Development in Asia Demands Huge Sacrifices

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In today’s post, Christian Goebel, Professor of Chinese Studies at the University of Vienna talks to Rosa Gosch of Sustainable Governance Indicators (SGI) about a new study he co-authored for the Bertelsmann FoundationAssessing Pathways to Sustainable Growth – Need for Reform and Governance Capacities in Asia

Professor Goebel, why are some Asian nations successful while others fail?

First, we must define success. In our analysis of development in China, Indonesia, Singapore, Malaysia, India, South Korea, Vietnam and Japan, we comprehend success not only as economic growth in terms of per capita income, as is often the case. Social development, gender equality, equal access to education, environmental policies and the quality of democracy are equally important. We found that the Asian countries started with economic development, then moved into the social and environmental realm and finally, in some cases, into democratic development. How did they do this? Most governments first developed their executive capacity and only later became more accountable and sometimes more democratic.

Is there a common path for development in Asia?

There isn’t a single recipe for all countries. Development is highly idiosyncratic. Our analysis of Asia, however, shows that countries with strong governments that exhibit high executive capacity tended to be more successful than those with weak executive capacity. The governments of all the countries in our sample first invested in the improvement of executive capacity, and only afterwards in executive accountability and the quality of democracy. With the exception of India, where change has been more decentralized, government has been the main actor in bringing about economic and social change in each case. If there is an Asian model, then it is characterized by a pro-business government that increasingly seeks to govern markets as its executive capacity grows, and which prioritizes social and environmental issues that are beneficial for economic growth over those which are not.

What policy areas did you look at in your study?

We looked at economic policies, which include the transformation from an agrarian economy to a knowledge economy, innovation policies, and social policies like poverty reduction programs and education policies. We also had a close look at issues of gender equality, access to education, and environmental protection. In total, we examined nearly 150 different indicators for every country.

You group the countries in your study into four categories: long-standing democracies (India, Japan), young democracies (South Korea, Indonesia), one-party autocracies (China, Vietnam), and “electoral autocracies” (Malaysia, Singapore). Did regime type affect the performance of the countries?

No, at the aggregate level it didn’t. We didn’t find that democracies are doing better than non-democracies, for example. One of the most successful countries according to the SGI is Singapore, which is not a democracy. China is another example that is developing fast without being democratic. On the other hand, we have India and Indonesia, where development is less impressive despite them being democracies. So it’s not really the presence of democracy but the quality of democracy that matters for development. However, increasing the quality of democracy is very difficult because this requires knowledge, skills and financial resources. High quality of democracy and high executive capacity seem to feed into each other.

So, contrary to the situation in the OECD, policy performance and quality of democracy aren’t correlated in Asia?

That’s true. But that doesn’t mean that democracy doesn’t matter. We arrived at this conclusion because Singapore performs better than Japan, and China better than Indonesia. In the OECD, only democracies were analyzed, and high quality democracies perform better than low quality democracies. The same is true in Asia. Here, however, we have autocracies with high executive capacity, and they perform better than democracies with low executive capacity. This means that democratic quality can help you fine-tune the system only if you have the fundamentals in place.

In which policy areas did the Asian countries perform particularly well?

Nearly all countries did very well in the development of per capita income, poverty reduction, access to education, and access to social welfare. Most children in Asia are today able to access basic education, and the number of years of education has also increased. The gap between boys and girls in access to education has decreased, so there is more gender equality, especially at primary and secondary school level. Interestingly, South Korea – run by a female president today – is among those nations where girls and women don’t have equal access to university education.

Which other shortcomings did you come across?

The developmental models pursued in Asia demand huge sacrifices, notably in the form of inequality and environmental destruction. About half of the countries in our sample are highly unequal; the gains from economic growth are not distributed equally. China, Singapore and Malaysia, for example, have for a long time been very unequal societies with Gini coefficients above 0.45. And the developmental achievements are made at high environmental costs. Moreover, even the established democracies display serious deficits in democratic quality, especially in dimensions such as government accountability, media freedom and even civil rights.

What does your study tell us about future development in Asia?

Our explanations lead us to think about how countries develop and what kind of strategies can be chosen. It is very likely that some of the countries have learned from Japan and from each other. A report like ours should not be taken to say: This is how the world functions. We have discovered regularities, but these are not laws of nature. It should lead us to think: Are these actually good developments? Are there alternatives? We call these developments successful, but the price people pay in terms of social dislocation or environmental pollution can be huge.

What surprised you the most when examining governance in Asia?

We didn’t expect Indonesia to stay democratic, that Indonesians would keep embracing democracy the way they do. The fundamentals are not very good: executive capacity is low, corruption high, rule of law not very strong, and the country is just recovering from the second crisis that affected its economy very severely. Despite this, the country is holding on to democracy. Indonesia has the largest Muslim population in the world. That tells you something about the alleged incompatibility of Islam and democracy – even when democracy is under stress.

Useful links

OECD work on public governance

Professor Dani Rodrik of Harvard University discusses Asian growth models here

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4 comments to “Development in Asia Demands Huge Sacrifices”

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  1. Tom Schuller - 07/08/2013 Reply

    Interesting piece. But I don’t understand the remark about Korean education and gender. As the UN’s Human Development Report 2013 says: today, young Korean women are amongst the most educated in the world. Their enrolment rate in higher education is extraordinary , at over 82%. More than half of them have completed a college education.
    Moreover as the OECD’s Closing the Gender Gap shows, when it comes to choice of vocational training they are not confined to traditional subjects. 29% of Korean women in vocational secondary training are in engineering, construction or manufacturing, compared with an OECD average of 7%.
    Korea is a major example of what I call the Paula Principle – that women work below their level of competence.

  2. Rachel Kasumba - 02/09/2013 Reply

    Great Q & A – thanks to Prof. Goebel and Rosa. Development does indeed occur under various models and forms of government. For emerging markets, with large populations living below or close to the poverty line, better to focus on infrastructure development and social services, first and then governance issue later. This is because low to middle income earners in these countries tend to be less educated and skilled and hence likely to be in the informal sector, where they work for themselves. So it is important for infrastructure to be in place to enable them to conduct their businesses and also social services to supplement their meager earnings. This way, everyone wins.

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