Changes in the International System: The Pacific Basin

Abstract

The economies of the Pacific Basin have been much more successful than those in other areas during the 1980s. Economic growth in the Pacific has been high and inflation has been well contained. Five factors seem to be most important in explaining this success. First, these economies have managed to form a consensus to promote growth rather than other societal goals. Second, the people work very hard. Third, they save and invest an unusually large share of their current incomes. Fourth, they implement market-conforming economic policies that are particularly outward looking. Finally, these economies benefit from a regional factor that comes from being surrounded by other successful countries. Leadership in the Pacific Basin has been supplied only by the United States; however, Japan has taken on a more prominent role in recent years and may become dominant in the future.