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This paper introduces the special collection on East Asia and the global crisis. After justifying why a focus on East Asia is appropriate, it draws out the main themes that run through the individual contributions. These are the extent to which the region is decoupling from the global economy (or the West), the increasing legitimacy of statist alternatives to neoliberal development strategies, and the impact of crises on the definition of 'region' and the functioning of regional institutions and governance mechanisms. [ABSTRACT FROM AUTHOR]

This paper assesses the relative merits and demerits of different East Asian models by placing them in a historical perspective. It re-interprets Gerschenkron's model of late industrialization, and extends it to compare East Asian economies in view of substituting and complementing models, ft then explains divergent performances among East Asian economics from the late 1990s by examining the different Challenges they faced as their economies became mature and more fully open to forces of globalization. fn conclusion, the paper discusses the applicability of the East Asian models for today's developing countries. [ABSTRACT FROM AUTHOR]

Editorial. Introduces the articles published in the March 2000 special issue of 'The Journal of International Trade and Economic Development' focusing on East Asian experience in economic development and transformation. Issue of growth with openness; Relations of exchange rates, trade flows and capital accounts; Miracle of growth in Thailand.

This paper examines effects of exchange rate changes on technology-intensive exports for five Northeast Asian economies: China, Hong Kong, Japan, Republic of Korea (ROK) and Taiwan. In these economies, China, Hong Kong and Taiwan have increased the shares of high-skill and technology-intensive exports (usually finished goods) while Japan has highly concentrated on medium-skill and technology-intensive exports (mainly intermediate goods). ROK has shifted its exports from finished to intermediate goods following Japan. Panel dynamic Ordinary Least Squares (OLS) with heterogeneous time trends was applied to trade data during the period 1995–2011. Our estimation results revealed that exports with high skill and technology intensity are more sensitive to real exchange rates in China and Taiwan, while exports with medium skill and technology intensity are very sensitive to exchange rate changes except for China. These results are consistent with the current roles of those economies in the regional production networks. [ABSTRACT FROM PUBLISHER]

This paper argues that to understand the relevance of developmental states in East Asia and elsewhere, we need to focus on the changing development agenda in the early twenty-first century, especially how this connects with the global challenge of climate change and thereby sustainable, low-carbon development. It combines theories on state capacity and ecological modernisation to form the 'new developmentalism' concept. This is applied to study revitalised and refocused forms of state capacity aimed at realising the transformative economic objectives associated with sustainable development. New developmentalism helps us understand not only current state capacity practice in a climate challenged world but also how we have moved beyond original conceptions of developmental statism. It may be understood in the wider context of the sustainable development agenda and climate interventionism. As is argued, new developmentalism is most clearly evident in East Asia but can be applied in a wider geographic sense where strong forms of developmental state capacity are exercised towards meeting transformative sustainable development goals. [ABSTRACT FROM AUTHOR]

This paper estimates the economic impacts of the various sequential liberalization scenarios in East Asia, emphasizing the significance of the 'sequence' of the liberalization process in computable general equilibrium (CGE) analysis. The major findings are as follows: (1) 'Sequence' matters in measuring the economic impacts of free trade agreement (FTA) scenarios in the region; (2) Scenario 1 (Korea-China FTA → Korea-Japan FTA → China-Japan FTA) is the sequence maximizing Korea's economic gains, whereas Scenario 3 (Korea-China-Japan FTA) is the one most preferred economically by China and Japan; (3) Korea's FTAs with the United States (US) and European Union (EU) can be evaluated as a preemptive strategic move, causing changes in FTA preferences of Korea and Japan; (4) the prediction of Bond and Baldwin (adjustment cost and juggernaut effect) and that of Evenett et al. (trade diversion effect) are supported by the empirical results that Korea's (China's) expected gains from northeast Asian FTA sequences increase (decrease) after Korea's FTAs with the US and EU are made; (5) predictions about the International Political Economy (IPE) theories (power consideration and domestic politics) upon the sequential FTA formations in East Asia are consistent with the findings above. [ABSTRACT FROM AUTHOR]

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. [ABSTRACT FROM AUTHOR]

