Transcript Lecture 1: Introduction to Course - Cal State LA

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POLS 459
Politics of East Asia
Lecture Topic: The East Asian “Miracle”
September 25, 2007
Professor Timothy C. Lim
California State University, Los Angeles
The East Asian “Miracle”
Course Introduction
Geographic Bearings
East Asia is an ambiguous terms, but it typically includes Japan,
China, North and South Korea, and Taiwan • The focus of our
attention for the first part of the quarter are the three economies
and societies of Japan, South Korea and Taiwan. We will be
discussing China in the second part of the quarter.
The East Asian “Miracle”
Course Introduction
The East Asian Miracle: Basic Data
Compared to other regions, the High Performing East Asian
economies (HPAEs) have grown at a remarkable pace, especially
between 1965 and 1990
The East Asian “Miracle”
Course Introduction
The East Asian Miracle: Basic Data
•
GDP Per Capita:
International Ranking
(Selected Countries), 2005
On a per capita basis, Japan is
the 18th wealthiest country in the
world,* while Taiwan and South
Korea are in the top 20% of
wealthiest countries in the world
____________________
* Most countries richer than Japan have much
smaller populations--e.g., Luxembourg, Ireland,
Norway, Iceland, Denmark, etc.)
NOTE: GDP dollar estimates are derived from PPP
calculations. Figures come from the IMF, World Bank
and the University of Pennsylvania. Complete listing
of countries is available at:
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_per
_capita_%28PPP%29
Country
GDP per capita
3. United States
$41,999
18. Japan
$32,674
24. Taiwan
$27,721
27. New Zealand
$24,797
34. South Korea
$20,590
46. Saudi Arabia
$15,229
55. South Africa
$12,161
65. Mexico
$10,186
75. Turkey
$7,950
98. Peru
$5,983
104. Philippines
$4,923
158. Kenya
$1,445
The East Asian “Miracle”
Course Introduction
The East Asian Miracle: Basic Data
GDP: International Comparison,
Selected Countries, 2006 est.
 On an absolute basis, South
Korea was the 13th richest
country in the world in 2006 with a
GDP of $1.1 trillion, while Taiwan
was 18th with a GDP of $668
billion
 Japan had the 3rd largest
economy in the world with a GDP
of $4.2 trillion (China was second
at $10 trillion)
Source: CIA World Factbook--Rank Order -GDP (PPP)
Country
GDP (PPP), in
million $
1. United States
$12,980,000
3. Japan
$4,220,00
8. United Kingdom
$1,930,000
13. South Korea
$1,180,000
14. Canada
$1,165,000
18. Taiwan
$668,000
29. Saudi Arabia
$374,000
50. Peru
$181,800
77. Ghana
$59,150
93. Kenya
$44,770
105. Bolivia
$27,210
The East Asian “Miracle”
Course Introduction
The East Asian Miracle: Basic Data
Even more surprising, this rapid growth has been achieved with
relative equity (that is, equitable distribution of income)
The Gini coefficient measures
the inequality of income
distribution within a country. It
varies from zero, which indicates
perfect equality, with every
household earning exactly the
same, to one, which implies
absolute inequality, with a single
household earning a country's
entire income. Latin America is
the world's most unequal region,
with a Gini coefficient of around
0.5; in rich countries the figure is
closer to 0.3.
The East Asian “Miracle”
Course Introduction
The East Asian Miracle: Two
Questions
“The rapid economic growth of eight East
Asian economies, often called the ‘East
Asian miracle,’ raises two questions: What
policies and other factors
contributed
to that growth? And can
other
developing countries replicate
those
policies to stimulate equally
rapid
growth?”
- Joseph Stiglitz (click to view Dr. Stiglizt’s homepage)
The East Asian “Miracle”
Course Introduction
The East Asian Miracle: First
Question
To what can we attribute East Asia’s
remarkable economic success? In other
words, what is the best explanation of
rapid and sustained capitalist
development in East Asia?
Discussion Question. What do you think is
the reason for East Asia’s economic success?
Do you agree with the authors of the two
readings assigned for today? To what do they
attribute East Asia’s success?
The East Asian “Miracle”
Course Introduction
The East Asian Miracle: Page
Reading
Some Key Points:
The HPAEs, while highly diverse, share three important attributes …
1.
High rates of investment
2.
High and rising endowments of human capital due to universal
primary and secondary education
3.
Superior productivity performance
These two factors are not hard to understand: more
investment = higher rates of economic growth. In this
sense, there is no “miracle” to explain. The third
factor, though, requires more analysis.
}
The East Asian “Miracle”
Course Introduction
The East Asian Miracle: Page
Reading
Total Factor Productivity (TFP)
To adequately explain the success of the HPAEs, it
is necessary to identify the source(s) of the their
relatively high TFP
Page suggests two sources …
Unusual success at allocating capital to high yielding investments
a. ______________________________________
_____
Catching up technologically to the advanced economies
b. ______________________________________
Identifying
_____ the sources of high TPF, however, raises another
critical question, namely …
The East Asian “Miracle”
Course Introduction
The East Asian Miracle: Page Reading
Who or what was (primarily) responsible for the
unusual success of allocating capital to high
yielding investments and for catching up
technologically?
States or
Markets?
governments?
Firms and
Something
entrepreneurs?
else?
The answer, it is important to emphasize, need not be either/or. We
should also consider relationships and/or combinations …
The East Asian “Miracle”
Course Introduction
The East Asian Miracle: Stiglitz
Reading
Some Key Points
In thinking about the process of economic
development, it is useful to consider the
metaphors discussed by Stiglitz
This metaphor relies on identifying an “engine
•
•
•
•
of growth”;
it suggests
is a function
This metaphor
is that
usedgrowth
by mainstream
of a economists,
particular factor.
that factor
The engine metaphor
whoThe
see stronger
the economy
as anis,
the
stronger system,
economic
growth one
will be.
equilibrium
meaning
that
automatically adjusts to imbalances. In this
The chemical or catalyst metaphor
view, the best economic system is one that is
leftmetaphor
alonemetaphor
by suggests
“non-market”
actors
or forces.
This
suggests,
among
other
things,
that
economic
success
The biological or “adaptive systems”
that
economic
growtha isprocess
a function
of a more
is achieved
through
of adaptation-complex
reaction,
where certain
factors
can
the ability
to respond
to changes
and
The physics or equilibrium metaphor
serve
as a catalyst,
where otherand
factors
are
opportunities
in thebut
environment,
to learn
equally
essential to
the overall
from
past mistakes.
Systems
that process.
cannot adapt
die; those that have superior adaptive
capacities thrive.
The East Asian “Miracle”
Course Introduction
The East Asian Miracle: Introduction
We will have much more to say about the various
explanations of East Asian economic growth ,
including those offered by Page and Stiglitz, in
subsequent classes
This first lecture, however, is meant only to give
you a taste of the issues and concerns; with this in
mind, we will now look at the issue from a very
different perspective …
The East Asian “Miracle”
Video Presentation • Asia Rising Japan and Korea Rebuild
Background Video: Asia Rising
Japan and Korea Rebuild
As you watch, consider the following
questions:
• Can you identify an implicit argument(s) about the
reasons for East Asia’ economic success?
• Or can you identify the specific (explanatory) factors
that the filmmaker focuses on?
• How does the film’s explanation differ from the ones
offered by Page and Stiglitz?
• Also, as you watch, jot down what you consider to
be particularly interesting or important points; think
about any questions you may have