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away. Similarly. labour productivity demanded educational arrangements. often arranged by
the state; the powerful forces of learning by doing and on the job training had to build on the
base of institutional education provided by schools and colleges. often run by the state. or by

the local authorities.

Absenteeism and negligence in jobs could not be restrained until the virtues of
punctuality and work responsibility had received adequate recognition. Nor could involuntary
absence be brought into manageable limits until the debilitating effects of epidemic and
endemic illnesses had been sufficiently overcome through epidemiological intervention.

Social responsibility and cooperation are as central to these developments as mar-

ket based competition. Indeed. in this evolution the market joined hands with other institu-
tions ; the private economy drew on purposive state action; behavioral ethics and work norms
supplemented the plurality of institutions. This was already observed in the industrial revolu-
tion in Europe and North America. and later on in the remarkable economic progress of
l
Japan and East and South-East Asia .

The Basis of Success of East and South East Asia
Indeed. the economic success of East and South East Asis is particularly interesting

to study to understand the forces behind the dynamism that made these economies progress
so fast often much faster than the older capitalist economies. Strong features of what may be
called the "eastern strategy" included. first of all. and emphasis on public education as a
prime mover of change. In this the state played a major role. Second. It also involved a wide
dissemination of basic economic entitlements (through education and training. through land
reform. through availability of credit). which broadened access to the opportunities offered by
the market economy. Third. the chosen design of development included a deliberate combi-

nation of state action and use of the market economy.

Take the experience of two of the major countries in the region. viz. Japan and
China. Even at the time of Meiji restoration in the middle of the nineteenth century. Japan
already had a higher level of literacy than Europe. even though Japan had not yet had any
industrialization or modern economic development. which Europe had experienced for a
century. That focus on developing human capability was intensified in the early period of
Japanese development. in the Meiji era (1868-1911). For example. between 1906 and 1911,

education consumed as much as 43 percent of the budgets of the towns and villages. for Japan
as a whole. 2

IThe experiences of Japan and of East Asia are discussed more fully in my Asia and Pacific Lecture ("Beyond
the crisis: Development Strategies in Asia") given in Singapore. on July 12. 1999.
2See Carol Gluck. J~p'an's Modern M}'!hs : IdeologY. in the Late Meiji Period (Princeton: Princeton University
Press. 1985). P. 166; see also the literature cited there.