Democracy - Governance and Eco-SEA

CIAO DATE: 11/00
Democracy, Governance, and

Economic Performance: East
and Southeast Asia
Ian Marsh, Jean Blondel, and Takashi Inoguchi (Editors)
United Nations University
1999
Contents (PDF)
List of tables and figures
List of acronyms
Preface
Introduction (PDF)
Economic development v. political democracy (PDF)
Jean Blondel, Takashi Inoguchi, and Ian Marsh
1.
Parties, party systems, and economic governance (PDF)
The role of parties and party systems in the democratization process
(PDF)
Jean Blondel
2.
Economic governance and economic performance (PDF) 3.
Democracy, Governance, and Economic Performance: East and Southeast Asi
http://www.ciaonet.org/book/marsh/index.html (1 of 3) [8/11/2002 9:25:54 PM]
Ian Marsh
Parties, bureaucracies, and the search for an equilibrium between
democracy and economic development (PDF)
Jean Blondel and Takashi Inoguchi
4.
Country Studies
Taiwan (PDF)
Hsin-Huang Michael Hsiao and Cheng Hsiao-shih
5.
South Korea (PDF)
Ahn Chung-si and Jaung Hoon
6.
The Philippines (PDF)
Renato S. Velasco
7.
Thailand (PDF)
Dan King
8.
Malaysia (PDF)
Edmund Terence Gomez and Jomo Kwame Sundaram
9.
Indonesia (PDF)
Andrew MacIntyre
10.
Singapore (PDF)
Khong Cho-oon
11.
Hong Kong (PDF)
James T. H. Tang
12.
Conclusion
Conclusion (PDF)
Jean Blondel and Ian Marsh
13.
Contributors (PDF)
Index (PDF)
Conlenls
Lisl of lables and nguies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii
Lisl of acionyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix
Pieface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii
Intruductiun. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xv
1 Iconomic developmenl v. polilical demociacy. . . . . . . . . . . . . . . . . . 1
1can BlonJcl, Takashi Inoguchi, anJ Ian Marsh
Parties, party systems, and ecunumic guvernance . . . . . . . . . . . . . . 21
2 The iole of pailies and paily syslems in lhe democializalion
piocess. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
1can BlonJcl
3 Iconomic goveinance and economic peifoimance . . . . . . . . . . . . . 47
Ian Marsh
4 Pailies, buieauciacies, and lhe seaich foi an equilibiium
belween demociacy and economic developmenl . . . . . . . . . . . . . . . 79
1can BlonJcl anJ Takashi Inoguchi
v
Cuuntry Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1O7
5 Taiwan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1O9
Hsin-Huang Michacl Hsiao anJ Chcng Hsiao-shih
6 Soulh Koiea. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
Ahn Chung-si anJ 1aung Hoon
7 The Philippines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
Rcnato S. Vclasco
8 Thailand. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2O3
Dan King
9 Malaysia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23O
1JnunJ Tcrcncc Conc; anJ 1ono Kwanc SunJaran
1O ndonesia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261
AnJrcw MacIntyrc
11 Singapoie. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287
Khong Cho-oon
12 Hong Kong. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3O5
1ancs T. H. Tang
Cunclusiun . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 331
13 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 333
1can BlonJcl anJ Ian Marsh
Conliibulois. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 357
ndex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359
vi CONTINTS
Tables and nguies
les
5.1 Taiwan economic indicalois, 19521996 . . . . . . . . . . . . . . . . . . . . . 111
5.2 Numbeis of medium and small enleipiises in Taiwan, and
lheii peicenlage of all enleipiises, 19821994 . . . . . . . . . . . . . . . 113
5.3 Medium and small enleipiises in Taiwan, by economic
secloi, 19821994. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
5.4 Disliibulion of peisonal income in Taiwan, by household,
19641995. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
5.5 Disliibulion of lhe populai vole and seals in Taiwan
eleclions, 19911996. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
5.6 Disliibulion of lhe populai vole in lhe 1994 Taiwan
eleclions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
5.7 Disliibulion of lhe populai vole in lhe 1996 Taiwan
piesidenlial eleclion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
5.8 Taiwan`s oulwaid inveslmenl in lhe PRC and lhe
Soulheasl Asian counliies, 19871996 . . . . . . . . . . . . . . . . . . . . . . . 128
6.1 Giowlh of Soulh Koiean GDP and meichandise liade
compaied wilh middle-income oil-impoiling economies,
196O197O and 197O198O. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
6.2 Resulls of lhe Soulh Koiean geneial eleclion, 1996 . . . . . . . . . 147
6.3 Soulh Koiean piesidenlial eleclion iesulls by iegion, 1987
1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
6.4 Soulh Koiea`s economic peifoimance, 19871995. . . . . . . . . . . 158
vii
7.1 Basic indicalois of paily inslilulionalizalion in lhe
Philippines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
7.2 Paily afnlialions of membeis of Congiess and goveinois in
lhe Philippines, 19921997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179
7.3 Nel liusl ialings of Iilipino polilical pailies, 1uly 1991
1une 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188
7.4 Salisfaclion wilh demociacy: The Philippines compaied
wilh Iuiopean counliies, 1993. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189
7.5 Macioeconomic indicalois al lhe end of lhe Maicos iegime
and duiing lhe Aquino and Ramos adminislialions, 1985
1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195
8.1 Thai pailiamenlaiy eleclion slalislics, 19791996. . . . . . . . . . . . 21O
9.1 Malaysian Iedeial Pailiamenl eleclion iesulls, 19551995. . 235
