Crisis management and the diversity of capitalism: fiscal stimulus packages and the East Asian (neo-)developmental state

Abstract

This paper contributes to the understanding of East Asian capitalism by investigating the political economy of crisis management in Japan, Korea and China during the global economic crisis. Reacting to the global shock of the economic crisis that began in 2008, East Asian capitalism has remained a distinct state-led model that differs substantially from the liberal, neo-corporatist or welfare state varieties of capitalism in the West. More specifically, this paper studies the fiscal stimulus packages implemented by East Asian countries to address the global financial crisis from 2008 to 2010. We find that East Asian fiscal stimulus packages were comparatively large and supply-side-oriented. Unlike in the West, where a (short-lived) revival of demand-side-oriented Keynesian strategies stimulating consumption could be observed, East Asian countries reinforced industrial policies and supported investment and international competitiveness. We argue that the East Asian variety of crisis management can largely be explained by a path-dependent transformation of the East Asian developmental state into a neo-developmental competition state.     

The new Korean political economy: beyond the models of capitalism debate

Abstract

A key theme within the literature on the evolution of the Korean political economy since the 1997/8 crisis has been the extent to which Korea remains a ‘developmental state’ or has pursued radical neoliberal reform. These debates have not only reflected a concern with understanding the Korean economy but with a wider set of questions relating to the future of capitalist diversity within a globalized economy. By the late 1980s Korea had come to be regarded as a model of successful state-led late capitalist development. Korean modern economic history has insured that questions relating to the extent that it has pursued neoliberal reform have been of keen interest to students of political economy globally. This paper argues that substantive neoliberal reform has taken place in Korea since 1997. The thesis that a new ‘developmental state’ is in process of consolidating itself is simply wrong. However, the state's reform program interacted with material conditions and political coalitions at the meso level in a complex and uneven manner. In certain critical sectors, such as finance, a neoliberal regulatory regime has been consolidated. In others, such as telecommunications, developmentalist regulatory structures have proven to be highly resilient. In order to fully understand the complexity of the contemporary Korean political economy it is necessary, therefore, to prioritize the importance of meso-level analysis.     

Power transitions and the rise of the regulatory state: Global market governance in flux

This special issue examines the consequences of the ongoing power transition in the world economy for global regulatory regimes, especially the variation in rising powers' transition from rule-takers to rule-makers in global markets. This introductory article presents the analytical framework for better understanding those consequences, the Power Transition Theory of Global Economic Governance (PTT-GEG), which extends the scope of traditional power transition theory to conflict and cooperation in the international political economy and global regulatory governance. PTT-GEG emphasizes variation in the institutional strength of the regulatory state as the key conduit through which the growing market size of the emergent economies gives their governments leverage in global regulatory regimes. Whether or not a particular rising power, for a particular regulatory issue, invests its resources in building a strong regulatory state, however, is a political choice, requiring an analysis of the interplay of domestic and international politics that fuels or inhibits the creation of regulatory capacity and capability. PTT-GEG further emphasizes variation in the extent to which rising powers' substantive, policy-specific preferences diverge from the established powers' preferences as enshrined in the regulatory status quo. Divergence should not be assumed as given. Distinct combinations of these two variables yield, for each regulatory regime, distinct theoretical expectations about how the power transition in the world economy will affect global economic governance, helping us identify the conditions under which rule-takers will become regime-transforming rule-makers, regime-undermining rule-breakers, resentful rule-fakers, or regime-strengthening rule-promoters, as well as the conditions under which they remain weakly regime-supporting rule-takers.     

China,the United States,and order transition in East Asia: An economy-security Nexus approach

A dualistic-order thesis has been emerged as a widely-used concept to describe East Asia’s regional dynamics. According to the thesis, the economic and security spheres of the region have become divorced from one other, whereby China and the United States dominate the economic and security realms, respectively. This paper demonstrates the deficiencies of this thesis, based on a comprehensive assessment of the economic and security developments in the region, as well as the strategic choices of small and middle regional powers. In order to form a more accurate and systematic understanding of regional prosperity and stability, this paper develops an economy-security nexus approach by integrating the interactions of regional actors in both the economic and security realms into a unified framework. From this perspective, East Asian regional order is sustained by a delicate coupling of regional economic and security configurations: ‘hot economics’ is accompanied with cooperative security interactions. Although China and the United States are not the dominant actors in either field, their relatively benign interactions in both realms collectively play a significant role by shaping the strategic environment for regional actors, allowing them to enjoy a large degree of strategic flexibility and increase their security and prosperity.     

