East Asia - The Development state (chap 10)

Question 1

What is consider Development State? (Asia)

Answer 1

Economy which is market based but extensive state guidance.

Question 2

what countries could be consider a development state?

Answer 2

1. Japan
2. South Korea
3. Malaysia
4. Thailand

Question 3

What country (east Asia ) industrialize first ?

Answer 3

Japan

Question 4

what country serve as economic model for others ? (east Asia)

Answer 4

Japan , the other used the “Flying Geese” model.

Question 5

how traditional Japan change and with who?

Answer 5

it change with the Meiji Restoration (1868-1912), young samurais overthrew the Shogun with the fact that they need it to change to survive

Question 6

in what Meiji reformers believed ?

Answer 6

In authoritarian military government but with an emphasis on economic modernization.

Question 7

what the Japanese Model emphasizes it economy ? (specialize)

Answer 7

1) Large scale industries: related to military needs (iron&steel)
2. Labour-intensive industries: where Japan’s cheap labour would give it an advantage.
3. “dualist economy”: Small businesses but with few middle sized businesses-the rise of “dualist economy”
4. A strong military emphasis.

Question 8

Common Features of Development States? (procedure)

Answer 8

1. The government identifies opportunities for investment.
2. It uses incentives to influence the private sector (tax, controls over banks)
3. Export base economy - foreign exchange is needed to import resources and machinery for manufacturing.
4. Dual Economy- there are large firms with close links to state and small firms with no link.

Question 9

large firms from Japan and South Korea ?

Answer 9

Japan: Keiretsu

South Korea: Chaebol

Question 10

how many and which phases pass (typically) an economy with Development state model?

Answer 10

1. wages - low skill industries
2. High level industries - eventually high tecnology.
3. Education , transportation, high saving rate and investment

Question 11

Limitations of the Development state?

Answer 11

1. bank credit: as a source of finance caused many firms to be over leveraged
2. “crony capitalism”: ties government and private sector turned into
3. harder government planing: bigger economy , more complex
4. Tendency to Over-regulate.
5. The rise of special interest in the new democracies.