How Asia Works : Success and Failure in the World’s Most Dynamic Region (2013) by Joe Studwell is a great book on Asian Industrial development. Studwell was a business journalist who now has a PhD.
The book is recommended by a vast array of economists and businessmen. After reading Noah Smith recommend the book again I finally got around to reading it.
The book looks at the incredibly important question of why some large non-Western countries have managed to develop quickly and catch up to the richest countries in the world. So far, these countries are limited to Japan, Taiwan and Korea with China rapidly growing.
Studwell writes that three things were done by Japan, Taiwan, Korea and China successfully that were not done by Malaysia, Thailand, Indonesia and the Phillipines. They are 1) Land reform so small farmers can intensively farm. 2) Work on industrial policy for manufacturing and to increase technological sophistication with export discipline and 3) Direct financial institutions to support these endeavours.
Most importantly these are not the recommendations of textbook economics. Studwell also acknowledges substantial corruption occurring with this development but with the states having an over arching push toward exports and industrialisation.
Studwell excludes the very rich city states of Hong Kong and Singapore. This is a bit of a sneak. Hong Kong has 7.5 million residents and Singapore 5.4M. That is they more or about as many people than Denmark, which is a country often regarded by many as a model society.
At any rate, Studwell’s theory of growth definitely has successful examples. He also points out that Germany, the US and others followed similar strategies to catch up to Britain.
The book also points out that once a country has become rich and technologically sophisticated it should change and work on efficiency more. Studwell describes how Japan has failed to do this and this explains the lack of growth in Japan since the early 1990s.
The book is now nine years old and it has remained very relevant. The situation has changed somewhat for Indonesia and Malaysia that are now growing well but are still much poorer than Japan, Taiwan or The Phillipines.
How Asia Works is an excellent book that is definitely worth reading for anyone interested in the question of how developing countries can get rich.