Summary/Review:
Stephan Haggard, a renowned political scientist at the University of California-San Diego, focuses on the political economy of the Asian financial crisis. According to the author, in the literature the crisis has been studied from various angles, primarily by economists, but not much analysis has been provided by political scientists. This book tries to redress this imbalance by asking three basic questions.
First, politics may have affected the onset of crises in Asian countries. So the question is: Did political factors contribute to Asia's vulnerability to crisis, and if so how?
Second, politics also affected how governments managed financial distress once it occurred. How did incumbent governments and their successors manage the contentious politics of adjustment, including both short-term crisis measures and longer-term structural change?
Third, the most important question is what were the political and institutional consequences of the crisis, or more specifically, whether the crisis has generated reforms that are politically sustainable over the long run.
Haggard's study seems to provide some optimism, because he maintains that the crisis has strengthened Asia's institutional framework for future growth in three fundamental ways. As a result of the crisis (1) economic governance at the level of the state and of the firm has been improved; (2) countries' commitment to engagement in the international economy has been strengthened rather than reduced; and (3) democratic forces have become stronger to push reforms in the future. The author concludes that "taken together, these developments constitute a silver lining to an otherwise costly episode in the region's economic history."
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