@ Development Experience The Miracle, the Crisis and the Future HA-JOON CHANG vA RTT Cae AWA MTR CTU entThe East Asian Development Experience The Miracle, the Crisis and the Future is published by Zed Books Ltd., 7 Cynthia Street, London N1 9JF, UK and Room 400, 175 Fifth Avenue, New York, NY 10010, USA and Third World Network, 131 Jalan Macalister, 10400 Penang, Malaysia Distributed exclusively in the USA on behalf of Zed Books by Palgrave Macmillan, a division of St Martin’s Press, LLC 175 Fifth Avenue, New York, NY 10010, USA Copyright © Ha-Joon Chang, Third World Network 2006 The right of Ha-Joon Chang to be identified as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act, 1988 Printed by Jutaprint, 2 Solok Sungai Pinang 3 11600 Penang, Malaysia All rights reserved No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic or otherwise, without the prior permission of the publisher. ISBN: 978 1 84277 140 2 hb (Zed Books) ISBN: 978 1 84277 141 9 pb (Zed Books) ISBN: 983 2729 72 6 (TWN) A catalogue record for this book is available from the British Library US CIP data is available from the Library of CongressContents Chapter 1 THE EAST ASIAN MODEL OF ECONOMIC POLICY —__13 1, Introduction: The Belated Interest in the Diversity of Capitalism 13 2D E = ich? 3.__ Investment Policy 19 4. Trade Policy: Infant-Industry Programmes and Export Promotion 29 5. Industrial Policy 34 6. The Question of Replicability 47 The End of the East Asian Model? 05 8. Summary and Conclusion 54 PART II: INTERPRETATION OF THE EAST ASIAN MIRACLE Chapter 2 THE POLITICAL ECONOMY OF INDUSTRIAL POLICY IN KOREA 63 L__Introduction 63 2._A Free Market? 64 3.__Market-Preserving State Intervention? 67 How Does State | ion Work in Korea? 5. __Why Does State Intervention Work in Korea? 85 6 Conelusion 100 i Ss One 6E-8XSQ