Public policy in asia

Public Policy in Asia Public Policy in Asia Implications for Business and Government Edited by Mukul G Asher, David Newman, and Thomas P Snyder QUORUM BOOKS Westport, Connecticut • London Library of Congress Cataloging-in-Publication Data Public policy in Asia : implications for business and government / edited by Mukul G Asher, David Newman, Thomas P Snyder p cm Includes bibliographical references and index ISBN 1–56720–432–5 (alk paper) Asia—Economic policy Policy sciences—Asia I Asher, Mukul G II Newman, David, 1956 HC412.P83 2002 338.95—dc21 2001016129 British Library Cataloguing in Publication Data is available Copyright ᭧ 2002 by Mukul G Asher, David Newman, and Thomas P Snyder All rights reserved No portion of this book may be reproduced, by any process or technique, without the express written consent of the publisher Library of Congress Catalog Card Number: 2001016129 ISBN: 1–56720–432–5 First published in 2002 Quorum Books, 88 Post Road West, Westport, CT 06881 An imprint of Greenwood Publishing Group, Inc www.quorumbooks.com Printed in the United States of America TM The paper used in this book complies with the Permanent Paper Standard issued by the National Information Standards Organization (Z39.48–1984) 10 To Radha, Andrew, Benjamin, Trisha, and Janet Contents Preface Introduction: The Challenge of Policy Studies in Asia Thomas P Snyder, David Newman, and Mukul G Asher I Growth, Income Security, and Fiscal Reform ix Economic Growth and Income Inequality: The Malaysian Experience Donald R Snodgrass 11 Economic Growth and Income Inequality: The Korean and Thai Experiences Nanak Kakwani and Hyun H Son 33 Aging Populations and Income Security: The Challenges in East Asia Robert L Clark 61 Aging Populations and Income Security: A Framework for Analysis and Action G Shantakumar 81 Globalization and Fiscal Policy: Rationale for Reform in Southeast Asia Mukul G Asher 93 Globalization and Fiscal Policy: Tax Reform in Japan Hiromitsu Ishi 121 viii Contents II Governance and Management Reform 143 Globalization and Economic Management Anwar Shah 145 Learning and Innovation in Public Institutions: Lessons from Singapore Tan Tay Keong and Khoo Boon Hui 175 10 Good Governance: The Role of the United Nations Gambhir Bhatta 193 11 Good Governance: The Role of Legal Institutions Annie de Roo and Robert Jagtenberg 217 III Technology, Innovation, and the Role of Government 239 12 Science, Technology, and Innovation: Issues and Rationales Mark Dodgson 241 13 National Technology Policy: The Singapore Experience Koh Ai Tee and Koh How Eng 265 14 National Technology Policy: The Korean Experience Linsu Kim 283 IV Environmental Policy and Management 295 15 Integrated Environmental Assessment Colin Kirkpatrick 297 16 Environmental Valuation Jack L Knetsch 311 Index 331 About the Contributors 337 Preface Public policy and policy studies is a growth industry around the world, and Asia is no exception While the economic boom of the 1990s suggested to some that Asia was somehow removed from any economic budget constraint, post-crisis Asia has awakened to a new set of realities: political choice involves trade-offs between alternatives; individuals within particular countries have different propensities to trade off among alternatives, engendering decisions with a political element; an increasingly politicized environment raises questions of legitimacy with respect to process; and a new economic reality of limited budgets constrains government efforts to sweeten difficult decisions These environmental changes have attracted the attention of policy analysts from both within and outside the region internationalizing the field of policy studies Globalization, the growth of international institutions and transnational actors, and, particularly for those of us in Asia, the Asian economic crisis have internationalized policy studies and put policy studies on the map in Asia in the past decade In the United States in recent years, public policy programs have embarked on a new round of expansion in international and comparative policy studies While the Association for Public Policy Analysis and Management (APPAM) editorial board is still drawn exclusively from the United States, it does have at least two international institutional members (the National University of Singapore and Keio University in Japan), and non-APPAM member schools have been created in Korea (as an offshoot of the Korean Development Institute), in Argentina (Universidad Torcuato di Tella), and in England (University College London School of Public Policy) The trend in the future will be to look cross-nationally at best policy practices and examine which are importable to one’s own circumstances However, the art of lesson drawing is not easy, and neither is implementation of strategies, however appropriate Indige- x Preface nous research capability, policy entrepreneurship, and sustained effort remain indispensable for successful lesson drawing Our goal in this volume, in part, is to bring established international and regional experts together to examine several of the most pressing concerns facing Asia In doing so, we have incurred a series of debts to numerous