The changing state-market condominium in East Asia : Rethinking the political underpinnings of development

New Political Economy

Volumn 10, Issue 1, 2005, Pages 1-24

  Underhill, Geoffrey R D ^a   Zhang, Xiaoke ^a  

^a UNIVERSITY OF AMSTERDAM   (Netherlands)

Author keywords

[No Author keywords available]

Indexed keywords

MARKET; POLITICAL DEVELOPMENT; POLITICAL ECONOMY; STATE-LOCAL RELATIONS;

ASIA; EASTERN HEMISPHERE; EURASIA; FAR EAST; WORLD;

EID: 17644417497     PISSN: 13563467     EISSN: None     Source Type: Journal    
DOI: 10.1080/13563460500031156     Document Type: Article

References (133)

1. The paradigmatic status of the model in the international policy community is reflected in the recognition of the importance, if only partial and grudging, of the role of the state in economic development from the World Bank.
2. See The World Bank, The East Asian Miracle (Oxford University Press, 1993);
3. and World Development Report 1997 (Oxford University Press, 1997).
4. These efforts include, among others, R. Boyd & T. W. Ngo (eds), Asian States (Routledge, 2005);
5. S. Chan, C. Clark & D. Lam (eds), Beyond the Developmental State (Macmillan, 1998);
6. R. Doner, 'Limits of State Strength', World Politics, Vol. 44, No. 3 (1992), pp. 398-431;
7. Peter Evans, Embedded Autonomy (Princeton University Press, 1995);
8. and Linda Weiss, The Myth of the Powerless State (Polity, 1998).
9. Among the many studies along the developmental state line of reasoning, those frequently cited include Alice Amsden, Asia's Next Giant (Oxford University Press, 1989);
10. Stephan Haggard, Pathways from the Periphery (Cornell University Press, 1990);
11. Chalmers Johnson, MITI and the Japanese Miracle (Stanford University Press, 1982);
12. and Robert Wade, Governing the Market (Princeton University Press, 1990).
13. See, for example, C. Clark & K. C. Roy, Comparing Development Patterns in Asia (Lynne Rienner, 1997);
14. R. F. Doner & G. Hawes, 'The political economy of growth in Southeast and Northeast Asia', in: Manochehr Dorraj (ed.), The Changing Political Economy of the Third World (Lynne Rienner, 1995), pp. 145-85;
15. C. I. Moon & R. Prasad, 'Networks, politics, and institutions', in: Chan et al., Beyond the Developmental State, pp. 9-24;
16. and M. Woo-Cumings, The Developmental State (Cornell University Press, 1999).
17. Our thanks to Richard Robison for this point.
18. See Evans, Embedded Autonomy;
19. Weiss, The Myth of the Powerless State;
20. and Linda Weiss & John Hobson, States and Economic Development (Polity, 1995).
21. Linda Weiss (ed.), States in the Global Economy (Cambridge University Press, 2003).
22. Kent Calder, Crisis and Compromise (Princeton University Press, 1989);
23. and Richard Samuels, The Business of the Japanese State (Cornell University Press, 1987).
24. Doner, 'Limits of State Strength';
25. Doner & Hawes, 'The political economy of growth';
26. E. Y. Kim, 'The Developmental State and the Politics of Business Interest Associations', Pacific Focus, Vol. 8, No. 2 (1993), pp. 31-60;
27. and D. Okimoto, Between MITI and the Market (Stanford University Press, 1989).
28. C. Clark & S. Chan, 'Market, state, and society in Asian development', in: Chan et al., Beyond the Developmental State, pp. 25-37;
29. and Clark & Roy, Comparing Development Patterns in Asia.
30. The review of the recent revisionist literature has been necessarily brief, leaving out much subtlety and variety among the perspectives discussed here. It has also neglected emerging sociological studies that attribute divergent economic outcomes in East Asia to different organisational structures that shape inter-firm interactions and industrial patterns and the sectoral approach that focuses on the organisational features of industrial sectors as a determinant of state autonomy and capacity.
