Anthem Press [imprint of Wimbledon Publishing Company], 2017. xxii, 293 pp. (Tables, graphs.) US$115.00, cloth. ISBN 978-1-78308-687-0.
Asia’s role in postcolonial global economic growth and development has been a matter of intense academic interest for several years. Beginning with the remarkable turnaround of Japan after World War II, academic interest in the development of Asia has been sparked by the celebrated “flying geese” development paradigm, which resulted in the robust export-oriented industrialization of Taiwan, Hong Kong, Korea, and Singapore, as well as the Southeast Asian economies of Malaysia, Philippines, Thailand, Indonesia, and Vietnam, and, last but not least, China. The sustained economic success of these Asian countries, as compared with those elsewhere on the continent, has led to “Asia” being essentially recognized in economic literature as the parts comprising East and Southeast Asia. Indeed, the strong economic take-off of these countries and the ability of quite a few of them to join the league of high-income Organization of Economic Development (OECD) nations, is in sharp contrast to other relatively economically backward regions of Asia, notably South, Central and West Asia, where one does not find comparable economic success.
Among the industrially mature economies of East Asia, greater academic attention has been devoted to Japan, and more recently, China. Relatively lesser attention has been devoted to Korea and Taiwan, two major high-income economies from the region with distinguished achievements in business processes, industrial functions, and organization of production. Indeed, Korean and Taiwanese economic growth has not just contributed to Asian and regional economic development, but also to that of the world economy. Economic Development of Emerging East Asia by Frank S.T. Hsiao and Mei-Chu Wang Hsiao is an important contribution to the existing literature in this regard.
The book is structurally organized in a purposeful fashion for engaging readers at great depth on the modern economic histories of Taiwan and Korea. It is written over two parts and has nine chapters. Part 1 includes five chapters reflecting on the development indicators of the two countries, followed by a discussion of experiences of managing capital flows during the turbulent Asian financial crisis of 1997. Later chapters in part 1 look at analysis of productivity growth and its detailed performance over specific periods of time. The final chapter in part 1 can be considered an exception from the larger trend of the book, in terms of it being a comparison between India and Taiwan, posited on their colonial pasts and convergence in learning. Part 2 takes a much broader and exhaustive view of “catch up” and “convergence” in the context of East Asian economic growth. Chapters 6 and 7 are devoted to study of the miracle that the postwar Asian economic performance is variously described as, along with international comparisons of the growth of newly industrializing economies (NIEs). Chapter 8 looks at catch up and convergence more closely in the context of long-run growth trajectories in East Asia. Chapter 9 concludes on the interesting note and prognosis of whether emerging East Asia is the beginning of the grand process of an Asia-centred world economy in the new millennium.
Apart from being a sincere and rigorous descriptive analysis of the economic development paths of Korea and Taiwan, the book’s exploratory findings offer a number of revealing insights. These often extend beyond the domain of empirical economics and resonate on the socio-political characters of both countries. An interesting conclusion that probably sets apart Korea and Taiwan concerns political freedom. The lack of freedom in Taiwan might, according to the authors, create problems for it in the foreseeable future in terms of achieving the critical balance between deploying greater resources in military expenditure vis-à-vis social development programs. It is also noticeable that the authors underpin the role that regional economic integration has played in the development of both economies in a mutually reinforcing fashion. Indeed, walking back from an outward-oriented strategy would be counterproductive for both Korea and Taiwan, given the critical roles export and foreign investment have played in their growth. This is notwithstanding the fact that efficiency improvements and technological changes have not necessarily been identical in both countries. The difference, as the authors argue, is evident from Taiwan having more “frontier” sectors in traditional industries and Korea having more frontiers in hi-tech sectors. This could well mark a difference in the way both countries approach their industrial strategies for future and the comparative advantages they aim to develop. In an interesting comparison with India, the authors argue that Taiwan’s achieving its “miracle” is explained not by any wondrous circumstances, but by the social and economic reforms that it implemented, as opposed to India. This is a point with which few would disagree. Indeed, the roles played by both social and economic reforms assume great importance if—as the authors further argue—the story of emerging East Asia is likely to mature into a continent-wide process, making Asia the core contributor to future global growth. Much of the prognosis, if true, will require strong and sustained economic performances by India and several other emerging Asian economies. The experiences of Korea and Taiwan should prove invaluable lessons for their journeys.
Amitendu Palit
National University of Singapore, Singapore