individuals and institutions We would like to thank Singapore Pools, the Lien Foundation, the Lee Foundation, and the International Development Research Centre for financial support related to this project We would like to express our appreciation to the National University of Singapore’s Public Policy Programme and its director, Ong Jin Hui, for providing an intellectually stimulating environment, which has made projects such as this possible In Singapore we would like to thank Agnes Tan and Deborah Chew for their administrative assistance with the details associated with this effort The contributors to this volume truly deserve the credit for it They labored under artificially tight deadlines and our requests for clarification and in some instances elucidation, especially when their knowledge exceeded our understanding We thank them for their contribution and understanding It was a pleasure to work with each and every one of them We gratefully thank Usha Sritharan and Brenda Nicole Lim Mei Lin for their assistance in preparing the manuscript The two of them responded with good spirit to having three bosses insisting on incompatible changes Juliana Bte Ali and Josephine Chiu also deserve our appreciation for liberating Usha’s time As always, we remain responsible for any errors Chapter Introduction: The Challenge of Policy Studies in Asia Thomas P Snyder, David Newman, and Mukul G Asher Much of East Asia and Southeast Asia has seen dramatic changes over the past two decades These changes provide an excellent laboratory for exploring and examining our understanding of social, economic, and political institutions and theories The region also provides an excellent opportunity to apply theories and concepts to improve policy decisions and the lives of the people It is the objective of this book to aid in these endeavors EAST ASIA AND SOUTHEAST ASIA—DIVERSITY AND CHANGE Over the past two decades many countries in East Asia and Southeast Asia have experienced rapid growth At the same time growth seems to have passed over other countries where citizens barely eke out a daily existence At one end of the spectrum is Japan, which modernized rapidly after World War II, and by any standards is a fully developed country Then there are the Asian Tigers— Korea, Taiwan, Hong Kong, and Singapore—which grew rapidly in the 1980s and 1990s and are on the verge of or have achieved developed status Then there are Malaysia and Thailand, and to a lesser degree China, Indonesia, and the Philippines, which have begun to develop but still have a long way to go; and at the bottom of the development ladder are Cambodia, Laos, Myanmar, and Vietnam, which are essentially undeveloped countries Just as the level of development varies widely in East Asia and Southeast Asia, so development policies and practices Some countries have relied largely on internal savings and investment, such as Japan and Korea, while other countries have relied heavily on foreign investment, such as Singapore In some countries development has focused on trade, while in others it has focused on Public Policy in Asia increased internal demand The countries have also varied widely in their policies toward education and the adoption and diffusion of new technology No clear-cut development model has emerged that meets the needs of all the countries in the region Diversity in the region also extends beyond growth, development, and economics The size of the countries ranges from two of the largest countries in the world, China and Indonesia, with over billion and 200 million people, respectively, to Singapore, a city-state with only million people The region has some of the most densely populated areas of the world in Java, Japan, and coastal China, and some of the most sparsely populated areas in Borneo, Laos, and Western China The countries of the region also vary greatly along ethnic lines China and Japan are relatively homogeneous, while Indonesia, Malaysia, and Singapore are ethnically diverse Politically the countries run the spectrum from open democracies in countries such as the Philippines, Taiwan, and Thailand to authoritarian states in countries such as China, Laos, Myanmar, and Vietnam THE EMERGENCE OF POLICY ANALYSIS IN ASIA With the growth in East Asia and Southeast Asia over the past two decades and the diversity of political, social, cultural, and economic institutions, the region is an ideal place for policy analysts and social scientists to examine and verify, as well as to apply, the theories and principles that underlie contemporary policy analysis The region is thus a natural place to examine the determinants of growth—why growth occurs and why certain policies work in one area and not in others The region is also a natural place to look at the consequences of growth—who benefits from growth and who gets left behind, and what can be done to improve the fate of those who get left behind Much of social science theory has evolved in the West, and there are questions about the universality and cultural/contextual relevancy of the theory in the rest of the world The issues of verification and applicability are just starting to emerge in both the traditional academic