INTEGRATED PROGRAMME IN MANAGEMENT (IPM)

COURSE OUTLINE COVER PAGE

AY 2023-24 TERM:VIII
TITLE OF THE COURSE: Policies for Economic Development: Lessons from East Asia
CREDITS: 4

Name of the Instructor/s Faculty Room No. Email Telephone Number

Karthikeya Naraparaju K-101 karthikeyan@iimidr.ac.in 0731-2439596
Before finalizing the course outline, please read the respective programme’s manual carefully where
individual component and group component evaluation details are mentioned.
Resources details required before commencement or during the course to be mandatorily purchased/arranged. In
case of non-submission of details in the below table, procurement/arrangement will not be made by the
Programme office:
SN Resources required for the Details Unit required and Approx. price (in
conduct of course Rs.)
1 Textbooks Author of 1: The e-books of all three textbooks
Joe Studwell listed from no. 1 to no. 3, are
1. How Asia works: Success Publisher of 1: currently accessible through the
and failure in the world's Profile Books. (Printed in India by IIMI Learning Centre. It is
most dynamic region. Manipal Technologies Limited, requested to continue to subscribe
Manipal) ISBNs:9781846682438. to these e-books.
2. Development Economics 9781847654090.
Moreover, one book chapter each
3. East Asian Development: Author of 2: is being referred from the edited
Foundations and Strategies Debraj Ray books listed in no. 4 and no. 5
Publisher of 2: respectively. These are available
4. Rents, rent-seeking and Princeton University Press for free download from the
economic development: ISBN: 9781400835898 author’s website (link has been
Theory and evidence in given in the outline below). Hence
Asia. Author of 3: it is not required to procure these
Dwight H. Perkins book chapters.
5. The Industrial Policy Publisher of 3:
Revolution I. Harvard University Press.
ISBNs: 9780674725300.
9780674726130.

Editors of 4:
Mushtaq H. Khan, & Jomo, K. S.
Publisher of 4:
Cambridge University Press.

Editors of 5:
Joseph Stiglitz and Justin Yifu Lin
Publisher of 5:
Palgrave Macmillan, London.
2 Stationery (to be List of items with units required
purchased by office)
3 Software (to be purchased Party
by office)
4 License (to be purchased Service provider
by office)
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 5 Simulation (to be Agency
purchased by office)
6 Field Visit (to be Purpose, Location & no. of Transport/food arrangements by
conducted by Instructor) sessions for the activity the office or claim reimbursement
7 Industry Expert/Guest CV to be enclosed with the Mention no. of sessions &
Speaker (being invited by outline memento or honorarium offering
the Instructor)
Note regarding course resources and reading materials:
1. Only those cases/readings/articles will be procured by the programme office that are available in HBSP/ Darden Publishing/ IIMA case unit
website.
2. If Instructors (Internal faculty or Visiting faculty) plan to use their own cases/articles, they are expected to provide the same for classroom
use. These cases will not be procured by the Programme office.
3. Purchase of resources, only for the exam(s) purpose when the same is not used and debriefed in any of the classes in that course is not
allowed.
Please mention Yes/NO below to provide details about the course outline:
This is an old course outline: NO (Yes/NO)
This is a new course outline: YES (Yes/NO)
If it is an old course outline, then have you updated any content or reading material in it? YES (Yes/NO)
If any changes have been incorporated into the old course outline, please provide details below in which session
(number) you have made the changes:
Session No. Details of the changes applied to the old course outline.

Although the course title remains the same, the course outline has been substantially
revamped (close to 50% of the course). Hence it has mentioned as a new course outline
above.
Please indicate the changes made in the course outline based on the measurement of assurance of learning
(closing the loop)/student feedback:
1. I have incorporated more readings that look at the East Asian growth experience from economists’ perspectives.

