The Developmental State Model and the Tigers of Asia

The adopted model by the four Tigers or Dragon of Asia (South Korea, Taiwan, Singapore and Hong Kong) would be following the original successful Japanese capitalism model, also so-called as of goal model for the long term (or Developmental State Model), which basic different from the traditional classical western model is its active and strategic promotions of the Sate in specific targeting.

In the Hong Kong case, the more liberal case, there is minimal intervention to allow market to reign. In the South Korea case there is a nationalist strategy with oriented intervention to get industrial developmental targets. In the case of Taiwan there is the State Strategy with discretional control and incentives. Finally, for Singapore there is the internationalist strategy with macroeconomic management, predilection for joint venture and foreign participation.

All these four case represent different version of the Japanese Developmental State Model mentioned previously, where the different strategies depend of the reality of each country, which have allowed the four known economic miracles.

However, for some neoclassical scholars this Developmental State Model does not exist. They affirm that the necessity of State intervention is obvious because the presence of critical market failures in all these four countries.

Thus, Hong Kong, Taiwan, Korea and Singapore all had problems of lack of information, transactional costs because the poor conditions of public infrastructure and so on. In the neoclassical perspective the presence of market failures always is a universal phenomenal for any country, including western countries and that in that circumstances the laissez faire does not work, because it is necessary specific intervention to eliminate relevant cases of market failures first. After these market failures are eliminated, the State should eliminate its intervention in order to allow the market make its work.

According to these scholars, the empirical evidence show that intervention level in these four countries have been decreasing considerably, while the market failures have been decreasing also, demonstrating thus the fulfillment of the neoclassical principles for these four economic miracle mentioned.

This contrast suggests some questions: the miracle of the Tigers of Asia have as model the a specific Developmental State Model or it is just the neoclassical perspective with failure market problems? In any case is it possible replicate this strategies for the case of Peru and Latin America to get the same kind of economic miracle? What other considerations it is necessary in order to implement the Tiger of Asia Model?