disciplines, such as economics and political science, and in policy analysis circles Much of the research on Asia prior to this decade focused on comparative studies and area/regional studies Usually these fields have had weak links to traditional academic disciplines in the social sciences and have often focused on descriptive and cultural analysis In recent years the lines between comparative analysis and traditional academic disciplines have begun to merge Comparative analysis is becoming more formal and dependent on the theories and foundations of the traditional academic disciplines, and the academic disciplines are becoming more cognizant of Asia and the rest of the world in developing the theories and principles that underlie their fields The primary objective of this book is to improve policy analysis in Asia by bridging the gap between theory and practice In some of the chapters, the focus is on the application of theory to problems in the regions Chapter on aging Environmental Valuation 327 The results of some studies have indicated that the disparity may decrease, or even disappear, over repeated trials (see, e.g., Shogren et al 1994) However, it now appears, on the basis of further tests, that such results may be attributable to the failure of the Vickrey auction used in these studies to accurately reveal people’s valuations (Knetsch, Tang, and Thaler 1999) The early and well-known Kahneman and Tversky “Prospect Theory” paper (1979), calling attention to the disparity between people’s valuations of gains and losses, is reputed to be the most often-cited paper ever published in Econometrica (Laibson and Zeckhauser 1998), a testament to both the importance of the finding and the range of its implications Hanemann (1991, 645) has correctly pointed out that standard theory can, under particular conditions, allow for a large difference in gain and loss values for an identical entitlement These include a positive income effect and a lack of substitutes for the good at issue However, large differences have been observed under conditions that violate those required for this standard theory explanation The reference effect giving rise to the pervasive differences observed in the numerous tests and in common experience is, as Hanemann notes, “a different phenomenon.” Two types of scales, with attendant sanctions, might be used: one based on changes in specific resources, such as the loss of particular shellfish populations, and one based on activities that give rise to resource losses, such as an oil spill Each has advantages, and determining the most appropriate seems likely to depend on particular circumstances and management requirements (Chuenpagdee, Knetsch, and Brown 2001) For example, Exxon apparently paid $1.15 billion (payable over 11 years) for the natural resource damages caused by the Exxon Valdez oil spill, even though a contingent valuation study indicated that lost existence values alone were $3 billion (Portney 1994) REFERENCES Carson, Richard T., and Robert Cameron Mitchell 1993 Contingent Valuation and the Legal Arena In Valuing Natural Assets: The Economics of Natural Resource Damage Assessment, ed Raymond J Kopp and V Kerry Smith Washington, D.C.: Resources for the Future Chansang, H., and S Poovachiranon 1994 The Distribution and Species Composition of Seagrass Beds along the Andaman Sea Coast of Thailand Phuket Marine Biological Center Research Bulletin 59: 43–52 Chuenpagdee, Ratana, Jack L Knetsch, and Thomas C Brown 2001 Environmental Damage Schedules: Community 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An Analysis of Dollar Responses to Public Issues Journal of Risk and Uncertainty 19: 220–42 Kahneman, Daniel, David Schkade, and Cass R Sunstein 1998 Shared Outrage and Erratic Awards: The Psychology of Punitive Damages Journal of Risk and Uncertainty 16: 49–86 Kahneman, Daniel, and Amos Tversky 1979 Prospect Theory: An Analysis of Decisions under Risk Econometrica 47: 263–91 Kahneman, Daniel, Peter P Wakker, and Rakesh Sarin 1997 Back to Bentham? Explorations of Experienced Utility The Quarterly Journal of Economics 112: 375– 405 Knetsch, Jack L 1964 The Influence of Reservoir Projects on Land Values Journal of Farm Economics 46: 231–43 Knetsch, Jack L 1990 Environmental Policy Implications of Disparities between Willingness to Pay and Compensation Demanded Measures of Value Journal of Environmental Economics and Management 18: 227–37 Knetsch, Jack L 1997 Reference States, Fairness, and Choice of Measure to Value Environmental Changes In Environment, Ethics, and Behavior, ed Max H Bazerman, David M Messick, Ann E Tenbrunsel, and Kimberly A Wade-Bensoni San Francisco: Lexington Press Knetsch, Jack L., and John A Sinden 1984 Willingness to Pay and Compensation Demanded: Experimental Evidence of an Unexpected Disparity in Measures of Value The Quarterly Journal of Economics 99: 507–21 Knetsch, Jack L., Fang-Fang Tang, and Richard H Thaler 1999 The Endowment Effect and Repeated Market Trials: Is the Vickrey Auction Demand Revealing? University of Chicago Working Paper Laibson, David, and Richard Zeckhauser 1998 Amos Tverksy and the Ascent of Behavioral Economics Journal of Risk and Uncertainty 16: 7–47 