Choi governments and markets in east asia; the politics of economic crises (2006)

Governments and Markets in East Asia The Asian economic crisis of 1997–8 had a dramatic impact not only on the region’s economies but also on its politics This book examines the relation between economic performance, elite cooperation, and political regime stability in the context of the Asian crisis It argues that economic crisis is not the cause of greater political harmony or discord; rather, it serves as a catalyst that may encourage elites to cooperate or conflict depending on the particular circumstances at the time of crisis It maintains that the political consequences of the Asian crisis varied according to the type of elite that existed in a crisis-stricken society It goes on to consider the origins and socioeconomic impacts of the crisis in Indonesia, Thailand, Malaysia, South Korea, and the Philippines It investigates the precrisis political contexts and elite configurations of these five countries, and considers what lessons can be drawn from their experiences Overall, this book constitutes an impressive body of descriptive and theoretical material on the Asian crisis and the implications of economic crisis for elite behavior and political stability Jungug Choi is Assistant Professor at the Department of Political Science, Konkuk University, Korea His main research interests include political party systems, electoral behavior and political economy in East and Southeast Asia Routledge Malaysian Studies Series Published in association with the Malaysian Social Science Association (MSSA) Series Editors: Mohammed Hazim Shah, University of Malaya Shamsul A.B., University Kebangsaan Malaysia Terence Gomez, University of Malaya The Routledge Malaysian Studies Series publishes high quality scholarship that provides important new contributions to knowledge on Malaysia It also signals research that spans comparative studies, involving the Malaysian experience with that of other nations This series, initiated by the Malaysian Social Science Association (MSSA) to promote study of contemporary and historical issues in Malaysia, and designed to respond to the growing need to publish important research, also serves as a forum for debate on key issues in Malaysian society As an academic series, it will be used to generate new theoretical debates in the social sciences and on processes of change in this society The Routledge Malaysian Studies Series will cover a broad range of subjects including history, politics, economics, sociology, international relations, geography, business, education, religion, literature, culture and ethnicity The series will encourage work adopting an interdisciplinary approach The State of Malaysia Ethnicity, equity and reform Edited by Edmund Terence Gomez Feminism and the Women’s Movement in Malaysia An unsung (R)evolution Cecilia Ng, Maznah Mohamad and tan beng hui Governments and Markets in East Asia The politics of economic crises Jungug Choi Governments and Markets in East Asia The politics of economic crises Jungug Choi First published 2006 by Routledge Park Square, Milton Park, Abingdon, Oxon OX14 4RN Simultaneously published in the USA and Canada by Routledge 270 Madison Ave, New York, NY 10016 Routledge is an imprint of the Taylor & Francis Group, an informa business This edition published in the Taylor & Francis e-Library, 2007 “To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.” © 2006 Jungug Choi All rights reserved No part of this book may be reprinted or reproduced or utilized in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data A catalogue record for this book has been requested ISBN 0-203-96864-6 Master e-book ISBN ISBN10: 0-415-39902-5 (hbk) ISBN10: 0-203-96864-6 (ebk) ISBN13: 978-0-415-39902-9 (hbk) ISBN13: 978-0-203-96864-2 (ebk) To my mother and father in Seoul Contents List of tables List of figures Preface ix x xi Introduction: economic crises, political elites, and democratic stability Crises, cooperation, and democratic stability Elite paths to democratic stability