International marriage in East and Southeast Asia: trends and research emphases

This paper gives an overview on international marriage in East and Southeast Asia. It first reviews the available data on the incidence and trends of transnational marriage. It then discusses the factors generally cited as contributing to the rising incidence of international marriage in the region: the increased mobility of population, particularly with respect to tourism, business travel, short-term employment and international study; and marriage market issues in a number of countries of the region, leading to deliberate and targeted search for spouses in other countries. It also reviews the types of international marriages in the region, including the national, ethnic and social characteristics of spouses in such marriages. Finally, it discusses the issues and problems covered and not (or inadequately) covered in the literature of international marriage in East and Southeast Asia in relation to the questions of rights and of the boundaries and sovereignty of the state.     

In defence of FTAs: from purity to pragmatism in East Asia

This paper discusses the shift in East Asia from a focus on multilateral trade liberalization through the WTO to a pragmatic approach since 1999 favouring bilateral and regional FTAs while continuing to support the WTO system. It is argued that such FTAs are a second-best option compared to WTO agreements. However, while economists may seek the ideal solution, governments will focus on the politically attainable, especially as new multilateral agreements require lengthy negotiations beyond the life span of governments. As the WTO negotiating process has become bogged down, even once sceptical governments in East Asia are turning to FTAs. It is contended that such FTAs could form a lattice network within and across regions. In this context, the paper discusses the underlying security rationale for the conclusion of FTAs, highlighting the nexus between security interests and international economic policy in East Asia.     

Institutional competitiveness in the global economy: Denmark,the United States,and the varieties of capitalism

Despite high taxes, a large welfare state, and much economic regulation, Denmark competes successfully against other advanced capitalist economies. Denmark’s success is based in large part on its institutional competitiveness – its capacity to achieve socioeconomic success as a result of the competitive advantages that firms derive from operating within a particular set of institutions. The institutional basis for successfully coordinating labor markets and vocational training programs are examined for Denmark and the US – two countries that were very different institutionally but very successful in the 1990s and in the 2000s. We show that there is no one best way to achieve success in today’s global economy, except with respect to social inequality; that the mechanisms underlying institutional competitiveness are more complex than often recognized; that institutional hybrids can be as successful as purer political economic cases; and that high taxes and state spending can enhance socioeconomic performance. As such, this paper challenges both neoliberalism and the varieties of capitalism school of comparative political economy.     

Editorial introduction: international marriage,rights and the state in East and Southeast Asia

The dramatic increase in intra-Asia cross-nationality marriage is a distinct, yet relatively under-researched, aspect of globalization and regionalization. Most existing research focuses on individual experiences of international marriage, but articles in this issue are intended to examine the politics of legal recognition: namely, how states categorize, legitimate and de-legitimate various intimacies, and how gender, religion, nationality and class play their roles in this process. More specifically, the articles address the following four themes: (1) the links between the institutionalization of marriage and ideologies of family in the process of nation-building; (2) the coexistence and conflicts between different legal systems vis-à-vis marriage and the related social implications; (3) gender and its implications for access to citizenship; and (4) recent policy changes in nationality laws and the reconstruction of ‘national identities’ in the transnational context. Thus, collectively this volume deepens our understanding of citizenship issues in East and Southeast Asia by teasing out how, in the case of foreign spouses, membership of a nation is determined legally, politically, culturally and socially.     

Choosing the path of austerity: how parties and policy coalitions influence welfare state retrenchment in periods of fiscal consolidation

What are the conditions under which some austerity programmes rely on substantial cuts to social spending? More specifically, do the partisan complexion and the type of government condition the extent to which austerity policies imply welfare state retrenchment? This article demonstrates that large budget consolidations tend to be associated with welfare state retrenchment. The findings support a partisan and a politico-institutionalist argument: (i) in periods of fiscal consolidation, welfare state retrenchment tends to be more pronounced under left-wing governments; (ii) since welfare state retrenchment is electorally and politically risky, it also tends to be more pronounced when pursued by a broad pro-reform coalition government. Therefore, the article shows that during budget consolidations implemented by left-wing broad coalition governments, welfare state retrenchment is greatest. Using long-run multipliers from autoregressive distributed lag models on 17 OECD countries during the 1982–2009 period, substantial support is found for these expectations.     

Southeast Asia in the study of international relations: The rise and decline of a region

Three features stand out from the literature on Southeast Asia's international relations, written over the last fifty years: the dominance of extra‐regional scholarship; an overwhelming emphasis on regional security, and a related preponderance of realist perspectives; and the appearance, consolidation, and ebbing of the perceived utility of Southeast Asia as a useful analytical region. During the 1990s, there has been a questioning of the realist assumptions which have underlain international relations writing on the region, and there has been increased emphasis on economic issues. Southeast Asians are making an increasingly important contribution to the study of their own region's international relations, though mainly in terms of policy‐oriented research. The most important recent development has been the questioning of Southeast Asia's usefulness as an analytical region, in view of the growing intensity of economic and security relations between Northeast and Southeast Asia.     