Environmental Valuation 329 Loewenstein, George F 1988 Frames of Mind in Intertemporal Choice Management Science 34: 200–214 Odean, Terrance 1998 Are Investors Reluctant to Realize Their Losses? The Journal of Finance 53: 1775–98 Peterson, George L., and Thomas C Brown 1998 Economic Valuation by the Method of Paired Comparison, with Emphasis on Evaluation of the Transitivity Axiom Land Economics 74: 240–61 Portney, Paul R 1994 The Contingent Valuation Debate: Why Economists Should Care The Journal of Economic Perspectives 8: 3–17 Rutherford, Murray B., Jack L Knetsch, and Thomas C Brown 1998 Assessing Environmental Losses: Judgments of Importance and Damage Schedules Harvard Environmental Law Review 22: 51–101 Shefrin, Hersh M., and Meir Statman 1985 The Disposition to Sell Winners Too Early and Ride Losers Too Long: Theory and Evidence Journal of Finance 40: 777– 90 Shogren, Jason F., Seung Y Shin, Dermot J Hayes, and James B Kliebenstein 1994 Resolving Differences in Willingness to Pay and Willingness to Accept The American Economic Review 84: 255–70 Sunstein, Cass R 1993 Endogenous Preferences, Environmental Law Journal of Legal Studies 22: 217–54 Sunstein, Cass R., Daniel Kahneman, and David Schkade 1998 Assessing Punitive Damages (with Notes on Cognition and Valuation in Law) The Yale Law Journal 107: 2071–2153 Tolley, George S., and Robert G Fabian 1998 Issues in Improvement of the Valuation of Non-Market Goods Resource and Energy Economics 20: 75–83 Turner, R Kerry, David Pearce, and Ian Bateman 1993 Environmental Economics Baltimore: Johns Hopkins University Press U.S National Oceanic and Atmospheric Administration Panel 1993 Report of the NOAA Panel on Contingent Valuation U.S Federal Register 58(10) (January 15): 4602–14 Vatn, Arild, and Daniel W Bromley 1994 Choices without Prices without Apologies Journal of Environmental Economics and Management 26: 129–48 This page intentionally blank Index Abdul Razak, Tun, 16 Accountability: fiscal implications for Southeast Asia, 101–3; of institutions, 158–59; traditional channels, 159 Affirmative-action programs See New Economic Policy (NEP) (Malaysia) Aging populations: in East Asia, 61–66; fiscal implications, 100–101; in Japan, 121–22; studies of, 83–87 See also Retirement plans Agricultural workers, retirement plans for, 68 Annan, Kofi, 196–99, 203–4, 209–10 Annuities, 74–75 Appraisal, of environment See Integrated environmental assessment Aristotle, 222 ASEAN Free Trade Area (AFTA), 107 Asian Development Bank, 218 Asian financial crisis, 1997–1999: Bretton Woods Institutions and, 210–11; fiscal implications, 94–98; in Korea, 39, 49, 54–55, 284–92; in Malaysia, 26–27; science, technology, and innovation policies, 247; in Thailand, 40, 42, 49, 54–55 Association of Southeast Asian Nations (ASEAN), 83 Borrowing, sub-national, 164–66 Bretton Woods Institutions (BWIs), 207– 11, 212, 218 Bumiputra See Malaysia Capital gains taxes See Taxation policy Chaebols, 286; foreign investment, 289; governance, 290–91; restructuring, 287– 88 Chen, Albert, 227 China: aging population, 61–62, 64, 85; decentralization, 154; direct foreign investment, 251, 252–54; GNP, 17; national system of innovation, 249–51; NGOs, 200–201; retirement plans, 66, 74, 75, 88; rule of law, 227, 231; science, technology, and innovation, 244, 246, 254, 256–58 Citizen participation, in economic management, 147–48, 160–61 Clarke, Donald, 227 Competence, allocation of, 219–20 Confucius, 221 Consolidated Appeal Process (CAP), 203 Consumption tax See Value Added Tax (VAT) Corporate tax See Taxation policy 332 Index Daim Zainuddin, Tun, 25 Damage schedule, for environmental loss, 318–26; Phangnga Bay example, 321– 26 Debt service burdens, 111 Decentralization: economic management, 150–62; fiscal controls, 100–102 Defined benefit plans, 68–69, 73 Defined contribution plans, 69, 88 Deming, W Edwards, 185 Democracy: fiscal implications, 101–3; rule of law, 223–25 Developing countries: reform of fiscal systems, 167–70; reform of public sector, 150–56 See also specific countries Direct foreign investment (DFI), in science, technology, innovation, 251–54; globalization and, 265–66; in Korea, 288–89; in Singapore, 269–74 East Asia See specific countries E-commerce, 108 Economic and Social Council (ECOSOC), 194, 195–96; Bretton Woods Institutions, 207–11; NGOs, 200, 204–5 Economic appraisal, of environment See Integrated environmental assessment Economic growth: Asian financial crisis, 94; debt service, 111; in Korea/Thailand, 34–38; law, 225–28; in Malaysia, 11–28; retirement plans, 65–66 Economic management, 145–71; decentralization/reform, 153–56, 160–62; developing countries, 150–56, 167–70; globalization, 145–50; institutions, 156– 59, 162–67; jurisdictional realignments, 150–53 See also Fiscal policy Economic structure, in Korea/Thailand, 36–38 Education: in Korea, 289; in Malaysia, 15, 16 Electronics, 245–46 Environmental assessment See Integrated environmental assessment Environmental valuation, 311–26; limits of current methods, context dependence, 314–18; limits of current meth- ods, gains and losses, 311–14 See also Integrated environmental assessment Ethnic heterogeneity: economic growth and, 11; in Malaysia, 11–12, 