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Institutions and growth in East Asia

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Abstract

Institutions have played a central role in political economy explanations of East Asia’s growth, from the developmental state to the micro-institutions of industrial policy. A review of these institutional explanations finds that few if any of the postulated institutional explanations involve either necessary or sufficient conditions for rapid growth. This finding suggests two conclusions. First, there are multiple institutional means for solving the various collective action, credibility, and informational problems that constitute barriers to growth. The search for a single institutional “taproot” of growth is likely to be a misguided exercise, and more attention should be given to understanding the varieties of capitalism in East Asia. Second, institutions are themselves endogenous to other political factors that appear more consequential for growth, including particularly the nature of the relationship between the state and the private sector.

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Stephan Haggard is the Lawrence and Sallye Krause Professor at the Graduate School of International Relations and Pacific Studies, University of California, San Diego. He is the author ofPathways from the Periphery: The Political Economy of Growth in the Newly Industrializing Countries (1990) andThe Political Economy of the Asian Financial Crisis (2000). He is the co-author (with Robert Kaufman) ofThe Political Economy of Democratic Transitions (1995) and (with David McKendrick and Richard Doner)From Silicon Valley to Singapore: Location and Competitive Advantage in the Hard Disk Drive Industry (2000). Also with Robert Kaufman, he is co-editor ofThe Politics of Economic Adjustment (1992). He is currently working with Robert Kaufman on a project on changing social contracts in East Asia, Latin America, and Central Europe.

I am indebted to Tun-Jen Cheng, Rick Doner, Cheng-Tian Kuo, Greg Noble, and Andrew MacIntyre, not only for comments but for extended discussion of these issues over the years.

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Haggard, S. Institutions and growth in East Asia. St Comp Int Dev 38, 53–81 (2004). https://doi.org/10.1007/BF02686328

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