31. See M. Orrù, N. Biggart & G. Hamilton, The Economic Organization of East Asian Capitalism (Sage, 1997);
32. D. M. Shafer, Winners and Losers (Cornell University Press, 1994).
33. The literature is too vast to review in this article. For prominent examples, see A. Cox (ed.), The State, Finance and Industry (Wheatsheaf, 1986);
34. Peter Hall, Governing the Economy (Oxford University Press, 1986);
35. Peter Katzenstein, Small States in World Markets (Cornell University Press, 1985);
36. Claus Offe, Disorganised Capitalism (MIT Press, 1985);
37. Andrew Shonfield, Modern Capitalism (Oxford University Press, 1969);
38. and John Zysman, Governments, Markets and Growth (Cornell University Press, 1983).
39. Our thanks to one of the anonymous reviewers for this point.
40. Weiss & Hobson, States and Economic Development, p. 170.
41. Weiss, The Myth of the Powerless State, p. 38.
42. Gary Rodan, Kevin Hewison & Richard Robison, 'Theorising Southeast Asia's boom, bust, and recovery', in: Gary Rodan et al., (eds), The Political Economy of Southeast Asia (Oxford University Press, 2001), p. 6.
43. Peter Gourevitch, 'The Second Image Reversed', International Organization, Vol. 32, No. 4 (1978), pp. 881-912.
44. Elsewhere this issue has been discussed more effectively. See, for example, C. Clark, 'Modernisation, democracy and the developmental state in Asia', in: J. F. Hollifield & C. Jillson (eds), Pathways to Democracy (Routledge, 2000);
45. Stephan Haggard, 'Business, politics and policy in Northeast and Southeast Asia', in: A. MacIntyre (ed.), Business and Government in Industrialising Asia (Allen & Unwin, 1994), pp. 268-301;
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47. See H. Landreth, History of Economic Thought (Houghton Mifflin, 1976), ch. 6.
48. See O. Williamson, Markets and Hierarchies (The Free Press, 1975), who recognises the point but who does not bring it alive in political and social terms.
49. Karl Polanyi, The Great Transformation (Beacon Press, 1944).
50. See the arguments of H. Schwartz, States versus Markets (Macmillan, 2000), ch. 11.
51. Such as that propounded by Susan Strange in The Retreat of the State (Cambridge University Press, 1996).
52. Polanyi, The Great Transformation.
53. Geoffrey Underhill, 'State, Market, and Global Political Economy', International Affairs, Vol. 76, No. 4 (2000), pp. 805-24;
54. and Geoffrey Underhill, 'States, Markets and Governance for Emerging Market Economies', International Affairs, Vol. 79, No. 4 (2003), pp. 755-81.
55. Polanyi, The Great Transformation.
56. J. S. Migdal, 'The state in society', in: J. S. Migdal et al. (eds), State Power and Social Forces (Cambridge University Press, 1994), pp. 7-36.
57. Michael Moran, 'Financial markets', in: J. Simmie & R. King (eds), The State in Action (Pinter, 1990), pp. 48-51.
58. Moon & Prasad, 'Networks, politics, and institutions';
59. and Robert Wade, 'East Asia's Economic Success', World Politics, Vol. 44, No. 2 (1992), pp. 270-320.
60. J. Glassman, Thailand at the Margins (Oxford University Press, 2004);
61. and K. S. Jomo, 'Introduction', in: K. S. Jomo (ed.), Southeast Asia's Industrialisation (Palgrave, 2001), pp. 1-29.
62. Doner & Hawes, 'The political economy of growth'.
63. E. T. Gomez & K. S. Jomo, Malaysia's Political Economy (Cambridge University Press, 1997), pp. 49-53;
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65. K. S. Jomo et al., Southeast Asia's Misunderstood Miracle (Westview, 1997);