22 European Union, 218, 224 Exchange rates, 34 Expenditure structures, 106–9 Exports, 21 Family Income and Expenditure (FIAE) survey (Korea), 39, 42 Family Life Surveys (FLS), 86 Family structures, retirement and, 87–88 Fertility rate, 62 Fiscal policy: decentralization, 163–64; implications of globalization, 98–100; in Japan, reform of, 121–40; in Southeast Asia, 94–103; in Southeast Asia, reform of, 103–15 See also Economic management Fiscal sustainability, 103–5 Foreign direct investment (FDI) See Direct foreign investment (DFI) Free trade zones, 110 General System of Preferences (GSPs), 15 Ghazali Shafie, Tan Sri, 20, 22, 25 Gini index of income: Korea, 42, 44–50; Thailand, 43–50 Goh Chok Tong, 177 Governance: economic management, 145– 71; globalization’s challenges to, 145– 50; learning and innovation, 175–91; legal institutions, 217–36; United Nations and, 193–212 Governance for Sustainable Human Development, 232 Government orientation, indicators of, 161 Government research institutes (GRI) (Korea), 289–90 Gross National Product (GNP), 16–17; exchange rates and, 34 Hara, Fujio, 20 Health care issues, 89–90, 101 Index Hermalin Framework, 81–83 Hong Kong: aging population, 62; direct foreign investment, 251; GNP, 17; law, 230–31 Hussein Onn, Tun, 16 Impact assessment See Integrated environmental assessment Imports, 106–8 Income inequality: globalization and, 99; inverted U-shaped pattern of, 36; in Korea/Thailand, 42–50; in Malaysia, 11–28 Income security See Retirement plans Income tax See Taxation policy Indonesia: aging population, 61–62, 83, 85, 86; Bankruptcy Law, 224; decentralization, 101–2, 155; direct foreign investment, 251, 252; GNP, 17, 95; government revenue, 105; public debt, 95; retirement plans, 66, 69, 75, 76, 88, 112–13; science, technology, and innovation, 244, 245, 258–59; tax revenue, 108 Industrial Coordination Act of 1975 (ICA) (Malaysia), 14–15, 23 Inflation, poverty rate and, 54–57 Information revolution, 147, 149 Infrastructure costs, 99 Innovation See Science, technology, and innovation (STI) Institutions, defined, 181 Integrated environmental assessment, 297– 307; damage schedules, scales of importance, 318–26; impact assessment, 300–303; recommendations, 305–7; sustainable development, 297–300; of trade-related agreements, 303–5 See also Environmental valuation Intellectual property, 245–46 International Monetary Fund (IMF): fiscal incentives, 111; in Indonesia, 224; Special Data Dissemination Standard, 102; structural adjustment, 98; United Nations, 207 International Trade Organization (ITO), 207 Internet commerce, 146–47 333 Japan: aging population, 61–62, 64, 83; GNP, 17; law, 227, 230, 231; retirement plans, 66, 68, 72–75 Japan, tax reform in, 121–40; future level/ structure, 122–27; future reforms, 135– 40; personal/corporate/consumption mix, 130–35; recent developments, 127–30 Jayasuriya, Kanishka, 224 Judicial accountability, 158–59 Knowledge-based economy (KBE): defined, 266–69; knowledge acquisition, 269–71; knowledge creation, 272–76; knowledge diffusion, 271–72; Singapore as, 268–80 Korea, 33–58; aggregate inequality, 42– 50; aging population, 64, 85; analysis of poverty, 50–56; direct foreign investment, 251; economic growth/ income inequality, 34–38; GNP, 17; government, 284–86; individual welfare, 38–42; retirement plans, 69, 75, 88; science, technology, and innovation, 243–46, 254, 257–58, 283–92 Korean Institute of Health Social Affairs (KIHSA), 85 Kuznets, Simon, 36 Latin America: decentralization, 154; retirement plans, 66, 68–69, 76 Law, Capitalism, and Power in Asia (Jayasuriya), 224 Laws See Rule of law Leadership training skills, 182–83 Learning organization: public sector organizations, 182–84; Singapore Police Force as, 176, 184–91 Legal system, components of, 220 See also Rule of law Legitimate opposition, concept of, 222– 23, 231 Liberal democracy See Democracy Life expectancy, 63–64 Lindeman, David, 76 Localization, of authority, 150 Macao Plan of Action on Aging for Asia and the Pacific, 85 334 Index Mahathir bin Mohamad, 14, 20 Malaysia: aging population, 61–62, 83, 86; Asian financial crisis, 26–27; decentralization, 101; direct foreign investment, 251, 252; fiscal incentives, 110; government revenue, 103, 105; New Economic Policy (NEP), 12–26; public debt, 95; retirement plans, 66, 69, 74, 75, 76, 88, 112; science, technology, and innovation, 244–45, 247, 254, 257–58; tax revenue, 106–7, 108 Marketization, 100 Michigan, University of, 86 Miller-Adams, Michelle, 217 Monetary policy See Economic management; Fiscal policy Morey, Roy, 211 Multimedia Super Corridor (MSC) (Malaysia), 245, 247 Nakasone, Yushiro, 129 Naming-blaming-claiming pyramid, 234 National innovation system (NIS), 241, 247–49; in China, 249–51; concept of, 284; in Korea, 283–92; in Singapore, 265–80 National Institute of Aging (United States), 86 National Pensions Research Centre (NPRC) (Korea), 85 Nation-state See Governance New Economic Policy (NEP) (Malaysia): analysis, 21–26; objectives, 12–14; outcomes, 16–21; policies, 14–16 NGOs (nongovernmental organizations), 198–205, 207, 211–12 Non-Governmental Liaison Service (NGLS), 200 North, Douglas, 226, 227 Organization, defined, 180–81 Organized crime, 