Embedded Autonomy in the "East Asian Miracle": Hong Kong`s Banking, Textile/Garment, and Electronics Sectors in the 1990s

Abstract

Conventional wisdom suggests that the economic miracle of Taiwan, Singapore, and South Korea was due to interventionist policies. Peter Evans`embedded autonomy, a theory emphasizing state prowess and interconnection between the state and society or business actors, has been used to explain the Asian miracle. The relevance of embedded autonomy to Hong Kong`s economic history has been largely neglected, however This paper aims at applying this concept to study the banking, textile/garment, and electronics sectors of Hong Kong.\nTheoretically, embedded autonomy is a pattern of state-society interaction that allows the state bureaucrats to become highly professionalized and to gain close access to important societal actors, thereby crafting successful policies. Being relatively autonomous from society, however, the government can make timely policy adjustments that could either be hands-off or interventionist depending on necessity. As such, embedded autonomy and the role of the government are conceptually separate. This revelation directs the focus of the cross-sectoral analysis of Hong Kong toward studying the relationship between embedded autonomy and the role of the government. The major empirical finding is that embedded autonomy varies across sectors—being high in the banking, medium in the textile/garment, and low in the electronics sectors of Hong Kong from 1990 to mid-1997. This variance correlates with the level of success of the government`s rolesetting that indicates different developmental prospects of the three industries.