The World Bank’s East Asian Miracle: Too Much a Product of Its Time?

The 1993 publication of a World Bank book on the East Asian Miracle explained the extraordinarily rapid growth of Japan and seven other economies of East Asia (at 5 percent a year) between 1965 and 1990 as grounded in those economies’ adherence to market “fundamentals”—sound macro management, “shared” growth policies, investment in human capital—combined with an “export push” which fostered the technological learning that drove those countries’ high total factor productivity growth. The World Bank authors dismissed “industrial policy” as central to their growth and cautioned against other developing countries adopting industrial policy in the absence of strong government institutions. Was that caution too much a product of its post-Soviet, neoliberal era? Considering what we know now about the state of governance in developing countries, might industrial policy help boost growth in at least some developing countries?

This paper was first published in the Fall 2025 issue of the Journal of Economic Perspectives.