The crisis also raised new questions about the role of the developmental state. While analysts long recognized that the Little Tigers did have developmental states as effective as those of Japan or Korea, they nonetheless saw them as roughly similar. The crisis revealed that the state’s regulation of the financial sector in particular was very weak, even in Korea. Banks lent money for dubious investments, often to companies with which they had close, even family, ties, and when the crisis hit they rapidly sank into bankruptcy as their creditors could not repay the loans. Neoclassical economists argued that in spite of East Asia’s rapid success, the state’s role was not as beneficial as had been assumed. Many began to argue that economic growth would have been even more rapid without state credit and subsidies to key industries.They began calling for states that provided the classic regulations needed to “guide” the market.Their opponents countered that the crisis showed the problem of rapid flow of investment in and out of countries open to the global economy, which suggested the need the speed at which these transactions occurred and guide them into longer-term investments rather than short-term currency speculation. These critics suggested the international factors were to blame rather than the developmental state itself.