Summary: This study discusses the relationship between public policy and rapid economic growth. East Asia has a record of high and sustained economic growth during the last twenty-five years. Most of this growth occurred in eight economies - Japan, Hong Kong, the Republic of Korea, Singapore, Taiwan, and the newly industrializing Indonesia, Malaysia, and Thailand. The High Performing Asian Economies (HPAEs) use a variety of policies to achieve three functions of growth - accumulation, allocation, and productivity growth. They are diverse in natural resources, culture, and political institutions; and they differ in the degree of government intervention in the economy and the manner in which policies are shaped and implemented. The study attempts to explain East Asia's success and to develop a model of rapid growth with equity. It finds that the diversity of experience, the variety of institutions, and the variations in policies among the HPAEs does not allow a model to be developed. However, some lessons for other developing countries can be learned from the East Asian experience. First, it is essential to get the fundamentals right. High levels of domestic saving, broad based human capital, good macroeconomic management, and limited price distortions provide the basis for growth. Second, careful policy interventions to accelerate growth produces very rapid growth.
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