Bad banking in Thailand? An empirical analysis of macro indicators

It appears to be common wisdom that the basic cause of Thailand's crisis is its extraordinarily weak financial institutions. The article questions this proposition from an empirical viewpoint. It is well established that the long‐term performance of Thailand's financial system is favourable. The insight from moral hazard indicators is unexpected regarding the bad banking proposition, although not compelling. Finally, the liberalisation process produced inadequately addressed risks. However, this also applies to experienced and well‐regulated foreign banks. It is argued that the facts provided can be better explained in a framework of system change than by bad banking in Thailand.     

Going South: capitalist crisis,systemic crisis,civilisational crisis

This article argues that the current protracted and severe financial and economic crisis is only one aspect of a larger multidimensional set of simultaneous and interacting crises on a global scale. The article constructs an overarching framework of analysis of this unique conjecture of global crises. The three principal crisis aspects are: an economic crisis of (over) accumulation of capital; a world systemic crisis (which includes a global centre-shift in the locus of production, growth and capital accumulation), and a hegemonic transition (which implies long term changes in global governance structures and institutions); and a worldwide civilisational crisis, situated in the sociohistorical structure itself, encompassing a comprehensive environmental crisis and the consequences of a lack of correspondence and coherence in the material and ideational structures of world order. In these ways, the global system is now `going south'. All three main aspects of the global crisis provoke and require commensurate radical social and political responses and self-protective measures, not only to restore systemic stability but to transform the world system.     

Structural change and neoliberalism in Mexico: 'Passive revolution' in the global political economy

This article examines an enduring context of 'passive revolution' in the making of modern Mexico by developing an account of the rise of neoliberalism during a period of structural change since the 1970s. It does so by analysing and understanding both the unfolding accumulation strategy and the hegemonic project of neoliberalism in Mexico since the 1970s as emblematic of the survival and reorganisation of capitalism through a period of state crisis. This is recognised as a strategy of 'passive revolution', the effects of which still leave an imprint on present development initiatives in Mexico. Therefore, through the notion of 'passive revolution', the article not only focuses on the recent past circumstances, but also on the present unfolding consequences, of neoliberal capitalist development in Mexico. This approach also leaves open the question of 'anti-passive revolution' strategies of resistance to neoliberalism.     

Neo-liberalism and East Asia: Resisting the Washington Consensus

This article examines current debates over the future direction of the reform agenda in post-crisis East Asia and sets them in the broader context of the global debate on the role of ideas and ideology in shaping economic policy-making. It argues that the contest of ideas in economic policy-making can evolve independently of their intellectual merit and empirical credibility and political interests play an important role. In the case of post-crisis East Asia, re-igniting the 'economic miracle' of the pre-crisis era does not stem from a politically neutral, dispassionate and intellectually rigorous analysis of what went wrong in the recession-inducing 1997 financial crisis that engulfed the region. It represents an attempt to reinvent orthodoxy in the domain of economic ideas and ideology by the global policy community that is in turn influenced by US-centric institutions.     

Chinese views of global economic governance

China’s rise and America’s global retreat have made China’s role in global governance more important than ever before. By analysing Chinese (mainly academic) literature, this article studies contemporary Chinese views of global economic governance. It finds that the 2008 financial crisis is a notable point of the Chinese discourse. In addition, dialogue platforms – the G20 in particular – rather than key institutions of global economic governance such as International Monetary Fund (IMF), World Bank and Word Trade Organization (WTO) win overwhelming attention in the Chinese discourse. Chinese views of global economic governance also highly value the role of the state, while paying less attention to Non Governmental Organisations (NGO) and civil society. Overall, this article highlights a diverse, shifting and sometimes contradictory Chinese discourse on global economic governance, which helps to develop a more accurate understanding of China’s ambition in global economic governance.     

Estonia's success: prescription or legacy?

This paper focuses on Estonia's post-communist transition and attempts to determine why it has been more successful than the other two Baltic states, Lithuania and Latvia. It proposes that the central factor conditioning the outcome of the Baltic states' transition process was their different experiences during the Soviet period. Although the post-independence reform program itself played a crucial role in Estonia's successful transition, the paper concludes that the seeds for the country's achievements can actually be found in its Soviet legacy: Estonia's selection of policies, their implementation and the resulting positive outcome were all dependent on favorable conditions which had been established in Estonia during the Soviet period. Significantly, these positive conditions had not been created in the other two Baltic states.     

