In 1997, several of Asia's economies collapsed and the international community was called in to help mend the ailing region. The crisis attracted a great deal of attention among both the scholarly and policy communities. At that time, it seemed that the Asian miracle had come to an abrupt end. Places such as South Korea enjoyed a prosperous run though suffered a dubious demise. Later developers in Southeast Asia and China, having just emerged from out of the starting gate, quickly stalled in their attempts to ride the wave of Asia's postwar economic dynamism. Fortunately, things would not remain dour for too long. Some countries, such as Taiwan and Japan, made it through the crisis relatively unscathed. Both China and South Korea quickly rebounded. Southeast Asian countries, such as Malaysia, Indonesia, and Thailand, adapted and have consequently begun new growth trajectories. In the end, it seemed that the most severe and lasting casualty of the 1997 crisis was the East Asian developmental state model itself. To be sure, the more recent literatures on East Asian political economy have taken a sharp turn, wherein terms like “booty capitalism” and “crony capitalism” have quickly come to replace more laudatory titles such as the “East Asian Miracle.”

The Japanese developmental state catapulted Japan into economic prominence. However, almost just as world attention focused on Japan's distinctive model, the era of the developmental state was drawing to a close. A generation of scholars has ably documented the story of Japan's developmental state by focusing on industrial policy. They chronicled how a strong bureaucracy buffered by insulation from politicians lay at the heart of the developmental state. As Joseph Wong points out in the introductory essay to this special issue, scholars have also argued that the developmental state contained within itself the seeds of its own dismantling.1 Since the 1960s, formal powers had been stripped from the bureaucracy, leaving it increasingly dependent upon “administrative guidance” not legally enforceable.2 By the late 1980s, the very success of the developmental state had eroded the powers of the bureaucracy to set industrial policy.

This article examines how postindustrial pressures and political changes have shaped recent social policy reforms in Japan and South Korea. Postindustrial pressures are categorized into exogenous and endogenous factors: exogenous being economic globalization and internationalization, endogenous being changing family and gender relations and demographic shifts such as population aging and declining birthrates. I argue that we need to attend more closely to the interactions between postindustrial and political factors to explain social and welfare policies in these countries. The conventional view on East Asian welfare states no longer adequately explains recent social welfare policy changes in the region.

On the surface, the Great Development of the West (GDW, Xibu Dakaifa) campaign seems like a classic maneuver by a developmental state to bolster the growth of an underdeveloped region. Even in 2002, GDP per capita in western China, which includes the provinces of Xinjiang, Tibet, Ningxia, Gansu, Shaanxi, Sichuan, Chongqing, Qinghai, Yunnan, and Guizhou, remained at U.S.$666, or just more than half of the national average (see Table 1). The poorest province in China, Guizhou, had a GDP per capita of only U.S.$375, roughly equivalent to Haiti's GDP per capita in 1999. The effort to develop western China, according to the official rhetoric, was aimed at shifting western China's developmental trajectory closer to that of the rest of China, thus decreasing regional inequality and bolstering overall growth.

Long after the start of the reform period, and well after the proven success of the private sector, the fate of the state-owned sector in China continued to disturb the sleep of many policymakers in the Chinese central government.

South Korea is currently undergoing a process of industrial restructuring. As competitors in the Asian region have begun to catch up—in terms of technological know-how, investment mobilization, price competition, and human capital development—advanced Asian economies such as South Korea's have had to shift their industrial focus away from conventional manufacturing sectors toward postindustrial sectors including biotechnology, nanotechnology, and advanced information and communications technologies. As such, the ongoing processes of postindustrial restructuring in South Korea have involved a transition from the industrial learning paradigm to a new knowledge creation paradigm where technology innovation, rather than technology borrowing, is key. This article examines this transformative process in the area of biotechnology and bioindustry development. It specifically looks at how the South Korean developmental state has begun to reinvent itself in order to meet the challenges of innovation-driven industrialization.