There are no miracles in the four East Asian economies, but they have adopted a paradigm that sets economic growth as the goal of their society. Emphasis has been given not to income equality, but rather to reduction in poverty and efforts to make available as many equal opportunities as possible. Whereas private investment has concentrated on output and capacity expansion, social investment has concentrated on infrastructure and capital that either helped to increase output capacity further or was favorable to the expansion of future productivity. Handsome social welfare provisions are not available, but a “survival” net has been assured. Entrepreneurial and hard-working efforts are treasured, while reliance on social welfare by individuals is discouraged. The government plays an active, but often indirect, role. It provides “fertilizers” as encouragement or incentives for individuals and business organizations to progress. The higher the degree of economic progress, the more active the business sector will be and the resultant rise in employment will, on the one hand, alleviate the need for welfare and, on the other hand, enlarge the government revenue pie. An effective and sound system for the rule of law has permitted the private sector to generate as many business and economic opportunities as possible.
The pro-business domestic environment has been rewarded by the continuous inflow of foreign capital that has expanded domestic output, export, and income. The export-oriented nature of the economy has enabled it to float according to world demand and change with the global economy. The expansion in the industrial sector soon spread to the banking sector. Monetary transactions aided the development of the financial centers, which, in turn, led to the development of modern services. The economy moved from one to a multiple number of virtuous circles. Economic development and growth has thus accumulated over a number of decades, thereby moving the four East Asian economies from the status of developing economies to industrialized, matured, and advanced economies. Their income has even caught up and surpassed some developed countries.
The political regimes in these economies are pro-business and pro-growth. Economic freedom is regarded as the fundamental issue. Economic well-being,