State Capitalism East Asian Experience

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State Capitalism East Asian Experience

• East Asian Model
• South Korea and Taiwan together with Singapore
  and Hong Kong constitute the so-called East Asian
  model of economic development, which has become
  one of the most interesting topics in the fields
  of political economy and comparative politics.

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Main characteristics of East Asian Model

• 1. Corporatist Developmental State
• 2. Export-led Economic Development Strategy
• 3. State policy and intervention

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1. Corporatist Developmental State

• The state intrudes into detailed operations of
  individual enterprises with various measures
  intended to promote national industrial policies.
  
• For example, Japan
• The Ministry of International Trade and Industry
  (MITI) and the Ministry of Finance
• Corporate conglomerates, such as Mitsui,
  Mitsubishi, Sumitomo, Fugo, Sanwa, Dai Ichi
  Kangyo Bank, Toyota, and Hitachi

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Differences between free market economy and
corporate developmental state
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Differences
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Differences
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2. Export-led Economic Development Strategy

• Such a strategy seeks rapid industrialization
  initially by exporting relatively cheap products
  of labor intensive industries, such as textiles,
  and then by exporting higher value-added products
  of more capital-intensive industries, such as
  iron and steel, shipbuilding, and machinery, and
  finally by exporting more products of
  technology-intensive industries.
• Examples

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3. State policy and intervention

• The first is the practice of targeting the
  strategic sectors and firms for state special
  support starting with labor-intensive sectors
• The second is a neo-mercantilist trade policy of
  maximizing exports and minimizing imports
• The third is the state attempt to establish the
  parameters, rules, priorities, and
  infrastructures for the harmonious integration of
  the component parts of the society and the
  economy to achieve the common good of the whole
  society while each of the component parts is
  self-motivated and self-managing within
  state-initiated, organic structures.