Colours of a revolution. Post-communist society,global capitalism and the Ukraine crisis

Abstract

The Ukraine crisis is usually treated either as Russia’s return to the old-style empire-building (the right) or as a clash of two imperialisms (the left). However, the essence of this crisis can be understood only from the dual perspective of the consequences of the Stalinist degeneration of the Russian Revolution and the fate of the modern global capitalism. The most rotten sections of the Soviet bureaucracy moved the society to capitalism. However, this effort could secure only a peripheral (Ukraine) or at best semi-peripheral (Russia) position in the capitalist world-system as a provider of cheap raw materials. Meanwhile, modern capitalism led to world economic crisis. In these conditions, the capital of the core capitalist countries obviously decided to strengthen its control over the periphery, and Russia’s aspirations to secure its domination over the former Soviet space were in the way. To thwart them, Western powers decided to provoke a Ukraine crisis, exploiting Ukrainians’ justified indignation at the backwardness and corruption inherent in their own peripheral capitalism. Hence, a study of the properties of the post-Soviet societies and their place in the world hierarchy is the key to understanding the Ukraine crisis.     

Chinese capitalism: Cultures,the Southeast Asian region and economic globalisation

Globalisation is often presumed to be an economically, socially and culturally homogenising force. The deterioration of capitalism's major rival in the early 1990s has paved the way for a truly global economy in which all participants increasingly operate under the general logic of capitalism-that is, a market-orientated system of production and exchange, private ownership and a flexible labour market predicated upon self-interest. Yet, while the pressures of globalisation are obviously formidable and increasingly felt by all, economic societies remain diverse and have responded to these pressures in unique ways. This article makes its case for the continued diversity of capitalism by emphasising the unique mode of economic organisation that has emerged in Southeast Asia; one rooted in the demands of globalisation as well as in the cultural foundations of the Overseas Chinese. The evolution of ethnic-Chinese business networks, which define Southeast Asia's political economy, constitutes a unique reaction to the pressures of globalisation and has laid the basis for a distinct articulation of capitalism in the region.     

Neo-liberalism and Domestic Capital: The Political Outcomes of the Economic Crisis in Thailand

The 1997 economic crisis in Thailand provided an opportunity for a reinvigoration of neo-liberal economic policies. International financial institutions, together with Thailand's Democrat-led government, emphasised further market reforms, liberalisation, deregulation, decentralisation, privatisation and a reduced role for the state. The deep economic downturn saw a popular rejection of such policies, meaning that the neo-liberal interregnum was short-lived. The 2001 landslide electoral victory of the Thai Rak Thai Party symbolised the intensity of opposition to neo-liberalism. It also showed that national governments remain critical in shaping markets and that domestic economic actors continue to have significant political roles. In Thailand, far from neutering domestic capital's political capacity, the crisis and opposition to neo-liberalism saw this enhanced. One reason for this was that neo-liberal restructuring was not simply about the efficient operation of the market. Rather, it demanded a fundamental transformation of the operations of government and of the ways that business was organised and conducted. This threatened domestic capital. Its economic survival required that it seize the state so that it could control economic policy-making. This was achieved through the Thai Rak Thai electoral victory and its subsequent rule, where the protection of domestic capital's interests was achieved through a re-negotiation of its social contract with other classes.     

East Asian financial regionalism: why economic enhancements undermine political sustainability

East Asian financial regionalism was born in response to the Asian Financial Crisis of 1997–1998. The centrepiece of financial regionalism was the Chiang Mai Initiative (CMI), an emergency liquidity mechanism created by the ASEAN+3. It embodied both a clear interpretation of what had gone wrong in 1997–1998 and an understanding of the need for institutions that would be politically viable despite Sino-Japanese rivalry. Enforcement under CMI relied on the ‘IMF link’ – release of funds would be predicated on crisis countries' initiating negotiations with the International Monetary Fund (IMF), as a means of reducing moral hazard, enforcing conditionality and diverting blame from the leading creditors, Japan and China. The global financial crisis of 2008–2010 and the eurozone crisis that followed have inspired important changes meant to address CMI's economic gaps, including accelerated adoption of ‘CMI Multilateralization’ (CMIM), the creation of a new surveillance unit (ASEAN+3 Macroeconomic Research Organization, or AMRO), and the establishment of a new precautionary line. Many observers have remarked that these developments weaken the IMF link, which had effectively subordinated CMI to the IMF. While the moves appear to demonstrate a more confident, autonomous regionalism and a relative devaluation of the US-dominated global financial institutions, this paper argues that in fact, the ASEAN+3 states have again unearthed the underlying politics of divided leadership and mutual suspicion. CMIM is now threatened by the renewed potential for internal divisions. Further complicating the picture, both China and Japan have recently established large bilateral swap lines outside of the CMIM framework with several of their ASEAN+3 partners, raising the question of whether CMIM is moving towards political irrelevance even as it has arrived at a high water mark in its institutional development.     

