The booming economies of Asia continue to raise millions of people out of poverty and improve the standard of living for billions more. But there is considerable diversity within this positive overall picture. For instance, several economies have successfully created competitive business environments that fuel high growth rates, despite having backward political institutions. Elsewhere, however, corruption and lack of reforms have created apparently insurmountable handicaps, leading to relative stagnation. What are the key differences that account for these divergent outcomes?

Asia is doing something right—its boom has raised hundreds of millions of people out of poverty. Yet debate still rages over how the region’s economies can maintain high growth rates and competitive business environments.