Path one to elite consensus: an elite settlement and its preconditions Path two to elite consensus: elite convergence and its preconditions Economic crisis and the deepening of elite consensus 12 Outline of the volume 14 The outbreak of the Asian economic crisis and its socioeconomic consequences 15 Features and causes of the economic crisis 15 Economic vulnerabilities 18 Socioeconomic responses and effects 22 An excursus on the Philippines 25 Conclusion 25 Political circumstances before the Asian economic crisis: elite configurations in the five countries Indonesia 28 Thailand 31 The Philippines 33 Malaysia 37 South Korea 39 Conclusion 43 28 viii Contents Economic crisis, divided elites, and prospects for an elite settlement 45 Precrisis power imbalance, external pressures, and no elite settlement 45 Strong old-regime forces and disunited opposition forces: political cleavages in the 1999 general election 50 Logrolling, veto power, and captured presidency: an outcome of elite fragmentation 53 Conclusion 57 Economic crisis, fragmented elites, and prospects for elite convergence 58 Political cleavages before the crisis 58 The Philippines: dominant but tractable ethno-linguistic cleavages 61 Convergence attempts and failures 62 Conclusion 74 Economic crisis, consensual elites and prospects for the further consensus 76 Malaysia 77 South Korea 87 Conclusions 98 Notes Bibliography Index 103 122 132 List of tables 1.1 1.2 2.1 3.1 3.2 4.1 5.1 5.2 6.1 6.2 6.3 6.4 6.5 6.6 6.7 The effects of economic performance on political stability Types of political elites Key economic indicators in the five countries Concentration of economic power in Korea: Chaebols’ assets as a proportion of national assets before the crisis Elite configurations in precrisis Asia Correlations between political parties’ vote percentages in the 26 electoral districts in Indonesia Results of the 1998 Philippine presidential election (per cent) Philippine presidential candidates’ vote percentages among the top six linguistic groups 1999 Malaysian parliamentary election results Quadratic regression of the majority shift from the National Front (BN) Bankruptcies in Korea before the currency crisis Regional voting in the 1997 Korean presidential election Government stake in Korean commercial banks before and after the crisis (per cent) Top five chaebols’ debt ratio and shareholders’ equity after the crisis Chaebols’ assets as a proportion of national assets after the crisis (per cent) 26 42 44 52 68 69 81 85 88 90 95 97 97 126 Governments and 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joint manifesto of, 80 American colonial policy, 61 Amnuay Virawan, 63 Angkatan Belia Islam Malaysia (ABIM), 79 anti-system forces/parties, 33,72; and elite fragmentation, 36 Anwar Ibrahim, 78–9; Alternative Front, 80; and Keadilan, 79 Aquino, Benigno, 34 Aquino, Corazon, 34, 61 arbitrary action, 16 Arroyo, Gloria Macapagal, 72 Arthit Kamlangek, 32–3, 59 ascriptive voting, 41 Asian currency crisis see Asian economic crisis Asian economic crisis, 1; and absence of elite settlement in Indonesia, 57; and business bankruptcy, 23; and concentration of national assets/wealth, 96; and differential effects on ethnic groups, 86; and elite transformations, 99; and foreign debt, 19; and foreign ownership, 24; and government debts, 24; and IMF in Indonesia, 46; and IMF policies, 23; and inflation, 23; and international capital, 17; and Philippine economy, 66; and political elites, 98; and regime types, 15; and trade surpluses, 23; and unemployment, 23; as great shock, 15; as market failure, 17; as retreat from state interventionism, 17; characteristics of, 15; Chinese factor of, 20; currency devaluations, 17; domestic factors of, 18; effects of, 22; effects on Korean politics, 92; external/internal causes of, 17; impacts on Korea’s regional voting, 90; initiated by currency crisis, 16; international factors of, 18, 22; literature about, 98; local responses to, 22; nationalistic/anti-imperialist reactions to, 22; perceptions of responsibility for, 89; region-wide, 