Second, because input-driven growth is an inherently limited process, Soviet growth was virtually certain to slow down. Long before the slowing of Soviet growth became obvious, it was predicted on the basis of growth accounting. (Economists did not predict the implosion of the Soviet economy a generation later, but that is a whole different extrapolation of past trends. But is it relevant to the modern world? s of naive It's an interesting story and a useful cautionary tale about the danger PAPER TIGERS At first, it is hard to see anything in common between the Asian success stories of recent years and the Soviet Union of three decades ago. Indeed, it is safe to say that the typical business traveler to, say, Singapore, ensconced in one of that city's gleaming hotels, never even thinks of any parallel to its roach-infested counterparts in Moscow. How can the slick exuberance of the Asian boom be compared with the Soviet Union's grim drive to industrialize? And yet there are surprising similarities. The newly industrializing countries of Asia, like the Soviet Union of the 1950s, have achieved rapid growth in large part through an astonishing mobilization of resources. Once one accounts for the role of rapidly growing inputs in these countries' growth, one finds little left to explain. Asian growth, like that of the Soviet Union in its high-growth era, seems to be driven by extraordinary growth in inputs like labor and capital rather than by gains in efficiency Consider, in particular, the case of Singapore. Between 1966 and 1990, the Singaporean economy grew a remarkable 8.5 percent per annum, three times as fast as the United States, per capita income grew at a 6.6 percent rate, roughly doubling every decade. This achievement seems to be a kind of economic miracle. but the miracle turns out to have been based on perspiration rather than inspiration: Singapore grew through a mobilization of resources that would have done Stalin proud. The employed share of the populat surged from 27 to 51 percent. The educational standards of that work force were dramatically upgraded: while in 1966 more than half the workers had no formal education at all, by 1990 two-thirds had completed secondary education. Above all, the There have been a number of recent efforts to quantify the sources of rapid growth in the Pacific Rim Key readings include two papers by Professor Lawrence Lau of Stanford University and his associate Jong- lI Kim, "The Sources of Growth of the East Asian Newly Industrialized Countries, Journal of the Japanese and International Economies, 1994, and"The Role of Human Capital in the Economic Growth of the East Asian Newly Industrialized Countries, mimeo, Stanford University, 1993; and three papers by Professor Alwyn Young, a rising star in growth economics, " A Tale of Two Cities: Factor Accumulation and Technical Change in Hong Kong and Singapore, NBER Macroeconomics Annual 1992, MIT Press Lessons from the East Asian NICS: A Contrarian View, European Economic Review Papers and Proceedings, May 1994; and"The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience, "NBER Working Paper No. 4.680, March 1994 66 Second, because input-driven growth is an inherently limited process, Soviet growth was virtually certain to slow down. Long before the slowing of Soviet growth became obvious, it was predicted on the basis of growth accounting. (Economists did not predict the implosion of the Soviet economy a generation later, but that is a whole different problem.) 'It's an interesting story and a useful cautionary tale about the dangers of naive extrapolation of past trends. But is it relevant to the modern world? PAPER TIGERS At first, it is hard to see anything in common between the Asian success stories of recent years and the Soviet Union of three decades ago. Indeed, it is safe to say that the typical business traveler to, say, Singapore, ensconced in one of that city's gleaming hotels, never even thinks of any parallel to its roach-infested counterparts in Moscow. How can the slick exuberance of the Asian boom be compared with the Soviet Union's grim drive to industrialize? And yet there are surprising similarities. The newly industrializing countries of Asia, like the Soviet Union of the 1950s, have achieved rapid growth in large part through an astonishing mobilization of resources. Once one accounts for the role of rapidly growing inputs in these countries' growth, one finds little left to explain. Asian growth, like that of the Soviet Union in its high-growth era, seems to be driven by extraordinary growth in inputs like labor and capital rather than by gains in efficiency.5 Consider, in particular, the case of Singapore. Between 1966 and 1990, the Singaporean economy grew a remarkable 8.5 percent per annum, three times as fast as the United States; per capita income grew at a 6.6 percent rate, roughly doubling every decade. This achievement seems to be a kind of economic miracle. But the miracle turns out to have been based on perspiration rather than inspiration: Singapore grew through a mobilization of resources that would have done Stalin proud. The employed share of the population surged from 27 to 51 percent. The educational standards of that work force were dramatically upgraded: while in 1966 more than half the workers had no formal education at all, by 1990 two-thirds had completed secondary education. Above all, the 5 There have been a number of recent efforts to quantify the sources of rapid growth in the Pacific Rim. Key readings include two papers by Professor Lawrence Lau of Stanford University and his associate Jong￾Il Kim, "The Sources of Growth of the East Asian Newly Industrialized Countries," Journal of the Japanese and International Economies, 1994, and "The Role of Human Capital in the Economic Growth of the East Asian Newly Industrialized Countries," mimeo, Stanford University, 1993; and three papers by Professor Alwyn Young, a rising star in growth economics, "A Tale of Two Cities: Factor Accumulation and Technical Change in Hong Kong and Singapore," NBER Macroeconomics Annual 1992, MIT Press; "Lessons from the East Asian NICS: A Contrarian View," European Economic Review Papers and Proceedings, May 1994; and "The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience," NBER Working Paper No. 4.680, March 1994