Synopsis of the Lecture

In most developing countries after World War II, governments adopted policy measures to promote industrialization. At that time, most economists were expecting to see rapid growth in resource-rich countries in Africa and Latin America, but the real success stories appeared in East Asia, where the endowment of natural resource was extremely poor.

The various institutions that hinder economic development in most former socialist and developing countries today are shaped by their governments, which followed inadequate ideas about giving priority to the development of capital-intensive heavy industry in the 1950s when capital was lacking. The failure of many former socialist and developing countries to achieve dynamic growth in their transitional process is due also to their governments' specific transition strategies which were based on inadequate ideas that ignored the existence of large amounts of non-viable firms in the economy.

In the coming lecture, Professor Justin Lin will analyse why the dominant social thinking about the modernization of developing countries in the 1950s and their transition in the 1990s was incorrect, and how they shaped government policies and established institutions in the developing countries. Professor Lin will also discuss why the governments of a few economies in East Asia managed to escape the influence of the dominant social thinking in the 1950s, and why China and Vietnam did not follow the transitional approach advocated by the dominant social thinking in the 1980s.