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Industry Policy in Taiwan and Korea in the 1980s

Winning with the Market Heather Smith, Fellow, Division of Economics, Research School of Pacific and Asian Studies and Asia Pacific School of Economics and Management, Australian National University, Australia
Heather Smith reignites the contentious debate of the role of the state using East Asian economic development in general with particular emphasis on Taiwan and Korea. Using quantitive techniques, the author analyses the view that industry policy interventions were a necessary factor explaining Taiwan’s economic performance in the 1980s.
Extent: 320 pp
Hardback Price: $155.00 Web: $139.50
Publication Date: 2000
ISBN: 978 1 84064 249 0
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  • Asian Studies
  • Asian Business
  • Business and Management
  • Asia Business
  • International Business
The growth in global competitiveness and interdependence has led to an increased interest in the role of industrial policy in achieving economic growth objectives.

Heather Smith reignites the contentious debate of the role of the state using East Asian economic development in general with particular emphasis on Taiwan and Korea. Using quantitive techniques, the author analyses the view that industry policy interventions were a necessary factor explaining Taiwan’s economic performance in the 1980s. Lessons for other countries attempting to upgrade their industrial structure are drawn from the comparative industrialisation experience of Taiwan and Korea, along with:

• a comprehensive discussion of strategic industry policy with an application to East Asia.
• discussion on the impact of the 1997–1998 financial crisis in Korea
• a critique of the structuralist/revisionist literature in the light of the financial crisis.

This highly topical study constitutes essential reading for governmental and non-governmental policymakers, business leaders and academics alike.
‘This is a very good piece of research. As a book, it is important because it focuses on important conceptual and empirical issues, namely the role of government and industrial policy in promoting rapid economic growth; and particularly the case of Taiwan as an exemplar of rapid industrial development. The author convincingly refutes the view that sector-specific industrial policy was an important source of Taiwan’s rapid industrial growth in the 1980s.’
– Hugh T. Patrick, Columbia University, US

‘Dr Smith takes Taiwan and Korea as case studies to address fundamental questions concerning the rapid growth and subsequent financial crisis in East Asia:
• were the Taiwan and Korean governments interventionist in the 1980s?
• did industry policy play a role in the financial crisis of 1997–1998?
Heather Smith has put together a comprehensive discussion of strategic industry policy. She analyses at length the fascinating connection between the growth of the chaebol in Korea, its links to the government and to the financial sector, and the unravelling of the financial crisis in Korea. Her analysis throws light on the fundamental strength that Taiwan has shown throughout the crisis. These are fascinating and important questions vital to the economics profession and of interest to the enormous contingent of economic commentators following the East Asian crisis.’
– Ron Duncan, Australian National University, Australia
Contents: Introduction: Winning with the Market or Governing the Market? 1. The Role of Government in the Industrialisation of Taiwan and Korea 2. Taiwan’s Industry Policy in the 1980s 3. Korea’s Industry Policy Legacy 4. Picking Winners or Sustaining Losers? 5. Did Industrial Policy Really Contribute to Industrial Upgrading? 6. Determinants of Industrial Competitiveness 7. Did Industry Policy Interventions Result in Sustained Productivity and Export Growth? 8. Revision of the Revisionists: The 1997–8 Asian Crisis Appendices Bibliography Index