This paper discusses major conceptual and empirical issues relevant to the exchange rate policies of East Asian ecnomies. Given the high degree of economic integration, intraregional exchange rate stability remains an important objective in East Asia. But the current uncoordinated practice of each economy managing exchange rates or maintainging a de facto dollar peg is not optimal for this purpose. The paper suggests that the region's governments take a coordinated action to shift the anchor of nominal exchange rate policy from the US dollar alone to a common basket of the US dollar, The Japanese yen, and the Euro, Which would be more reflective of the average structure of foreign trade and direct investment. At least initially, each economy is gree to choose its own formal exchange rate arrangement, be it a fixed exchange rate regime, a crawling peg or a managed float with wide margins, as long as it chooses the common basket as the reference. Such an arrangement is a pragmatic policy option for East Asia until greater political and institutional development create an environment condcive to a more robust framework of monetary and exchange rate policy coordination. [ABSTRACT FROM AUTHOR]

Given its potentially global significance and the attention that there tends to be towards things that go wrong, it is hardly surprising that most of the literature dealing with economic events in East Asia during recent years has concentrated on the crisis period of 1997 and 1998. This work has sought to gain a better understanding of why such crises occur and how best they can be handled if and when they do. Less attention has been paid to the more recent post crisis period. To what extent and within what time frame did countries in the region recover from the crisis, and, if there has been a recovery, can it be sustained? Drawing on the available evidence, this paper attempts to answer these questions. By implication, however, it also has something to say about the vulnerability of the region to subsequent crises and briefly considers what needs to be done to reduce this. [ABSTRACT FROM AUTHOR]

The International Monetary Fund has been in the spotlight over recent years, particularly in the context of its involvement in the East Asian economies following the 1997-98 crisis. Various reports on aspects of the international financial system have made recommendations for reforming the IMF. Having provided a brief historical and empirical background, this paper identifies the underlying issues in the ongoing debate: does the world still need the IMF, should the Fund be an adjustment or lending institution, what should be its relationship with private capital markets, should it be a crisis averter, crisis lender or crisis manager, does it have a long term lending role in developing countries and is there too much overlap with the World Bank, do Fund programmes work and what is the future for conditionality, should the Fund's organisational structure be reformed, and how should the Fund be financed? The paper distinguishes between areas of consensus and dissent and briefly assesses the chances of reform. [ABSTRACT FROM AUTHOR]

This paper explores permanent, unanticipated shocks in the yen-dollar exchange rate in a perfect-foresight, infinite-horizon, representative-agent model for an open, semismall economy that produces a single good, imports intermediate inputs and investment goods from Japan and competes with Japan in external markets. Therefore, the model captures some of the features of the developing countries of East Asia. External debt is constrained by a country-risk premium that depends on the level of external debt. The capital stock is maintained and incremented by an endogenous mixture of Japanese and home goods. An appreciation of the dollar against the yen is neutral for external indebtedness and the trade account in the long run, but raises the capital stock, consumption and hence welfare in the long run; the home currency depreciates against the dollar but appreciates against the yen. Whether a cycle of current account surpluses followed by current account deficits or vice versa is generated depends on the initial response of the shadow value of external debt. [ABSTRACT FROM AUTHOR]

Soaring prices for minerals and energy are posing a major threat to the resource security of economies in Asia. As a result, many regional governments have launched new resource security strategies in the last few years. Most recent attention to resource security in Asia has focused on debating whether the Chinese government’s resource policies are mercantilist or liberal. This China-focused debate is too narrow to fully capture the nature of resource politics in Northeast Asia, since the governments of Japan and Korea have also recently launched their own resource security strategies. This paper considers regional-level trends in Asian resource politics by examining the causes, content and implications of the resource security strategies deployed by the consumer governments in Northeast Asia. It argues that growing resource security concerns, combined with a process of competitive policy emulation, have seen the Chinese, Japanese and Korean governments each adopt mercantilist resource security strategies over the last decade. Furthermore, the competitive nature of these mercantilist strategies is acting to intensify political and economic competition for resources between the Asian region’s three main economic powers. [ABSTRACT FROM PUBLISHER]

