Governed interdependence: Rethinking the government‐business relationship in East Asia

Analyses of East Asia's high‐performance economies have highlighted the advantages of a coordinated approach to market failures. With states dominating the process, both public and private agencies are increasingly involved. The recent literature sees public‐private cooperation as a limit to state capacity and thus a challenge to statism. Within an institutionalist framework, this paper proposes a fresh view of the government‐business relationship which avoids the statist premise of domination, but without relying on ‘weak state’ arguments. Through an examination of key organizational features of state and industry in Korea, Taiwan, and Japan, the paper proposes a theory of ‘governed interdependence’ in which both state and capital are taken seriously; where both strong state and strong industry go hand‐in‐hand; and where the capacities of both are mutually enhanced. The article identifies four principal types of government‐industry cooperation in the East Asian experience — some apparently ‘state‐led’, others apparently ‘business‐led’ — all of which can be accommodated by the theory.     

Developmental states in transition: adapting,dismantling, innovating,not ‘normalizing’

Abstract

In recent years, there has been an increasingly vigorous debate by a wide range of participants over the past, present and future of Japanese security and the national defence policy. Ever since the end of the Cold War, international relations theorists have cast their gaze to Japan, and have been given to re-examining ‘comprehensive security’ with a particular eye for the meaning of ‘security’. The 1990s were a particularly interesting time for this scholarly revisionism, while events of September 2001 have cast an entirely different spectre on the nature and expectations of Japanese security, both domestically and internationally. This article is particularly concerned with the developments in the 1990s as scholars sought to reassert the ‘defence’ component of the comprehensive security policy hitherto pursued by Japan. This re-examination has elevated former Japanese Defence Agency (JDA) bureaucrat Kubo Takuya as the key architect in crafting Japan's security policy. Tsuyoshi Kawasaki's contributions to the debate are especially interesting on this point. He rightly challenges the short-comings of the so-called ‘domestic-constructivists’, especially Berger and Katzenstein. However, in attempting to demolish their cases for ‘selective biases’ he then proceeds to selectively argue a similarly biased case in asserting the superiority of yet another derivation of the realist cause – ‘postclassical realism’. His key premises are based on his interpretations of the architect of Japan's National Defence Program Outline, Kubo, and in doing so ‘proves’ the military aspect of Japan's security policy and its ‘inherent superiority’ as an explanatory framework. Equally, one can mount a case for the ‘comprehensive security’ proponents by citing the work and presence of the late Okita Saburo in his contributions to understanding post-war security policy. This article will demonstrate a similar argument to that of Kawasaki's based on an analogous analytical framework which grounds Japanese security consciousness in a deeper historical context. It is part of a larger project which seeks to give empirical substance to constructivist interpretations of Japanese security.     

Book reviews

This article addresses the concern that democratization may contribute to the reproduction of neo-patrimonialism, rather than to counteract it. The article reports the result of a survey among members of parliament in Ghana regarding their election campaigns. Total spending, sources of funds, and their usage are analysed in the context of the consolidation of liberal democracy. The survey results are supplemented with data collected in 34 interviews with MPs. The data show that MPs are involved in patron-client relationships to a significant degree to reproduce their political power. Furthermore, the prevalence of patronage politics among MPs in Ghana has increased throughout the period of democratic rule. This persistent pattern of patronage politics threatens the very heart of democratic consolidation. Vertical accountability and legitimacy is threatened by alternative pacts of loyalty, expectations of corruption, and tendencies to delegative mandates. Horizontal accountability risks pervasion by 'big man' interventions, and by insufficient allocation of time to monitoring the government and legislative activities.     

Trust,regulation, and market efficiency

Building from the interest-group theory of regulation, we posit that trust alters the payoff from regulatory rent-seeking relative to profit-seeking. Trust reduces the costs of productive economic exchange by lowering transaction costs, thus raising the cost of rent-seeking behavior. In addition, trust increases political accountability, discouraging politicians from creating regulatory rents. We therefore hypothesize that trust reduces the extent of business regulation while simultaneously facilitating market efficiency. To test that hypothesis, we construct an overall business regulation index measuring procedures, time, and cost along eight dimensions of doing business in a country. The empirical results reveal that trust negatively relates to business regulation but positively relates to market efficiency. Interaction and split-sample results further indicate that trust and business regulation are substitutes. Collectively, the findings reported herein suggest that business regulation itself is not the root cause of market inefficiency, but rather lack of trust is the dominant factor.

     

Market Orientation and Public Service Performance: New Public Management Gone Mad?

The backbone of theory of the market‐based approach New Public Management is that market orientation improves public service performance. In this article, market orientation is operationalized through the dominant theoretical framework in the business literature: competitor orientation, customer orientation, and interfunctional coordination. Market orientation is examined from the vantage point of three stakeholder groups in English local government: citizens, public servants, and the central government’s agent, the Audit Commission. Findings show that market orientation works best for enhancing citizen satisfaction with local services, but its impacts on the performance judgments of local managers or the Audit Commission are negligible. The conclusion discusses important implications of these findings for research, policy, and practice.