Journal of Economic Perspectives
ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)
Industrial Policy, Asian Miracle Style
Journal of Economic Perspectives
(pp. 101–26)
(Complimentary)
Abstract
We decipher the riddle of the meteoric rise of the Asian Miracles—Korea, Taiwan, Singapore and Hong Kong, and Japan before them—in the second half of the twentieth century. We argue that the secret of their success lies in the specific type of industrial policy focused on technology and innovation. This overarching policy focused on exports of sophisticated products by domestic firms while fostering fierce domestic competition and accountability for the support received. The successful implementation of this policy depended on a particular type of institutions—a leading agency with a distinct institutional design and a mandate to develop sophisticated industries. The experience of the Asian miracles provides a blueprint for developing economies to achieve rapid convergence with advanced economies. It also suggests a reassessment of the roles of the state and the market, the appropriate tools of industrial policy, and the meaning of "good" institutions.Citation
Cherif, Reda, and Fuad Hasanov. 2025. "Industrial Policy, Asian Miracle Style." Journal of Economic Perspectives 39 (4): 101–26. DOI: 10.1257/jep.20251448Additional Materials
JEL Classification
- E23 Macroeconomics: Production
- F14 Empirical Studies of Trade
- L16 Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices
- L52 Industrial Policy; Sectoral Planning Methods
- O14 Industrialization; Manufacturing and Service Industries; Choice of Technology
- O25 Industrial Policy
- O38 Technological Change: Government Policy