ist, 1995, p. 676). Such programs often include the availability of tax holidays, inexpensive financing, and land at reduced prices. Although virtually all states have established incentive programs, recent studies have cast doubt on the effectiveness of such incentives, particularly where disincentives, such as complex regulatory frameworks, are also in place. It has therefore become increasingly apparent that although incentives may be of some assistance in attracting DFI, the elimination of disincentives has a far more positive effect. This situation is particularly true in the case of small and medium sized firms, which often possess many desired technologies and a willingness to invest but lack the resources to negotiate their way through complex regulatory frameworks.
When post-Second World War reconstruction turned into rapid economic growth not only in industrial but also in developing countries, "it became evident that technological advances, including those in such 'soft' technologies as national economic management, could lead to unprecedented new paces of growth and development. These hopes have not been fulfilled in most developing countries. A group of '7'·Hong Kong, Indonesia, a South Korea a, Malaysia, Singapore, Taiwan and Thailand·have, however, emerged as leading developing countries with long-term sustained per capita income growth rates of more than 6 per cent. They are likely to continue to lead world growth during the rest of the 1990s if not longer" (Hughes, 1995, p. 88).
The "East Asian 7" include 350 million people, ranging from Singapore with less than three million to Indonesia with nearly 200 million people. Singapore in 1939 already had the highest level of per capita income in Asia after Japan, but in 1945 Thailand and Indonesia were among the poorest countries in the world. South Korea was devastated by Civil War in the early 1950s. The seven countries do not encompass all of East Asia....