Policy Lessons of the East Asian Demographic Transition

THE “EAST ASIAN MIRACLE”—the several decades of extraordinary economic growth and poverty reduction in a group of East and Southeast Asian countries, beginning around the 1960s—provides the gold standard of development achievement. The miracle also entailed rapid social development, in particular the transformation of demographic regimes from high to low mortality and fertility and a strong expansion in secondary education on top of near-universal primary schooling. Altogether, through some combination of good judgment and historical luck, those countries got the settings right. Others should seek to learn from them how it was done. The miracle is identified in this article with the development experience of seven countries: China, Indonesia, Malaysia, South Korea, Taiwan, Thailand, and Vietnam, roughly from the 1960s to the 1990s. Some regional high-flyers are thus omitted. Japan, whose industrialization and demographic transition were well underway before World War II, lies in a different time frame; Singapore and Hong Kong, although good for the averages, are too distinctive in their roles as city-states and entrepôt ports, far removed from the populous agrarian states that made up most of the region as it emerged from wartime occupation and decolonization. The Philippines would once have been routinely grouped with Thailand, Malaysia, and Indonesia, but its economic record—per capita income growth averaging 1 percent per year over 1965–95—is no match for the others. (The Philippines is not one of the “high-performing Asian economies” that are the subject of the World Bank’s much-cited report on the East Asian miracle—indeed it is hardly mentioned in it [World Bank 1993].) Table 1 presents the broad picture. On the economic side, the ingredients of this success and what the policy lessons of the experience are, and are not, have been vigorously debated, especially in the shorthand terms of the relative significance of government and market. Some analysts assign the major determinative role to an interventionist state; others point to straightforward capital accumulation, physi-