15; responses to, 22; shortterm effects of, 23; uniform policy responses to, 23; US factor of, 21; vulnerabilities of local economies to, 18 Asian economic model, 19 Asian financial crisis see Asian economic crisis assimilation, 60 austerity, 102 Austria, authoritarian legacy, 57 authoritarian regime types, authoritarianism, 3, 31, 53, 67; weaknesses of, 16 Autonomous Region of Muslim Mindanao, 35 autonomous regional council, 35 autonomy, 5, 7, 13 balance of power, 7, 43, 48, 57, 99; and foreign pressures, 45; and institutional stability, 8; in precrisis Indonesia, 28 Bali, 50 Bank Bali scandal, 55 Index 133 Bank of Thailand, 53 bank restructuring: in Korea, 94 banking sector: and Government of Korea, 94 banks, 94 barangays, 35 bargaining power, 22, 53, 74 barrios, 35 Belgium, bond market, 21 bonds, 24 Britain, British colonial legacy, 37 British colonial policy: and ethnic segregation, 111 British Malaya, 60 budget surpluses, 23 bureaucratic authoritarianism: and economic crisis, 104 Burton, Michael, 5–6, 28, 39 businesses, 24–5 buyer’s market, 24 campaign spending, 92 capital controls, 78 capital exodus, 21 capital markets, 21 captured presidency, 53, 57; veto power, 56 Cardinal Sin, 61, 67, 74 catch-all party, 51 Catholic Church (Philippines), 34, 36 Central Axis, 54 chacha, 117 chaebols, 23, 42, 77, 94; and Capital Structure Improvement Plans, 96; and militant labor, 112; bankruptcies of, 87; debt ratio of, 97; preferential treatment of, 96 Chamlong Srimuang, 32, 59 Chandra Muzaffar, 79 Chart Pattana Party (National Development Party), 59, 64 Chart Thai Party (Thai Nation Party), 59 Chatichai Choonhavan, 32, 59, 63 Chavalit Yongchaiyudh, 32, 59, 63 Chettha Thanajaro, 64 China: external debt of, 19 Cholla (Korea), 89 Chuan Leekpai, 32, 59, 65, 100, 116 Chulachomklao Royal Military Academy, 32 Chun Doo Hwan, 40, 88 Chung Ju Young, 93, 112 Ciganjur Agreement, 47 circulation, elite, 98 citizenship, 60 civic culture: and democratic stability, civic engagement, civil society, 61 civil war, class conflicts: in the Philippines, 69 class opposition, 10 classes, economic: and political fragmentation, 69–70; and voting, 69; definition of, 105 closed election, 43 Cojuangco, Eduardo, 34–5, 68, 70 Cold War, 35, 60 collective action: dilemmas of, 2; solutions to dilemmas of, collusion, 40 colonial legacy, 60 colonialism, 60–1, 76 communism: and national liberation, 60 Communist Party of the Philippines (CPP), 35, 61, 72–4 Communists: France, 10; Indonesia, 28, 53; Thailand, 60; the Philippines, 35 competition, electoral, 39 competitiveness, 20–1, 23 compulsory voting, 64 concentration of national assets/wealth, 13, 42, 77, 93, 96–7, 101 consensual elites, 9; chances of forming, 28; hallmarks of, 101 consensual/consociational democracy, 38, 105; supermajority/unanimity rule, 105; vs consensual elites, 105 consensus, 2, 27, 93 constitution, 39, 64, 67; Malaysian, 80; new Thai, 64; Philippine, 34 constitutional reform, 74 consumption level, 25 cooperation, 57, 99; and crisis as common threat, 25; and democratic stability, 2; and enforcement, 8; crisis as source of, 2; external events as sources of, 2; origins of, corporate governance, 95 corporate restructuring: state intervention in, 95; via debt workouts, 96 Corporate Restructuring Agreement, 96 correlation analysis, 51 corruption, 109 Crouch, Harold, 30 counter-elites, 28–9, 43, 47 134 Index creditors, 23–5 Creoles, 61 crisis: and resiliency of consensual elites during, 12; as source of initial cooperation, 10; currency/financial/ economic, 25; exogenous, 15; not cause of political cooperation/conflict but as catalyst, cronyism, 109 cross-pressures, psychological, 11 cross-voting: and democratic stability, 76; definition of, 118 currency board, 46 currency crisis, 25 current account, 23 Daewoo, 96 Daim Zainuddin, 78 de Venecia, Jose, 68, 117 de Villa, Renato, 68, 117 debt crisis: in Asia, 22; in Latin America, 22 debt, external, 18; short-term, 19 debtors, 23 Dee, Howard, 72 defection, 92 defection rate, 83 delegative democracy, 42, 77; and democratic consolidation, 