The Political Economy of East Asia: Post-Crisis Debates

Rating:
Summary: Balanced and Comprehensive
Review: Islam and Chowdhury use the prevailing language of strong versus weak thus fails to explain a government's ability to cultivate or encumber economic performance. When discussing East Asia's powerhouse economies--South Korea, Malaysia, Taiwan, Hong Kong, and Singapore--Islam and Chowdhury have clearly established the inadequacy of the traditional neoclassical categories. In East Asia, strong, not weak, states have allowed the private sector to make a sizable contribution to growth. Opposite to expectation, the "weakest" nation-states in that region--Indonesia and the Philippines--have not nurtured strong private sectors. As a case in point, these have been much less successful than the others in generating home demand and in accumulating capital and skills. Islam and Chowdhury have been very helpful in making me understand this dynamic.

According to Islam and Chowdhury, the economic successes of East Asian governments, a new generation of statist scholars has arisen to champion the role of a strong state in promoting economic development. Islam and Chowdhury are quick to point out the strong bifurcation in the literature. On the one hand, a strong state is viewed as an restraint to economic development; on the other hand, state activism is championed as an essential component in the most celebrated cases of economic growth since the end of World War II. Who really knows. Kudos to Islam and Chowdhury for making such a complex subject easier to understand. According to Islam and Chowdhury, both of these theoretical positions embody crucial elements of truth, but both, in an of themselves, are too limited to account for the different economic performances of developing and nations in East Asia.

In "The Political Economy of East Asia: Post Crisis Debate" Islam and Chowdhury point out that when states are too weak to curb their own officials, agents of the nation-state may act exclusively of one another. Economies in East Asia--Japan, Malaysia, South Korea, Singapore, and Taiwan--all now the extent and limits on their control over private-sector profits. As I mentioned above, even if the advocates of state activism raise sensible doubts about the earlier neoclassical view, it is not clear why some cases "strong" states promote economic development, while others carry on policies that encumber it. Islam and Chowdhury are even handed to point out that countries that have pursued activist policies have also experienced reverse growth along with increased social inequality. Their treatment of the labor issue in East Asia is second to none. If just for that alone, I give Islam and Chowdhury five stars.

Miguel Llora