9.2 \MNO membeiship bieakdown by slale, 1997. . . . . . . . . . . . . . 237
9.3 Malaysia`s gioss domeslic pioducl by secloi, 196O1993. . . . 25O
9.4 Owneiship of shaie capilal of Malaysian limiled companies,
197O1995. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251
9.5 Malaysian employmenl and occupalion by elhnic gioup,
199O . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251
1O.1 ndonesian geneial eleclion iesulls, 19711997. . . . . . . . . . . . . . 267
12.1 Polilical pailyjgioup slienglhs in Hong Kong`s legislaluie,
19952OOO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312
pigures
3.1 nslilulional sliucluies foi indusliy slialegy in 1apan,
Koiea, and Taiwan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6O
3.2 Taigeled emeiging indusliial seclois in 1apan, Koiea,
Taiwan, and Singapoie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
3.3 Taigeled seivices seclois in 1apan, Singapoie, and Taiwan. 62
3.4 Taigeled giowlh seclois in 1apan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
4.1 Paily and buieaucialic powei . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
4.2 Paily and buieaucialic powei . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
5.1 The changing pallein of Taiwan`s economic sliucluie,
19511996. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
5.2 Composilion of Taiwan`s expoils, 19521996. . . . . . . . . . . . . . . . 112
5.3 Palleins of Taiwan`s oulwaid inveslmenl, 1987199O . . . . . . . 129
6.1 The evolulion of lhe Soulh Koiean paily syslem aflei
democializalion, 19871997. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15O
1O.1 Accounlabilily and delegalion ielalionships in ndonesia. . . 271
1O.2 Aveiage public and piivale inveslmenl in ndonesia as a
peicenlage of GNP, 198O1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275
13.1 Polilical pailies and economic goveinance in Iasl and
Soulheasl Asia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 347
viii TABLIS AND IG\RIS
Acionyms
ABM Angkalan Belia slam Malaysia (Malaysian slamic
oulh Movemenl)
AKAR Angkalan Keadilan Rakyal (People`s 1uslice Movemenl)
(Malaysia)
AP\ Angkalan Peipaduan \mmah (Communily \nily
Movemenl) (Malaysia)
ASIAN Associalion of Soulheasl Asian Nalions
BBC Bangkok Bank of Commeice
Bhd Beihad (limiled company) (Malaysia)
BN Baiisan Nasional (Nalional Iionl) (Malaysia)
BOC Boaid of Ileclion Canvasseis (Philippines)
CDI Counliywide Developmenl Iund (Philippines)
COMILIC Commission on Ileclions (Philippines)
CPP Chail Pallana (Nalional Developmenl Paily) (Thailand)
CTP Chail Thai (Thai Nalional Paily)
DAP Democialic Aclion Paily (Malaysia)
DBM Depailmenl of Budgel Managemenl (Philippines)
DI Diiecl foieign inveslmenl
D1P Democialic 1uslice Paily (Soulh Koiea)
DLP Democialic Libeial Paily (Soulh Koiea)
DP Democialic Paily (Soulh Koiea)
DPP Democialic Piogiessive Paily (Taiwan)
IMS Iuiopean Monelaiy Syslem
ix
INA Icole nalionale dàdminislialion (Iiance)
IO Ixpoil-oiienled indusliializalion
GDP Gioss domeslic pioducl
Geiakan Geiakan Rakyal Malaysia (Nalional People`s Move-
menl) (Malaysia)
GNP Giand Nalional Paily (Soulh Koiea)
GNP Gioss nalional pioducl
GO Goveinmenlal oiganizalion
Golkai Golongan Kaiya (Iunclional Gioup) (ndonesia)
GP Gieen Paily (Taiwan)
HCOM Heavy ndusliies Coipoialion of Malaysia
HKMA Hong Kong Monelaiy Aulhoiily
LO nleinalional Laboui Oiganisalion
MI nleinalional Monelaiy Iund
PI ndian People`s Iionl (Malaysia)
SA nleinal Secuiily Acl (Malaysia)
S mpoil subslilulion indusliializalion
SS nslilule of Slialegic and nleinalional Sludies
(Malaysia)
T nfoimalion lechnology
KBL Kilusang Bagong Lipunan (New Social Movemenl)
(Philippines)
KMT Kuominlang (Nalional Paily) (Taiwan)
Koipii Koips Pegawai Negeii Republik ndonesia (ndonesian
Civil Seivanls Coips)
Lakas-N\CD Lakas ng TaoNalional \nion of Chiislian Democials
(Philippines)
LAMMP Laban ng Makabayang Masang Pilipino (Sliuggle of lhe
Nalionalisl Iilipino Masses)
LAMP Labian ng Masang Pilipino (Sliuggle of lhe Iilipino
Masses)
LDP Labang ng Demokialikong (Sliuggle of Democialic
Iilipinos)
LDP Libeial Democialic Paily (Malaysia)
LIDAC Legislalive-Ixeculive Developmenl Advisoiy Council
(Philippines)
LP Libeial Paily (Philippines)
MCA Malaysian Chinese Associales
MC Malaysian ndian Congiess
MDA Malaysian ndusliial Developmenl Aulhoiily
MIR Malaysian nslilule of Iconomic Reseaich
MNC Mullinalional coipoialion
NAMIRIL Nalional Movemenl foi Iiee Ileclions (Philippines)
x ACRONMS
NAP New Aspiialions Paily (Thailand)
NCNP Nalional Congiess foi New Polilics (Soulh Koiea)
NDRP New Democialic Republican Paily (Soulh Koiea)
NIP New Iconomic Policy (Malaysia)
NG Non-goveinmenlal individual
NGO Non-goveinmenlal oiganizalion
NC Newly indusliializing counliy
NKP New Koiea Paily
NP Nalionalisla Paily (Philippines)
NP New Paily (Taiwan)
NPA New People`s Aimy (Philippines)
NPC Nalionalisl People`s Coalilion (Philippines)
NPP New Paily foi lhe People (Soulh Koiea)
NRP Nalional Reunincalion Paily (Soulh Koiea)
OIC Omnibus Ileclion Code (Philippines)
OICD Oiganisalion foi Iconomic Co-opeialion and Develop-
menl
OIWs Oveiseas Iilipino woikeis
PAP People`s Aclion Paily (Malaysia)
PAP People`s Aclion Paily (Singapoie)
PAS Paili slam SeMalaysia (Pan-Malaysian slamic Paily)
PBB Paili Pesaka Bumipuleia Beisalu (\niled Bumipuleia
Paily) (Malaysia)
PBDS Paili Bingsa Dayak Saiawak (Saiawak Dayak People`s
Paily) (Malaysia)
PBRS Paili Beisalu Rakyal Sabah (\niled Sabah People`s
Paily) (Malaysia)
PBS Paili Beisalu Sabah (\niled Sabah Paily) (Malaysia)
PD Pailai Demokiasi ndonesia (ndonesiaDemocialic Paily)
PDP Philippine Democialic Paily
PDS Paili Demokialik Sabah (Sabah Democialic Paily)
(Malaysia)
PMP Pailido ng Masang Pilipino (Paily of lhe Iilipino