232 Pakistan, 200 Patents, 244–45 Pay-as-you-go social insurance systems, 69, 88 Pensions See Retirement plans People’s Republic of China (PRC) See China Permodalan Nasional Berhad (PNB), 14 Phangnga Bay, 321–26 Philippines: aging population, 83; direct foreign investment, 251; GNP, 95; government revenue, 103, 105; NGOs, 201, 203; public debt, 95; retirement plans, 76, 88, 112; science, technology, and innovation, 258; tax revenue, 108 Pistor–Wellons Survey, 227–28, 230 Plato, 222 Political development, 222–23; liberal democracy, 223–25; rule by law, 221–22 Poverty, income vs consumption measurement of, 50–56 See also Income inequality Privatization, 95, 98, 100 Provident funds, 69, 88 Public debt, 95 Public sector organizations, in Singapore, 176–74; bureaucratic structure, 179–80; as conservative culture, 178–79; institutionalizing tendencies, 180–82 Purchasing power parity (PPP) rate, 34 Quotas, in Malaysia, 14–15 RAND Corporation, 86 Research and development (R&D) See Science, technology, and innovation (STI) Retirement plans: challenges to, 72–77; demographic/economic environment, 61–66; financing, 111–13; future needs, 100–101; in Japan, 122–27; systems for, 66–72 Risk, allocation of, 219–20 Rule by law, 221–22 Rule of law, 217–36; bad government, 233–34; conflicts of interest, 219–21; East/West compared, 229–34; economic development, 225–28; good government’s symbiotic relationship with, 219; judicial accountability, 158– 59; political development, 222–23; political development and liberal democracy, 223–25; political develop- Index ment and rule by law, 221–22; shared learning, 235–36 Rule of relationships, 227 Sanctions, environmental See Damage schedule, for environmental loss Savings rates: during Asian financial crisis, 54; poverty and, 49–56 Science policy, defined, 242 See also Science, technology, and innovation (STI) Science, technology, and innovation (STI), 241–60; in China, 249–51; direct foreign investment, 251–54; infrastructure, 254–57; in Korea, 283–92; national innovation systems, 241, 247– 49; overview, 241–47; in Singapore, 265–80 Self-employed workers, retirement plans, 68 Senge, Peter, 176, 185 Shared learning, law and, 235–36 Singapore: aging population, 61–62, 83, 86, 100; direct foreign investment, 251, 252; fiscal incentives, 110–11; GNP, 17, 265; government revenue, 103, 105; as knowledge-based economy, 268–80; public sector organizations, 176–84; retirement plans, 66, 69, 74, 75, 76, 88, 112–13; science, technology, and innovation, 244–45, 254, 257–58; Singapore Police Force, 176, 184–91; tax revenue, 106–7 Singapore Police Force (SPF), 176, 184– 91 Social development, 160–62 Social impact assessment, 299 Social Security See Retirement plans Socio-Economic Survey (SES) (Thailand), 40, 43 Southeast Asia, fiscal implications, 94– 103; aging populations, 100–101; Asian economic crisis, 94–98; democracy/transparency of government, 101– 3; globalization, 98–100; marketization/ privatization, 100 See also specific countries Southeast Asia, fiscal reform, 103–14; in- 335 centives, 109–11; institutions, 113–14; Social Security, 111–13; structures, 111; sustainability, 103–5; tax and expenditure restructures, 106–9 See also specific countries South Korea See Korea State-owned enterprises, 95, 98, 100 Stock market capitalization, 95 Structure of economy: changes in Korea, 36–38; changes in Thailand, 36–38 Sub-national borrowing, 164–66 Sustainable development, 103–5 Sustainable human development (SHD): goals, 198, 205; UNDP and, 200, 218; United Nations and, 205–7 Switzerland, 232 Taiwan: aging population, 62; direct foreign investment, 251; GNP, 17; retirement plans, 66, 69, 75; science, technology, and innovation, 244–46, 254, 255–56, 257–58 Takeshita, Noboru, 129 Taxation policy: Asian financial crisis, 94; expenditure structures, 106–9; global issues, 146–47; globalization, 99–100; incentives, 109–11; in Japan, 121–40; Social Security income and, 112–13 Tax identification number (TIN) (Japan), 136–37 Technology policy, defined, 242–43 See also Science, technology, and innovation (STI) Tennessee Valley Authority, 181 Thailand, 33–58; aggregate inequality, 42– 50; aging population, 83, 85, 100; analysis of poverty, 50–56; decentralization, 102; direct foreign investment, 251, 252; economic growth/income inequality, 34–38; GNP, 17; government revenue, 105; individual welfare, 38– 42; Phangnga Bay area, 321–26; public debt, 95; retirement plans, 88, 113; science, technology, and innovation, 244, 258; tax revenue, 108 Third Malaysian Plan (1976), 16 Trade-related agreements, integrated assessment of, 303–5 336 Index Transnational corporations, 232 Transparency of government, fiscal implications, 101–3 U.S Agency for International Development (USAID), 160 Unemployment, poverty rate and, 54–57 United Malays National Organization (UMNO), 12, 25 United Nations, 193–212; Annan’s reforms, 196–99; Bretton Woods Institutions, 207–11; good governance standards, 205–6; NGOs, 198–205, 207, 211–12; principles/mandates/structure, 195–96; roles, 193–95; sustainable development, 297; sustainable human development, 205–7 United Nations Development Group (UNDG), 210; good governance, 217– 18 