66. and Richard Robison, 'Structures of Power and the Industrialisation Process in Southeast Asia', Journal of Contemporary Asia, Vol. 19, No. 4 (1989), pp. 371-97.
67. A. MacIntyre, Business and Politics in Indonesia (Allen & Unwin, 1990);
68. and Robison, 'Structures of Power and the Industrialisation Process'.
69. R. Doner & A. Laothamatas, 'Thailand', in: S. Haggard & S. Webb (eds), Voting for Reform (Oxford University Press, 1994), pp. 411-52;
70. and Andrew Rosser, The Politics of Liberalisation in Indonesia (Routledge, 2003).
71. Haggard, 'Business, politics and policy in Northeast and Southeast Asia', pp. 294-5;
72. and H. Milner, Resisting Protectionism (Princeton University Press, 1988), pp. 14-17.
73. Geoffrey Underhill, Industrial Crisis and the Open Economy (Macmillan, 1998), pp. 18-25.
74. Okimoto, Between MITI and the Market;
75. and Weiss, The Myth of the Powerless State.
76. T. Mitchell, 'The Limits of the State', American Political Science Review, Vol. 85, No. 1 (1991), pp. 77-96.
77. I. Dalla & D. Khatkhate, Regulated Deregulation of the Financial System in Korea, World Bank Discussion Paper 292, 1995, World Bank;
78. and M. B. Woo, 'Slouching toward the market', in: M. Loriaux et al., Capital Ungoverned (Cornell University Press, 1997), pp. 57-91.
79. Xiaoke Zhang, The Changing Politics of Finance in Korea and Thailand (Routledge, 2002), ch. 7;
80. and Y. J. Cho, 'The role of poorly phased liberalization in Korea's financial crisis, in: C. Caprio, P. Honohan & J. E. Stiglitz (eds), Financial Liberalization (Cambridge University Press, 2001), pp. 159-87.
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84. and G. Noble & J. Ravenhill, 'The good, the bad, and the ugly', in: G. Noble & J. Ravenhill (eds), The Asian Financial Crisis (Cambridge University Press, 2000), pp. 80-107.
85. Y. H. Chu, 'Surviving the East Asian financial storm', in: T. J. Pempel (ed.), The Politics of the Asian Economic Crisis (Cornell University Press, 1999), pp. 184-202;
86. and Linda Weiss, 'Developmental States in Transition', Pacific Review Vol. 13, No. 1 (2000), pp. 21-55.
87. K. Y. Chin & K. S. Jomo, 'Financial sector rents', in: Khan & Jomo, Rents, Rent-Seeking and Economic Development, pp. 304-26.
88. A. Sheng, 'Bank restructuring in Malaysia', in: D. Vittas (ed.), Financial Regulation (World Bank, 1992), pp. 195-238;
89. and Z. Yusof et al., 'Financial reform', in: G. Caprio et al. (eds), Financial Reform (Cambridge University Press, 1994), pp. 276-320.
90. Chin & Jomo, 'Financial sector rents';
91. and Stephan Haggard, The Political Economy of the Asian Financial Crisis (Institute for International Economics, 2000), pp. 27-8, 35-6.
92. Scott Christensen et al., Thailand (World Bank, 1993), pp. 21-3;
93. and R. Doner & D. Unger, 'The politics of finance in Thai economic development', in: C. H. Lee et al. (eds), The Politics of Finance in Developing Countries (Cornell University Press, 1993), pp. 93-122.
94. D. Unger, Building Social Capital in Thailand (Cambridge University Press, 1998), ch. 4;
95. and Zhang, The Changing Politics of Finance, ch. 3.
96. The 1962 and 1985 revisions of Commercial Banking Act, for example, were designed through extensive consultation and cooperation between the BOT and the private banking community. See Bank of Thailand, 50 Years of the Bank of Thailand, 1942-1992 (Bank of Thailand, 1994).
97. Unger, Building Social Capital in Thailand, pp. 83-108.
98. A. Siamwalla, 'Can a Developing Democracy Manage its Macro-Economy? The Case of Thailand', TDRI Quarterly Review, Vol. 12, No. 4 (1997), pp. 3-10.