One of the most striking features of the economic development that has occurred in the East Asian region has been the influential role of the state in directing its course. Vietnam is also following this well-worn path of state-led developmentalism. The principal contribution of this paper is two-fold. First, we place the Vietnamese experience in comparative historical and conceptual perspective. It is suggested that the structure of the Vietnamese state itself and the distinctive nature of the policies it has undertaken are reflections of the country's traumatic recent history and the fact that its leadership is notionally “communist.” Our second contribution is to detail some of the more important aspects of this process. We provide two case studies which focus on the role of state-owned enterprises and decentralisation initiatives which demonstrate that, despite the frequently ad hoc and contingent nature of the developmental project and an absence of the sort of state capacity that distinguished the likes of Japan in its heyday, the Vietnamese government is overseeing economic development in creative and surprisingly effective ways. [ABSTRACT FROM PUBLISHER]

This paper reviews recent developments in regional financial and monetary cooperation in East Asia, and suggests some issues that could contribute to more constructive development in the future. The regional monetary and financial cooperation was originally motivated by the Asian financial crisis, but it has faced new challenges due to some recent events, such as the global financial crisis and global imbalances. We review recent developments of regional financial and monetary cooperation in East Asia, such as CMIM, ABMI and ABF, and regional surveillance mechanisms. We argue that there are several issues to be discussed in developing more effective regional financial and monetary cooperation: including developing CMIM to be effective in preventing future crisis, linking regional cooperation with global financial architecture properly, constructing effective surveillance mechanism, and strengthening regional policy dialogue. [ABSTRACT FROM PUBLISHER]

This paper proposes a general framework of patent protection which can be applied to most existing theories, and can be used to resolve various issues regarding the protection of information technology (IT)-enabled innovations, especially those involving business methods (BMs) and software. We suggest that one should consider that firms have many strategic choices or mixtures of appropriate combinations of innovations, examine different combinations of menu components rather than focusing on well-explored policies, revise market assumptions to make them more realistic and capture the complexity of policy-strategy assumptions by applying methodologies, such as experiments, system dynamics and intelligent agent theory. The work explores how these innovations are protected using the cases in the East Asian economy and find out that software and BMs are better protected in the nations that enforce strong patent rights. [ABSTRACT FROM AUTHOR]

The global financial crisis of 2008-09 presented a critical challenge to East Asian regional financial cooperation. Over a decade of efforts to reduce regional vulnerability to financial crisis and contagion were confronted with the worst global economic crisis since the 1930s. The results for East Asia were mixed. On the one hand, no economies were forced to submit to IMF-led bailouts, as had happened so painfully in 1997-98. On the other hand, the most highly-developed component of the project of ASEAN+3 financial regionalism - the Chiang Mai Initiative (CMI), which set up a system of emergency liquidity provision - appeared irrelevant, as the central banks of South Korea and Singapore prioritized the establishment of new swap agreements with the United States as a means of ensuring dollar liquidity instead of relying on their Chiang Mai partners. Nonetheless, in May 2009, the ASEAN+3 finance ministers agreed to a substantial expansion and 'multilateralization' of the initiative. This paper critically addresses whether CMI has been transformed into an 'Asian Monetary Fund' and argues that the events of 2008-10 make substantial additional movement in that direction unlikely. [ABSTRACT FROM AUTHOR]

The global financial crisis has shattered many illusions, one of which being that sovereign wealth funds (SWFs) are properly treated as arms-length investment institutions subject only to global standards of good governance. In fact, in a number of East Asian countries SWFs have acted as 'insurers of last resort' for their nation-states underwriting financial stability and social welfare. In this paper, we explain how and why this came to pass, arguing that this role serves to sustain the legitimacy of the nation-state as well as justify the separation of SWF assets from the public interest in current consumption and spending. Focusing upon the Government of Singapore Investment Corporation (GIC), we suggest that the prospect of recurrent financial crises was an important prompt for its establishment in 1981, reinforced by the experience of many East Asian countries in the 1997 Asian financial crisis. The formal constitution of the GIC, the mechanisms by which its reserves are returned to the government in crisis, and the role of different sections of the political elite in managing those assets are explained. Referencing the principles of best-practice fund governance and the Santiago Principles underwriting the legitimacy of SWFs, we also consider the governance of the GIC, especially as regards its investment processes. Implications are drawn for the experience of Western countries, particularly the UK and the USA, wherein the failure of their banking systems has put untold pressures on current and future living standards. [ABSTRACT FROM AUTHOR]

