Response and responsibility: China in East Asian financial cooperation

Abstract

China's behaviour in East Asian financial cooperation has overall changed from passively responding to external pressures to taking proactive initiatives, which are highlighted by Chinese elites as evidence of a sense of responsibility. China has taken varied positions towards proposals for Asian financial regionalism, from ‘silent’ objection, to lukewarm or superficial support, to enthusiastic participation and substantial contribution, and this variance has not always taken place in a chronological order. Despite much speculation over the trajectory of China's role in East Asian regionalism, there has not been a study focused on China's policymaking towards East Asian financial cooperation. Therefore, this paper fills the gap by analysing the factors and policymaking processes that have led to those varied positions. It argues that China, recognising the momentum in the region to enhance cooperation, has replaced the blunt dismissals of proposals, particularly those from Japan, with a more subtle approach that is aimed at ensuring China's influence and promoting the image of a responsible great power; that the extent to which it can contribute to this process is mainly constrained by its economic conditions, particularly the financial institutions.     

Understanding Economic Development and Institutional Change: East Asian Development Model Reconsidered with Implications for China

This paper presents a coherent framework to characterize the dynamics of economic development and institutional change in the East Asian Development Model. In the early stage of development, due to market incompleteness, a government with high autonomy and capacity can promote economic development through interlinked and relational arrangements (e.g., industrial policy). In later stages, market completion will usually unravel interlinked and relational contracts, and lead to a rule-based society. The paper shows that the appropriate role of government and institutions are functions of the stage of development. In particular, relation-based governance is suited to investment-led development, while rule-based governance is suited to innovation-led development. The paper ends up with some implications for China’s development and institutional change.     

Introduction: making sense of Korean discourses and the East Asian regional order

This opening article presents rationales for the Special Section which analyses South Korea's debates and discourses on crucial issues related to East Asian regional politics. The article opens with a consideration of why attention is drawn to South Korea and particularly to its discourses. Expanding upon constructivist theoretical insights, this article shows how they matter in foreign policy-making and state behaviour. In addition, the article clarifies the scope of analysis of this Special Section. While recognising that many different actors and issues shape the regional order in East Asia to varying degrees, we hold that the most direct impact on changes and/or continuity in that order comes from state actors in the realm of security (or the security–economy nexus). The article ends on a cautiously optimistic note: although the perspectives and discourses analysed in this Special Section are not exhaustive, the analysis can serve as a useful reference point for discussion that seeks to advance our understandings of how South Korea is likely to behave toward its neighbours and what the future of the East Asian regional order will look like.     

Against the economic orthodoxy: on the making of the East Asian miracle

With an eye on the transition from socialism to capitalism in Central Europe and the decline of industrial economies such as Britain, the article contributes to the debate on the economic development of Japan and the newly industrialized countries of East Asia. It begins with a discussion of the reasons why accounts derived from neoclassical economic theory have dominated explanations of industrialization in the region. By reference to three recent books on the development of South Korea, Taiwan, Hong Kong and Singapore, the article proceeds to mount a critique of the economic orthodoxy, arguing for a central role to be accorded to state influence and direction over the economy. The article ends by suggesting that there are a number of elements in the East Asian model of development that could be creatively appropriated to inform strategies for economic rejuvenation elsewhere in the world.     

Nonprofit equity: a behavioral model and its policy implications.

This article assumes that nonprofit decisionmakers have an incentive to earn and accumulate surpluses, and it suggests six reasons for this being the case. Based on the assumption that both the program outputs and the equity of a nonprofit yield satisfaction to its decisionmakers, a behavioral model is developed. This is used to derive a demand function for equity, which is then applied to a national sample of 6168 charitable nonprofits drawn by the Internal Revenue Service for the 1985 taxable year. The results substantiate the hypothesis that nonprofit decisionmakers consciously plan to increase their organization's equity. Currently, evidence of continued equity buildup is not sufficient to call into question a nonprofit's exempt status, because federal tax laws assume that surplus accumulations will ultimately be used in support of program mission. However, equity accumulation can become excessive. We present several criteria to define excessive equity accumulation and discuss why large equity accumulations may not be in the best interest of society.     

Review Article: Don't Discard State Autonomy: Revisiting the East Asian Experience of Development

Rapid East Asian economic growth was commonly credited to the existence of strong, autonomous developmental states. Subsequently a new 'institutionalist' school of thought emerged which argued that an effective state must be connected to civil society, not autonomous from it, and which reinterpreted East Asian development in these terms. This paper is a critical reappraisal of the institutionalist school. The evidence of state autonomy (seen in relativistic rather than absolute, either-or terms) in East Asia's recent history is too great to be ignored. And since some institutionalists themselves acknowledge autonomy as a necessary foundation for developmentally effective relationships with civil society, we should recognize autonomy as a potentially important element of state capacity. State autonomy remains an important analytical concept that deserves the attention of scholars.     

