Alternative Patterns of Distribution and Growth in the Mixed Economy: the Philippines and Taiwan

We assume here that the main societal objective is the rapid generation of growth in the presence of increased employment opportunities and the improvement of the size distribution of income — or at least an avoidance of deterioration in employment and distribution in the course of the transition growth process. This ‘development task’ is shared by all societies regardless of the social ‘system’ they have chosen for themselves on the spectrum between non-existent pure market economies and equally non-existent pure socialist economies. But the ability to achieve success in minimising conflicts among these objectives clearly relates to a society’s initial conditions as well as the policies it brings to bear over time. Thus, while the definition of the development task may not be very different, the initial advantages or handicaps various countries face, as well as their ability to change the environment over time, will differ markedly. Countries always do have a range of organisational institutional choices open to them, as well as a range of economic policy choices which will affect their ability to solve their transition growth problem as we have defined it. Thus, given differences in the initial conditions, in the nature of the institutional/organisational choices as well as in the nature of the economic policy choices made over time, developing countries will end up with different ‘payments systems’, yielding different employment, distribution and growth outcomes at the closed end.