100; and populism, 100 democracy, 23; advantage of, 16; and ethnic conflicts, 10; consensual vs majoritarian, 105; in Malaysia, 13; incurring economic crisis, 16; parliamentary, 13; pluralistic, 16; presidential, 16; stable, 105 Democrat Party, 59 Democratic Action Party (DAP), 79, 101, 111 democratic breakdown: and masses vs elites, 104 democratic consensus, democratic consolidation, 1, 3, 100; and path dependence, Democratic Forum (Indonesia), 29 democratic government: and revolutionary movement, 35 democratic legitimacy, theory of: assumption of, 104 Democratic Liberal Party (Korea), 39, 88 Democratic Soldiers, 32 democratic stability, 33; and economic crisis, 57; and political cleavages, 10; favorable structure of political cleavages for, 11 democratic transition, 1, 3, 57, 88, 100; in Indonesia, 46–8; in Korea, 13, 39; in the Philippines, 36; pacted, democratic uncertainty, 41 Department of Local Administration (Thailand), 64 dependency, 22 dependent economies, 21 deregulation, 22, 73 Deutsch, Karl W., 62 devaluation, 16, 18–9, 24; and hedge funds, 18; in China, 1994, 20; of baht, 63 developing economies, 18 Dewan Perwakilan Rakyat (DPR), 48 distribution of power see also balance of power; and cooperation, 8; even/uneven, divide and rule, 60 division of labor: ethnic, 37–8; international, 20 domestic demand, 23 East Asia, 21 East Timor, 55 Eastern Europe, 5; transition to market economies in, economic crisis, 3, 25, 43, 57; and authoritarian regimes, 16; and democratic breakdown, 3–4; and democratic consolidation, 1; and democratic legitimacy, 3; and electoral volatility, 4; and electoral/elite polarization, 4; and elite configurations, 99; and elite consensus, 13; and ethnic voting, 83; and political conflict, 3; and political elite consensus, 5; and political elites, 98; and political stability, 1, 99; as source of conflicts, 2; debt crises in Latin America, 17; effects on authoritarian regimes, 4; impacts on Malaysian ethnic groups, 84; in Eastern Europe, 17; in Mexico, 15; of the 1930s, economic development: models of, 15 economic growth: and political conflict, economic inequality, 24, 68; and political conflict, economic liberalism, 66 economic monopoly, 42, 94 economic performance, 66; in the Philippines, 19; under Suharto, 31 economic performance, regional: strong before Asian economic crisis, 15 Index 135 economic policies, 78; and political elites, 98; market-oriented, 23 economic programs: Keynesian, 102 economic recession, 66 economic recovery: explained, 102 economic reform, 98 economic structure, 21 economy: Japanese, 18, 21; US, 18, 21 effective number of parties, 29, 39; definition of, 109; in Indonesia, 29, 50; in Korea, 39; in Malaysia, 37; in Thailand, 31; in the Philippines, 35, 67 Egypt, 47 Ekkaparb (Solidarity), 115 El Salvador, election commission, 64 elections, 9, 43; and Malays, 13; candidates and positions in the Philippines, 117; in France, 1962, 9; in Indonesia, 29, 49–50, 53; in Korea, 39, 40–1, 89–90; in Malaysia, 13, 37, 80, 111; in Thailand, 31, 121; in the Philippines, 34, 67; of MPR chairman, 54; presidential, 16 electoral system, 48–9, 57, 88; effects of, 49; in presidential election of Indonesia, 55 elite configurations, 99 elite consensus, 77, 93; and economic reform, 93; deficient in the Philippines, 67; different conditions for paths to, 6; in Korea, 42; in Malaysia, 82; on political neutrality of Korean military, 77; paths to, 5; vs civic culture/social capital, elite convergence, 9, 58, 68, 75, 99; and anti-system parties, 9; and Asian economic crisis, 61; and electoral coalition, stable and broad, 9; and electoral rules, 9; and ideological differences, 9; and spatial theory, 11; and theory of political cleavages, 10; dissident elites, 9; explained, 9; favorable political cleavages for, 10; how to apply theory of, 11; in France, 9; prospects for, in the Philippines, 70 elite cooperation: and regime stability, 98; induced jointly by power balance and crisis, 8; types of, elite differentiation, 5–6, 12–3, 37, 39, 41, 76, 93–4, 97, 101; and chaebols, 42; definition