United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), 85 United States: aging population, 64; re- tirement plans, 68, 72–76; science, technology, and innovation collaboration, 244–45 Value Added Tax (VAT): in Japan, 134– 35, 137–39; tax structures and, 108, 110 Vietnam: NGOs, 201; science, technology, and innovation, 258 Wang, Dingding, 227 Weber, Max, 179, 225–26 Weber–North thesis, 225–26, 228–30 Welfare, in Korea/Thailand: average, 39– 42; individual, 38–39 Willing to accept (WTA), as monetary measure, 313–14, 316–18 Willing to pay (WTP), as monetary measure, 313–14, 316–18 World Bank, 207–11, 212, 217 World Bank: New Agendas into Changing World, The (Miller-Adams), 217 World Health Organization (WHO), 85 About the Contributors MUKUL G ASHER is Professor of Public Policy at the National University of Singapore He was educated in India and the United States In addition to these countries and Singapore, he has also taught or researched in Australia, Malaysia, and Sweden From June 1997 to December 1997 he was a Visiting Professor at the Fiscal Affairs Department of the International Monetary Fund He specializes in public finances of developing countries An expert on social security arrangements in Southeast Asia, he has authored or edited several books, numerous journal articles, and more than 50 book chapters GAMBHIR BHATTA is Assistant Professor at the Department of Political Science at the National University of Singapore (NUS) Since 1997 he has also been a Consultant Trainer at the Singapore Institute of Management Prior to joining NUS in 1996 he was with the United Nations (UN) in Uganda and has served as a consultant to the United Nations Development Programme on various occasions His main areas of research interest are governance, public sector management, and capacity building His latest research effort is a forthcoming book on UN reforms ROBERT L CLARK is Professor of Business Management and Professor of Economics at North Carolina State University Professor Clark has conducted numerous research studies examining retirement decisions by older workers, firm decisions to offer pension plans, the choice between defined benefit and defined contribution plans, the impact of pension conversions to defined contribution and hybrid plans, government regulation of pensions, the economic well-being of the elderly, and Social Security In addition, he has examined the economic 338 About the Contributors responses to population aging, international pensions and Social Security, and the human resource policies of firms MARK DODGSON is Executive Director of the Australia Asia Management Centre and Professor of Management at the Australian National University In addition to numerous articles, he is the author of The Management of Technological Innovation: A Strategic and International Approach (2000), Effective Innovation Policy (with John Bessant) (1996), The Handbook of Industrial Innovation (editor, with Roy Rothwell) (1994), Technological Collaboration in Industry (1993), and The Management of Technological Learning (1991) HIROMITSU ISHI is Professor of Economics and President at Hitotsubashi University He specializes in public finance with an emphasis on tax theory and policy He was recently appointed Chairman of the government tax advisory commission and is responsible for crafting a tax reform plan in Japan He is the author of a number of books, including Making Fiscal Policy in Japan (2000) and The Japanese Tax Policy, 3rd ed (2001) He has previously been a visiting professor at a number of universities including the University of New South Wales, L’Universita` Bocconi, and Carlton College ROBERT JAGTENBERG is a mediator and an Associate Professor of Comparative Law at Erasmus University, Rotterdam, the Netherlands He is co-editor of the series Yearbook Law & Legal Practice in East Asia His areas of interest include the legal traditions of Asia, legal education, dispute resolution, and privatization issues NANAK KAKWANI is Professor of Econometrics at the University of New South Wales His numerous publications include Analyzing Redistribution Policies: A Study Using Australian Data (1986) and Income Inequality and Poverty: Methods of Estimation and Policy Applications (1980) His research areas include econometric theory, welfare economics, inequality, poverty, and public finance He was elected a Fellow of the Academy of Social Sciences, Australia, in 1979 and was awarded the Mahalanobis Memorial Gold Medal in 1985 for his contributions to quantitative economics KHOO BOON HUI joined the Singapore Police Force in 1977 and has been the Commissioner of Police since July 1997 He has a Master of Arts in Engineering Science and Economics from St John’s College, Oxford University, and a Masters in Public Administration degree from the John F Kennedy School of Government at Harvard University LINSU KIM is Professor of Management at Korea University and the Chairman of the Government Reform Council of Korea He has published 11 books and 70 research articles, including Imitation to Innovation (1997), Learning and About the Contributors 339 Innovation in Economic Development (1999), and Technology, Learning, and Innovation (2000) COLIN KIRKPATRICK is Professor of