Right target; wrong tactics: the trump administration upends East Asian order

President Donald Trump initiated a tariff war claiming that the ultimate target was mercantile Chinese economic practices. Numerous countries share such concerns about China. Yet the Trump administration’s approach is wrong for at least three big reasons. First, tariffs avoid addressing the most fundamental complaints about China while they undermine the longstanding and beneficial global liberal trade order. Second, the U.S. approach has been unilateral rather than multilateral, weakening America’s bargaining position while alienating close allies. Third, the Trump administration escalates what is an economic challenge into an existential threat, ignoring numerous benefits from Chinese policies as well as ignoring multiple areas where China has been a powerful global partner. Middle powers in Asia have acted collectively and individually to bolster the global trading system and avoid the worst consequences of the Trump actions while seeking to avoid making permanent binary choices between the United States and China. Beyond the immediate problems, the Trump tariff wars are creating, they also generate damaging second order effects that are undermining domestic and regional policies conducive to enhanced American strengths and an economically less mercantilist China.     

The limits of economic globalization in East Asian developmental states

Abstract

In an attempt to adjust to economic globalization or internationalization, East Asian developmental states have liberalized their domestic economic systems, accelerating the introduction of the free‐market ideology. Despite their plan to establish the internationally compatible open‐market economy, however, the extent to which they can advance economic liberalization is limited. Political and economic burdens that the developmental state's extensive intervention in the market has incurred in the course of state‐led mercantile economic development, make it impossible for those states to execute full‐scale economic liberalization. The South Korean case clearly shows this. The Korean developmental state retains two major economic burdens: the exclusive ownership and the poor financial structure of the chaebôl. Insofar as Korean big business preserves those weak spots, the government cannot surrender the power of regulation despite its spontaneous implementation of the economic liberalization policy. In addition, the common ‘egoistic’ interests which government bureaucrats and the political class share also limit the degree to which economic liberalization policy can be implemented. The degree of state intervention in the market in Korea has been deeper than that in Japan which pioneered Asian developmental statism, and, thus, the political and economic burdens it has incurred for itself are heavier. Consequently, the East Asian developmental state cannot entirely withdraw its intervention in the market. The ‘support’ of industries is likely to diminish, but ‘regulation’ for the formation of the autonomous market will increase. For the Korean developmental state, globalization and economic liberalization are political economic slogans to re‐launch economic growth and to elevate the international economic competitiveness of industries under the initiative of the state, and motivated by nationalistic reasons. Hence, the role of the state in the market is still far from becoming redundant even in the tide of globalization and economic liberalization in the case of South Korea, where the legacy of strong developmental statism remains considerable.     

Subregional economic zones,politics and development: The Philippine involvement in the East ASEAN Growth Area (EAGA)

In Southeast and East Asia there has been a recent trend towards setting up subregional economic zones often known as ‘growth triangles’. This article examines the concept of subregional economic zones and then focuses on the history of the recently established East ASEAN Growth Area (EAGA) locating it in the wider Philippine policy context. The article also assesses the likely contribution of EAGA to Mindanao's future development, paying particular attention to the political issues which could impinge on the attainment of economic prosperity.     

Explaining success in South Asian rural development: The importance of routine

The article compares the Training and Visit System of Agricultural Extension in India with the Anand-type dairy cooperatives (India) and the Grameen Bank (Bangladesh) to explain the reasons for their success. In attempting an explanation of such microsuccess in an environment of macrofailure, the article lays emphasis on tailoring the programmes to the needs and social capabilities of the rural people. The services offered are perfected to a routine, thus encouraging the recipients of the services to respond on a regular and systematic basis. The recipients of these programmes see success in terms of increased benefits, greater participation and ultimately increased incomes. Their success has led to their widespread adoption elsewhere in the Third World.     

Executive control of bureaucracy and presidential cabinet appointments in East Asian democracies

This article examines the role of cabinet appointments in controlling the bureaucracy in presidential democracies. I demonstrate how administrative challenges stemming from the structure of the bureaucracy shape presidential choice of ministers. Analyzing a sample of four East Asian cases from 1986 through 2013, I find that presidents are more likely to select ministers from the civil service as bureaucracies are more professionalized, controlling for several political factors. Further evidence from qualitative interviews and case studies suggests that, in professionalized systems equipped with a sizable pool of talent but lacking responsiveness, presidents tend to promote ideologically aligned senior civil servants. However, in politicized systems, where presidents easily obtain responsiveness but face a low level of competence, policy experts tend to be selected from outside the bureaucracy. My findings have important implications for the regulatory governance and state capacity of East Asia, demonstrating the value of balancing between responsiveness and competence.     

