Managing Change in the Twenty First Century
Chapter 3: Institutional Foundations of East Asian and South Asian States
In Chapter 2 we have discussed at considerable length the determinants of enabling institutions with particular reference to a country’s history of political governance and religious orders, as well as its geographic location and the types of institutions which make it possible for a developmental state to fulfil its goals. In this chapter we will comment briefly on the presence or otherwise in East Asia and South Asia of those enabling institutions allowing developmental state leaders to promote robust economic growth and socio-economic development in their countries. Three major topics are covered in this chapter. We begin by discussing the historical patterns of governance in these nations, then consider the institutional support that the various states have provided for economic development, and finally describe several governmental policies that have proved effective for stimulating development. Historical governance Japan Japan’s rise to an economic superpower began in 1868 under the monarch, Emperor Matsuhito (Meiji), who began to implement reforms to promote Japan’s feudal society and economy to a modern industrial state – consisting of thriving manufacturing, mining, banking, transportation and agricultural sectors, financed, developed and controlled by big zaibatsu (financial houses) such as Mitsui, Mitsubishi and Sumitomo which continue to dominate the industrial structure to this day. Japan’s transition to a rudimentary democratic governance structure began in 1955 with the formation of the Liberal Democratic political party. Although Japan’s process of transformation to an economic and industrial superpower accelerated after 1954–55, it nevertheless began much earlier. Japan’s religious and cultural order greatly...