Can TFP analyses of East Asian economic growth yield reasonable estimates of technological change?

Krugman, Young, Kim & Lau and Collins & Bosworth have argued that the extraordinary record of economic growth in East Asia can be explained adequately by factor accumulation deriving from Abread-and-butter economic forces@ such as high savings rates, good education, and the movement of under-employed peasants into the modern sector. Yet this explanation that it was all based on Aworking harder, not smarter@ is quite at odds with what analysts of technological change have to say about technology acquisition in East Asia over the last few decades. This discrepancy derives from the inability of conventional growth accounting to adequately track technological change. Using selected assessments of technological capability acquisition in East Asia, this paper develops an alternative Aappreciative@ theory of growth (in the sense specified by Richard Nelson). This theory invokes a conception of physical capital as technical knowledge hard-coded in machines and human capital as production-specific knowledge >soft-coded= in people. Human capital is seen not just as initial education, but activity-specific skill built up from production practice. This conceptual framework is then extended to include productivity-enhancing organizational and institutional change which also contribute to aggregate growth. In this theory, clear distinctions are drawn between education, technical knowledge, information and the >social capital= accumulated in formal and informal institutions as implicit knowledge structures. While this new approach to East Asian growth is consistent with the views of technologists and the perspectives of evolutionary economists, it is at variance with the mainstream analysis.