The East Asian Growth Regime
and Political Development

Kenichi Ohno (GRIPS)
July 2007

East Asia’s
Achievements and Issues
 Diversity in performance Participation in the regional

production network
 Policy as key to economic success Authoritarian developmentalism asa dynamic and temporary regime The exit problem
 Democratic developmentalism?

1

High Performance
No doubt about high average growth
in recent decades
4000
Per Capita GDP(Measured in 1990
international GearyKhamis dollars)

3500

E as t A s i a

3000
2500
2000

A f ri ca

1500
1000
Source: Angus Maddison,
The World Economy: AMillennium Perspective,
OECD Development Centre,
2001.

500
01950

1960

1970

1980

1990

1998

Diversity in Political andEconomic Development
Governance, WGI2005

High correlation(0.90) but
causality cannot
be argued fromthis diagram

600
Sin
500

Hkg
Jpn

S Kor
400

MalMong

Twn

Only circled
economies
participate inregional dynamism

Bru

Thai

300
Phil
VN

China

200
Camb

E Timor

Indo

PNG
Lao
N Kor
Mya

100

0100

1000

10000

100000Per capita income ($PPP2004, log scale)

Sources: Compiled
from World Bank,Worldwide GovernanceIndicators, Sep. 2006;
and World Bank, World
Development
Indicators, 2006.

2East Asia’s Uniqueness The region is like a big factory where

member economies compete
 Growth starts by participating in thisregional dynamism
 The sandwich effect—pressure fromabove and below to work harder FDI as relocater of industries
 Clear but shifting order and structure(flying geese)

Manufactured Exports
Manufactured exports / total exports
100%
Japan

90%

Taiwan

80%

Korea
70%
Singapore60%

Malaysia

50%

Thailand40%

Philippines
Indonesia

30%

China
20%
Vietnam10%

Myanmar

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

1988

1987

1986

1985

19841983

1982

1981

1980

1979

1978

1977

1976

1975

0%

Sources: Asian Development Bank, Key Indicators of Developing Asian and Pacific Countries, 1993 & 2006; Statistical Bureau,Ministry of Internal Affairs and Communications, Japan Statistical Yearbook 2007.

3Development and Aid Strategy
There is a clear gap in developmental thinking
between Eastern practitioners and Western aidcommunity.

East Asia’s Way
Goal

Economic prosperity
and national prideWestern Donors
Poverty reduction(MDGs)

Policies Industry, investment, Health, education,
trade, technology
governance
Key
Central government Local communities
actors and businessesand people

East Asia’s Policy Mix4

Growth policies—vision, strategy, technology,HRD, infrastructure, SMEs, FDI, trade, finance,logistics, etc.
Supplementary policies—inequality, pollution,urbanization, congestion, labor migration,corruption, drugs, HIV/AIDS, etc.

--Rapid growth always creates newproblems, which destabilize society.
--Unless both policies are implemented,development will fail (Murakami).
--Success depends on these policies,
rather than diligence or Confucianism

Authoritarian Developmentalism
E. Asia chose authoritarian developmentalism(AD) for economic take-off.
Key ingredients of AD Powerful and economically literate top leader Development as a supreme national goal Technocrat group to support leader andexecute policies
 Political legitimacy derived from growth
The leader, as primary force of change,
can create the other three conditions.

5Authoritarian Developmentalism in East Asia
1945

50

55

60

65

70

75

80

60 61

Rhee Syngman

Korea

Park Chung-hee
75

Nationalist Party
46

Philippines

48

53

61

86

Marcos55

LaborParty

Singapore

46 48

76

UMNO / Rahman

Razak

63

73

MyanmarGoh Chok-tong

77

Mahathir
80

88

91

97PremThanomLabor Party

Chuan

KriangsakChatichai

Vietnamese Communist Party

62

U NuHabibie

81

Hussein
75

76

48

EstradaWahid

Lee Kuan-yew
7051
Indochina
Communist Party

98

Ramos

90

People'sAction Party

Sarit

Chen
Shuibian

99

65

57 58

PhibunThailand92

AquinoSuharto57

Malaysia

Kim Dae-jung

Macapagal

59

2000

97

Lee Teng-hui

Chiang Ching-kuo

SkarnoIndonesia

95

Kim Young-sam

88

65

GarciaMagsaysay

Vietnam

78

Chiang Kai-shek

57

Quirino

90

87 88
92
Noh TaeChun Doo-hwan
woo49

Taiwan85

7988

Burma Socialist Programme Party / Ne Win

SLORC

Source: Akira Suehiro, Catch-up Type Industrialization , Nagoya University Press, 2000, p115.

