The purpose of this study is to explain the rise and transformation of the developmental states, developmental strategies and economic policies in Northeast Asia, which shaped its economic performance from the 1950s to 1990s. In particular, this study is interested in how the economic miracles of Taiwan and South Korea were created and what made their economic performance different in the 1990s. The central argument is that a consistent external threat and political-economic institutions are the two fundamental forces that shaped the Northeast Asian developmentalism.