Abstract: Government and market are the two kinds of resource allocation. In the history of world economic development，the resource allocation leading roles of government and market are regular alternating in the developed countries，such as England，America，German and Japan，which have successfully transited from traditional agricultural economy to modern industrial economy. In early modernization，government plays the leading role of resource allocation. With the market mechanism increasingly stronger，the role of government is weakening while the role of market is just the opposite. The success of“East Asian model”and failure of “Latin American model”not depend on the lack of governmentintervention in East Asian economies，but on the more effective intervention than in the Latin America. Economic history spanning five hundred years shows that the industrial division caused by market liberalization that advocated by developed countries may make developing countries more attached to the developed countries，which keeps the developing countries in the bottom of value chain of industry. The secret of the latecomer countries to surpass the advanced developed countries is that an active government. To directly engage in high quality economic activities with increasing returns，it is the shortcut of latecomer countries to surpass the advanced developed countries.

Key words: government, market, resource allocation, government’s economic behavior, latecomer countries