What Democracy Can Do for East Asia

Abstract

Between 1960 and 1997, East Asia's high-performing economies consistently grew faster than the world rate of growth. This remarkable record rests in part on innovations in policy and governance made by governments in Indonesia, Malaysia, the Philippines, Singapore, South Korea, Taiwan, and Thailand. Now, in the wake of the late 1990s financial crisis and in the midst of a worldwide economic downturn, these governments must make tough policy choices, some of which may upset the very groups who were the biggest winners from the high- growth years. What insights should guide today's leaders as they work to restore a unified commitment to genuine national development? How can democratic principles assist them in this task? Anxious to counter Chinese belligerence and the spread of commu- nism during the Cold War, East Asian leaders realized the need to craft strategic social compromises within their own societies. They adopted innovations in governance in order to reduce social divisions. While the primary intention may have been political, there were huge material benefits as well, for these reforms laid the groundwork for the extra- ordinary economic success that the region would enjoy throughout almost the whole of the late twentieth century. Fearing enemies at the gate, elites throughout East Asia made short- term sacrifices in authority, rents, and privileges in order to improve the living standards of the rural poor and the working class. Convinced that economic failure could lead to national disintegration, the leaders of these countries gave technocrats authority over economic policy. 1 With national Hilton L. Root has been an advisor on East Asia to the World Bank, the International Monetary Fund, and the U.S. Treasury Department. Formerly a professor at the University of Pennsylvania and Stanford University and a fellow at the Hoover Institution and the Milken Institute, he is the author of numerous articles and six books, including Small Countries, Big Lessons: Governance and the Rise of Asia (1996).