Economic Development strategies

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Economic Development strategies

Each country aspires to improve its economy and prosper. To achieve this, different development strategies are employed. China, Japan and Korea are some of the countries that have applied development strategies to improve their economy and improve the living standards of their people.  The three countries have recorded rapid growth in their development in the last three decades.

There are a number of similarities in the developmental strategies that were adapted by the three countries, which made them experience rapid growth in their economies in the last three decades.  Since 1970s, the three countries have incurred economic growth through initiatives of industrialization (Boltho &Weber, 2007, p. 279). According to Boltho &Weber (2007), there is no clear model that helps to explain the model of development among these three countries (279). Most of the studies are based on the ideologies preferences. It is not clear how these industrial structures were transformed or how government intervened in solving various problems, and pursuing of efficient policies (Ebrey, 2009, p. 25). However, regardless of these views, these three countries have laid more emphasis on ensuring that there is rapid growth in investment, external competitiveness and manufacturing sector. This policy was then translated into interventionist trade, industrial and financial, and other policies that were geared at uplifting the economy.

The three countries had a concomitant belief on a competitive economy, whereby, they were protected from foreign companies and any downturns (Ebrey, 2009, p. 25).  However, this did not apply in the case of domestic rivals as these countries were required to find amicable solutions that would help them come out of the situation. The countries, therefore, encouraged competition within them and protected themselves from external competition, which was aimed at ensuring that they achieve their goals. Macroeconomic polices were employed in the three countries and aimed at budgetary balance and ensuring surplus. The policies also aimed at ensuring that the rate of inflation was managed and protected within certain limits.

Another similarity among the three countries is that they had a number of favorable preconditions relating to the socio-economic and political nature that was based on the homogeneity of the populations (Ebrey, 2009, p. 25).  The strategy employed to stimulate growth was based on the similarity in the population. Human capital involved in the building and growth of the economy was based on the homogeneity of the people.

The three countries had high levels of human capital formation that helped in the promotion of the economy (Boltho &Weber, 2007, p. 282). The human capital was readily available and was qualified to enhance innovation and creativity in moving the countries’ economy forward. Therefore, organizational structures were well structured, which helped in coordination and moving the economies forward. The income distribution patterns of employees were equal and fair, and this was adopted from the agrarian reforms that happened before industrialization.   They were also characterized with competitive bureaucracies and authoritarian governments, which helped in agitating and reforming the industrial sectors that impacted positively on the level of economic growth.

The fixed investment in the three countries was high and was propelled by increased public investment provisions that helped in crowding of the private sector capital formation. This was a characteristic that were exemplified in the three economies. This strategy of increasing fixed investments helped to boost their economy hence promoting development.

The three countries shared a belief that competitive market conditions were crucial in ensuring that there was rapid economic growth. The three countries allowed competition to thrive in ensuring that they recorded positive performance in the economy (Boltho &Weber, 2007, p. 279).  In Japan, this competition took place in the rival national conglomerates that were active in almost all sectors. In Korea, competition was forced upon large domestic groups,   whereby, government was compelled to offer conditional support on the export successes in the world markets. On the other hand, China provided soft budget constraints to its business and as the years went by, it forced some of the businesses to merge or close down to ensure that there was competitive competition in the market.

There are various differences manifested in the development strategies of these three countries on their business structure, labour patterns and government development policies. One of the differences was in the distribution of income among the people. In the tender stages, China embraced socialist approach where income was supposed to be equal, but currently, it is one of capitalist countries, as many people aim at promoting individual interest (Boltho &Weber, 2007, p. 279). It therefore adopted a command-kind of markets where government to some extends dictated the terms on the market. This was not the case for the other two countries, which from the first stage had a spirit of capitalist and adapted to mixed market.

Another set of differences lies on the idea of external competitiveness and industrial policy. There were some variations among these countries.   Competition was important to all the countries, but Japan and Korea emphasized plans that were geared at specific industries they believed to be important, while China’s industrial planning had no significant impact on competition. External competitiveness of China was a less planed system and did not target particular firms or sectors as that of Japan and Korea.

Another difference is that external policy of China was more open compared to that of Korea and Japan in terms of FDI and trade (Boltho &Weber, 2007, p. 279).  For instance, when China prepared to enter into World Trade organization, it dismantled many protectionist apparatus. China was in the forefront of embracing liberalism and opening up to foreign markets compared to Japan and Korea

In conclusion, the three countries had some similarities as well as differences in their development strategies during their high growth era.  Some of the obvious similarities experienced among the three countries are at the level of broad macroeconomic policies and indicators.  They all recorded high Investments, GDP and savings in the manufactured goods. The high growth was accompanied by low inflation rates and large budget deficits. Likewise, there are noticeable differences evidenced among the three countries. For instance, the organization structure of China was on central command market and its economy was planned, while that of Korea and Japan was mixed market economy.  Governmental involvement in sectoral development was high in Korea and Japan compared to China, which allowed flourishing of the largely unregulated private enterprise sector.   Even though these differences existed, the three countries have managed to grow and ensure that their economies remain stable.


Boltho, A., &Weber, M. (2007). Did China follow the East Asian development model? The          European Journal of Comparative Economics, 6(2): 267-286.

Ebrey, P. (2009). East Asia: A Cultural, Social, and Political History, 2nd Ed. Houghton: Mifflin   Harcourt


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