Emergence of AD
 AD emerges through a coup as well as election.
 AD is more likely to rise when the nation’s

existence is threatened by: External enemy
 Internal ethnic/social instability
 Incompetent and corrupt leader
 The rise and fall of AD is conditional mainly on
the development stage of each country, butinternational environment also influences them.
Eg. Cold War – reduced global criticism of AD

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Why Power Concentration isNeeded?
 Growth requires a critical mass of mutuallyconsistent policies. A strong state is needed tomobilize resources quickly and flexibly.
 If broad participation is allowed, policies are
too slow and can’t achieve critical mass due to:--Power struggle, party politics, interest groups--Processes requiring patience and compromise,
including parliamentary debate and consensus building--Some groups may refuse to cooperate with state
purposes

Adrian Leftwich (2005)“The institutional characteristics andrequirements for development and for
democracy pull in opposite directions.”“Democracies have great difficulty intaking rapid and far-reaching steps toreduce structural inequalities in wealth.”
Development

Democracy

ChangeSpeed & flexibility
Accumulation

Compromise
Accommodation
Procedure

7

Critiques of AD
Democracy and development are separate
issues:“I do not subscribe to the idea that you
need to delay democratization just so thatyou can actually have growth or that you
can have democracy only when you canafford it.” (Dani Rodrik, 2006)

Democracy is required for development“Expansion of freedom is viewedE both as
the primary end and as the principal meansof development.” (Amartya Sen, 1999)

Korean ExperienceN.T.T.Huyen “Is There a Developmental Threshold forDemocracy?: Endogenous factors in the Democratizationof South Korea” (2004)“Democracy as an advanced form of politics is
not independent from socio-economicdevelopment.”“Developmental threshold for democracy [is]a point in the development process beyond
which democracy can be effectively installed
and sustained.”

8

Korea: Per Capita GDP in 1990 USD

10000
9000
8000
7000
6000
5000
80%
4000
farmers
3000
2000
1000
0
1960 62 64 66 68

90% middle
class

End ofAD70

72

74

76

78

80

82

84

8688

90

Catching-upperiod(AD useful)

Exit of AD92

94

High income
society
Democracy
Pluralism

Low
incometrap

 AD is a temporary regime of convenience,needed only to push up the country to a higherlevel.
 Once a certain level is reached, AD becomes anobstacle to further development.
 Watanabe (1998) argues that successful AD
melts away automatically through socialchange and democratic aspiration.
“if development under authoritarian regime proceeds
successfully, it will sow the seeds of its own dissolution”[improved living standards and diversified social strata]

9Exit of AD:
A Less Optimistic View
 However, barriers do exit: stubborn leader,bureaucratic resistance, interest groups.
Therefore, leadership and strategy are alsoneeded for an exit.
 Strong leaders often refuse to step downbecause they will be revenged, jailed andeven executed after transition, with most or
all of their policies denied and reversed.

The Exit Problem for One-party
Rule (China and Vietnam)
 Rapid growth and social transformation driven

by private dynamism (local & FDI)
 Success so far in managing liberalization, but
not industrial activism
 Policy challenge is in social areas, notaccelerating growth Future options:(1) Greatly enhancing party’s policy capability(2) Multi-party system under social democracy(3) Other10

Fulldemocracy

Democraticinstitution(Form)
Constitution
Laws
Parliament
Election
Court
Party
Setback

Pure
dictatorship

Democratic
institution(Form)
Constitution
Laws
Parliament
Election
Court
Party

(Content)
Reform vs conservatism, big vs small
government, foreign policy, etc

The Case of Japan
US ruleShowa2

1945-51

Fulldemocracy

1960

2007

Democratization
New constitution

Politicalcompetition

LDP dominanceLack of policy debate
Military rises

1931 Democracy
movement,Party cabinet

1937
DefeatWar

Male suffrage 1925

Showa1TaishoConstitution 1889
Parliament

Fascism 1937-45
EdoPuredictatorship

Meiji
Political fights

Reform vs conservatism, big vs small
government, foreign policy, etc(Content)
Politicalcompetition

11

“Democratic Developmentalism”?
(Mild Form of AD)
 Research on DD--Robinson and White eds (1998)--Centre for Policy Studies study on “The
Democratic Developmental State in Africa”--Ethiopian Prime Minister Meles Zenawi
 Can we separate resource mobilization fromfreedom and human rights?
 Countries that already have free election,functioning parliament, human rights—canthey adopt developmental policies without
throwing out their political achievements?
 Need to decompose democracy into parts
and analyze its structure

Components of Democracy
Purposes

Freedom, human rights, equality,
social and economic benefits for all,security, peaceful coexistence

Procedures Legitimacy (election), rule of law,participation, multi-party system,
balance of power (L-E-J), local
autonomy
Properties

Tolerance, compromise, fairness,transparency, accountability

Random & excessive oppression should never be allowed.
Can some of these restricted for resource mobilization?

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Designing DD:
Tentative Suggestions
 Democratic criteria should go beyond“free election.”
 Generally speaking, policy purposes
should be upheld but procedures andproperties may be partly adjusted.
 The executive branch should havesufficient power, but with a mechanism
to overthrow it if it performs badly.
 Excessive decentralization at an earlystage is not desirable.

Final Remarks
 When income is very low, a bottom-up

regime based on rural population orsocial democracy (poor farmers or poorworkers) may not work.
 More realistic: use the East Asian AD
model (top-down quick decisions withsupporting elites) with added democraticelements.

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