Beyond Compatibility

Replicating High-Performing Asian Economies

Abstract

There is much contention on the applicability of the high-performing asian economic (HPAE) model, often on the basis that the Asian countries’ unique historical, political, economic and cultural conditions are really what make the model work. I argue in this paper, however, that the replication of this model may be desirable for certain economies. This is of course not without conditions. First, the country should have a significantly Pareto-suboptimal starting level of resource mobilization. The HPAE model is most effective in pushing a country’s economic development toward the Pareto frontier through mobilization of underutilized resources. Second, given this, the success of an HPAE model hinges on the state’s intervention in not only the procedural but also the substantive aspect of economic policymaking. Since there are presumably high stakes involved in having the state playing the “coach” (and not just the “referee”), having a reliable decision-making body is indispensable to implementing the HPAE model. Third, for the HPAE model to achieve its maximum effect, the demographic makeup of the target country should meet a few requirements, such as a relatively low dependency ratio. On the other hand, I contend that the country’s sociocultural compatibility with the HPAE model is of limited importance because the HPAE is powerful in transforming such contexts to its advantage. Lastly, I address what I call a “latent political cost” in adopting the HPAE model as a policy caveat looking forward.