The newly industrialising countries (NICs) of East Asia have attracted considerable attention in recent years, and the impressive economic performance of the 'Gang of Four' (Hong Kong, Taiwan, Singapore and South Korea), in particular, has played an important part in what Little (1982) describes as 'the resurgence of neo-classical economics' in development thinking. The experience of these outward-looking, export oriented economies is contrasted with the record of the more inward-looking, import substituting policies adopted by many other less developed countries (LDCs), and is interpreted as confirmation of the neoclassical thesis that economies which permit the market mechanism to establish a structure of equilibrium prices and incentives can expand in accordance with their comparative advantage, generating significant employment gains, rapid economic growth and improvements in income distribution. The employment gains represent the predictable consequences of the expansion of labour-intensive manufactured exports. As Little (1981) notes in his comparative study of South Korea, Taiwan, Hong Kong and Singapore, 'The major lesson is that labour intensive export-oriented policies ... were the prime cause of an extremely rapid and labour-intensive industrialisation' (p. 42). The employment intensity of the export oriented industrialisation (EOI) strategy is in turn seen as the central factor behind improvements in income distribution. Thus, Balassa (1982) argues that 'gains in employment may also be obtained as exports increase the demand for labour and thereby improve income distribution' (p. 59). Fields (1984) reiterates the point: 'Quite simply, if everyone in the labour force is employed at a market-clearing wage, inequality is less than if some are employed at higher than market clearing wages and others are unem ployed and earn nothing' (p. 81). Minimum government intervention has facilitated the efficient operation of the market. Fields (1984), for example, regards the difference in wage-setting processes—'supply and demand in the East Asian NICs, institutional wage