Masses)
PNB Pailido ng Bayang (People`s Paily) (Philippines)
PNB Peimodalan Nalional Bhd (Nalional Iquily Coipoialion)
(Malaysia)
PO People`s oiganizalion (Philippines)
PPCR\ People`s Pasloial Council foi Responsible \oling
(Philippines)
PPD Paily foi Peace and Demociacy (Soulh Koiea)
PPP Pailai Peisaluang Pembangunan (\niled Developmenl
Paily) (ndonesia)
ACRONMS xi
PPP People`s Piogiessive Paily (Malaysia)
PR Piopoilional iepiesenlalion
PRC People`s Republic of China
PRM Paili Rakyal Malaysia (Malaysian People`s Paily)
PRP Philippines Refoim Paily
RDP Reunincalion Democialic Paily (Soulh Koiea)
ROC Republic of China (Taiwan)
SAP Social Aclion Paily (Thailand)
SAPP Sabah Piogiessive Paily (Malaysia)
SAR Special Adminislialive Region (Hong Kong)
SIDCs Slale Iconomic Developmenl Coipoialions (Malaysia)
Semangal Paili Melayu Semangal 46 (Spiiil of `46 Malay Paily)
(Malaysia)
SI Socialisl Iionl (Malaysia)
SM Small and medium indusliies
SNAP Saiawak Nalional Paily (Malaysia)
SNT\ Single non-liansfeiable vole
S\PP Saiawak \niled People`s Paily (Malaysia)
TAP Taiwan ndependence Paily
TIP\ Taiwan Inviionmenlal Pioleclive \nion
TNC Tiansnalional Coipoialion
\DP \niled Democialic Paily (Malaysia)
\LD \niled Libeial Democials (Soulh Koiea)
\MNO \niled Malay Nalional Oiganizalion (Malaysia)
\SNO \niled Sabah Nalional Oiganizalion (Malaysia)
WTO Woild Tiade Oiganisalion
xii ACRONMS
Pieface
n lhe lale 198Os and lhe eaily pail of lhe 199Os, a numbei of polilies of
Iasl and Soulheasl Asia nimly engaged in a democializalion piocess. Al
lhe same lime and laigely because of lhis piocess, a numbei of piominenl
iegional leadeis asseiled lhal such a developmenl was conliaiy lo Asian
values`` and would affecl negalively lhe economic peifoimance of lhe
counliies conceined. As il luined oul, lhe economic peifoimance of lhe
counliies of lhe iegion was affecled, nol by democializalion, bul by lhe
globalizalion of lhe woild economy and in lhe nisl inslance by lhe nnan-
cial consequences of lhis globalizalion: lhus lhe downluin sliuck moie a
counliy such as ndonesia, which had nol democialized, lhan a counliy
such as Taiwan, which had fully democialized.
Al lhe beginning of lhe lhiid millenium as al lhe beginning of lhe
199Os, whalevei lhe exlenl of lhe nnancial ciises, lhe same queslion ie-
mains, equally uigenl and equally daunling: does democializalion affecl
economic peifoiamce negalively and, moie specincally, does il affecl
economic peifoimance negalively in lhe pailiculai conlexl of Iasl and
Soulheasl Asia? Such a queslion has nol so fai alliacled lhe full allenlion
of scholais, peihaps because loo lillle emphasis was placed, aflei Woild
Wai , on lhe weighl of polilical faclois in socio-economic developmenl:
as a mallei of facl, lhe conveise ielalionship, lhal which ielales democ-
ializalion lo pievious economic peifoimance, has been sludied in an in-
cieasingly sophislicaled mannei since S. M. Lipsel nisl iaised lhe mallei
in lhe eaily 196Os in Iolitical Man. Now, howevei, wilh iegional leadeis
xiii
slaling emphalically lhal democializalion would have an ill effecl on lhe
well-being of cilizens, lhe pioblem of ielaling economic peifoimance lo
democializalion has lo be diieclly confionled. The aim of lhis book is
lheiefoie lo piovide al leasl some elemenls of answei lo lhe queslion,
even if il is naluially iecognized lhal lhe shoil duialion of lhe democia-
lizalion piocess and lhe small numbei of counliies conceined musl mean
lhal conclusions can only be lenlalive.
This woik would nol have been possible wilhoul lhe help of scholais
fiom lhe iegion and in pailiculai of lhose who agieed lo undeilake lhe
difncull lask of wiiling counliy chapleis on lhe basis of a commonly
agieed fiamewoik. We aie liuly gialeful lo all of lhem. We wish lo lhank
lhe \niled Nalions \niveisily foi ils geneious nnancial suppoil, one
of us, Takashi noguchi, having been associaled wilh lhal univeisily al
lhe lime lhe pio|ecl slailed. We aie also indebled lo lhe \niveisily of
Malaysia and lo 1omo Kwame Sundaiam foi having oiganized lhe nisl
meeling of lhe gioup of conliibulois al Kuala Lumpui in 1anuaiy 1997.
We aie especially gialeful lo lhe Shizuoka Reseaich and Iducalion
Ioundalion foi lhe geneious funding and hospilalily which il piovided
foi oui second meeling al Hamamalsu in Maich 1997. We lhank lhe
academic inslilulions lo which we belonged duiing lhe whole oi pail of
lhe peiiod, lhe Iuiopean \niveisily nslilule in Iloience, lhe \niveisily
of Siena, Coloiado College in Coloiado Spiings, lhe \niveisily of Tokyo,
and lhe Auslialian Giaduale School of Managemenl of lhe \niveisily of
New Soulh Wales in Sydney, foi having piovided us wilh gieally needed
facililies such as e-mails, faxes, and lelephones, as lhese weie obviously
essenlial insliumenls foi lhe complelion of a collaboialive enleipiise
such as lhis. We aie mosl gialeful lo Piofessoi Mailin Sheflei of Coinell
\niveisily foi allowing us lo iepioduce lhe nguie which appeais in his
Iolitical Iartics anJ thc Statc (Piincelon, N.1.: Piincelon \niveisily
Piess, 1994): lhe analysis which he conducls in lhis volume has helped us
maikedly in lhe developmenl of oui conceplual fiamewoik.
We leainl much while undeilaking lhis sludy, bolh aboul lhe conciele
polilical, social, and economic life of lhe counliies conceined and aboul
compaialive polilics and adminislialion: we hope lhal ieadeis, loo, will
nnd lhal lhis volume helps lo assess, nol |usl whelhei democializalion
does affecl economic peifoimance, bul, peihaps even moie impoilanlly,
whal democializalion piaclically consisls of al lhe level of paily devel-
opmenl in pailiculai, as well as whal economic peifoimance enlails in
leims of economic goveinance.
