Industrial Policy, Innovation and Economic Growth: The Experience of Japan and the Asian NIEs

The role of industrial and technology policy in economic development has been a controversial issue in the literature. In particular, the positive role of the state in the rapid economic growth of East Asia has been questioned in the light of the 1997 Asian financial crisis, which ravaged growth in much of East Asia. The East Asian Miracle has been alleged to be the East Asian Mirage instead, while the continuous weakness of the Japanese economy has been used to discredit the role of industrial policy of any kind.

In response to such a sweeping negation of the role of state intervention, this volume provides a careful historical analysis of the development experience of the five most advanced countries in East Asia - Japan and the four Asian NIEs (Taiwan, Korea, Singapore and Hong Kong). Written by scholars from the respective countries, the chapters provide in-depth review of the role of the state in industrial development in each of the countries, in general, as well as in selected industries. The essays evidence a nuanced understanding of the different varieties of state intervention in these economies, and its benefits, as well as the negative impacts of policy inertia and institutional dysfunction.