Developmental Regimes

This chapter argues that certain economic achievements arose in tandem with a specific type of regime in Japan, Korea, and Taiwan, and a particular economic paradigm. The three national experiences, though not identical, were sufficiently analogous in a number of fundamentals that they can be treated as a group. They provide empirical manifestations of “developmental regimes.” All three had strong and cohesive state institutions; each had concentrated and dominant progrowth socioeconomic coalitions; all received extensive security and economic support from the United States and enjoyed the benefits of global financial and trade institutions. Each regime bonded around the so-called “protection pacts.” Driven by a shared sense of existential threat, foreign and domestic elites joined together to advance an economic policy paradigm that the chapter considers “embedded mercantilism.” Core components included industrial policy, undervalued currencies, export expansion, and rapid industrialization, all advancing behind institutional bulwarks against the perceived threats.