Japan and the Asian Financial Crisis: The Developmental Initiatives

Abstract

The Asian financial and economic crisis had a great influence on development policies for East Asian countries and the development philosophy of the international community. The East Asian countries, whose economic growth was admired as the East Asian ‘miracle’, suddenly plunged into unprecedented economic turmoil. Furthermore, their economic management was accused of having much to do with the crisis. The major aspects of the developmental state, which was pioneered by Japan and was emulated by other East Asian countries, were regarded as the causes of the crisis. While close public—private collaboration provided the bases of crony capitalism and endemic corruption, the governmentinitiated export-oriented industrialisation was inherently fragile. It is argued that the Asian financial crisis marked ‘the end of the Asian developmental state’ (Pang 2000).