This paper challenges the conventional explanation of the role of the state in skill formation in the high performing Asian economies as advocated by World Bank economists. It does this through an examination of the institutions which supported beneficial strategic state intervention in the process of skill formation in Singapore, Taiwan and S. Korea. These enabled governments to produce a pace of skill formation so high that it achieved within the space of one generation something that took the advanced industrial countries three generations to achieve. Our research has identified a set of government strategies and associated institutional structures in the field of education and training in these economies which, it is argued, played a crucial role in ensuring that economic growth could proceed without employers experiencing severe skill shortages. We put forward a model of the skill formation process which is dynamic in character, focussing on the relationship between the state and the rapidly changing demand for skills during the process of industrialisation. This model allows us to examine some of the processes which are currently sustaining as well as threatening existing forms of intervention in the area of skill formation, including those related to the financial crisis of the late 1990s
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