COVID-19 pandemic and long-term development trajectories of East Asian and Western economic models

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COVID-19 pandemic and long-term development trajectories of East Asian and Western economic models
// Pathways to Peace and Security. 2020. No 2(59). P. 41-62

DOI: 10.20542/2307-1494-2020-2-41-62

Vladimir Popov is a Chief Researcher at Central Economics and Mathematics Institute (CEMI), Russian Academy of Sciences

Abstract. The article examines the reasons for the superior performance of East Asia in containing the human and economic costs of the 2020 coronavirus pandemic. The East Asian model is based on solidarity and priority of collective interests over individual interests, whereas the Western model emphasizes competition and guarantees of individual rights. The quantifiable characteristics that allow to draw a distinction between the two models are income and wealth inequalities, property and control over corporations, institutional capacity of the state (measured as homicide rate and the size of shadow economy), and trust in the government. Because of the East Asian model’s superiority in these respects, both the number of infections and the mortality rates from COVID-19 in China and other East Asian countries were lower than in Western countries by two orders of magnitude. Besides, the 2020 economic crisis associated with the pandemic was much deeper in the West than in East Asia. These developments give new arguments in support of the views that East Asian economic and social model is more viable than the Western model. Continued rise of East Asia and proliferation of East Asian model in the developing world will lead to profound changes in the world economic order.

Keywords: models of capitalism, inequalities, state institutional capacity, health care system, coronavirus, structural crisis, adverse supply shock, conventional Keynesian counter-cyclical policy, industrial policy


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For citation:
Popov V. COVID-19 pandemic and long-term development trajectories of East Asian and Western economic models. Pathways to Peace and Security, 2020, No 2(59), pp. 41-62. https://doi.org/10.20542/2307-1494-2020-2-41-62



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