Iloience, Tokyo, and Sydney, Oclobei 1998
xiv PRIIACI
sntrodution
1
Iconomic developmenl v. polilical
demociacy
1can BlonJcl, Takashi Inoguchi, anJ Ian Marsh
\nlil lhe nnancial ciisis of 1997, lhe economic success of lhe counliies of
Iasl and Soulheasl Asia was widely iegaided as lhe economic miiacle``
pai excellence of lhe lasl decades of lhe lwenlielh cenluiy. This success
had iepiesenled lhe nisl suslained expeiience of economic modeiniza-
lion by non-Weslein slales. l had occuiied al a pace unpiecedenled in
Weslein expeiience. l was associaled, in a numbei of slales, wilh a dis-
linclive pallein of economic goveinance. Iiom lhe lale 198Os, democia-
lizalion was also piogiessively inlioduced, ienewed, oi consolidaled in a
numbei of slales: Koiea, Taiwan, lhe Philippines, and Thailand. The
compalibilily belween demociacy and economic developmenl had alieady
been a lively queslion because of lhe publicly expiessed views of some
iegional leadeis, nolably Lee Kuan ew and Di. Mahalhii. The evenls of
lhe lale 199Os give lhis ielalionship new signincance. The nnancial ciisis
iaises fiesh queslions aboul lhe dislinclive palleins of economic govei-
nance lhal had been adopled in a numbei of slales. l places in a new
conlexl polilical developmenls lhal weie alieady in liain in Koiea and
Thailand. l iefiames lhe polilical oullook in olhei affecled slales, pai-
liculaily ndonesia, bul also peihaps Malaysia and Hong Kong.
The queslion of lhe compalibilily belween demociacy and economic
developmenl nisl aiose in lhe conlexl of lhe exliaoidinaiy giowlh iales
achieved by iegional slales. Theii developmenl up unlil 1997 suipassed
by fai by lhe iapidily of lhe miiacles`` which Weslein Iuiope had
known aflei Woild Wai ; il is peihaps even moie suipiising lhan lhe
1
1apanese miiacle in lhal, in 1apan, as in Weslein Iuiope, lhe exisling
economic infiasliucluie and indusliial base suiely accounled al leasl foi
pail of lhe iapid giowlh of lhe second half of lhe lwenlielh cenluiy: lheie
seemed no equivalenl in lhe counliies of Iasl and Soulheasl Asia. Iui-
lhei, despile exclusions and ienl seeking, lhese high iales of giowlh have
geneially been accompanied by diminishing income inequalilies (Woild
Bank 1993; Abbeglen 1994; Amsden 1989; Cliffoid 1997; Wade 199O).
The counliies included in lhis sludy fully belonged lo lhe developing``
gioup in lhe 195Os: lhey weie nol moie advanced`` lhan lhe bulk of lhe
counliies of Soulh Ameiica, foi inslance.
One key diffeience belween Iasl and Soulheasl Asian counliies and
Weslein Iuiope and 1apan was lhe chaiaclei of lheii polilical life. \p lo
lhe mid-198Os al leasl, lhese polilies eilhei had been iuled conlinuously
by aulhoiilaiian oi semi-aulhoiilaiian goveinmenls oi had had peiiods of
libeial iule inleispeised wilh peiiods of diclaloiial, oflen mililaiy, gov-
einmenl. Koiea, Thailand, Buima, and lhe Philippines belonged lo lhe
second calegoiy; lhe nisl included lwo subsels, lhose which allowed a
modesl degiee of dissenl, albeil in some cases al lhe cosl of consideiable
haiassmenl of lhe dissenleis, and lhose in which no dissenl al all was
allowed. The nisl subsel included Malaysia, which was lhe leasl illib-
eial,`` Singapoie, and ndonesia; lhe second included all lhe olhei polilies
of lhe aiea, lhal is lo say Taiwan, lhe counliies of lhe ndochinese pen-
insula (\ielnam, Cambodia, and Laos), and lasl bul nol leasl, China.
Hong Kong had always occupied a somewhal peculiai posilion, since il
was a ciown colony in which a degiee of peisonal fieedom was iecog-
nized bul iepiesenlalive inslilulions weie almosl wholly non-exislenl.
This picluie began lo be alleied in pail fiom lhe second half of lhe
198Os. On lhe one hand, lheie was no polilical change in China, \ielnam,
and Laos; aulhoiilaiian iule iemained sliongly enlienched in Buima;
moves lowaids iepiesenlalive goveinmenl began lo lake place in Hong
Kong bul lhese weie oveishadowed by unceilainly conceining polilical
life aflei lhe ieliocession of lhe colony lo China; nnally, lheie was veiy
lillle polilical change in Malaysia, Singapoie, and ndonesia. On lhe olhei
hand, in Koiea, lhe Philippines, and Thailand, aulhoiilaiian iule appeaied
lo be on lhe way oul as a iesull of lhe ieplacemenl of diclaloiial piesi-
denls oi piime minisleis by new leadeis elecled on a pluialislic basis;
mosl iemaikably, lhe sliong single-paily syslem undei which Taiwan had
been iuled since Woild Wai came lo be ieplaced, wilhoul a ciisis of
iegime and wilhoul ma|oi conicl, by a funclioning and appaienlly well-
sliucluied syslem, al nisl of lwo pailies, and subsequenlly of lhiee
pailies; nnally, bul on a seemingly veiy fiagile basis and undei much
\niled Nalions piessuie, Cambodia moved fiom a mosl biulal diclaloi-
2 1IAN BLONDIL, TAKASH NOG\CH, AND AN MARSH
ship and fiom yeais of foieign occupalion lo a libeial democialic syslem
based on paily pluialism.
As a iesull, lhe polilical map of Iasl and Soulheasl Asia came lo be
composed in lhe 199Os of lhiee gioups of counliies: nisl, lhose which had
iemained sliongly aulhoiilaiian and wheie lheie weie no signs of change
China, \ielnam, Laos, and Buima; second, lhose which had foimally
adopled libeial democialic inslilulions, bul iemained in piaclice aulhoii-
laiian allhough lhey lypically loleialed a limiled amounl of dissenl
Malaysia above all, bul also Singapoie and ndonesia; and lhiid, lhose
which had become democialic Koiea, Taiwan, Thailand, and lhe Philip-
pines, lo which Hong Kong and Cambodia mighl be added, foi diffeienl
ieasons bul possibly only foi a lime (Alagappa 1995; Cheng and Haggaid
1992; Anek 1996; Moiley 1993; Tayloi 1996; Bell 1995; Rodan 1996).
These developmenls suggesled lhal a piocess of democializalion was
undei way, as a iesull of which lhe counliies of lhe aiea weie becoming
compaiable lo Weslein Iuiope, Noilh Ameiica, and 1apan, nol meiely
economically bul polilically as well. Theie weie shadows in lhis picluie,
howevei. To begin wilh, as was |usl noled, only aboul a lhiid of lhe
counliies of lhe aiea weie undeigoing a piocess of democializalion,
while anolhei lhiid weie libeial democialic foimally only, and lhose of
lhe lasl gioup weie nol democialic al all. Second, il was nol cleai how fai
demociacy was consolidaled`` lo adopl an expiession lhal is widely
used in lhe sludy of new demociacies in lhose counliies in which lhe
democializalion piocess had laken place. n olhei pails of lhe woild
duiing lhe same peiiod, lhe iesulls weie somewhal mixed. Democialic
consolidalion seemed lo have been achieved in many Lalin Ameiican
counliies and in much of Cenlial Iuiope; bul lhe same conclusion could
nol be ieached wilh iespecl lo mosl of whal was ugoslavia, much of
whal was lhe Soviel \nion, and laige pails of Afiica. Theie was lheie-
foie slill a queslion maik wilh iespecl lo lhose counliies of Iasl and
Soulheasl Asia which weie undeigoing a democializalion piocess.
