid of North-South and South-South cooperation for achieving agreed specialization. While our discussion is at the exploratory stage with respect to concrete policy implications, developmental regionalism could contribute to bridging the aforementioned two contending concepts. *