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This article attempts to present some policy implications for the new frontier of development management, by examining the main issues of "strucural adjustment" and the "East Asian Miracle" that are contemporary themes in development studies (including development economics) and development aid practice. 1. To begin with, please let me quote a conversation between Alice and the While King in Lewis Carroll, Through the Looking-glass and What Alice Found There, in order to describe the current state of the discussions on the lessons from srtuctural adjustment and the East Asian miracle. "I see nobody on the road," said Alice. "I only wish I had such eyes," the King remarked in a fretful tone. "To be able to see Nobody! And at that distance too! Why, it's as much as I can do to see real people, by this light”. 2. East Asia, now regarded as the world's growth centre, has achieved rapid economic growth. This reality has sparked a new policy debate over whether development should be led by the government or the market, and specifically concerning the role of the ''guiding hand” and the “invisible hand” in development management. 3. The neo-classical economic view of development management, which emphasises the market mechanism, has tended to prevail in this debate. Recently, however, there has been growing interest in the development mechanism (i.e., selective government intervention) that triggered the so-called "East Asian Miracle." East Asia's economic success stories show not only the importance of weighing the "three failures" of economic policy management (i.e., the governments, the market. and the coordination of the two) in light of conditions in each country, but also the need to build strategic management capacity (i.e., adaptability, flexibility, and pragmatism) into each country's socio-economic system, as well as the potential to apply the East Asian approaches in other regions. 4. This situation suggests that development economics may once again become an interesting facet of development studies. How can we go beyond structural adjustment and the East Asian miracle? What lessons can be drawn from structural adjustment and the Ea8t Asia miracle? 5. The praise and criticism of structural adjustment and the East Asian miracle by those in the fields of development studies and development economics, have allowed five lessons, learned from practical experience over the last 40 years, to be pointed out as necessary for successful development management. <LESSON 1> There is a need for an appropriate combination of stable macro-economic management, economic and industrial policies that utilise an adequate incentive system, and the development of infrastructure facilities and human resources for successful economic development. <LESSON 2> Development models must be appropriate for individual countries. <LESSON 3> There is a need to integrate structural adjustment programmes by stages into medium and long-term development plans. <LESSON 4> Organic cooperation should be established between the market mechanism and the public sector's institutions. <LESSON 5> The formation of a socio-economic system that has a strategic management capability as a trinity of adaptability, flexibility, and pragmatism, is required. 6. Moving between an "incomplete government'' and an "incomplete market," the developing countries are aiming for autonomous development to take on structural changes in their socio-economic systems. It is in the formation of a "strategic management capability" based on theory, methodology, and practice that we find the frontier at which further intellectual work is expected in development policy theories that manage the interaction between development and aid. 7. One of the most important lessons would be the need to form the "strategic management capability" to make choices from diverse and complex options concerning development policies in the course of seeking organic cooperation between the government and market in both areas of domestic and international systems. 8. The importance of this lesson is demonstrated by the experiences of countries that have developed successfully, including East Asian countries. The capability is twofold: the ability to learn from practice; and the ability to modify policies if necessary. Because of this capability, the system in question incorporates three elements: adaptability; flexibility: and pragmatism. 9. In the world of development, the employment of proper policies is less important than the construction of economic and social systems that enable one people to recognise and adopt such policies at their own discretion. Without such .internal efforts, a country cannot be expected to achieve development, and assistance from the aid-providing side is unlikely to yield the desired effect. 10. Awareness from such a viewpoint leads to the realisation that it will be necessary to develop analytical models that can be used to explain how the development process can be controlled and managed. It also suggests the need to redefine "development" from this viewpoint in terms of whether development means "growth", "elimination of poverty", or "structural transformation". A commonly observed characteristic in the process of the shift from a traditional exchange economy to a modern market economy is the "structural transformation" of nations. The problems related to "development" in this process should be viewed as problems of the creation of, or transformation into, flexible, useful and practically effective economic and social systems. 11. The problem of the "replicability" of the experiences evidenced in the East Asian miracle to other regions should be discussed not for the purpose of recommending the employment of similar policies, but for the purpose of learning practical methodologies for the development of the capabilities needed for dynamic economic and social systems that can adapt to a constantly changing world markets and seize opportunities. 12. The World Bank Report The East Asian Miracle after enthusiastic studies of the lessons offered by the East Asian experience of development fails to show a sufficient and deep understanding of wider institutional aspects. The major reason is the lack of distinction between "policies" and ''economic and social systems", in addition to a bias toward free market principles. As advocated in my presentation, al the root of discussions about development management in the developing nations is the belief that development must be autonomous. 13. Lastly, I should like to emphasise that East Asian countries differ from other developing countries in that they have made effective and discretionary use of comprehensive economic cooperation (i.e., aid, investment and trade) from Japan and other countries out of their longing for growth and equity, and that they have established many institutions and fostered the above-mentioned management capabilities through their own sustainable development efforts. Without such self-help efforts, assistance from any foreign country or international organisation is unlikely to yield sufficient benefits. Without a firm will lo develop itself, no country can be constructively helped in its efforts to develop the capabilities to realise its development. 14. The "formation of strategic development management capability", which consists of the theory and practice that enable developing countries to implement reforms of their economic and social systems in order to achieve autonomous development, is a frontier that will require intellectual effort in terms of development management policies, and also in terms of new work in the fields of development studies, including development economics. 15. We are thus seeking a new frontier in development studies, one that will take us beyond traditional economics and enable us to conduct comparative studies of institutions for development management in relation to government and the markets in developing countries. We sec the East Asian miracle as an "knowledge treasure-house of inforrnation" that will revitalise development economics. 16. Finally, please let me summarise the main messages of my article by quotation again from Lewis Carroll, Alice's Adventures in Wonderland, in order to search for a new frontier of development management in East Asian Miracleland. "Consider your verdict”; the King said to the jury. “Not yet, not yet!" the Rabbit hastily interrupted. "There's a great deal to come before that!"
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