99. Zhang, The Changing Politics of Finance, chs 4 and 7.
100. Nowhere is this problem more clearly demonstrated than in the debacle of the Bangkok Bank of Commerce. For the background, see P. Phongpaichit & C. Baker, Thailand's Boom and Bust (Silkworm Books, 1998), pp. 105-10.
101. D. Rueschemeyer & P. Evans, 'The state and economic transformation', in: P. Evans et al. (eds), Bringing the State Back In (Cambridge University Press, 1985), pp. 44-77.
102. S. Haggard & C. I. Moon, 'Institutions and Economic Policy', World Politics, Vol. 42, No. 2 (1990), pp. 210-37;
103. and G. J. Ikenberry, 'The Irony of State Strength', International Organization, Vol. 40, No. 1 (1986), pp. 133-6.
104. A. Kohli & V. Shue, 'State power and social forces', in: Migdal et al., State Power and Social Forces, pp. 293-326.
105. E. Y. Kim, Big Business, Strong State (State University of New York Press, 1997), pp. 167-212;
106. and C. I. Moon, 'Changing patterns of business-government relations in South Korea', in: MacIntyre, Business and Government in Industrialising Asia, pp. 142-66.
107. Kim, Big Business, Strong State, pp. 200-3;
108. and J. Schopf, 'An Explanation for the End of Political Bank Robbery in the Republic of Korea', Asian Survey, Vol. 41. No. 5 (2001), pp. 693-715.
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111. Chu, 'The realignment of business-government relations', in: MacIntyre, Business and Government in Industrialising Asia;
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113. T. J. Cheng, 'Transforming Taiwan's Economic Structure in the 20th Century', China Quarterly, Vol. 165 (2001), pp. 34-6;
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115. Cheng, 'Transforming Taiwan's Economic Structure', pp. 34-5;
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118. A. Bowie, 'The dynamics of business-government relations in industrializing Malaysia', in: MacIntyre, Business and Government in Industrialising Asia, pp. 167-94.
119. Gomez & Jomo, Malaysia's Political Economy, pp. 117-65;
120. and Jomo & Gomez, 'The Malaysian development dilemma'.
121. B. T. Khoo, 'The state and the market in Malaysian political economy', in: Rodan et al., The Political Economy of Southeast Asia, p. 190.
122. G. Felker, 'The politics of industrial investment policy reform', in: Jomo, Southeast Asia's Industrialization, pp. 129-82;
123. and Jomo & Gomez, 'The Malaysian development dilemma', pp. 291-2.
124. Bowie, 'The dynamics of business-government relations', pp. 188-90;
125. and Gomez & Jomo, Malaysia's Political Economy, pp. 75-116.
126. Thailand's experiment with industrial deepening was epitomised in the ill-fated East Seaboard Project. See R. J. Muscat, The Fifth Tiger (M. E. Sharpe, 1994);
127. and Phongpaichit & Baker, Thailand's Boom and Bust.
128. Doner & Laothamatas, 'Thailand'; and Jomo et al., Southeast Asia's Misunderstood Miracle.
129. A. Laothamatas, 'The politics of structural adjustment in Thailand', in: A. J. MacIntyre & K. Jayasuriya (eds), The Dynamics of Economic Policy Reform (Oxford University Press, 1992), pp. 32-49;
130. and P. Phongpaichit, 'Technocrats, businessmen and generals', in: MacIntyre & Jayasuriya, The Dynamics of Economic Policy Reform, pp. 10-31.
131. R. Doner & A. Ramsay, 'Rent-seeking and economic development in Thailand', in: Khan & Jomo, Rents, Rent-Seeking and Economic Development, pp. 168-9;
132. and P. Phongpaichit & C. Baker, 'The Political Economy of the Thai Crisis', Journal of the Asia Pacific Economy, Vol. 4, No. 1 (1999), pp. 199-200.
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