This paper attempts an analytical framework centred on the relationship between the concept of viability and choice of development strategy. On the basis of a critical review on the mainstream literature in economic development, it presents the conceptual framework with an emphasis on elaborating the dichotomy of 'comparative advantage defying (CAD) strategy' versus 'comparative advantage following (CAF) strategy'. Empirical experiences of economic development in China and other East Asian economies in the contemporary era are discussed in the context of the conceptual framework. [ABSTRACT FROM AUTHOR]

There has been a long tradition in business and economics to use frontier analysis to assess a production unit's performance. The first attempt utilized the data envelopment analysis (DEA) which is based on a piecewise linear and mathematical programming approach, whilst the other employed the parametric approach to estimate the stochastic frontier function. Both approaches have their advantages as well as limitations. This paper sets out to use an alternative approach, i.e. artificial neural networks (ANNs) for measuring efficiency and productivity growth for seven East Asian economies at manufacturing level, for the period 1963 to 1998, and the relevant comparisons are carried out between DEA and ANN, and stochastic frontier analysis (SFA) and ANN in order to test the ability of ANNs to assess the performance of production units. The results suggest that ANNs are a promising alternative to traditional approaches, to approximate production functions more accurately and measure efficiency and productivity under non-linear contexts, with minimum assumptions. [ABSTRACT FROM AUTHOR]

There is a general perception particularly among the developing countries of East Asia that China's WTO membership would spell bad news for their exports. The ASEAN countries in particular are quite concerned about its likely negative impact on their export and growth potentials. In this light, the main objective of this paper is to empirically assess the trade implications of China's WTO membership for these countries. Only few studies, using a Computable General Equilibrium (CGE) approach, have addressed the issue of China's WTO membership trade implications. Further, these studies have not adequately addressed the issue from the perspective of the developing countries of East Asia, particularly the ASEAN countries. Using the latest version of the Global Trade Analysis Project (GTAP) model and based on the latest tariff reduction commitments by China, the results showed that, contrary to the current perception and previous studies, almost all of the developing countries of East Asia are likely to benefit from China's WTO membership overall, after allowing for anticipated price adjustments. Without the price adjustments, the Philippines and Singapore would have come out as net losers. These findings have confirmed the need for economic and export restructuring among the ASEAN countries and the importance of accelerating their economic integration. They have also highlighted the importance of promoting trade and investment cooperation between China and ASEAN countries. [ABSTRACT FROM AUTHOR]

This paper presents exogeneity tests for the existence (or absence) of a behavioural relationship between financial deepening and economic growth for three high performing economies: Hong Kong, South Korea and Taiwan. The findings suggest that weak, strong and super exogeneity assumptions are valid, and the variable of financial deepening has a positive influence on output growth. Since the successful stories of these high performing economies have been examples for other developing countries, we argue that a sound financial system is essential in the course of economic development. [ABSTRACT FROM AUTHOR]

The common success as well as the post-1997 crisis of East Asian countries has led to a widespread tendency to view their economic systems as a homogeneous monolith. In reality, there are significant structural differences among the region's economies, although they do share many strengths and weaknesses. In particular, Northeast Asia and Southeast Asia appear to have followed significantly divergent paths toward development and growth. The main goal of this paper is to elaborate upon those differences to contribute toward a more complete and balanced understanding of East Asian economies. [ABSTRACT FROM AUTHOR]

Presents information on a study which surveyed the total factor productivity (TFP) growth in East Asia. Background of the study; Debate on the factors that propelled the productivity growth; How the TFP is estimated; Evaluation of the work on productivity growth.

We study the effect of the sovereign credit ratings on the economies of seven East Asian countries, applying panel vector autoregression (VAR). We find that rating has less effect than outlook of rating on the credit default swap (CDS) spreads, the stock indexes, and the GDP growth rates. Rating upgrade and positive outlook have stronger effects than rating downgrade and negative outlook, and the effects of positive outlook and rating are greater after the financial crisis. There is evidence of contagion in that the economic variables of a country seem to have been affected by the outlooks of the other countries. [ABSTRACT FROM AUTHOR]