Following details to be filled by the Visiting Faculty (VF) Instructor only:

Please provide feedback, in case the same course was taught earlier in the Programme:
S. No. Instructor’s name Course Name Course feedback Instructor’s feedback
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Approved by: Course Coordinator/Area Chair

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 INTEGRATED PROGRAMME IN MANAGEMENT (IPM)
AY: 2023-24 BATCH: 2021-26 TERM: VIII

TITLE OF THE COURSE: Policies for Economic Development: Lessons from East Asia
CREDITS: 4 ELECTIVE No. of Sections:

Name of the Faculty Faculty Block/ Email Telephone

Room No. Number
Karthikeya Naraparaju K-101 karthikeyan@iimidr.ac.in 0731-2439596

CONSULTATION TIME FOR STUDENTS

Name of the Faculty Timing
Karthikeya Naraparaju Monday 3:30 PM to
4:30 PM (by prior
email confirmation)

COURSE DESCRIPTION
This course is intended as an introduction to understanding policies that led to one of the most
successful economic transformations in the modern world: accelerated economic development
over several decades in Japan, South Korea, and Taiwan (hereafter collectively referred to as
“North-East Asia"). Based on pioneering studies of the region by academics and other observers,
the policy interventions most crucial for accelerated growth in these economies are shown to
have taken place in the agricultural and industrial sectors, with policies in the financial sector
playing an important supporting role. In the process, we will also discuss how lack of proper
emphasis or/and execution of policies in these sectors have led several other East Asian nations
like The Philippines, Indonesia, Thailand, and Malaysia (hereafter, “South-East Asia”), on
unsustainable growth paths. Concepts from Information Economics, Institutional Economics,
and Political Economy will be used to understand the empirical evidence. The theory and
examples discussed here will also be used to shed light on the South Asian development
experience.

COURSE OBJECTIVES
The course aims to enable students to have a better understanding of the factors behind rapid
economic growth in Japan, South Korea, and Taiwan. Based on the framework discussed in the
course, they should also be able to contextualize the rapid economic development of
economies like China, Vietnam, etc., and the prospects for other developing countries, including
India.

PEDAGOGY/TEACHING METHOD:

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The material for the course will be drawn from academic articles published in journals, edited
volumes, as well as excerpts from books which are especially relevant as an accessible
introduction to this topic. Relevant readings will be assigned from chapters in these books for each
session. For better learning outcomes, students are strongly advised to come prepared with the
readings. Those marked under “Additional Readings” are optional but are recommended for a
better grasp of the subject. Pedagogy will be based on lectures and classroom discussions.

TEXT BOOKS /BOOK CHAPTERS FOR THE COURSE

Khan, M. H., & Jomo, K. S. (Eds.). (2000). Rents, rent-seeking and economic development: Theory
and evidence in Asia. Cambridge University Press. [Chapter 1 from this book will be assigned to
introduce the theory of rent-seeking; the reading can be accessed at:
https://eprints.soas.ac.uk/9842/ ].

Khan, M. H. (2013). Technology policies and learning with imperfect governance. In Stiglitz,
Joseph and Justin Yifu Lin (eds) The Industrial Policy Revolution I (pp. 79-115). Palgrave
Macmillan, London. [This reading provides the conceptual framework for industrial policies in
developing countries. This can be accessed at: https://eprints.soas.ac.uk/17296/]

Perkins, D. H. (2013). East Asian Development. Harvard University Press. [Chapters from this
book will be assigned to provide an overview of policies adopted in various East Asian countries].

Ray, D. (1998). Development economics. Princeton University Press. [Chapters from this book will
be assigned to relate the economic theory behind the success of agrarian reform in East Asia]

Studwell, J. (2013). How Asia works: Success and failure in the world's most dynamic region.
Profile Books. [Chapters from this book will be assigned to introduce the agricultural and
industrial policies in East Asian countries.]

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EVALUATION

Individual Component Group Component Weightage

Class Participation 10
Quiz 20
Mid Term Exam 35
End Term Exam 35
Total 100%

ACADEMIC DISHONESTY
IIM Indore believes in Academic honesty.
Academic dishonesty or misconduct is cheating that relates to an academic activity. It is a violation
of trust between the Institute and its stakeholders. Plagiarism, fabrication, deception, cheating
and sabotage are examples of unacceptable academic conduct. Please consult the Programme
manual for the section on academic dishonesty.

SCHEDULE OF SESSIONS

Module I : Introduction

Module Objective: To introduce students to the economic transformation witnessed in East

Asia in the five decades from 1960

Session 1 Introduction to the course.

Objective: To look at the metrics of economic performance (viz. per-capita income,

income inequality) in East Asian countries from 1960 to 2010.

Reading: Perkins, D. H. (2013). East Asian Development. Harvard University Press.

