Analysis Of Government Intervention Mechanism In The East Asian Economic Development

With a strong economy-building sense, the active intervention of government is a basic and essential factor to the systematic model of economic modernization in East Asia. From the low-grade original conditions to the miraculous rise, government intervention makes the rapid economic development in East Asia not only form a distinctive contrast with absolutely free way of economic development in the Western countries, but also take a sharp contrast with the limited prosperity of most countries in Latin America and Africa. However, the perfect economic effects can抰 prove that the government is omnipotent in economic development. The inherent market requests make government intervention have its potentially negative effects.The eruption of financial crisis in East Asia in 1997 is a bitter cost. How should we correctly recognize and evaluate government intervention in the process of economic development in East Asia? Taking the course of economic development as the clue, the thesis analyses its position and role in four parts.According to the classical theories of Western economics, the basic reason of government intervention is market failure. But at the beginning of its development, there was not only market failure, but more market absence in the countries and areas in East Asia. In order to break away from the briddles in the spontaneous process step by step, push economic increasement and modernization rapidly, the countries and areas chose government intervention as the short-cut according to the actual conditions. Morever, the intervention in East Asia provided a new visual angle for the theory of government intervention, because it broke through the bundles of the western classical theories.In the direction of the thought of 揈conomic development is the first? the countries and areas in East Asia made their government economicalize. They used their strong administrative power to draft and apply policies which were profitable to economic development. These efforts created the shocking 揈ast Asia Miracles? The intervention measures included creating original conditions to make economic take-off, using industrial policies to make economic structure high-level, setting economic development strategies to make economy2internationalize, conducting macro-regulation to ensure stable and coordinate economic development.But government intervention in the countries and areas in East Asia was a specific choose under a specific condition, so it must be only carried on at a certain phase during economic development. With the mature of market machenism, government must quit the stage of economic development progressively. However, owing to the absence of adjustment porter and the bindles of systematic inertia, the ejection of government intervention to the market became more and more obvious. Thus the improper results such as goal malposition, policy fault, supervisor lagging and so on led to financial crisis finally.But the eruption of the financial crisis couldn抰 prove that the contemporary market economy doesn抰 need government intervention any more. With the change of the circumstances and the improvement of the development level, the economy is bound to require deeper and more full-scale market adjustment, require the transformation and stipulation of governmental functions. After the alternation of miracle to crisis, the countries and areas in East Asia must be brave in reform. Beginning with a limit to governmental functions, defining the range of government intervention, strengthening supervi or, liightening the scientific level of policy-making could further the favourable operation of government intervention and attribute to the economic development in East Asia in the 21st century.