Although many previous studies have investigated the economic growth of East Asian countries from the perspective of productivity growth, they have adopted a limited focus only on the national level or on the aggregated level and have overlooked the heterogeneity at the disaggregated level. Furthermore, only a few studies have examined the sources of the remarkable growth and trade performance of the Korean machinery and equipment industry, despite its importance for sustainable growth of national economy. Therefore, we investigated the Total Factor Productivity Growth (TFPG) of the Korean machinery and equipment industry and its 12 sub-sectors from 1970 to 2012 using the stochastic frontier production approach. As a result, we found that the industry has achieved labour input-driven TFPG largely due to technical progress. This is contrary to the previous result that East Asia has expanded the production frontier by capital accumulation. In contrast, in some sub-sectors, scale effect and allocation efficiency have driven TFPG. We also found distinctive patterns of TFPG across different sub-sectors from the perspectives of the effect of input factors and the pattern of technical progress. These results imply that policy makers should consider industry-specific policy designs that incorporate the specific characteristics of individual sub-sectors. [ABSTRACT FROM PUBLISHER]

Bond markets have expanded rapidly in emerging East Asian economies in recent years. Asian policymakers have played a pivotal role in this development. This process presents an interesting challenge to the developmental state literature associated with bank-based financial systems. We argue that it is best to understand the role of the state as an entrepreneurial state in the construction of these markets, focusing on institutional innovation in three mechanisms of state-led market infrastructure: national or local credit rating agencies, mortgage corporations and bond pricing agencies. National credit rating agencies rate the creditworthiness of debt in local currency. Mortgage corporations create markets in securitised housing loans. Bond pricing agencies put a value on illiquid debt instruments to enable mark-to-market portfolio management. Together, these three mechanisms constitute the core determinants of the market (demand for creditworthy products, supply of tradeable assets, and the fixing of a price to those assets). In so doing they influence the nature of market operations, producing outcomes very different from the free market ideal type. We also consider cross-country commonalities and variations in this general pattern. [ABSTRACT FROM AUTHOR]

Political economists have long noted that the prospects for trade liberalization diminish in a climate of economic recession. A stagnant economy intensifies the burden of adjustment for non-competitive sectors and polarizes domestic trade politics. Not surprisingly, the global financial crisis has raised concerns of a substantial protectionist backlash, through the imposition of national measures that circumvent WTO disciplines such as anti-dumping or tied stimulus packages. The impact of economic crisis on regional integration is, however, more ambiguous and has not been explored systematically. On the one hand, policymakers may be pressed to renege on trade liberalization commitments on all fronts - also weakening the momentum to negotiate or implement free trade agreements (FTAs). On the other hand, policymakers may be tempted to 'insulate' their region from adverse global trends and may see FTAs as more amenable to political manipulation that shelters inefficient sectors. In order to shed light on the connection between external crisis and regionalist drive, this article assesses three main challenges East Asian elites confront in devising a regional trade bloc capable of acting as a growth locomotive: institutional fit, multilateralization, and architectural design. The track record of East Asian governments of negotiating FTAs to score diplomatic points abroad and ensure political survival at home - at the expense of maximizing economic gains through far-reaching liberalization - does not bode well for the magnitude of this challenge. [ABSTRACT FROM AUTHOR]

This analysis explores the impact of the Great Recession on the evolution of East Asia's developmental states. An analytical framework, which emphasizes the political tug-o-war between the coalition of groups that support the developmental state and the coalition of those who advocate for neo-liberal reforms to state structures and state policies, is used to plot the fortunes of the developmental state since the 1980s and the advent of globalization in East Asia. The elements of the Great Recession that influenced this battle between the two sets of collations are examined and the shift in the influence of the coalition supporting the developmental state structures and policies are assessed. [ABSTRACT FROM AUTHOR]

The Asian miracle has been the focus of much research seeking to understand this extraordinary phenomenon. Ventura (Quarterly Journal of Economics 112: 57-84.) offers an explanation for the success of the Asian Tigers in sustaining exceptional growth rates over an extended period based primarily on capital accumulation. He points to their ability as export-oriented economies to exploit the accumulated capital to reallocate from labor-intensive to capital-intensive sectors instead of raising the capital intensity within each sector. We test this argument using industry-level data on manufacturing in 33 countries over three decades. The evidence on the argument is mixed. We identify two stages in the evolution of the structural change in the Tigers. It was labor-intensive initially and became capital-intensive only in the 1980s. Compared to other countries, the Tigers are exceptional in the extent of their shift from a labor-intensive to a capital-intensive structural change during the sample period. However, structural change in the 1980s accounted for only a negligible part of capital accumulation in manufacturing. [ABSTRACT FROM AUTHOR]