of, 5; in Korea, 13, 77 elite dissension, elite fragmentation, 32, 39, 99; and political cleavages, 52 elite integration, 5–6, 12, 37, 76; definition of, elite pact see elite settlement elite settlement, 2, 43, 57, 99; absent in Indonesia, 49; and Alliance (Malaysia), 38; and economic crisis, 45; and extrication, 7; and four-player game, 7; and transplacement, 7; compared with elite convergence, 9; El Salvador’s peace accords in 1994, 8; explained, 6; Glorious Revolution, 8; how to apply theory of, 9; in game-theoretical terms, 7; in Korea, 39; possible obstacles to, 45; variables of, 45 elite theory: crisis viewed as source of cooperation, elites, 44, 105; consensual, 5,9, 39; definition of, 2; divided, 5, 9, 12, 29, 33; divided in precrisis Indonesia, 28; elite configurations, 5; elite transformations, 5; fragmented, 5, 9, 12–3, 39, 46, 57; fragmented, in Indonesia, 57; ideocratic, 5, 12; in precrisis Korea, 13, 43; in precrisis Malaysia, 12, 39; in precrisis Philippines, 33, 61; in precrisis Thailand, 31, 58; military, 28; paths to elite cooperation, 6; semi-consensual, 12, 13, 39; semi-consensual in precrisis Malaysia, 37; types of, 5, 28 England, Enrile, Juan Ponce, 72 Enriquez, Salvador, 66 entry barrier, 41 Estrada, Joseph E., 66; and communists, 74; as populist, 66, 71; elected as president, 68 ethnic Chinese, 37; and US colonial policy, 61; in Southeast Asia, 38; in Thailand, 60; in the Philippines, 61; proportions of, 111 ethnic cleavage: without single non-arbitrary center, 11 ethnic conflict, 38, 84 ethnic identity, 58; qualitative and indivisible, 10–11 ethnic violence, 12 ethnic voting, 13, 41, 101 ethnicity, 10 ethno-linguistic ties, 62; and Philippine presidential election, 70 export markets, 20–1 136 Index factions: military, 30, 60; military vs civilian, 31 family planning, 67 fascism, 12 Federal Reserve Bank (US), 107 Federalist Papers, 105 Financial and Economic Stabilization Board (Indonesia), 46 financial crisis, 25 financial institutions, 18–9, 24–5; restructuring of, 23 Financial Institutions Development Fund (Thailand), 63 fixed terms, 16 focal point: examples of, foreign direct investment, 19 foreign exchange markets, 19, 23, 25 foreign exchange reserves, 19, 106; in China, 20 foreign ownership, 22, 24 formal theory, 99; central issue of, fragmentation, 33, 53, 61 France, 4, Frieden, Jeffry, functional interdependence, 38 game theory: asymmetric equilibrium, 2, 8; focal point, 7; non-Pareto-optimal equilibrium, 8; Pareto-optimal equilibrium, 2, game, self-enforced, Gascon, Chito, 67 Gaullist, Geddes, Barbara, 4, 104 Gerakan Ra’ayat Malaysia, 111 Germany, global economic system, 24 globalization, 22 Glorious Revolution, Golkar, 29, 48, 50 government: and businesses, 97 government debts, 24 government subsidies, 23, 46 governments, 24–5; overloaded, 25 Grand National Party, 89 Great Depression, 23 growth, 15; debt-financed, 18; export-driven, 19; rates of, 23 Habibie, Bacharudin J., 46, 55 Haggard, Stephan, 3, 16, 42 Hamzah Haz, 56 Hanaram (Korea), 94 Hanbo, 87 Harakah, 81 Harmoko, 113 Harn Linanond, 59 Harun Din, 82 hedge funds, 18 hegemonic parties, 13 heterogeneity, 11 Higley, John, 5, 6, 28 homogeneity, 11 hot money, 19 Huntington, Samuel, 39 Hutomo Mandala Putra, 55 Hwang, Inhak, 42 Hyundai, 93, 96 ideology, 58; definition of, 105 Idham Chalid, 29 immigration, 37 imperial president, 42 income distribution, 10 income gap, 24 incompatibility of democracy and ethnicity: psychological explanation of, 10; spatial theory-based explanation of, 11 Indonesia, 9, 15–16, 19, 42–3, 93, 99, 102; characteristics of elites, 49; economy during Asian crisis, 24; external debt, 19; May riots, 47; militant Islamists, 53; military coup of 1965, 28; presidential election of 1999, 55; regional attachments, 52; results of MPR chairman election, 54–5; unsettled issues in, 49 Indonesian Democratic Party (PDI), 29, 46 Indonesian Muslim Intellectuals, 52 Indonesian Muslim Students Association, 53 Indonesian Nationalist Party (PNI), 29 inflation, 17, 31; and riots, 47 institutional design, 46, 48 interest