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Contents Introduction

In several recent papers, Easterly has propounded a ‘Luck View’ of the East Asian growth. This view is untenable, unwarranted, and unfortunate. It is untenable, because the ‘Luck View’ cannot explain the geographical concentration of the East Asian growth phenomenon. It is unwarranted, because such a portrayal is not necessary to discount the validity of the new growth models whose equilibrium growth rates depend on country specific characteristics. Finally, it is unfortunate, because East Asian nations achieved economic growth through considerable labor and ingenuity, so that describing this growth as a matter of luck may not be a fair characterization. Proper understanding of the East Asian growth rather requires taking a ‘Long View’ that sees this growth as a part of the transition of human societies from a pre-industrial to the industrial level on a global scale through the process of diffusion. From this viewpoint, Japan can be seen as another focal point for diffusion of industrialization in Asia. Many particularistic historical conditions were necessary for Japan to play this role and for the Gang of Four, namely Hong Kong, Korea, Singapore, and Taiwan, to emerge as the first batch of NIEs. However, with the road paved, it has become easier for other nations to follow the route, as the experience of other East Asian countries such as Thailand, Malaysia, Indonesia, and recently China and Vietnam, shows. The proposition of industrialization through export-led growth thus has become more general. Neoclassical growth theories, both of the original and new varieties, are not geared to capture sweeping historical processes. However, the rapid growth of the NIEs and the subsequent tapering off of their growth rates can to some extent be seen as compatible with the convergence implication of the original neoclassical growth theory.