The significance of ethnicity in the Estonian return migration policy of the early 1920s

In this article the Estonian return migration policy is analyzed from the perspective of the return migrants' ethnicity. The time period of this study covers the most intensive phase of the state-organized return of emigrants to the newly established Republic of Estonia. The survey of attitudes of the Estonian authorities towards the return of emigrants with different ethnic backgrounds leads to the conclusions that the return of ethnic Estonians was preferred to the return of non-Estonians during the first years of Estonia's independence on both economic and political grounds. The political loyalty of non-Estonians was doubted in the administrative circles of Estonia which was especially the case with regard to the emigrants that had formerly belonged to the ruling power elites. The negative attitudes towards the return of non-Estonians were further aggravated by the crisis the Estonian economy was facing at that time. As a result, a parallel with the return migration policies of other new nation-states that emerged from the ruins of the Russian empire can be drawn.     

To reject or not to reject nationalism: debating Marx and Engels' struggles with nationalism, 1840s–1880s

The relationship between Marxism and nationalism has been tumultuous. While theoretically attempting to reject nationalism as a transient product of capitalism, Marxism has in practice oftentimes exploited its appeal and utilized its extensive institutional repertoire. To a large extent, the difficult dialogue between the two ideological constellations can be traced back to Karl Marx and Friedrich Engels who neglected to leave a definitive statement on the nationality question. The article traces the evolution of Marxism's conceptualization of the nationality question – a slow shift from an outright rejection of nationalism to an acceptance of its progressive features, complexity, varieties and influences. It re-evaluates Marx and Engels' views on the nationality question, from its outright denial to limited acceptance and application. After identifying factors that shaped their perception of the nationality question, the study offers an analysis of the evolution of these attitudes from the 1840s to the 1860s. The objective is to show how Marx and Engels' theoretical dogmatism was tainted by their desire for activism. Their views were not inflexible but rather evolved in response to changing circumstances in the mid 19th century.     

The political economy of global firms from India and China

This article attempts to build a bridge between contemporary studies of global firms from emerging economies and existing theories in comparative political economy. It argues that given the primacy of the state as an economic actor in developing countries, the variety of capitalism literature could provide a theoretical foundation for firm-level analyses of emerging market multinationals. For example, the authors suggest that China and India may be moving towards a ‘hybrid market economy’. They also offer a typology of Indian and Chinese corporates to demonstrate an empirical approach to analysing domestic business–government relationships and the ways in which these firms are shaped by the peculiarities of their respective institutional setting. Finally, they identify some of the likely pitfalls of doing cross-national comparisons of emerging market multinationals, particularly with respect to the reliability of corporate data.     

Democracy,property rights and economic growth

What does the global surge in democracy and capitalism portend for economic growth? The shift toward popular government is predicted by some to accelerate growth, by others to retard it. Often left out of the equation is property rights as a factor distinct from democratic rule. Using recent data on 59 less developed and transitional countries, this article explores the relationship among institutional factors and growth in the 1980s and early 1990s. Democratic freedoms and property rights are associated with the dependent variable, suggesting that national income in poor countries stands to gain from recent efforts to implant these institutions.     