Security architecture in Asia: the interplay of regional and global levels

I argue that there is a distinct and longstanding regional structure in East Asia that is of at least equal importance to the global level in shaping the region's security dynamics. Without considering this regional level neither ‘unipolar’ nor ‘multipolar’ designations can explain East Asian international security. To make this case, I deploy regional security complex theory both to characterize and explain developments in East Asia since the end of the Cold War. The shift from bipolarity to unipolarity is well understood in thinking about how the ending of the Cold War impacted on East Asia. Less written about in Western security literature are the parallel developments at the regional level. Prominent among these are the relative empowerment of China in relation to its neighbours, and the effect of this, as well as of the growth of regional institutions, and the attachment of security significance to East Asian economic developments, in merging the security dynamics of Northeast and Southeast Asia. How China relates to its East Asian region, and how the US and China relate to each other, are deeply intertwined issues which centrally affect not only the future of East Asian, but also global, security. With the notable exception of some crisis between China and Taiwan, this whole pattern looks mainly dependent on internal developments within China and the US. Also significant is whether the basic dynamic of interstate relations in East Asia is more defined by the Westphalian principle of balancing, or by the bandwagoning imperative more characteristic of suzerain-vassal relationships. The main probability is for more of the same, with East Asian security staying within a fairly narrow band between mild conflict formation and a rather odd and weak sort of security regime in which an outside power, the US, plays the key role.     

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.     

Political parties and public investments: a comparative analysis of 22 Western democracies

When do political parties push for public investments in education, research, and infrastructure? Existing literature has mainly answered this question by pointing to parties’ state?market ideology. In contrast, this article presents a novel argument highlighting the role of parties’ aspirations to office and their ambitions to maximize votes. It builds on the idea that investments not only constitute redistributive tools for politicians, but also work as public means to foster economic growth in the long run. This unique feature makes investments attractive for parties with high office and vote aspirations, because they anticipate government responsibility in the future and can use investments’ dispersed growth effects to appeal broadly to a large, heterogeneous pool of voters. Support for this claim is found through time-series cross-sectional analyses of party manifestos from 22 Western democracies between 1947 and 2013. Results also indicate that parties’ positions on the second social value dimension matter.     

A history of sex and the state in Southeast Asia: class,intimacy and invisibility

This essay offers a history of international marriages that questions the definition of marriage and what it meant to belong, as a legal subject or citizen, to a colonial state in Southeast Asia. European imperial states deployed monogamous marriage alongside other weapons of empire as a justification for intervention into Southeast Asian societies. With monogamous marriage came also European notions of belonging that traced surnames and legal subject status (later citizenship) via husbands and fathers. The ramifications for individuals in international marriages between Asian women and European men are well known. However, the vast majority of ‘international marriages’ were not those between colonial Europeans and Southeast Asian women, but between Southeast Asian women and lower class Asian men from India and China. Colonial states ignored or failed to register these lower class intra-Asian intimacies because their unions did not threaten colonial rule so long as they ensured a continuous pool of labor and promoted the colonial economy. Unlike recent theories which argue for an omniscient state that penetrates into the personal lives of its populations, this essay maintains that states intensely regulated marriage and belonging for some subjects but not for others. This longstanding unevenness in the management of intimate unions provides a historical context for understanding shifts in the marital regimes of contemporary postcolonial states. Taking a long-term view, the essay asks if recent increases in international marriages might be better understood as spikes rather than as absolute increases resulting from ‘globalization’. A historical framework ties the rise and fall of international marriage to early modern trade patterns, imperialism's labor requirements, war, and the recent demand for labor that has arisen from low birth rates and economic changes. Each of these ‘events’ entailed a large-scale movement of populations which resulted in the development of intimate unions.     

Mediating between state and citizens: the significance of the informal politics of third-party representation in the global south

This article argues that we should take more seriously the role of intermediaries in relationships between states and citizens in the global south. More specifically it holds that the practice of mediation, the third party representation of citizens to states and vice versa, is a widespread and important political practice in this context. Largely distinct from the contentious politics and popular mobilisation of social movements, mediation is more a politics of negotiation and bargaining by representatives. Developed as an emergent analysis from multiple case studies, mediation is a broad concept that includes practices that at other times might be described as lobbying, clientelism and coercion, but that we conceptualise in terms of claiming legitimacy to speak for the poor and marginalised, and theorise in terms of a democratic deficit between formal political institutions and these groups. In addition to identifying different kinds of mediators, the article categorises mediation in terms of the orientation and nature of various mediatory practices. Lastly, the article identifies at least three explanations for mediation including the endurance of pre-democratic political relations and practices, new forms of social exclusion in post-colonial democracies and the erosion of state authority brought about by neo-liberal policies and globalisation.     