rates, 17, 21, 23 Internal Security Act, 79 International Monetary Fund (IMF), 18, 27, 63, 89; economic policies of, 24, 46 International Monetary Fund (IMF) program: effects on regional voting, 90 investor confidence, 19 Islam, 50; in Indonesia, 52; traditional/modernist, 51 Islamic state, 36, 80 Islamization, selective, 82 Index 137 issue dimension (cleavage line): linear, 11; predominant, 10; single/multiple, 11; with non-arbitrary center, 10 Italy, Jalandoni, Luis, 72 James II (England), Japan, 16, 21, 46, 63 Java, 50 Kaufman, Robert R., Kelantan, 82 Keynesianism, 17 Kia, 87 Kim Dae Jung, 16, 39–41, 88, 90–1; and chaebol owners, 95; and IMF program, 89, 93; neoliberal vs social democrat, 93 Kim Jong Pil, 39, 88–9 Kim Jung Il, 90 Kim Young Sam, 39, 40, 88 King Bhumibol Adulyadej, 63 Korea, 15–16, 19, 21, 24, 101; corporate restructuring, 95; debt negotiations, 94; disappearance of authoritarian/ democratic cleavage, 43; distribution of voters according to places of birth, 41; external debt, 18; feeble rule of law, 89; government and banks, 94; lack of elite consensus on socioeconomic issues, 77; policy consensus, 93; political elites and regional voting, 91–2; power-sharing agreement of 1997, 88; semi-consensual elite, 12; state expansion after crisis, 94 Korn Dabbaransi, 64, 116 Kwangju Incident, 41, 112 Laban ng Makabayang Masang Pillipino (LMMP), 68 Labanan ng Mamamayan ang Bagong Diktadurya (Lambada), 67 labor markets, 23 labor reform, 96 Lakas ng Edsa-National Union of Christian Democrats-United Muslim Democratic Party (Lakas-NUCD), 68 land reform, 34, 61 Lande, Carl, 62 landed elites, 34 Laos, 60 Latin America, 2–5, 22; democratic transitions in, Laurel, Jose B., 34 Laurel, Salvador H., 34–5 layoffs, 23 Lee In Je, 88 legitimacy, liberal capitalism, 23 liberal democracies, liberalization, 17, 22, 24, 46, 73 Lijphart, Arend, 105 Lim, Afredo, 117 linear cleavage line, 62, 99 Linz, Juan, 3, 6–7 logrolling, 54–6 Long Term Capital Management, 107 Mahathir Mohamad, 22, 78, 83, 85 majority rule, 55, 105, 115; and ethnic conflicts, 10–11 majority shift, 83 Malayan Civil Service, 37 Malays, 37, 84; district-level percentage, 83 Malaysia, 15–16, 22, 25, 42, 62, 98,101; austerity economic package, 77–8; demographic change, 76; external debt, 19; features of cleavage structure, 38; Malay ownership of capital, 77; oppositions, 13; origins of ethnic coalition, 37; policy shift in 1988, 78; semi-consensual elite, 12, 76 mandate, democratic, 41 Manoon Roopkachorn, 32, 59 Marcos, Ferdinand, 34, 67 Marcos, Imelda, 34–5, 37 markets, 17 martial law, 34, 67 Masjumi, 29 mass mobilizations: avoidance of, 100 mass rallies, 67 maximization, payoff, Medan, 47 median voter, 11 median voter theorem, 11 Megawati Soekarnoputri, 30, 47, 115 mestizo, 61 Mexican peso crisis, 63 middle classes, 105 military, 28, 36, 38, 47–8, 64–5; ABRI/TNI (Indonesia), 113; and political parties of Thailand, 59; dominant but fragmented, 58; factions in Indonesian, 29–30; factions in Thailand, 31; generals in Thailand, 33; 138 Index in MPR (Indonesia), 48; in Thai politics, 59; Philippine, 61; politically oriented, 111; professionalism of, 58 military bases: US, 35 military coups, 13, 31, 36, 53; absent in Malaysia, 38; in Indonesia of 1965, 28; in Korea of 1960, 88; in Thailand, 32–3; in the Philippines, 36 military regime: Korea in comparative perspective, 112 Mindanao, 61 Missouri Compromise of 1820, Mitra, Ramon V., 35 mixed election system, 64 Mo, Jongryn, 113 monetary regime, 78 moral hazard, 22 Moro Islamic Liberation Front (MILF), 35 Moro National Liberation Front (MNLF), 35 Muhammadiyah, 52 Murdani, Benny, 29–30 Musa Hitam, 112 mutual trust, Nahdlatul Ulama, 29, 53 Nasution, 108 National Democratic Front of the Philippines (NDFP), 72, 118 National Economic Action Committee, 78 National Front (BN), 12, 76, 101; characteristic of, 37; not personalistic, 37 national savings, 15 nationalism, 50 nation-state building, 36 Nazareno, Joselin, 73 negotiated/pacted transitions, 7, 39; and balance of power, neoliberal reform: beneficiary of, 