Abstract
No matter which theory one chooses to believe concerning the reasons for East Asian economic success, there is general agreement that the governments of these nations made wise policy choices. This paper argues that one of the most important choices involved the treatment of agriculture relative to industry. Rather than pursue a highly discriminatory set of policies favoring manufacturing relative to agriculture, the policies pursued either favored agriculture or the degree of discrimination was small, at least relative to policies pursued in today's developing nations. Using some simple game theory it is shown that in societies where power is very unequally distributed (concentrated in the hands of government and/or industry), agriculture is discriminated against and overall growth is slow. Alternatively, in East Asia the land reforms redistributed potential power to the countryside resulting in more balanced policies with respect to agriculture and higher overall growth. ( JEL O10, O53)
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