Although many countries in East Asia have achieved high growth rates since the middle of the 20th century, former French colonies in the region have struggled to attain comparable levels of economic development. This article is an attempt to explain this variation in development through a cross-national analysis of economic growth in East Asia for the period from 1970 to 2007. Results suggest that the underperformance of former French colonies is attributable to their inheritance of colonial institutions that have been unfavorable for domestic investment, international trade, and educational attainment. Overall, conclusions lend support for the idea that long-term economic development should be understood in terms of path dependence, and that sustained economic growth requires a concerted effort to restructure growth-adverse institutional arrangements. [ABSTRACT FROM AUTHOR]

Since Japanese banks have been the major creditors in Asia, Japan has been a notable source of regional macroeconomic fluctuations. This study explores the patterns of Japanese bank claims in East Asian economies, focusing on the transmission effects of Japanese financial shock via international bank claims. The author finds that international lending by Japanese banks differed substantially from that of other major lenders. The study also suggests that the banking shocks captured by the Japanese stock market decline and nonperforming loans were transmitted throughout other East Asian economies via lending activity by Japanese banks. This association was found to be statistically significant. [ABSTRACT FROM AUTHOR]

In 1997-98 East and Southeast Asia experienced a region-wide financial crisis that saw national currencies lose 75 per cent of their value and stock markets wiped out. The financial crisis became an antagonistic and racialised referendum on Asian values between certain Asian governments and their Western critics. What was the larger political significance of this focus on Asian values? Focusing on the Malaysian government's controversial decision to go against the international financial community by implementing capital controls during the crisis, I argue that the debate over Asian values can be understood as performances to challenge and psychologically defend the conventional hierarchy of international relations that followed its symbolic disruption through the economic success of the regional economies before the crisis. [ABSTRACT FROM AUTHOR]

High-performing Asian economies are quite distinctive with efficient, flexible and responsive labour markets. Comparing the persistence of unemployment in East Asian economies to that in Western countries is difficult due to the data's short time spans and possible structural breaks. This article employs advanced unit root tests to deal with these problems and fails to reject 'hysteresis' in the unemployment rates of the high-performing Asian countries, even after taking into account structural change. An alternative explanation of different productivity growth for the hysteresis phenomenon of the Asian countries is proposed herein. [ABSTRACT FROM AUTHOR]

Criticism of the developmental state can be divided into two categories. One is the neoliberal position that criticizes the efficacy of the developmental state model itself. According to this view, the developmental state was not an important factor in East Asian development and the adoption of industrial policy would in fact be detrimental to developing countries. A second critical position concedes that a degree of achievement was indeed attained by the developmental state in the past, but argues that the developmental state model is no longer a viable option today. This position holds that the high level of government intervention in successful East Asian countries more or less contributed to their economic development, but that this policy is no longer feasible. While deepening globalization in the world economy is regarded as inimical to the developmental state, some also argue that the developmental state model could only have worked during the Cold War and could not function in today's international political and economic climate. Despite these negative observations, the purpose of this article is to demonstrate the viability of the developmental state model. First, the article supports the statist position by broadening the scope of the argument: developmental states exist not only in Northeast Asia, but also in Southeast Asia, and the East Asian authoritarian regimes had a role in economic development. Second, this article directly counters new criticism of the developmental state. It argues that the developmental state model is still an effective development strategy in the post-Cold War period and even in the era of globalization: the model was useful in East Asia, and could be useful beyond East Asia. [ABSTRACT FROM AUTHOR]

The Developmental State (DS) has been central to East Asia's rapid economic development over the last three decades. This analysis reviews the origins of the concept of the DS, the broader theoretical battles that provide the context in which the concept has been used, and the conditions that facilitated the emergence of the DS itself. The way in which the changing events in East Asia have influenced analyses of the DS will also be addressed with special attention paid to the onset of globalization, the end of the Cold War, and the impact of the Asian financial crisis. Finally, an assessment is undertaken of analyses of the DS that have appeared in the pages of The Pacific Review over the last twenty years. [ABSTRACT FROM AUTHOR]

