Learning from the Asian Tigers: Studies in Technology and by Sanjaya Lall

By Sanjaya Lall

This is a set of papers on commercial coverage - the position of governments in selling business improvement - and the actual importance of expertise improvement. essays care for the overall debate on business coverage and the character of know-how improvement; are serious value determinations of the area Bank's method of the talk on governments and markets; 4 are case reviews of coverage making on features of industrialisation, 3 in Asia and one in Africa.

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Market failures can stunt industrialisation if all governments do is 'get prices right', and wait for markets to do the rest. Even market-friendly interventions combined with liberal policies 24 Learning from the Asian Tigers can narrow and constrict industrial development. The lesson of the larger NIEs is precisely that these constraints of the market can be relaxed, and the industrialisation process greatly compressed and dynamised, by appropriate interventions. Countries need not be satisfied with the market-given pace and content of industrial development, but can use the market to enlarge their opportunities.

The question is more of degree than of kind. There are some levels of selective intervention that most governments can undertake, and there are some governments that cannot for the time being be entrusted with any - but these are governments that are unlikely to carry through even the market-friendly interventions that all development requires. Some new political economists hold that there are no circumstances in which any government can be trusted to act impartially in the national interest and do it effectively.

After a decade or so of light industrial activity (garment and semiconductor assembly), the government acted firmly to upgrade the industrial structure. It guided MNCs to higher value-added activities, narrowly specialised and integrated into the world-wide structure of their operations. It intervened to create the specific skills needed, 15 and set up public enterprises to undertake activities considered in the country's future interest, where foreign investment was unfeasible or undesirable. Such specialisation, along with the heavy reliance on foreign investments, greatly reduced the need for indigenous technological effort.

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