Late Marketisation versus Late Industrialisation in East Asia

This article analyses the complex interplay of various factors in the 'late marketisation' in China and Vietnam and the 'late industrialisation' in Korea, Taiwan and Japan. The article distinguishes the degree of 'comparative advantage-defying' and 'comparative advantage-following' strategies adopted, and thereby explains the different growth and transition records in the two groups of countries. The article also links the choice of reform strategies to the initial conditions, and attributes the post-transition economic record to the policies adopted. The differences in the allocation of rents and the principal ways in which market discipline was introduced are also discussed. Copyright © 2005 Asia Pacific School of Economics and Government, The Australian National University and Blackwell Publishing Asia Pty Ltd..