Revisiting the East Asian Development Model from the Perspective of History of Economic Thought

The goal of this paper is to trace the historical origin of the idea that the state (government) should actively intervene in the early stage of economic development, from the actual economic history and the history of economic thought. The previous literature on the East Asian economic development model correctly pointed to the relative effectiveness of the developmental state’s industrial, trade and exchange rate policy for boosting rapid economic development. But the same literature did not pay due attention to the historical origin of the East Asian development model that emphasized the state’s administrative, allocative and coordinative role in the early stage of capitalist development. This paper attempts to attribute the historical origin of this idea to the early 19th century German economist Friedrich List and examines how his policy prescription for rapid industrialization was widely accepted and applied, not only in the East Asia, but almost all advanced economies in Britain, France, Germany, the US and Japan.