Development Economics and Director of the Institute for Development Policy and Management at the University of Manchester, U.K He has extensive research and teaching experience in economic development policy issues in sub-Saharan Africa and Southeast Asia, including trade policy, privatization, and financial sector development His current work focuses on the integrated impact assessment methods for sustainable development JACK L KNETSCH is Professor Emeritus of Economics and Resource Management at Simon Fraser University, Canada He has worked in public agencies in the United States and Malaysia and has held visiting appointments at universities in Europe, Asia, Australia, and North America His research has focused mainly on resource and environmental valuation and policy issues, law and legal institutions, and behavioral economics KOH AI TEE, a Fulbright scholar, is Vice Dean of the Faculty of Arts and Social Sciences at the National University of Singapore (NUS), editor of the Singapore Economic Review, coordinator of the Science and Technology Task Force of the Singapore Committee on Pacific Economic Cooperation, and winner of the 1993/94 NUS Teaching Excellence Award in Economics Her research and publications are in the areas of technology and innovation, knowledge-based economy, organizational learning, and creativity KOH HOW ENG is Director of the Industry Division at the Singapore Ministry of Trade and Industry He holds an Adjunct Associate Professor position at the National University of Singapore and has been directly involved in the development of the country’s science and technology plans and policies He was in charge of funding of public research between 1994 and 1999 He received his undergraduate engineering education at Cambridge University and graduated from the MIT Sloan Fellows Program DAVID NEWMAN is Associate Professor of Public Policy at the National University of Singapore His research has focused on comparative politics, international relations, and electoral behavior His most recent book is How Asia Votes (2000) ANNIE DE ROO is Associate Professor of Comparative Law at Erasmus University, Rotterdam, the Netherlands She specializes in comparative employment and social security law, alternative dispute resolution, and law and development issues, with an emphasis on the East Asian region She is also co-editor of the 340 About the Contributors Yearbook Law & Legal Practice in East Asia and co-director of the international trainee program of the same name ANWAR SHAH is Lead Economist and Coordinator of the Public Sector Institutional Reform Cluster with the Operations Evaluation Department at the World Bank He has advised the Governments of Brazil, Canada, Indonesia, China, South Africa, Pakistan, Argentina, and Mexico on fiscal federalism issues His current research interests are in the areas of governance, fiscal federalism, fiscal reform, and global environment He has published numerous books and articles, including Fiscal Incentives for Investment and Innovation (1995) G SHANTAKUMAR is Associate Professor of Economics at the National University of Singapore (NUS) He joined the NUS in 1970 after having served in the Malaysian Department of Statistics His teaching and research interests are in demography, applied statistics, the economics of aging, social gerontology, manpower, and higher education He has been a consultant to numerous corporations and government boards, has conducted 12 household surveys in Singapore, and has served in the 1970 Malaysian Population Census DONALD R SNODGRASS retired from the Harvard Institute for International Development as an Institute Fellow in 1999 He has specialized in economic development in Asia since the early 1960s, living and working for extended periods in Sri Lanka, Malaysia, and Indonesia and undertaking many short-term consulting assignments An economist with a particular interest in human resource development, Snodgrass is the author or co-author of five books and numerous articles on education, income distribution, employment, small-scale industry, microfinance, health, and population THOMAS P SNYDER is Associate Professor of Public Policy at the National University of Singapore He teaches and researches in the areas of urban economics, public finance, infrastructure planning and finance, and land use planning and regulation He has consulted for numerous state, local, and national government agencies in the United States and Asia He holds a Ph.D from Harvard University HYUN H SON is a Ph.D candidate at the School of Economics, University of New South Wales Her research focuses on economic growth, poverty, and inequality TAN TAY KEONG is Assistant Professor of Public Policy at the National University of Singapore He received his Ph.D in Public Policy from the Harvard Graduate School of Arts and Sciences and a Masters in Public Policy About the Contributors 341 degree from the John F Kennedy School of Government at Harvard University with a specialization in public management and international development His current research interests are focused on social capital as a public resource and a strategic approach for building communities and promoting civic engagement