Industrial policy in post-socialist transitions: some lessons from the East Asian NICs

Abstract

This paper contrasts Eastern Europe's current economic reforms (based on free market principIes) with the experience of some East Asian countries (South Korea and Taiwan), which relied heavily since the 1960s on import protection and government intervention. Firstly, the role of protection and government support in the Asian NICs is stressed. Their gradual financial and trade liberalizations of the 1980s are al so reviewed. Secondly, the main flaws of the current reforms in Eastern Europe are highlighted. The paper suggests that the experience of the East Asian NICs challenges free market reform as both a restructuring policy and a structural development strategy.