entially unchanged. The question is, then, what institutional structures and strategies most effectively foster the learning and adopting process.
It will be suggested here that the common thread among the East Asian newly industrialized countries, as well as their exemplar, Japan, has been the effective political strength of the state, and the readiness of the state to use its power not only to subsidize favored industries or sectors, but, more important, to withhold such subsidies at will as a means of enforcing discipline.
"In Korea, Japan, and Taiwan ... the state has exercised discipline over subsidy recipients" (Amsden, 1989, p. 8). The same author goes on to clarify what is meant by discipline: poor performers have been punished by removal of their subsidies--an action often tantamount to signing their eventual death-warrant as firms or whole industries. Only successful performers qualify for the continuation of favored treatment (Amsden, 1989, p. 15).
The neoliberal critic will immediately identify at least three basic, theoretical problems with the assumption
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