Editorial BoardXML

Seoul Journal of Economics - Vol. 33 , No. 4

[ Article ]
Seoul Journal of Economics - Vol. 33, No. 4, pp.505-538
Abbreviation: SJE
ISSN: 1225-0279 (Print)
Print publication date 30 Nov 2020
Received 29 Sep 2020 Revised 29 Oct 2020 Accepted 29 Oct 2020
DOI: https://doi.org/10.22904/sje.2020.33.4.002

Which Economic Model is more Competitive? The West and the South after the Covid-19 Pandemic
Vladimir Popov
Vladimir Popov, Research Director, Dialogue of Civilizations Research Institute, Französische strasse 23, Berlin, 10179, Germany; Principal Researcher, Central Economics and Mathematics Institute, Russian Academy of Sciences, Nakhimovsky prospect 47, 117418, Moscow, Russia, Tel: +49 30209677900 (VPopov@docresearch.org)(vpopov@nes.ru)

Funding Information ▼

JEL Classification: D63, F6, O1, O17, O40, O43, P10, P17, P51


Abstract

China and other East Asian countries were able to deal with the coronavirus pandemic much better than most Western countries. Both the number of infections and the mortality rate were lower than in Western countries by two orders of magnitude. Besides, economic recession associated with the pandemic is likely to be much deeper in the West than in the South. These developments give new arguments to the views that East Asian economic and social model is more viable than the Western model.

This paper argues that East Asian model is superior to the other models in the Global South at least in the catch up development and possibly even in the innovations beyond the technological frontier. The crucial features of the East Asian economic model are relatively low income and wealth inequalities, strong state institutional capacity (as measured by the murder rate and the share of shadow economy), high patriotism and trust in the government institutions. In short, the East Asian model is based on solidarity and priority of collective interests more than on guarantees of individual rights and competition.


Keywords: East Asian economic model, Western economic model, State capacity, Inequalities, Growth, Catch up development, Covid pandemic

Acknowledgments

I am grateful to DOC Research Institute in Berlin (https://doc-research.org/) for supporting this project.