“Introduction”, pp. 1-14.
Additional
Reading: Studwell, J. (2013). How Asia works: Success and failure in the world's most
dynamic region. Profile Books. Introduction, pp. xiii-xxv
Session 2 Reconciling insights from cross-country growth econometrics with the
specifics of East-Asian growth experience.

Objective: Looking at the drivers of rapid economic growth in North East Asian countries
using growth accounting exercises and relating them to insights from cross-
country empirics of economic growth theories.

Reading: Perkins, D. H. (2013). East Asian Development. Harvard University Press.

Chapter 2, “Understanding East Asian Growth”, pp. 48-65.

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 Module II Land Policy in Northeast Asia and the Economic theory behind its success

Module Objective: To understand the importance of land redistribution in expanding output

from agriculture, which in turn creates demand for goods and services, and how this process
laid the foundation for equitable growth in Northeast Asia

Sessions 3, 4 Land-reform in Japan, South Korea, and Taiwan and its contribution to
economic development.

Objective: To provide the context to the factors that led to land-redistribution in these
economies and how it influenced their manufacturing take-offs.

Reading: Studwell, J. (2013). How Asia works: Success and failure in the world's most
dynamic region. Profile Books. Part 1: Land: The Triumph of Gardening, pp.1-
26 (till “Journey 2: Negros Occidental”)
Sessions 5,6 Economic theory behind why tenancy contracts are inferior to land
ownership in order to maximize production: Share cropping, Fixed Rent, Risk
Aversion

Objective: To demonstrate why leasing land to tenants is not going to maximize

output/efficiency due to the trade-off between incentives and risk

Reading: Ray, D. (1998). Development economics. Princeton University Press. Section

12.3.1; 12.3.2; and 12.3.3 in Chapter 12: Land pp.420-436.
Session 7 Economic theory behind why land ownership increases small-holder
productivity.
Objective: To discuss why employing family labor on owner-cultivated small holdings
increases output.

Reading: Ray, D. (1998). Development economics. Princeton University Press. Section

12.4.2 and 12.4.4 in Chapter 12: Land pp. 446-453 & pp.456-457.

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 Module III Industrial and Trade Policies in North East Asia
Module Objective: To understand industrial and trade policies in North East Asian countries.

Session 8 Industrial and trade policy choices of South Korea along with a brief overview
of the same in Japan

Objective: To understand the evolution of South Korean industrial and trade policies
from 1960 to 2010. To provide a brief overview of Japanese industrial
policies.

Reading: Perkins, D. H. (2013). East Asian Development. Harvard University Press.,

Chapter 3, “Government Intervention versus Laissez- Faire
in Northeast Asia”, pp. 66-83.
Additional
Reading: Studwell, J. (2013). How Asia works: Success and failure in the world's most
dynamic region. Profile Books. Part 2: Manufacturing: The Victory of
Historians, from section “Historian and general” till section “Triumph of
historians”; pp.103-110.

Irwin, D. A. (2021). From Hermit Kingdom to Miracle on the Han: Policy

Decisions that Transformed South Korea into an Export Powerhouse (No.
w29299). National Bureau of Economic Research.
Session 9 Understanding Industrial and Trade policies in Taiwan

Objective: To understand how government intervention in Taiwan evolved over time to

promote economic development.

Reading: Perkins, D. H. (2013). East Asian Development. Harvard University Press.

Chapter 3, “Government Intervention versus Laissez- Faire
in Northeast Asia”, pp. 84-91.

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Module IV Industrial and Trade Policies in South East Asia

Module Objective: To understand the nature of industrial and trade policies in South East
Asian countries and why they succeeded in some cases and failed in others
Session 10 Industrial and trade policies in Indonesia and Malaysia

Objective: To understand the policies of Indonesia and Malaysia and how they differed
from North-East Asian policies. An illustration is provided by comparing
policies to promote automobile industries of South Korea and Malaysia.

Readings: 1. Perkins, D. H. (2013). East Asian Development. Harvard University Press.

Chapter 4, “Successes and Failures in Southeast Asia”, pp. 100-115.

2. Studwell, J. (2013). How Asia works: Success and failure in the world's most
dynamic region. Profile Books. Part 2: Manufacturing: The Victory of
Historians from Section “Off to Korea and Malaysia till “Journey 3: Seoul to
Pohang and Ulsan” pp. 114-118; and from section “Doing, Learning” till
“Journey 4: Across Malaysia” pp.129-pp142.
Session 11 Industrial and trade policies in Thailand and the Philippines

Objective: To understand the policies of Thailand and the Philippines.

