NICs Lessons of Economic Growth
The issue of economic development has long plagued those countries which stand at the periphery of the international economy. How do nations emerge from the dregs of economic backwardness to stand tall with those other modern nations that have already industrialized? Newly-Industrialized Countries (NICs), particularly Taiwan and Korea, will serve as a unit of analysis to answer this question. This paper purposes economic backward nations must adopt the newest technologies and take advantage of the trail previous industrializes have blazed. The need for a strong stable state that is not obligated to the interests of the local elite, flexible domestic enterprises, land reform, and an initial import substitution industrialization (ISI) followed by a switch to export oriented industrialization (EOI) are all elements of economic growth that the NICs demonstrate.
Stephen Krasner notes the “desire by LDCs to secure both independence and development” (Krasner, 1985, 56). In this international economy there is always an internal struggle for states between autonomy and liberalization. All states wish to maintain their independence, but they soon face the reality that in order to industrialize they cannot shut their borders to the outside world. Attempts to force institutional change, in the form of a New International Economic Order (NIEO), in the international economy have failed and so, according to Krasner, the best alternative is to have “flexible and adaptive domestic political economic structures. Such structures facilitate adjustment to external pressure and make it much easier to take advantages of opportunities in the world market” (Krasner, 1985, 58). So, developing nations must make their nations flexible enough to handle shocks from the external environment. The only actor that can effectively implement these changes is the state. The state can coordinate efforts...