ABSTRACT
The World Bank’s 1993 report, East Asian Miracle, was significant not only for highlighting the outstanding economic performances of the region’s market economies, but also (albeit half-heartedly) for attributing this performance to strategic interventions by state agencies in consultation with private actors. The report also signalled intra-regional complexity, noting performance differences between the four Newly Industrializing Countries (NICs – South Korea, Singapore, Taiwan and Hong Kong) and four members of the Association of Southeast Asian Nations – Indonesia, Malaysia, Thailand and the Philippines (henceforth the ASEAN-4). These differences suggested qualms by both the Bank and other observers as to the general-
izability of the NICs’ experience even to regional neighbours. This scepticism focused not so much on the benefits of the NICs’ interventionist policies, although doubt about such benefits was widespread among mainstream economists. The core problem was rather that effective implementation of such policies required institutional qualities – typically labelled ‘developmental states’ – that are rare in the developing world (Pack 2000a: 64). By implication, the weaknesses of the otherwise high-performance ASEAN-4, at least relative to the NICs, reflected weaker institutions. This assertion raises several questions central to East Asian development and the particular position of the more developed ASEAN economies within the region’s growth:
How strong is the causal link between institutions and growth performance in the region? Later in this chapter I confirm this relationship by comparing institutional capacities in the NICs with those in the ASEAN-4, especially Malaysia and Thailand, the two most successful ASEAN countries and thus those most likely to match the NICs’ development performance.
