ACCOMMODATING PUBLIC-EXPENDITURE POLICIES - THE CASE OF FAST-GROWING ASIAN ECONOMIES

It is widely believed that the exceptional economic performances of th e East Asian economies are attributable as much to the visible hand of the state as to the invisible hand of the market. This paper analyzes the experiences of Japan, South Korea, Singapore and Taiwan in implem enting a key instrument of state intervention, namely, public expendit ure policy. The analysis shows that these economies could achieve high standards of physical and social infrastructure even with relatively low spending. The key features of complementary spending policy includ e: emphasis on macroeconomic stability, cost-effective spending, invol vement of private sector in providing quasi-public goods, minimum dist ortions in the labor markets and human resource development to achieve a broad-based development. (C) 1998 Elsevier Science Ltd. All rights reserved.