Many developing market economies were strongly distorted during the 1960s and 1970s by fashionable policies to force industrialisation and they experienced growth collapses when exposed to the price shocks of the 1970s. In this context, the centrally planned economies were even more highly...

Taiwan adopted a competitive industrial policy before South Korea but pursued it more cautiously. According to orthodox theory, Taiwan's less interventionist policy should have increased its initial per capita income lead over South Korea. In fact, the income gap narrowed, and income...