Global Capitalism and the Transformation of State Socialism

The article outlines the footprint of international economic interests under state socialism, and considers in more detail the economic integration of the postcommunist countries into the world system in the post-1989 period of the building of capitalism. The focus of the article is on the extent of economic globalization of countries and their economic corporations. It is contended that the globalization of capitalist companies and the direct role of global economic forces had little importance under state socialism. Since 1989, policy in the former state socialist countries has been geared to “joining” the world system, optimistically its core. Important differences have developed between the postsocialist states with respect to economic penetration and exposure to the world market. The outcomes have not fulfilled the expectations of early advocates of transformation and entry to the world economy. Although the new member states of the European Union have entered the world economy as formal members of the “core,” they are not economically equal to the dominant “old” members of the EU. In all the postcommunist countries, there is an absence of large scale global companies, of comparable levels of innovation, research and development. Russia is a resources rich country, a “hybrid” social formation containing elements of state economic control, national capitalism, and global capitalism. I conclude that the semi periphery is not a transient category in the world economy; it has potential for persistence and renewal.     

The transnational state and the BRICS: a global capitalism perspective

It is commonplace for observers to see the increasingly prominent role of the BRICS in international economic and political affairs as a Southern challenge to global capitalism and the power of the core Trilateral nation-states. Extant accounts remain mired in a tenacious realist debate over the extent to which the BRICS are challenging the prevailing international order. I suggest that we shift the paradigmatic focus in discussion of the BRICS phenomenon towards a global capitalism perspective that breaks with such a nation-state/inter-state framework. Global integration and transnational capitalist class formation has advanced significantly in the BRICS. BRICS protagonism is aimed less at challenging the prevailing international order than at opening up space in the global system for more extensive integration and a less asymmetric global capitalism. The article examines agricultural subsidies, US–China relations and international trade agreements as empirical reference points in arguing that the concept of the transnational state provides a more satisfying explanatory framework for understanding the BRICS phenomenon than the variety of realist approaches. By misreading the BRICS critical scholars and the global left run the risk of becoming cheerleaders for repressive states and transnational capitalists in the South. We would be better off by a denouement of the BRICS states and siding with ‘BRICS from below’ struggles of popular and working class forces.     

Reference Group Perspective on State Behaviour: A Case Study of Estonia's Counterterrorism Policies

For over a decade Estonia has been untouched by terrorist violence. However, notwithstanding the lack of a viable terrorist threat, the Estonian government adopted extensive counterterrorism measures. What explains the scope of Estonia's counterterrorism measures? The main proposition of this article is that the content of states' counterterrorism policies is shaped by the types of responses adopted by their reference groups. The evidence examined in the study demonstrates that Estonia's primary reference groups, NATO and the EU, have influenced the republic's counterterrorism programme. An unattractive target to terrorists, Estonia adopted broad counterterrorism responses to defend indivisible Euro–Atlantic security and to protect democratic values that terrorists attempt to destroy.     

Persistence and renewal: the German Left Party's journey from outcast to opposition

This article examines electoral support for the German Left Party (Die Linke) at the 2013 Federal election. It focuses on two substantive issues. The first is that whilst studies have commonly linked the party's support to political culture, the party has modernised and it is unclear how this has influenced its support. The second is that the election was held amidst the fallout of the global financial crisis and thus enables us to test if the party benefitted from economic adversity. Using multivariate logistic regression models, these issues are investigated at the individual-level using data from the German Longitudinal Election Study. The results demonstrate that the party's support is steeped in political culture, but with important east–west variation. Further, there is no evidence that the party attracted support from economically anxious voters. These findings present a basis for broader reflections on the party's influence on the contemporary political landscape.     

How to Save Europe

The sovereign debt problem in Europe, ignited by Greece, has morphed into an economic crisis challenging the solvency of major banks and countries as well as a generalized crisis of governance. Lacking the legitimacy of public support, the leaders of the European Union's fledgling institutions have been indecisive and unable to contain the looming danger of financial contagion. Along with the economic slowdown in the United States, instability and volatility in Europe threaten to derail the fragile global recovery. In this section, several former European leaders as well as political figures from the emerging economies offer their ideas on how to fix Europe and stem the global threat.     

A Robust Vision of Europe

The sovereign debt problem in Europe, ignited by Greece, has morphed into an economic crisis challenging the solvency of major banks and countries as well as a generalized crisis of governance. Lacking the legitimacy of public support, the leaders of the European Union's fledgling institutions have been indecisive and unable to contain the looming danger of financial contagion. Along with the economic slowdown in the United States, instability and volatility in Europe threaten to derail the fragile global recovery. In this section, several former European leaders as well as political figures from the emerging economies offer their ideas on how to fix Europe and stem the global threat.