Explaining the Growth Performances of Asian Developing Economies

Abstract

I. Development Performance of Developing Countries No matter how it is measured, the growth performance of the newly industrializing economies (NIEs) stands out. That of the Southeast Asian group, with the exception of the Philippines, and that of China is also impressive. The South Asian countries have done much less well, with countries in sub-Saharan Africa, the Caribbean, and Latin America even further behind. The NIEs have also done well in two other crucial indicators of development: income distribution and the quality of life. In a study of 34 developing countries, J. Riedel found that Taiwan has the best income distribution, surpassing even that of Sri Lanka, while Singapore, South Korea, and Hong Kong are placed in the top third of the sample.' The NIEs also did extremely well in two measures of the quality of life: the percentage of the age group enrolled in secondary education and the life expectancy at birth, where they are well ahead of the other groups. Thus the NIEs have not only grown much faster than other economies, but have also done better in bringing about a more equitable distribution of income and a better quality of life. Other measures of economic performance (e.g., employment and wages growth), equity performance (e.g., reduction in the absolute level of poverty), and quality-of-life performance (e.g., the number of doctors per capita) could have been used, but they would have shown the same thing. This finding is generally accepted. However, there is no generally accepted explanation for the different development performances. This article will examine the claims of the major explanations and then propose a new way of looking at them. In order to make the task manageable, it will be limited to the developing countries of Asia.