The dollar dominance in East Asia has depended on its regional support. Japan's supportive policy toward the dollar, however, shifted in the late 1990s as the Japanese government began to address the region's heavy dependence on the dollar, which was regarded as one (but an important one) of the causes of the 1997 Asian Financial Crisis (AFC), by promoting the use of the yen in the region and regional monetary initiatives. Despite emerging signs of those challenges, Japan's domestic resistance and the region's power rivalry between Japan and China still makes the dollar the currency of choice in the medium term future. [ABSTRACT FROM AUTHOR]

The crisis of 1997 involved a serious disruption within the financial systems of the East Asian economies. A substantial literature on the causes and results of the crisis subsequently accumulated, and while there has been a certain convergence of opinion, a number of factors appear to be consistently ignored or given insufficient attention. An attempt is made below to correct this imbalance. Attention is initially focused on some of the key influences affecting financial systems, and particular consideration is given to the influence of space. The nature, form and causes of the crisis are then examined, along with a discussion of the post-crisis recovery and the role of the state in this connection. The commentary concludes with an identification of the more important implications of the crisis and the lessons to be learnt from these. [ABSTRACT FROM AUTHOR]

The article examines the "Asian Culture/Asian Success" hypothesis, the framework which the rapid economic growth of East Asia has frequently been explained. In doing so, it examines the basis for this thinking from various disciplinary perspectives and raises questions about the information requirement to test such a framework at the macro and micro levels. Results show that macro level inference is not conclusive in view of the many factors operating: some economic, some historic, and some cultural, and the inability to replicate the relevant experiences over time. Micro level tests are challenging but more promising.

Contrary to the dominant view that the developmental state evolved to reduce transaction cost (such as moral hazard), it is argued that it represented, first and foremost policy compromise between business and government over redistribution and market competitiveness. This compromise was possible because of favouable political conditions: a long shadow of the future, a favorable payoff structure, and an unequal distribution of power (in favor of the government). The long shadow of the future, in particular, was decisive in allowing the government and business to commit to and enforce their agreement. In some East Asian countries, however, political changes shortened the time horizon of state and business elites, weakening their policy cooperation and increasing the vulnerability of the economy to a crisis. This theory is tested against the cases of nine East Asian countries, using the stability of the party system as a proxy for the length of the time horizon and thus, the ability of actors to make a credible commitment. Consistent with theory, it is found and the more fragmented or divided a country's party system (i.e the shorter the time horizon) had become before the outbreak of the crisis, the more severe and costly the economic crisis has been in that country. [ABSTRACT FROM AUTHOR]

The empirical suitability of the East Asian economies for potential monetary integration is assessed. The structural vector autoregression (VAR) method is employed to identify the underlying shocks using a three-variable VAR model across the East Asian economies. The estimates of the EEC are used as a benchmark to compare the size of the underlying shocks and the speed of adjustment to shocks in both regions to determine the feasibility of forming an optimum currency area (OCA) in East Asia. The empirical results do not display strong support for forming an OCA in the East Asian region. The results do imply, however, that some small subregions are potential candidates for OCAs, since their disturbances are correlated and small and these economies adjust rapidly to shocks. [ABSTRACT FROM AUTHOR]

For most of the past half-century, Western Pacific countries largely eschewed preferential trade agreements. Their preferred form of trade liberalisation was unilateral action on a non-discriminatory basis. In the past four years, however, more than 20 preferential schemes involving two or more Western Pacific countries have been put forward. The new interest in bilateralism is explained by: an increasing awareness of the weakness of existing regional institutions and initiatives; perceptions of positive demonstration effects from regional agreements elsewhere; and changing configurations of domestic economic interests. Contrary to arguments that emphasise a new sense of collective identity in East Asia post-crises, as many agreements have been proposed with prospective partners outside East Asia as with other East Asian countries. The agreements will have little impact on overall trade or economic growth because they typically involve countries that are relatively insignificant economic partners for one another. By exploiting ambiguities in wto rules, however, they enable governments to exclude sensitive domestic sectors. This 'liberalisation without political pain' has potentially negative consequences for the domestic political economy equation. [ABSTRACT FROM AUTHOR]

Focuses on the factors attributed to the East Asian financial crisis in 1997. Evidence suggesting that the crisis was preceded by a sharp export slump in the region as early as 1996; Significance of the appreciation of the American dollar's value against the Japanese yen.

