Economic Scenario of the East Asian Miracle

Running head: GLOBAL ECONOMY
Global Economy
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Executive Summary
The objective of this paper is to analyze the economic scenario of the East Asian Miracle. Japan
was one of those East Asian countries who exhibited an extraordinary performance between
1960s and 1980s. The central part of the discussion has been developed on an article ‘The East
Asian miracle in political perspective’. The article is focused on the World Bank Report 1991.
From the neoclassical perspective, the success of Japan is acceptable. The trade structure of
Japan is key parameter which has enhanced the country’s robust growth. The trade structure of
the country is comprised of large variable limitation on the domestic market. The import
substitution policy highly relies on export credit strategy and foreign direct investment.

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Table of Contents
1. Introduction..................................................................................................................................3
2. Japan finding the report...............................................................................................................3
3. Define Miracle.............................................................................................................................3
4. World Bank fundamentals and selective intervention.................................................................3
5. Neoclassical, revisionist and market friendly view.....................................................................3
6. Summary......................................................................................................................................3
Reference List..................................................................................................................................4

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1. Introduction
The economy of East Asia has experienced a remarkable growth between 1965 and 1990.
The resilient contribution of twenty-three countries has helped East Asia to achieve a sustainable
economic growth as compared to other European and American economies. According to the
article, Japan and four Asian tiger economies Hong Kong, Singapore, Taiwan, the Republic
Korea, China, Indonesia, Thailand and Malaysia are the eight major contributors to this
miraculous economic performance. The group of these eight nations is termed as High
Performing Asian Economies (HPAEs). Equal income distribution among HPAEs has led to the
change in the Gini Coefficient combined with greater growth in per capita income (Wade 1996).
These unique characteristics have made the HPAEs different from other developing countries in
Asia. The data states that Japan including the four tigers have recorded four times growth in real
per capita income from 1960 to 1985. The transformation of the Japanese economy is the key
concern of this study. Imposition of effective subsidy policy and convincing governmental policy
are claimed to promote miracle economic growth in Japan.
2. Japan finding the report
The article states that market friendly approach is the driving force for the Japan’s
success. The extensive intervention of the Japanese government has resulted in the
macroeconomic stability in the country. It has been observed that share of the international trade
to GDP has intensified to a great amount following the effectiveness of the government
intervention (Beckley, Horiuchi and Miller 2018). To explore the economic opportunities, the
government has guided the resource allocation process between the public and private sector. As
per the economic theory, accumulation of economic resources, fast technological catch-up and
efficient allocation are the fundamental pillars of the Japanese economy. It is important to