They are highly diverse in culture, resources and population yet they are banded together with some characteristics. They have all had rapid sustained growth with highly equal income distributions. Strong agriculture, rapid demographic changes and export booms.There are two main views of how the HPAEs were so successful. The first is the neo-classical, which stresses getting the basics right. This was providing a strong legal framework to promote competition (domestic and international), the absence of price distortions (e g price controls) and the investment in people, health and education. The second view is of the revisionist, where the government uses state-led development and intervention to achieve growth. The macroeconomic policies of the HPAEs were very responsible. They were able to limit fiscal deficits to levels that could be financed without the pressures of inflation increasing. Inflation was moderate and predictable, enabling interest rates to be very stable. The stability of the macroeconomic environment made long-term planning and private investment possible. HPAEs adjusted to terms of trade shocks more effectively than other developing economies and have had more robust recoveries of financial investment. Export growth grew thanks to exchange rate protection (Japan, Taiwan and China) and exchange rate adjustments. Import substitution (non macroeconomic) and pro export structures were established.Leaders of HPAEs tried to build an institutional basis for growth. They put forward ideas of shared growth, where everyone benefits from economic groups. Korea and China carried out land reforms while Indonesia used rice and fertiliser policies to raise rural incomes, this was to prove the shared wealth. HPAEs tried to build business-friendly environments by setting up deliberation councils to shape government policy towards business. Private sector companies drafted the rules and so became more willing participants. The buil...