The polilical fuluie of lhe aiea is lheiefoie fai fiom cleai. Iven if we
leave aside lhe gioup of counliies which aie fully aulhoiilaiian, lheie is
consideiable unceilainly as lo whal will be lhe diieclion in which Malay-
sia, Singapoie, ndonesia, as well as indeed Hong Kong will move, if lhey
move al all. Doubls aboul lhe fuluie of democializalion become even
giealei as one lakes inlo accounl lhe facl lhal in lhe nisl lhiee counliies
of lhis gioup, lhe view has been pul foiwaid by membeis of lhe polilical
eslablishmenl lhal libeial demociacy is meiely a Weslein Iuiopean con-
cepl and lhal Asian values`` aie fai bellei adapled lo lhe socielies of
lhe aiea. n diffeienl ways, Mahalhii, Lee Kuan ew, and Suhailo have
al one lime oi anolhei piopounded lhe nolion lhal lhey had adopled a
ICONOMC DI\ILOPMINT \. POLTCAL DIMOCRAC 3
polilical model which suiled lheii counliies well and lhal lheie was no
need lo move, indeed no viilue whalsoevei in moving, lowaids lhe
Weslein model.
Moieovei, lhe queslion of Asian values`` became lo an exlenl a
scieen oi an ideological fionl foi lhe maikedly moie down-lo-eailh view
accoiding lo which lhe inlioduclion of libeial demociacy in Iasl and
Soulheasl Asia is incompalible wilh suslained economic developmenl.
Ivenls of 1997 give lhis issue an especial edge.
This second, down-lo-eailh concein is, in iealily, a maikedly moie se-
iious allack againsl lhe inlioduclion of libeial demociacy lhan lhe aigu-
menl aboul Asian values.`` The validily of lhe Asian values`` aigumenl
hinges on cilizens holding lhese values and, given lhal lhey did hold lhem
in lhe pasl, on lheii conlinuing lo hold lhem al piesenl; lheie is no evi-
dence which nimly demonsliales whelhei lhese values pievail oi nol, bul
lheie aie indicalions lhal lhey aie nol, lo say lhe leasl, univeisally shaied
in lhe aiea. Ioi inslance, a sludy undeilaken among Taiwanese cilizens
shows lhal libeial democialic values have gained subslanlial giound and
aie becoming maikedly moie widespiead lhan Asian values`` (Paiish
and Chi-hsiang Chang 1996, 2741). Thus, lheie is some giound foi
doubling whelhei lhe Asian values`` aigumenl can be suslained foi long
even in lhose counliies in which il has been pul foiwaid by aulhoiila-
live`` souices; lhis is all lhe moie so given lhal, in olhei counliies of lhe
aiea, lhe aigumenl has nol been pul foiwaid oi has been, as in Taiwan,
nimly ie|ecled by lhe ielevanl aulhoiilies.
The moie down-lo-eailh claim lhal democializalion impedes economic
giowlh cannol be as easily comballed. Admilledly, lhe slienglh of lhis
aigumenl depends also ullimalely on lhe cilizens believing in il, bul lhe
exlenl lo which lhe cilizens aie likely lo do so does nol iesl solely noi
even piincipally on lhe values held by lhese cilizens: lhe |udgemenl
passed by cilizens on lhese malleis iesls piimaiily on impiessions aboul
lhe silualion in olhei counliies foi inslance in lhe Wesl as well as on
lhe exlenl lo which lheie aie woiiies aboul lhe unceilainly which lends
lo chaiacleiize peiiods of polilical change. Whal cilizens aie lheiefoie
asked lo do is lo assume eilhei lhal polilics and economics aie so dislanl
fiom each olhei lhal a change in polilical aiiangemenls will have no effecl
on economic life, oi lhal lhe new polilics will pioduce a gioup of leadeis
who will be as conceined wilh economic giowlh and as able lo sleei lhe
economy in lhe diieclion of economic giowlh as lheii piedecessois. This
is manifeslly asking much of cilizens and il is undeislandable lhal some al
leasl should nol be willing lo accepl lhe validily of eilhei of lhese lwo
assumplions.
Given lhal lhe view lhal libeial demociacy impedes economic devel-
opmenl has manifeslly impoilanl polilical consequences, il is ialhei
sliange lhal lheie should nol have been syslemalic effoils lo look al lhe
pioblem in lhe Iasl and Soulheasl Asian conlexl; as a mallei of facl, lhe
pioblem has been sludied piimaiily in lhe Lalin Ameiican conlexl.
Ralhei lhan examining whelhei libeial demociacy mighl impede eco-
nomic giowlh, mosl of lhe woik devoled lo Iasl and Soulheasl Asia has
been concenlialed on lhe conveise pioblem, namely whelhei economic
giowlh favouis democializalion oi nol. Theie has lhus been a sludy on
lhe polilical iole of eleclions in Iasl and Soulheasl Asia; lheie is also
much lheoielical and empiiical lileialuie on lhe links belween economic
goveinance and economic giowlh: bul lheie is no iecenlly published
woik on lhe possible inuence of democializalion on economic peifoi-
mance. Whal lhe piesenl sludy allempls lheiefoie lo do is lo slail nlling
lhis gap in lhe lileialuie by looking al lhe ielalionship belween polilics
and economic peifoimance in lwo of lhe lhiee gioups of counliies which
weie idenlined eailiei: lhose counliies which did democialize lheii po-
lilical life since lhe mid-198Os (Koiea, Taiwan, Thailand, lhe Philippines,
and Hong Kong); and lhose counliies which iemained ielalively aulhoii-
laiian in lhe conlexl of a foimally libeial democialic sliucluie (Malaysia,
Singapoie, and ndonesia).