27; source of state intervention in, 94 neoliberalism, 25, 69; and concentration of national assets/wealth, 102; and interventionist state, 102; in place of developmental state, 25 Netherlands, 4, 72 New Aspiration Party, 32, 59, 65 New Development Policy, 76 New Economic Policy, 76 New Korea Party, 88 New Order, 28; and elite configurations, 31; and students, 30; oppositions under, 29; vs New Society (Philippines), 109 New People’s Army (NPA), 35 New Society (Philippines), 109 Nik Abdul Aziz Nik Mat, 80, 82 Obillo, Victor, 73 oligarchs, 33, 36, 61; Aquino/Cojuangcos, 71; industrial, 13, 42, 77, 94; Macapagals, 71; Osmenas, 71; Philippine, 33; Rocos, 71 Olson, Mancur, Organization for Economic Cooperation and Development (OECD), 42 organized uncertainty, 13 Osmena, Emilio, 68 Osmena, John, 117 pak taharn, 59 Palang Dharma, 59 parliamentary system, 88 Partai Amanat Nasional (PAN), 48, 50 Partai Demokrasi Indonesia-Perjuangan (PDI-P), 48, 50 Partai Kebangkitan Bangsa (PKB), 48, 50 Partai Komunis Indonesia (PKI), 28 Parti Islam Se Malaysia (PAS), 79, 101; and political stability, 82; anti-development party, 82; membership of, 81; unintended beneficiary of reform movement, 86 Parti Keadilan Nasional (Keadilan), 79, 82; election manifesto of, 79; political viability of, 87 Parti Rakyat Malaysia (PRM), 79 party systems see also effective number of parties; 33; fragmented, 29 paternalism, 62 path dependence, patron-client ties, 100 payoffs, peace agreement: with MNLF, 35 peace negotiations: with CPP in the Philippines, 35 People’s Consultative Assembly – Interim (MPRS), 29 People’s Consultative Assembly (MPR), 47; composition under Suharto, 48; definition of factions (fraksi), 114; factions of, 153 People’s Initiative for Reform, Modernization, and Action (PRIMA), 66 people’s power: and stable democracy, 100 peso, Philippine, 16 Petition of 50, 20 Philippines, 12, 15–6, 29, 36, 39, 43, 60, 99, 100, 102; as crisis case, 15, 25; classes vs ethno-linguistic ties, 70; Index 139 constitutional change movement, 66; external debt, 19; IMF’s Extended Fund Facility, 66; oligarchs, 71; peace negotiations with communists, 72 planned economy, 17 pluralism, 94 plurality rule, 49, 64; effect of, 35, 114 policy immobilism, 53, 56–7 policymakers: liberal, 24 political cleavages, 33, 61, 99; and strategic alliances, 54; ascriptive, 11, 62; authoritarian/democratic, 39; crosscutting vs reinforcing, 11; democratic vs anti-democratic, 40; ethno-linguistic, 100; in Indonesia, 50; in Korea, 39; mutable, 100; nationalist vs Islamic, 51; non-ascriptive, 11; oldregime vs reformist, 51; Philippine, 61; regional, 13, 39, 41; salient, 10–11 political conflict: and economic crises, 1; and economic performance over time, political culture, 112 political economy: customary concern of, political elites, 25, 98 political extremism, political fragmentation, 64 political institutions: stable, 10 political parties, 29, 50; and chaebols, 42; in Thailand, 60 political resilience: explained, 102 political stability: and economic crises, 1; and economic crisis vs growth, 4; and economic stability, populism, 74–5, 100; and democratic consolidation, 100; and Thaksin vs Estrada, 121; in Thailand, 121; in the Philippines, 100 portfolio investment, 78 positive political economy see formal theory poverty, 24–5 poverty alleviation, 31 poverty incidence, 69 Prachachon (People Party), 115 Prachakorn Thai Party, 65 predatory rule, 36, 61 preferences: single-peaked, 11 Prem Tinsulanonda, 32, 63 presidential system, 88 privatization, 23, 73 production, costs of, 23 property rights, 36 proportional representation system, 46, 48 Przeworski, Adam, Puang Chon Caho Thai (Thai People’s Party), 32, 33 Putnam, Robert, quadratic regression model, 84 rainbow cabinet, 57 Rais, Amien, 47, 53–4, 56 Ramos, Fidel V., 34–5, 66; and term extension moves, 130 Rawlsian veil see organized uncertainty realignment, 16, 66, 72, 74, 87, 89, 98 real-name banking transactions, 40 Reformasi, 55, 104 regime types, 1; and economic crises, regional cleavages: policy-neutral, 77 regionalism, 