Global Poverty Amid Global Plenty: Getting Globalization Right DANI RODRIK
Children harvesting beans in a village in Guyuan, northwest China.
While Japan’s militarist and expansionist policies in
the run up to the Second World War tarred these accomplishments, its achievements on the economic front demonstrated it was possible to steer an economy away from
its natural specialization in raw materials. Economic
growth was achievable, even if a country started at the
wrong end of the international division of labor, if you
combined the efforts of a determined government with
the energies of a vibrant private sector.
THE GLOBAL RISE OF EAST ASIA
The experience of Asian tigers after World War II—South Korea, Taiwan, Hong Kong, Singapore, Malaysia, Thailand, and Indonesia—reinforced the lesson. All of these countries benefited enormously from exports, and hence from globalization. But
none, with the exception of British colony Hong Kong,
came even close to being free-market economies. The
state played an important guiding and coordinating
role in all of them.
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Consider two of the most successful countries of the
region: South Korea and Taiwan.
In the late 1950s, neither of these economies was
much richer than the countries of Sub-Saharan Africa.
South Korea was mired in political instability and had
virtually no industry, having lost whatever it had to
the more developed North Korea. Taiwan, too, was a
predominantly agricultural economy, with sugar and
rice as its main exports. The transformation that the
two economies began to experience in the early 1960s
placed them on a path that would turn them into major industrial powers.
In many ways, their strategies mirrored Japan’s. They
required, first, a government that was single-mindedly
focused on economic growth. Prior land reform in both
countries had established some space for governments
to act independently from landed elites.
Both countries also possessed an overarching geopolitical motive. South Korea needed to grow so it could
counter any possible threats from North Korea. Taiwan,
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