In recent years there has been considerable disagreement over the extent to which productivity growth has accounted for the success of the east Asian economies. Empirical evidence, based on forms of growth accounting or direct estimation of a production function, is inconclusive so that the debate appears to be at a stalemate. This article applies an alternative approach, using the Malmquist productivity indices, to investigate the contribution of productivity to the longer term growth. The results support the view that over the longer term, the east Asian economies were input driven but interesting differences arise between countries when shorter periods are analysed. [ABSTRACT FROM AUTHOR]

Intra-regional trade and investment in East Asia has increased during the last few decades. These flows have accelerated again since the beginning of the 1990s. The recent trade integration in the East Asian region can be explained mainly by the more active and connecting roles of newly industrializing economies (NIEs) rather than by Japan and concentrated FDI flows within the region. Regional financial market integration also helped facilitate this process of trade and investment integration within the region. The concentrated FDI flows have led to the internationalization of production networks, of which ethnic Chinese networks have been particularly significant. East Asian economies are able to seek further regional integration based on these production networks and on newly formed local and subregional integration schemes. [ABSTRACT FROM AUTHOR]

The historic success o fEast Asian economies prior to the 1997 financial crisis depended on their ability to escape the trap of deteriorating terms through a regional pattern of development known as the flying geese model. However, this pattern of development has come under increasing strain in the second half of 1980s. As competitive pressures intensified, producers throughout the region early-exited their niches of production in a futile attempt to safeguard their competitive position. The investment boom this has caused in the early 1990s led to the creation overcapacity throughout the region and the reemergence of the fallacy of composition inherent in a generalized system of export led growth, paving the way for the financial crisis of 1997. [ABSTRACT FROM AUTHOR]

Over the past decade, the statist perspective has been popular in interpreting the economic success of the East Asian countries. Proponents of this perspective discredit the neoclassical view that market forces alone were the most important dynamic behind these economic achievements. Instead, they credit the state as the key factor of East Asian economic success. This study employs an interrupted time series analysis to examine the validity of the statist perspective on Taiwan's industrial promotion policy. The results suggest that the government of Taiwan has been successful in upgrading the island's industrial structure. This finding supports the statist perspective on development. It does not, however, deny the utility of the neoclassical view since market forces also contributed to the growth of Taiwan's industrial structure. [ABSTRACT FROM AUTHOR]

This study investigates the effect of openness on economic growth for rapidly growing economies in East Asia in which rapid growth has been accompanied by a persistent openness to world trade. The framework of analysis is a five-variable vector autoregressive model that consists of real output, money supply, real government spending, foreign price shocks, and openness measures. The results do not strongly support the 'new' growth theories in which increasing openness affects long-run growth. For most countries in the sample, fiscal policy shocks as well as foreign price shocks have greater impacts on economic growth than does the openness shock. The results are generally consistent with the view that the role of the government is critical for growth among the East Asian economies. [ABSTRACT FROM AUTHOR]

The crisis in East Asia has been analyzed strictly in financial terms. In reality, however, it is multifaceted and deeply rooted in the history of social, economic and political developments of the region. In an attempt to show a few of these historical roots, this article will first examine some origins of the decade-long Japanese crisis. Next, it will trace some of the reasons for the export to other Asian countries of the japanese model of development, and eventually its crisis. Finally, the article will also show that the relentless efforts by Washington in pushing "liberalization" on these countries have also precipitated and worsened the current crisis whose social and political consequences would be far more difficult to reverse should there be economic recovery. [ABSTRACT FROM AUTHOR]

The article provides information on the development of East Asian societies compared to Western societies in 1994. It mentions that the U.S. could wait until the proof of East Asian success becomes too overwhelming and strong to ignore before determining whether it should compete the East Asians in critical self-analysis. It states that the U.S. could start reflecting on how and why it has to question its fundamental presumptions about its political and social arrangements, and learn from East Asian societies.

Seven months after the outbreak of the Asian financial crisis, the International Monetary Fund (IMF) moved into the eye of the economic typhoon ravaging the region. The Fund's high profile coincides with the spread of the deflationary and inflationary effects of the financial collapse on the real economy of the region, making the period potentially explosive. [ABSTRACT FROM AUTHOR]