10; in voting, 91; policy-neutral, 41; regional ties/ attachments, 41, 101; regional voting vs ethnic voting, 41; rigid, 18, 77 regression coefficients, 84 relative autonomy: from the state, 101 remittances, overseas, 108 Remmer, Karen, 2, revolution, ringgit, Malaysian, 25 riots of 1969 (Malaysia), 84, 111 Roco, Raul, 70, 72, 117 Roh Tae Woo, 39, 88 rule of law, 77 rules of the game, 13, 43, 46, 49, 57, 67, 74 rupiah, Indonesian, 46 Saalfeld, Thomas, Sachs, Jeffrey, 107 salience, 70 Saligang Adhikain ng MamamayanBantayan (Samba), 67 Salonga, Jovito R., 35 Samak Sundaravej, 65 Sammakhi Tham, 33 Sanan Khachornprasart, 59 Sanoh Thienthong, 64 Santiago, Miriam Defensor, 34, 68, 72 Sarawak Alternative Front, 119 Sato, Mitsuo, 107 scatter plot, 84 sectarianism, 52 sectional dominance, self-criticism, 22, 24 Semangat 46, 82 semi-consensual elites, 101; resilience of, 101 semi-democracy, 76 140 Index Senate (Thailand), 31, 59 separation of industrial and banking capital, 94 separatism, 49; Muslim, 35 Singapore, 16, 38, 98 Sison, Jose Ma, 73 Smith, William, Social Action Party, 59 social capital: and democratic stability, social pluralists, 11 Social Weather Stations, 69 Socialist-Communist Common Program for Government (France), 10 Socialists (France), 10 South Sulawesi, 50 Southeast Asia, 21; competing with China, 20 sovereign default, 94 sovereign-constituency transgression game, Spanish rule, 61 speculative capital, 18–19 speculators, 18 spill-over effects, 93 Sri Bintang Pamungkas, 29 Sri Sultan Hamengkubuwono X, 47 state, 17; expansion of, 93; interventionist, 101 state intervention, 17, 23, 94 state of emergency, 64 state-socialism, 12, 17 stembus accoord, 114 Stepan, Alfred, 3, 6–7 strong state: consequence of economic crisis, 97 succession, 16 Suchinda Kraprayoon, 32 Suharto, 28–30, 45–6; resignation of, 47 Sukarno, 28 sultanistic regime, 33, 36 sultanistic rule, 61 supermajority elite group, 12; National Front, 12 Taiwan, 16, 25, 98 takeovers: hostile and non-hostile, 24 Tanjung, Feisal, 30 Tarrin Nimmanhaeminda, 65 technocratic government, 64 Tengku Razaleigh Hamzah, 82, 112, 120 term limits, 66; effects of, 72 Thai Rak Thai Party, 121 Thailand, 12, 15–16, 19, 33, 36, 39, 42–3, 93, 99; absence of elite circulation, 74; absence of elite convergence, 65; current account surplus, 23; Democrat Party, 65; external debt, 18; military and political reform, 65; new constitution, 64; political options during economic crisis, 62; prospects for elite convergence, 74; restrained power struggles, 32; unstable regime, 15 Thaksin Shinawatra, 121 Thanong Bidaya, 63, 65 Tories, Torres, Ruben, 66 trade unions: militancy of, 102 transitions by agreement see also negotiated/pacted transitions transparency, 16, 23, 101 transplacement, 39 Tripoli Accord of 1976, 36 trusteeship, economic, 19 turnout, 91 uncontested seats, 82 unemployment, 15, 17, 23–4,90 United Development Party (PPP), 29, 46, 52,113 United Malay National Organization (UMNO), 38, 78; seat share in parliament, 119 United States (USA), 21, 46 university graduates, 23 US government, 63 Utusan Malaysia, 81 Velarde, Mike, 74 veto power, 57 Vietnam War, 60 Visiting Forces Agreement, 73 vote distribution: vs seat distribution, 109 voting: rigid, 13 vulnerability, financial, 18 Wahid, Abdurrahman, 29, 47, 53 Wan Azizah Wan Ismail, 79, 83 Weingast, Barry, 2, Whigs, Wiranto, 55 won, Korean, 16 World Bank, 24 yen, Japanese, 21 Yi Hoi Chang, 88 Young Turks, 32 Zimmermann, Ekkart, ... and tan beng hui Governments and Markets in East Asia The politics of economic crises Jungug Choi Governments and Markets in East Asia The politics of economic crises Jungug Choi First published... the Indonesian, the Filipino and Thai, and the Malaysian and South Korean Chapter concludes with a brief summary of my findings Most other studies of the Asian economic crisis deal with its economic. .. formation of the Gaullist winning coalition in 1960 until the moderation of the Socialists in the 1970s and their electoral victory in 1981 is the paradigm case of an elite convergence.30 The French