Automotive Industrialisation: Industrial Policy and Development in Southeast Asia by Kaoru Natsuda and John Thoburn (review)

neighbouring countries. Third, leaders across Asia were often quite decisive, introducing large (sometimes drastic) reforms when needed. Supporting all of this, in many countries, governments set out a shared vision of development for the future. These visions, many of which were labelled “plans”, were really broad outlines of the development strategy to be followed rather than serious attempts at formal economic planning. Nevertheless, the broad national visions helped underpin growth, especially when backed by a competent bureaucracy and other strong institutions. Another overarching theme which runs through the study is that the idea that there has been any “Asian consensus” about development policies which is different from the so-called “Washington consensus” is wrong. Rather, it was the pragmatic approach to policy—reinforced by pro-market programmes, state support and workable institutions—that contributed to success in Asia. The summary in Chapter 1 explains how these processes reinforced each other: “Markets, prices and competition are critical for the efficient allocation of resources and the creation of entrepreneurial incentives. The state is needed to establish strong institutions, intervene where markets fail to work efficiently and promote social equity. Strong institutions ensure orderly functioning of markets and accountability of the state”. It is true, as Western academic and media critics of Asian governments frequently point out, that these policies have often been adopted in a patchy way. There are still significant distortions in pricing and competition policies in many developing countries in Asia. Implementation of policies is often weak because of state failure. And greater attention to social equity is needed in many countries. Yet, overall, the improvements in these areas across developing Asia in the last fifty years has been remarkable. There is a long way to go. Developing Asia has made a good start. Hopefully, there will be many more improvements in the five decades to come. In the meantime, this book is the best and most up to day survey of the factors underpinning the success of development in Asia in the last half-century.