The 1993 World Bank Report titled on the subject and its intense criticism on epmirical data and explanations had remained at the centre of debate for a while in mid 1990s. Special attention remained on the government intervention versus free markets for forming industrial policies or sector specific regulation and controls. Where earlier criticsms had brought out the weaknesses in the report, there were few criticsms in the wake of 1997 East Asian Crises. In this context, following was a very relevant and comprehensive update on East Asian Miracle by Ha-Joon Chang in 1999 at a WB workshop ( a bit old). Worth reading… wbip-pdf
Technology and industrial policies have a critical role to play in building the national technological capability base and hence competitiveness.
Prof. Sanjaya Lall (1940-2005) at Oxfrod had been an international authority in FDI and corporate development, industrialisation, technological capabilities and learning and trade.
I believe his paper “Technological Change and Industrialization in the Asian NIEs: Achivements and Challenges” presented at STEPI, Korea during 1997 is one of the most comprehensive views of Asian industrialization backed by substantial emporical evidence. We have no choice but to agree to him on page 453 negating the general capital accumulation view:
” if simple accmulation is the real explanation of growth in East Asia, then all governments have to do is to ensure the the right macro economic conditions for high rates of savings and foreign investment flows, and mount functional interventions to ensure that human capital formation takes place. There is no role for technology policy, nor for selective interventions in trade and industry”.
Adding the commentary of Joseph Stiglitz (a neo-classical view) in the context of current global crisis is extremely relevant…You can read this at…www.Project-Syndicate.org…The Triumphant Return of John Maynard Keynes…Dec 15, 2008
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Economic theory had long explained why unfettered markets were not self-correcting, why regulation was needed, why there was an important role for government to play in the economy. But many, especially people working in the financial markets, pushed a type of “market fundamentalism.” The misguided policies that resulted – pushed by, among others, some members of US President-elect Barack Obama’s economic team – had earlier inflicted enormous costs on developing countries. The moment of enlightenment came only when those policies also began inflicting costs on the US and other advanced industrial countries.
Keynes argued not only that markets are not self-correcting, but that in a severe downturn, monetary policy was likely to be ineffective. Fiscal policy was required “