South Korea and Sino-Japanese rivalry: a middle power's options within the East Asian core triangle

Abstract

South Korea is a middle power in a region where its scope of action can rise and fall quickly and diplomatic flexibility is needed. Neither realist responses to threats nor idealist trust in integration meet its needs for adjusting triangular ties with China and Japan, as their relations become the principal great power divide in Northeast Asia. Its optimal choice is as a facilitator biding its time when tensions over both security and national identity clashes are intense, while preparing for opportunities. Four conditions would give it a favorable environment: forward-looking foreign leadership; security challenges brought under some control; subsiding preoccupation with national identities; and its own strategic planning with care not to overreach. Multiple possibilities emerge if it can rebuild ties with Japan as part of a triangle with China as well as one with the United States and also synchronize ties with China to other ties. Even amidst recurrent tensions, the core East Asian triangle offers Seoul a chance to take advantage of changing dynamics in the world's most ascendant region.     

End user computing in Asian countries: Policy lessons for development administration

End user computing requires policy initiatives very different from those needed for computerization in order to deal with the specific issues of initiation, development and institutionalization. Microcomputers provide a service and not goods or savings and require an emphasis on the dynamics of the system, where both strategic issues and operational priorities have to be set. The process is organizational, rather than a technological or a planning exercise. It requires governments to guide the change through deliberate decision making. The objective has to be to obtain the support of users at different levels. In this paper Asian experiences are compared with Western experiences to determine a framework for looking at the process. The limited set of strategies for success have also been identified.     

Japan's leadership role in East Asian security multilateralism: the Nakayama proposal and the logic of reassurance

Abstract

United States’ foreign policy towards the Asia-Pacific region is set to be fundamentally altered by two developments in Washington's defence policy. The first is the so-called pivot towards the region in terms of overall defence strategy. The second, occurring at roughly the same time, is a move towards a far greater role for advanced conventional weaponry in the US defence posture. We analyse the interaction of these two trends and discusses a central tension between short and long-term challenges, suggesting that, contrary to current developments, either a freeze in the deployment of these weapons programmes or a return to a strategy underpinned by traditional notions of deterrence may well be necessary.     

Huang Chin-Hao and David C. Kang,State Formation through Emulation: The East Asian Model

Journal of Chinese Political Science -     

North Korea and the East Asian Security order: competing views on what South Korea ought to do

This article investigates South Korean views on how to deal with the two major security issues regarding North Korea: its nuclear threat and regime instability. In this Special Section, the article analyzes the ongoing debate in South Korea over the government's policy toward North Korea in regard to these two issues. It argues that uncertainties about these two major issues are shaping the regional order in East Asia. In particular, the different levels of cooperation between South Korea and the United States may affect the regional security order in East Asia. In analyzing policy options available to South Korea, the riskiest option would be to employ early preemptive attacks and accelerate the collapse of North Korea given the security dilemma-driven action?reaction in East Asia. Given that the role of China has become the most crucial factor in dealing with North Korea, the most promising strategy would be to reinforce guarantees of extended nuclear deterrence and prompt a soft-landing unification.     

Maximizing social equity as a pillar of public administration: An examination of cannabis dispensary licensing in Pennsylvania

Public administration upholds four pillars of an administrative practice: economy, efficiency, effectiveness, and social equity. The question arises, however, how do administrators balance effectiveness and social equity when implementing policy? Can the values contributing to administrative decisions be measured? This study leverages the expansion of medical cannabis programs in the states to interrogate these questions. The awarding of dispensary licenses in Pennsylvania affords the ability to determine the effect of social equity scoring on license award decisions, relative to criteria that represent the other pillars. The results show that safety and business acumen were the most important determining factors in the awarding of licenses, both effectiveness concerns. Social equity does not emerge as a significant determinant until the second round of licensing. This study then discusses the future of social equity provisions for cannabis policy, as well as what the findings mean for social equity in public administration.     

Executive capacity to control legislatures and presidential choice of cabinet ministers in East Asian democracies

How do presidents in new democracies choose cabinet ministers to accomplish their policy goals? Contrary to existing studies explaining the partisan composition of the cabinet with institutional characteristics, such as formal authority, we argue that the broader political context surrounding the president's ability to control the legislature can affect cabinet partisanship. By analyzing original data on cabinet formation in all presidential systems in East Asia since democratization, we find that when presidents are more likely to be dominant in executive–legislative relations, they have less concern about legislative support and more leeway to focus on policy performance by appointing nonpartisan cabinet members. This analysis suggests that understanding cabinet partisanship requires a view of cabinet appointments as a trade‐off between securing legislative support and managing policy performance, and the scope of this compromise depends on the strength of the president vis‐à‐vis the legislature.