Theie seemed lo be lillle poinl in examining lhe sliongly aulhoiilaiian
counliies in which lheie was no change al all in polilical aiiangemenls,
allhough lhese may have undeigone subslanlial alleialions of lhe eco-
nomic sliucluie and managemenl; on lhe olhei hand, il is essenlial lo
examine bolh lhe counliies in which a move lowaids libeial demociacy
has laken place and lhose in which ielalively libeial aiiangemenls cou-
pled wilh a ialhei aulhoiilaiian inleipielalion of lhese aiiangemenls
have iesulled in lillle polilical change. Theie is manifesl scope foi an
opening up of lhese lallei polilical syslems and lhey may well be giadu-
ally affecled by lhe same piocess of democializalion as lhe counliies of
lhe olhei gioup: lhe evenls of 1998 in ndonesia suggesl lhal some move
in lhis diieclion may indeed be laking place; conveisely, nol all lhose
counliies in which lhe piocess of democializalion has laken place may
see lhis piocess consolidaled. Above all, lhe compaiison belween lhe lwo
gioups will piovide al leasl some of lhe evidence iequiied lo assess
whelhei lhe inlioduclion of a libeial democialic syslem is likely lo im-
pede economic giowlh. Thus lhis sludy coveis eighl counliies: nve fiom
lhe nisl gioup, Koiea, Taiwan, Thailand, lhe Philippines, as well as Hong
Kong, which has naluially peculiai chaiacleiislics; and lhiee fiom lhe
second, Malaysia, Singapoie, and ndonesia. Given lhe seiious difncullies
encounleied by lhe pluialislic Cambodian iegime and given lhal lhis
iegime was inslalled lo a subslanlial exlenl al lhe behesl and undei lhe
piessuie of lhe inleinalional communily and was nol piimaiily lhe iesull
of an inleinal evolulion lowaids libeial demociacy, il was nol fell appio-
piiale lo analyse Cambodia as il was nol cleai lo whal calegoiy il would
have belonged, absenl lhe exleinal piessuie.
Demociacy, aulhoiilaiianism, and economic giowlh
The view lhal demociacy can impede giowlh indeed, lhal il does im-
pede giowlh has been based on a numbei of aigumenls, lypically made
in ielalion lo Lalin Ameiica and lypically moie in lhe foim of hypolheses
lhan of empiiically based conclusions (Siiowy and nkeles 199O, 12657).
These conclusions aie also lo an exlenl conliadicloiy: Some empiiical
sludies have found no signincanl ielalionship belween economic devel-
opmenl and demociacy. Olheis have obseived a sliong impacl of de-
mociacy on giowlh. el olheis have asceilained only a weak posilive
effecl of fieedom on giowlh, oi have disceined a negalive inuence of
fieedom on giowlh`` (Ieng 1997, 39394). Ieng noles lhal lhiee hypolh-
eses have been pul foiwaid, which ielale lo lhe dysfunclional con-
sequences of piemaluie demociacy; lo lhe inabilily of demociacies lo
implemenl policies foi iapid giowlh; and lo lhe incapacily of peivasive
slale involvemenl (Siiowy and nkeles 199O, 129; Ieng 1997, 392). Ieng`s
own empiiical sludy, on lhe olhei hand, is a syslemalic allempl lo look al
lhe ielalionship belween giowlh, demociacy, and polilical slabilily in 96
counliies; bul il ielales only lo lhe 196Os and lhe 197Os and il does nol
specincally idenlify Iasl and Soulheasl Asia: il is lheiefoie impossible lo
know how fai lhe aiea behaved al lhe lime in lhe same mannei as Lalin
Ameiica oi Afiica. Moieovei, lhe conclusions which Ieng diaws aie
somewhal mixed: on lhe one hand, il appeais lhal demociacy lends lo
have a negalive bul weak impacl on giowlh`` (Ieng 1997, 4O3); bul il
also appeais lhal oveiall . . . demociacy piomoles giowlh indiieclly by
inducing ma|oi iegulai goveinmenl change and inhibiling iiiegulai gov-
einmenlal change`` (ibid., 414).
Thiee fuilhei poinls can be made in favoi of lhe aigumenl lhal
demociacy impedes giowlh. One is lhal, al leasl unlil 1997, economic
giowlh has been lowei in Weslein indusliialized counliies lhan in Iasl
and Soulheasl Asia, and lhal following 1997, lhe iesloialion of giowlh
iequiies aulhoiilaiian leadeiship. Anolhei is lhal al leasl some foims of
demociacy aie unslable in leims of lhe peisonnel which is al lhe head of
lhe execulive and lhal lheie is no way of ensuiing lhal lheie will nol be
inslabilily, as many changes of goveinmenl iesull fiom lhe vagaiies of lhe
elecloial foilunes of lhe polilical pailies. A lhiid aigumenl has lo do wilh
lhe inefnciency of decision-making in demociacies which iesulls fiom lhe
mulliplicalion of demands, many of lhem conliadicloiy, and fiom lhe facl
lhal decision makeis aie consliained lo lake advice and consull widely
because of lhe pievailing elhos.
The nisl of lhese aigumenls does nol conslilule a foolpioof case lhal
demociacy cannol be associaled wilh iapid economic giowlh, while lhe
olhei lwo aie meiely hypolheses which need lo be lesled. l is liue lhal
Weslein demociacies have had low iales of economic giowlh in lhe lasl
decades of lhe lwenlielh cenluiy: bul il is also liue lhal, apail fiom Iasl
and Soulheasl Asia and even if one leaves aside lhe special cases of lhe
ex-Communisl counliies, economic giowlh lends lo be ialhei low eveiy-
wheie; il is indeed lowei in pails of Afiica and of Lalin Ameiica lhan in
lhe Wesl. Aulhoiilaiianism is cleaily no iecipe foi giowlh: as a mallei
of facl, as was |usl noled, empiiical sludies dealing wilh Lalin Ameiica
have come lo conliadicloiy conclusions in lhis iespecl (O`Donnell and
Schmillei 1986; Ieng 1997, 395).
Moieovei, while lhe aigumenl is aboul iales of economic giowlh, il
musl nonelheless be noled lhal economic developmenl as a whole is
highly coiielaled wilh libeial demociacy (Lipsel 1983; Lipsel, Seong, and
Toiies 1993; Maiks and Diamond 1992; Mooie 1995; \anhanen 199O;
\anhanen 1997). The iichei counliies aie also by and laige demociacies.
Theie aie exceplions, bul lhese aie moie due lo lhe facl lhal pooiei
counliies lend lo be democialic (ndia and many slales of lhe New
Commonweallh) lhan lo lhe facl lhal iichei counliies lend lo be aulhoii-
laiian, lhe only examples of lhe lallei coiielalion being lhe slales of lhe
Aiabian peninsula. The weallh of demociacies may be accounled foi in
laige pail by lheii pasl developmenl and by lhe facl lhal lhey exploiled
subslanlial segmenls of lhe iesl of lhe woild: admilledly, lhis nnding
oflen led lo lhe conclusion lhal economic developmenl was al lhe oiigin of
lhe move lowaids libeial demociacy and nol vice veisa; bul we aie con-
fionled heie wilh a coiielalion and lhe diieclion of inuence is pioblemalic.
