Japan and the Asian Economies: A "Miracle" in Transition

ONE EAST ASIAN country after another has taken off from a stagnant state to achieve an annual economic growth rate of 10 percent or more. The fact that such high economic growth rates are being sustained, along with observation based on growth convergence regressions that prior economic and social conditions do not seem to have warranted such rapid growth, has led many to call the East Asian growth a miracle. ' However, this is not the first time that an Asian country has grown miraculously fast. From the mid-1950s until 1973, Japan grew at a rate comparable to that of the East Asian economies today. And just as concerns are voiced today that some East Asian economies are overheating and their governments face the difficult task of inducing a " softlanding," a similar concern was heard in Japan three decades ago. Japan's high rate of growth from the mid-1950s through the early 1970s was a topic explored by many studies at the time. Several authors believed that Japan's economic institutions and policies were unique, and that its growth was an exception to the rule. In light of the rapid growth of the other East Asian economies in recent years, this earlier Japanese experience is no longer viewed as exceptional. The success of the East Asian economies offers fresh case studies for development economics and growth theory. The World Bank study The East Asian