How domestic contexts shape international private governance: The case of the European Accord and American Alliance in Bangladesh

The international nature of supply chains has led to the rise of private authority in regulating the environmental and social impacts of production, which companies frequently address through corporate social responsibility (CSR) in the form of private governance (PG). Despite its claim to establish “global” rules, PG usually has national origins, and multiple efforts to address the same issue from different national perspectives frequently coexist. Numerous studies have explored the impact of national business systems on companies' domestic CSR practices, yet little is known about what factors shape CSR practices like PG internationally. Therefore, this study seeks to understand how differing domestic contexts shape approaches to CSR in the form of PG in host countries. I explore this empirically through the comparative case study of competing PG initiatives in the post-Rana Plaza Bangladesh garment industry, uniquely conceived to govern companies' practices rather than certify products. It combines empirical findings with the comparative CSR literature to hypothesize about ideal types of PG organizing in US and European contexts. It extends the analysis to also account for other influential factors, such as stakeholder pressure, thus demonstrating how institutional and agentic factors amalgamate to shape firms' choices. By explicating linkages between international PG and its domestic context, as well as between the comparative CSR and PG literature studies, this study extends our understanding of how and why international PG practices and preferences vary for firms originating from different environments.     

学科视野中的历史政治学:以历史社会学、政治史、比较政治学为参照

历史政治学是中国学者提出的研究政治学之全新范式,但当然不是从零开始,而有众多可资利用之知识资源,本文探讨其与历史政治学之关系。历史政治学与历史社会学均致力于带回历史、带回国家,并共享众多方法;但后者有西方中心论偏见,奉行价值无涉原则,止于理解或解释;历史政治学则破除西方中心论,公正对待中国等非西方国家、文明丰富的政治实践,且有明确价值追求,致力于从历史中探究善治之道。历史政治学呼吁历史学再度重视政治史,并使之有政治学想象力。历史政治学可为比较政治学带入大历史视野,以矫正其以西式政治制度为标准的偏失。     

Private association and public brand: the dualistic conception of political parties in the common law world

This paper examines the legal conception of political parties. It does so by unearthing the history and ontology of the common law relating to political parties in international perspective. The flexibility of the unincorporated association, in which parties are understood through the private law of contract as networks of internal rules or agreements, rather than as legal entities, has proven to be a mask. In the common law’s imagination, the ideal party is a ground-up organization animated by its membership. But the law mandates no such thing, and in its statutory and constitutional conception intra-party democracy may be sublimated as parties need be no more than an electoral persona or brand.     

Political support among winners and losers: Within- and between-country effects of structure,process and performance in Europe

Why is the winner-loser gap in political support wider in some countries and narrower in others? Previous studies have focused on how the input side of political systems (i.e., the institutional structure) affects the winner-loser gap. This study suggests that one should also consider the output side (i.e., the quality of political process and economic performance) and posits that two mechanisms – rational and psychological – can explain how output factors affect the gap. Going beyond previous research, this article also considers whether contextual characteristics explain the variation in the gap not only between countries, but also within them. Applying mixed models to survey data from 30 European countries between 2002 and 2015, the study finds that the differences in support between winners and losers across countries are smaller in consensual systems, as in these contexts the support among losers is higher. However, changes in the institutional structure do not explain the over-time variation in the winner-loser gap. Moreover, increasing quality of process and economic performance do not attenuate the gap across countries and over time, as they affect positively the political support of both winners and losers. The study shows which contextual factors explain the winner-loser gap and points to the conditions that increase losers’ consent, which is a crucial element of democratic legitimacy.     

Civil Society after Democracy: The Evolution of Civic Activism in South Africa and Korea

The phase of democratic consolidation can significantly impact the motives, dynamics and objectives of civil society. Its internal roles, dynamics and power balances are significantly altered by the advent of democracy, due to shifting resources, political opportunities and a general reframing of goals and objectives. By adopting a definition of civil society as an ‘arena’ (which highlights the continuously evolving composition and leadership of civil society) and borrowing a number of theoretical dimensions from social movement theory (which underline the importance of resource mobilization, political opportunities and conceptual framing processes), the article shows that the advent of democracy has posed a number of challenges to civil society organizations in Korea and South Africa. Moreover, the consolidation of democracy has inevitably changed the nature of government–civil society relations. While in South Africa institutional politics reasserted itself in the first years of democracy, thereby sidelining organizations and movements concerned with public accountability and good governance (which have only recently resurfaced through the action of new social movements), in Korea corruption and lack of transparency immediately marred the dawn of democracy, providing civic movements with a fertile terrain to galvanize civic mobilizations vis-à-vis the lack of responsiveness of the political class.