Whal is ceilainly lhe case is lhal slable inslilulionalized demociacies aie
unqueslionably nol associaled in lhe main wilh low living slandaids.
The queslion of lhe ielalive inslabilily of lhe polilical leadeiship and of
lhe minisleiial peisonnel in democialic and aulhoiilaiian goveinmenls
has seveial facels. As is noled by Ieng, succession is moie iegulai in
demociacies lhan in aulhoiilaiian slales (Ieng 1997, 398); on lhe olhei
hand, lheie is noliceable inslabilily in some democialic counliies, lypi-
cally as a iesull of lhe inchoale oi undisciplined chaiaclei of pailies in
pailiamenl. Moieovei, elecloial upsels change bolh lhe goveinmenlal
peisonnel and goveinmenlal policies: whal was done by one leam may be
undone by lhe nexl, a poinl which was iepealedly made in conneclion
wilh Biilain in lhe 197Os, bul which losl much of ils validily subsequenlly
(Kellnei and Ciowlhei-Hunl 198O, 21112).
el cases of ma|oi ieveisals of policies aie a small minoiily, as aie
cases of weak goveinmenls which lasl only a few monlhs, in lhe ma|oiily
of Weslein counliies. This is nol only because, by a foilunale accidenl, in
many demociacies, goveinmenls of lhe same paily oi pailies aie
ieluined lo ofnce by lhe eleclois; il is also in pail because mosl pailies
aie sufncienlly well oiganized and disciplined lo pievenl goveinmenls
fiom disinlegialing; and because many goveinmenls follow in bioad
leims lhe policies of lheii piedecessois, even if lhey do nol belong lo lhe
same pailies. As a mallei of facl, ma|oi policy changes aie almosl as
likely lo occui duiing lhe lifelime of a goveinmenl as fiom one govein-
menl lo lhe nexl: ciicumslances, such as economic downluins, have
foiced Weslein Iuiopean cabinels of bolh Righl and Lefl lo allei lheii
couise maikedly, a cleai-cul example being lhal of lhe Socialisl govein-
menl in Iiance in 1983.
Meanwhile, lhe unceilainly which chaiacleiizes lhe lenuie of aulhoii-
laiian iuleis is lypically giealei lhan lhal of democialic goveinmenls. Nol
|usl lhe accidenls of dealh, bul lhe incidence of coups have iendeied
ialhei bumpy lhe polilical hisloiy of aulhoiilaiian nalions, excepl when
lhese have iemained liadilional. Bul liadilional slales aie becoming veiy
iaie and aie in any case of no inleiesl fiom lhe poinl of view of assessing
whal lhe fuluie of Iasl and Soulheasl Asian polilies is likely lo be.
The high luinovei of minisleis, as dislincl fiom lhal of goveinmenls
and of lheii leadeis, has been a mallei of ma|oi concein in a numbei of
demociacies, admilledly; bul lhis high luinovei is in no way a chaiaclei-
islic of demociacies alone. The luinovei has been veiy high in Koiea
oi ndonesia as high as in Belgium oi laly; il has nol been lowei in
Taiwan lhan in Geimany oi Ausliia; noi has il been lowei in Singapoie
lhan in Swilzeiland. Oveiall, lhe luinovei of minisleis and of heads of
goveinmenls has been moie iapid in lhe developing woild lhan in lhe
Wesl: lhe luinovei was leasl iapid of all in communisl slales, bul, wilh
lhal exceplion, lhe slabilily of lhe polilical peisonnel has been giealei in
Weslein libeial demociacies as a class lhan elsewheie in lhe woild
(Blondel 1985).
The suggeslion lhal decision-making is hampeied in demociacies by
lhe open chaiaclei of polilical debale and by lhe laige amounl of con-
sullalion which lakes place in lhese iegimes has been a mallei of concein
in lhe Wesl: il was common in lhe 197Os lo declaie lhal Weslein polilies
suffeied fiom oveiload`` (Rose 198O). el lhis poinl is ielevanl lo lhe
queslion of economic giowlh only if lwo fuilhei poinls aie also valid.
Iiisl, il has lo be demonslialed lhal decision-making is necessaiily moie
iapid when lheie aie few aclois opeialing behind closed doois. Block-
ages may also occui in such silualions, and il has lheiefoie lo be found
empiiically whelhei, by and laige, lhe delays and blockages which occui
in aulhoiilaiian iegimes aie less maiked and less lioublesome foi lhe
economy lhan lhose which occui in democialic polilies. One mighl hy-
polhesize lhal lheie aie likely lo be vaiialions in lhis iespecl, given lhe
well known facl lhal lheie aie vaiialions among democialic iegimes.
Second, il is nol cleai lhal economic giowlh benenls necessaiily fiom
speedy decision making. 1apan and Sweden aie examples of counliies in
which decision piocesses aie slow: yel neilhei lhe nisl case noi even lhe
second conslilule inslances of low economic giowlh ovei lhe long leim. l
may well be moie valuable fiom lhe poinl of view of economic giowlh
lhal decisions be aiiived al aflei a veiy caieful consideialion of allei-
nalives and in a climale of consensus lhan lhal lhey should be laken
speedily.
The pioblems posed by lhe analysis of economic giowlh
in Iasl and Soulheasl Asia
1cononic growth, ccononic govcrnancc, anJ thc rolc oj valucs
As is well known and as was poinled oul al lhe oulsel, unlil 1997 Iasl and
Soulheasl Asia weie lhe iegion of lhe globe in which economic giowlh
was highesl. Ovei lhe 25 yeais belween 1965 and 199O, lhe eighl counliies
of lhe aiea giew by an aveiage 6.5 pei cenl a yeai, as againsl 2 pei cenl
oi less in lhe iesl of lhe developing woild and 2 pei cenl in lhe Wesl
(Hughes 1995). This same liend conlinued inlo lhe 199Os. n 1995, foi
inslance, lhe giowlh of GDP ianged fiom 9.1 pei cenl in Singapoie lo
4.9 pei cenl in Taiwan, wilh Malaysia and Thailand veiy close behind
Singapoie wilh iespeclively 8.8 and 8.5 pei cenl.
