Since the mid-1980s, Western academics and policymakers have regarded
the "tiger" economies of East Asia as an interesting intellectual
laboratory for debating theories about the causes of economic growth.
Advocates of laissez-faire economic policies have pointed to the
region's prolonged export boom as a triumph of market-led growth.
Advocates of interventionist policies have regarded the successes of
South Korea and Singapore as a vindication of government industrial
targeting, inspired in part by Japan's postwar economic take-off.
In the mid-1990s, however, Asia experienced a growth slump that has
called into question both its export dependence and its traditional
development formula of achieving growth through high levels of
domestic savings and investment. In 1996, in particular, there was
such a sharp deterioration in the corporate profitability and stock
market performance of Thailand and South Korea that many analysts now
regard their economies as structurally flawed, not just cyclically
depressed. The experience of 1996 suggests that Asian governments and
business leaders will have to make a number of microeconomic
adjustments in both public and private sectors if the region is to
regain the economic vitality apparent during the late 1980s and early
1990s. In all likelihood, the tiger economies will do so.