Of the developing nations of East Asia, Indonesia came relatively late to liberalizing its trade and investment regime. Only in the mid-1980s, when it was clear that oil revenues alone would not suffice and that a new engine of growth was needed, did the country's government swing behind a systematic deregulation effort. Tariffs were cut, non-tariff barriers were lowered, foreign investment restrictions were reduced, export promotion incentives were enhanced, and various financial sector regulations were eased. All this combined to spark a labor-intensive export-led economic boom that was...

The East Asian Crisis of 1997 and the following economic meltdown has raised new questions about the role of public policy in Asian economic growth and the best mix of policies to insure the survival of economic growth. Although economists agree that macroeconomic stability, the encouragement of exports and FDI inflows, and the development of human resources have been important in East Asian growth, they do not agree on whether industry specific policies have been useful. The policy experiences of the countries are diverse and do not show a strong relationship between policies and success....