St Adam and the Dragons: Neo‐classical economics and the East Asian miracle

This paper addresses recent explanations for the East Asian miracle. The argument that growth is entirely due to the accumulation of inputs is assessed and found wanting. There is still a place for the view that attributes success to activist policy. This is especially so, since the other explanations of East Asian success are rarely wholly convincing. The paper demonstrates that popular cross‐country models of growth usually fail to explain the East Asian experience, but presents evidence supporting emphasis on favourable initial conditions, including early specialization in manufacturing.