War and Economic Development: Export-Oriented Industrialization in East and Southeast Asia

War and the evolution of economies, states, and societies have historically been inextricably intertwined. Certainly, as a number of analysts have observed, war is a profound agent of change.' Of course, wars, or collective violence on a broad scale, come in many forms and sizes, from the widespread devastation and global reach of the second world war to the limited and confined actions of many insurgency campaigns. Yet, however local the consequences of wars may be, they invariably have a major effect on the lives of those individuals and institutions they touch. And, as the studies of the impact of war on the development of the economy, society, and state system of Europe have detailed, major wars can have an enormous influence over the development of countries and regions.2 Despite the evident importance of wars to the course of history, they have had little impact on analysts interested in economic development beyond Europe and the major powers.3 Nowhere has this lack of attention to the economic consequences of wars and preparation for war detracted more from our understanding of events than in East and Southeast Asia. From the early 1940s to the late 1980s this region was beset by the second world war, the Chinese civil war, the Korean war, the Vietnam war, confrontation over the formation of Malaysia, the Vietnamese occupation of Cambodia, a series of local guerrilla wars, and the overarching cold war, which constantly threatened to explode into open warfare in places such as the Korean peninsula and the Taiwan straits. In the same period emerged a number of strong states and rapidly expanding economies, notably Japan, the four newly industrialized economies (South Korea, Taiwan, Hong Kong, and Singapore), and the two near industrialized economies (Malaysia and Thailand). Although the links between the sequence of wars, on the one hand, and the development of these seven strong states and successful economies, on the other, are highly complex, they clearly should not be ignored. To what extent have wars and the threat of war been a crucial factor in the development of these seven successful economies? The intent here is not to ignore conventional explanations of the economic success of the region. Many valuable insights have emerged from the debate between neoclassical economists who emphasize outward-looking, market-conforming policies and the limited role of the government and statists who stress the intervention