Will the Tigers Keep Roaring? Catch-up and Capability Formation in the Asia-Pacific Region

Sammanfattning: The Asian tigers have been a tremendous case of economic success for decades. The economic financial crisis of 1997 put this to a test and they clearly passed it. This dissertation tries to unveil whether the same factors that led to the growth path in the 1960s, the so-called East Asian Miracle, are still responsible for overcoming the crisis. By means of factor analysis and a set of multivariate regressions I find that the same factors are still applicable. Governance is in all the specifications the main factor explaining the recovery, as it was also in the 1960s. However, and the main finding of this thesis, my preferred specification fixed effects shows that the impact of governance is negative nowadays, contrary to its effect during the miracle, as extensively proven by the State Led school of thought. I also find that openness and financial system have a second order importance impact on the recovery. Finally, a strong innovation system is also related to economic growth. The consequences of the deleterious effects of governance during the crisis cannot be neglected and would imply that the tigers have to explore a new path in the near future, by adopting an alternative political system.