Theories are tested by cases. Some countries have grown so fast that they transformed living standards within a single lifetime. Studying them, and comparing them with countries that stalled, is one of the best ways to understand development.

The East Asian tigers

From the 1960s, four economies, South Korea, Taiwan, Hong Kong and Singapore, grew at remarkable rates for decades and became rich. In the early 1960s South Korea's income per person was comparable to that of many poor countries in Africa and Asia; today it is among the richer countries in the world. In 1993 the World Bank published a study, The East Asian Miracle, trying to explain this.

Common ingredients include:

• Exporting manufactured goods to world markets, which forced firms to meet international standards.
• High rates of saving and investment.
• Heavy investment in education, including near-universal primary schooling early on.
• Land reform in South Korea and Taiwan, which spread rural wealth and raised farm output.

The role of government is debated. Free-market economists stress openness to trade and stable macroeconomic policy. Others point out that the South Korean and Taiwanese states actively directed credit and promoted chosen industries, an approach called industrial policy. Many scholars on both sides now accept that these were not simple free-market stories, and that much of the growth happened under authoritarian governments that later democratized.

China since 1978

The largest reduction in poverty in history took place in China. After Mao Zedong's death in 1976, a leadership under Deng Xiaoping began reforms in 1978. The early steps were in agriculture: under the household responsibility system, families could sell surplus crops after meeting state quotas, and farm output rose sharply. China then opened special economic zones, such as Shenzhen, to foreign investment, and gradually let markets set more prices while keeping a large state sector. It joined the World Trade Organization in 2001.

The World Bank estimates that China accounted for roughly three quarters of the world's reduction in extreme poverty between 1980 and 2019. The caveats are serious too: growth came with sharp increases in inequality, heavy pollution, and no political liberalization, and some official statistics are questioned by outside economists. China's path was also gradual, an experiment-and-expand approach rather than a single leap to markets.

Botswana

When Botswana became independent in 1966 it was among the poorest countries in the world, with very little paved road. Diamonds were discovered soon after independence. Many resource-rich countries suffer a resource curse, in which mineral wealth fuels corruption and conflict. Botswana did not. Under its first president, Seretse Khama, it kept regular elections, negotiated a joint venture giving the state a large share of diamond revenue, and spent much of it on roads, schools and health. For decades it was one of the fastest-growing economies in the world. Scholars often credit inclusive institutions, including traditions of public consultation, inherited from before colonial rule. Botswana still faces high inequality, dependence on diamonds, and a severe HIV epidemic that hit hard from the 1990s.

Comparisons

Comparison sharpens the picture. Many Latin American countries in the mid-twentieth century followed import substitution, protecting domestic industries from foreign competition; growth was often respectable for a time but later stalled amid debt and inflation. India grew slowly for decades, then picked up in the 1980s and especially after reforms in 1991. No single recipe fits all, but successful growth stories tend to share investment in people, integration with world markets, and a state capable of carrying out its plans.

Worked example: South Korea and Ghana

A comparison often used in development courses sets South Korea beside Ghana. Around 1960, the two had broadly similar incomes per person, by most estimates, and both had economies based largely on farming. Ghana, which became independent in 1957, had a well-known cocoa industry and was considered by many observers to have better prospects. Over the following decades South Korea became rich, while Ghana's income grew far more slowly.

How do the ingredients in this level help explain the difference?

• Exports. South Korea pushed its firms to sell manufactured goods abroad, setting export targets and rewarding success. Ghana relied on cocoa, whose price swung widely, and in its early decades protected domestic industries behind trade barriers.
• Education. South Korea achieved near-universal primary schooling early and expanded secondary and technical education.
• Land. South Korea's land reform spread ownership widely.
• Stability. Ghana experienced several military coups between the 1960s and early 1980s, which disrupted policy. South Korea was ruled by authoritarian governments for much of this period, but its policies were relatively consistent.

Some caveats. The starting points were not truly identical: South Korea had higher literacy, and it received large amounts of US aid in the 1950s and 1960s for Cold War reasons. Ghana has since become a stable democracy, with stronger growth since the 1990s. And South Korea's success came under repressive governments, a cost that should not be forgotten. Comparisons like this are useful for thinking, but no two countries are a controlled experiment.