References
1. Acemoglu, Daron, and James A. Robinson. Why nations fail: The origins of power, prosperity, and poverty. New York: Crown Publishers, 2012.
2. Bergsten, C. Fred, et al. China: The balance sheet. What the world needs to know now about the emerging superpower. Washington, D.C.: Institute for International Economics and Center for Strategic and International Studies, 2006.
3. Chang, Gordon G. The coming collapse of China. New York: Random House, 2001.
4. Diamond, Jared. Guns, germs and steel: The fate of human societies. New York: W.W. Norton, 1997.
5. Durant, Will. Caesar and Christ: The Story of Civilization, Vol. III. New York: Simon & Schuster, 1980.
6. Gilboy, George J. «The myth behind China’s miracle.» Foreign affairs (2004): 33-48.
7. Goldstone, Jack. Unpublished comments on Popov, V., Why the West became rich before China and why China has been catching up with the West since 1949: Another explanation of the “Great Divergence” and “Great Convergence” stories. NES/CEFIR Working paper No. 132, 2009.
8. Huang, Yasheng, and Tarun Khanna. “Can India overtake china?” Foreign Policy 137 (July–August 2003): 74-81.
9. Hutton, Will. The writing on the wall: China and the West in the 21st century. New York: Little, Brown, 2007.
10. Inglehart, Ronald, and Christian Welzel. Modernization, cultural change, and democracy: The human development sequence. Cambridge University Press, 2005.
11. Kaletsky, Anatole. We need a new capitalism to take on China. If the West isn’t to slide into irrelevance, governments must be much more active in taking control of the economy. The Times. (2010, February 4). (https://www.thetimes.co.uk/article/we-need-a-new-capitalism-to-take-on-china-pk53mbxwrp0/)
12. Krugman, Paul. “The myth of Asia’s miracle.” Foreign affairs 1994: 62- 78.
13. Kuznets, Simon. Modern economic growth: Rate, structure and spread. New Haven/London: Yale University Press, 1966.
14. Landes, David S. Wealth and poverty of nations: Why are some so rich and others so poor? New York: W.W. Norton, 1998.
15. Lin, Justin Yifu. “China’s Growth Deceleration: Causes and Future Growth Prospect.” Frontiers of Economics in China 14 (No. 1 2019): 26-52.
16. Lin, Justin Yifu, Guanghua Wan, and Peter J. Morgan. “Prospects for a re-acceleration of economic growth in the PRC.” Journal of Comparative Economics 44 (No. 4 2016): 842-853.
17. Lu, Aiguo. China and the global economy since 1840. New York: St. Martins Press, 1999.
18. Lu, Aiguo. “Thirty years of reform - China becomes a ‘normal’ developing country?” Research Report 2009-03 No. 21 (2009): 1-54. Centre for China and World Studies, Peking University. (In Chinese) (http://www.wyzxwk.com/Article/lixiang/2010/12/76327.html/)
19. Marsh, Christopher. Talking behind their back: Chinese thoughts on their coming collapse. The National Interest. (2002, October 23). (https://nationalinterest.org/article/talking-behind-their-back-chinese-thoughts-on-their-comingcollapse-2153/)
20. Milanovic, Branko. Does economic inequality set limits to EU expansion? Conference on Sovereign Insolvency, Opatija, Croatia, November 2012.
21. Mokyr, Joel. The gifts of Athena: Historical origins of the knowledge economy. Princeton University Press, 2002.
22. Morris, Ian. The measure of civilization. How social development decides the fate of nations. Princeton, NJ: Princeton University Press, 2013.
23. Ocampo, Jose. A. “The new order is being born, but the old order is still strong.” In Dutkiewicz, Piotr, and Richard Sakwa (Eds.), 22 ideas to fix the world conversations with the world’s foremost thinkers (pp: 77-94). New York: New York University Press, 2013.
24. Peerenboom, Randall. China modernizes: threat to the West or model for the rest? Oxford, UK: Oxford University Press, 2007.
25. Pei, Minxin. China’s trapped transition: The limits of developmental autocracy. Cambridge, MA: Harvard University Press, 2006.
26. Polterovich, Victor, and Vladimir Popov. “Accumulation of foreign exchange reserves and long term growth.” (2003).
27. Polterovich, Victor, and Vladimir Popov. Accumulation of foreign exchange reserves and long term economic growth. In S. Tabata & A. Iwashita (Eds.), Slavic Eurasia’s integration into the world economy (pp. 161-198). Sapporo, Japan: Slavic Research Center, Hokkaido University, 2004.
28. Pomeranz, Kenneth. The great divergence: China, Europe, and the making of the modern world economy. Princeton, NJ: Princeton University Press, 2000.
29. Popov, Vladimir. “Is the Chinese variety of capitalism really unique?” CEFIR and NES working paper No. 156 (2011a).
30. Popov, Vladimir. “Developing new measurements of state institutional capacity.” PONARS Eurasia Policy Memo No. 158 (2011b).
31. Popov, Vladimir. Mixed fortunes: An economic history of China, Russia and the West. Oxford, UK: Oxford University Press, 2014.
32. Popov, Vladimir. Slowdown of growth in China: Circumstances or choice? ). (https://doc-research.org/2019/01/slowdown-of-growth-in-china-circumstances-or-choice/)
33. Popov, Vladimir. Global health care system after coronavirus: Who has responsibility to protect. MPRA Paper No. 100542 (2020a).
34. Popov, Vladimir. How to deal with a coronavirus economic recession? MPRA Paper No. 100485 (2020b).
35. Popov, Vladimir, and Jomo Kwame Sundaram. “Income inequalities in perspective.” Development 58 (Nos. 2-3 2015): 196-205.
36. Solow, Robert. M. “Survival of the richest? Review of A farewell to alms: A brief economic history of the world by Gregory Clark.” New York Review of Books 54 (No. 18 2007).
37. Tetlock, Philip E., and Geoffrey Parker. Unmaking the West:” what- if” scenarios that rewrite world history. University of Michigan Press, 2006.
38. Tetlock, Philip. E., Richard N. Lebow, and Geoffrey Parker (Eds.). Unmaking of the West. “What if?” Scenarios that rewrite the world history. Ann Arbor, MI: The University of Michigan Press, 2009.
39. WIPO. World intellectual property indicators. Geneva: WIPO, 2009.
40. Wong, Roy. B. China transformed: Historical change and the limits of the European experience. Ithaca, NY: Cornell University Press, 1997.
41. Yang, Dali L. “Economic transformation and its political discontents in China: Authoritarianism, unequal growth, and the dilemmas of political development.” Annual Review of Political Science 9 (2006): 143–164.