Readings: Perkins, D. H. (2013). East Asian Development. Harvard University Press.

Chapter 4, “Successes and Failures in Southeast Asia”, pp. 115-121.

Module V Economic Rents as Instruments of Industrial and Trade Policies

Module Objective: To understand various forms of economic rents and how they were used in
industrial and trade policies in East Asia

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Sessions 12, 13 Different types of economic rents and their different implications for
efficiency and growth: Neo-classical approaches

Objective: To introduce the concept of economic rents; to discuss the nature and
implications of rents in the neo-classical approach: monopoly rents, natural
resource rents, and rents based on transfers.

Reading: Khan, M. H., & Jomo, K. S. (Eds.). (2000). Rents, rent-seeking and economic
development: Theory and evidence in Asia. Cambridge University Press.
Chapter 1, Rents, Efficiency and Growth: Introduction and Sections 1.1, 1.2,
and 1.3. pp. 1- 16.
Sessions 14, 15 Non neo-classical approaches to economic rents: insights from informational,
new institutional, and classical approaches

Objective: To discuss the growth and efficiency enhancing implications of some types of
rents using the non neo-classical approach and relating them to evidence
from East Asia: Schumpeterian rents; rents for learning; monitoring and
management rents.

Reading: Khan, M. H., & Jomo, K. S. (Eds.). (2000). Rents, rent-seeking and economic
development: Theory and evidence in Asia. Cambridge University Press.
Chapter 1, Rents, Efficiency and Growth: Sections 1.4, 1.5, 1.6, 1.7 and 1.8.
pp. 16-38.

Module VI Understanding impediments to industrialization in developing countries through

firm-level analysis.
Module Objective: To understand how lack of organizational and technological capabilities in
developing countries’ firms impedes industrialization and policies to address this.

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 Session 16 Need for industrial policies in developing countries from a firm’s perspective

Objective: To discuss the problem of developing country firms’ inability to acquire

advanced technological capabilities and the need for industrial policy.

Reading: Khan, M. H. (2013). Technology policies and learning with imperfect

governance. In Stiglitz, Joseph and Justin Yifu Lin (eds) The Industrial Policy
Revolution I (pp. 79-115). Palgrave Macmillan, London. Introduction pp.1-4
Sessions 17, 18 Effort in learning and acquisition of tacit knowledge

Objective: To demonstrate through a simple model how effort in learning determines

the likelihood of acquiring the tacit knowledge for improving productivity and
competitiveness.

Reading: Khan, M. H. (2013). Technology policies and learning with imperfect

governance. In Stiglitz, Joseph and Justin Yifu Lin (eds) The Industrial Policy
Revolution I (pp. 79-115). Palgrave Macmillan, London. Section 1. “Tacit
knowledge, Organizational Capabilities and Competitiveness” pp. 4-15
Session 19, 20 Contracting failures affecting technology acquisition, policy instruments and
implementation challenges.

Objective: To discuss different type of contracting failures affecting investment,

appropriate policy instruments to address those failures, and challenges in
implementing those policies. The theoretical aspects are illustrated using a
case study of policy making in the Indian automobile industry in the late
1980s.

Reading: Khan, M. H. (2013). Technology policies and learning with imperfect

governance. In Stiglitz, Joseph and Justin Yifu Lin (eds) The Industrial Policy
Revolution I (pp. 79-115). Palgrave Macmillan, London. Section 2. “Learning,
Effort and Governance” pp. 15-21.

Case: The Indian Automobile Industry. Khan, M. H. (2013). Technology policies and
learning with imperfect governance. In Stiglitz, Joseph and Justin Yifu Lin
(eds) The Industrial Policy Revolution I (pp. 79-115). Palgrave Macmillan,
London. Section 3 “Financing Learning with Imperfect Governance” pp.22-25.

Additional Readings
The following readings are recommended for supplementary reading:

Haggard, S. (2004). Institutions and growth in East Asia. Studies in comparative international development,
38, 53-81.

Rodrik, D. (2004). Industrial policy for the twenty-first century. (Available at

https://drodrik.scholar.harvard.edu/publications/industrial-policy-twenty-first-century)

Stiglitz, J. E. (1996). Some lessons from the East Asian miracle. The World Bank Research Observer, 11(2),
151-177.
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