How Can the EU Emulate the Positive Features of the East Asian Model?

Abstract

The spectacular, sustained economic growth experienced in several East Asian countries leads to the question what Europe can learn from the East Asian economic model. Three advantages of the East Asian model stand out: small social transfers, low taxation and free labor markets. The superiority of such policies is now widely accepted, and the question is how they can be emulated by Europe. Traditionally, the EU has taken a top-down approach to decision making and policy implementation, which is characteristic of the Lisbon Agenda, which has not made much progress. However, after the powers of the European Commission have been weakened in the last few years competition between national governments has spurred swift tax cuts and faster deregulation of labor markets. Bottom-up reforms arising from competition should be more readily accepted in the EU.