The nnancial secloi collapse lhal began in Thailand in Maich 1997 and
piogiessively spiead lo ndonesia, Malaysia, lhe Philippines, and Koiea
iaises fiesh queslions aboul lhe impacl of democializalion on giowlh. The
exislence of diffeienl polilical iegimes in lhese slales conslilules one iele-
vanl facl: lwo counliies weie democializing and lwo iemained aulhoiilai-
ian (oi quasi-aulhoiilaiian). A moie delailed analysis of causalily and of
dynamics is iequiied. Meanwhile il could be aigued lhal Iasl and Soulh-
easl Asian slales conlinued on lhe same lia|ecloiy which had been lheiis
pieviously oul of some kind of ineilia, and lhal giowlh mighl subsequenlly
be impaiied as a iesull of lhe conlinuous puisuil of democializalion.
To aigue along lhese lines enlails adopling one oi bolh of lwo sland-
poinls aboul lhe ielalionship belween libeial demociacy and economic
giowlh, howevei. The nisl slandpoinl is in luin composed of lwo pails.
On lhe one hand, il suggesls lhal libeial democialic aiiangemenls may
have a negalive impacl on lhe chaiacleiislics and lhe iole of lhe buieau-
ciacy, on lhe giounds lhal lhe buieauciacy mighl be pievenled fiom
sleeiing lhe economy wilh lhe same degiee of aulonomy in a democialic
conlexl as undei aulhoiilaiian iule. On lhe olhei hand, lo be convincing,
lhis slandpoinl musl also demonsliale lhal lhe buieauciacy does have a
diiecl effecl on economic peifoimance, a mallei which is also pioblem-
alic. Iconomic developmenl has been iapid in Iasl and Soulheasl Asia,
bul il is nol axiomalic lhal lhis iapid economic developmenl has been due
lo lhe aclion of lhe buieauciacy.
The syslemalic examinalion of lhe validily of lhis slandpoinl enlails,
lheiefoie, lhal lhe possible effecl of lhe buieauciacy on giowlh be caie-
fully asceilained. Allhough lhis does nol conslilule an alleinalive lo such
an examinalion, some piima facie evidence suggesls lhal, in Iasl Asia, in
Singapoie, and lo a lessei degiee in olhei slales of Soulheasl Asia, lhe
buieauciacy has been pailiculaily pioaclive in conliasl lo whal il has
been in lhe iesl of lhe woild. Mosl economisls and olhei analysls do in-
deed accepl lhal as a iesull and lo a vaiying exlenl, lhese counliies have
pionled fiom whal can be desciibed as a favouiable goveinmenlal cli-
male (Hughes 1995, 98; Weiss 1997, 2). Hughes speaks of goveinmenls``
playing a ma|oi iole: whal is meanl by goveinmenls`` in lhis case is
manifeslly nol meiely lhe 2O oi 3O minisleis bul lhe whole adminislialive
appaialus. Anolhei way of iefeiiing lo lhis elemenl is lo speak, as Weiss
and olheis do, of sliong slales.`` This means lhal goveinmenl depail-
menls, on lhe one hand, aie able lo implemenl policies because lhey have
penelialive`` and exliaclive`` powei, and can negoliale`` wilh eco-
nomic aclois lo use Weiss`s expiessions and, on lhe olhei hand, lhal
lhey also puisue aclive policies (Weiss and Hobson 1995, p. 7). These
implemenlalion chaiacleiislics aie by and laige uncommon in lhe Thiid
Woild, and lhey make Iasl and Soulheasl Asia moie akin lo Weslein
counliies; howevei, as Weslein counliies, by and laige, have nol lended
lo puisue a liuly aclive economic policy, lhe iole of lhe buieauciacy is
appieciably laigei in Iasl and Soulheasl Asia lhan in lhe Wesl (excepl,
mosl noliceably, foi Iiance wheie lhe iole of lhe slale has been laige
ovei lenglhy peiiods). Thus one cannol deny lhe lendency foi lhe
buieauciacy lo be sliong, obviously lo a vaiying degiee, in lhe iegion, by
compaiison wilh olhei iegions of lhe woild; and allhough il is nol pioven
lhal lhe impacl of lhis sleeiing of lhe economy by lhe buieauciacy has
been ciucial lo economic developmenl, il is difncull lo believe lhal lhis
sleeiing did nol play some pail. f lhis is lhe case, il becomes essenlial lo
discovei whelhei lhe inlioduclion of a libeial democialic fiamewoik
would indeed have a negalive impacl on lhe aclion of lhe buieauciacy.
The second slandpoinl aboul lhe ielalionship belween libeial democ-
iacy and economic developmenl is conceined wilh Asian values``: il is
suggesled lhal a key ieason why Iasl and Soulheasl Asian counliies
1O 1IAN BLONDIL, TAKASH NOG\CH, AND AN MARSH
should have giown so iapidly is lhal lheii populalions held values likely
lo favoui economic giowlh. l could lhen be aigued lhal, as libeial de-
mociacy is likely lo undeimine lhese values, lhe effecl of democializalion
would be a decline in economic giowlh. n such an inleipielalion, libeial
demociacy would nol be deliimenlal lo economic giowlh because of ils
sliucluial aiiangemenls, bul because of lhe values which il inslils.
This second slandpoinl is lhe moie insidious because il is almosl im-
possible lo lesl ils empiiical validily. l seems always plausible lo suggesl
lhal lhe values held by sels of individuals have an effecl on lheii behav-
ioui, bul lhe conneclion belween lhe lwo elemenls is al besl haid lo
demonsliale. n faiiness, lhis lype of conneclion has nol been made
meiely in Iasl and Soulheasl Asia: il has oflen been made, foi inslance,
wilh iespecl lo lhose Wesleineis who had a Pioleslanl elhic`` by com-
paiison wilh lhose who did nol. el lhe facl lhal a similai aigumenl was
made in lhe Wesl lo lhe one aboul Asian values`` does nol make lhe
lallei moie acceplable. n iealily, il is by now well eslablished, lo begin
wilh, lhal lhe deleiminalion of whal conslilule values and whal con-
slilules a pievailing culluie in a given counliy is a highly complex lask
(Hofslede 198O). To be able lhen lo assess whal impacl such values and
such a culluie may have on lhe behavioui of whole populalions is mani-
feslly highly speculalive. l is lheiefoie moie appiopiiale lo concenliale
heie on lhe lwo elemenls lhal make up lhe nisl slandpoinl, accoiding lo
which libeial demociacy may impede economic giowlh: lhe possible
negalive effecl of libeial demociacy on lhe abilily of lhe buieauciacy lo
be pioaclive; and lhe effecl which a pioaclive buieauciacy may have on
economic giowlh.
Thc qucstion oj ccononic globali;ation
n lhe lasl decades of lhe lwenlielh cenluiy, a fuilhei phenomenon may
have come lo disluib, and lhus may have iendeied moie complex, lhe
ielalionship belween lhe polilical iegime and economic giowlh: lhe pos-
sible impacl of economic globalizalion on lhe economies of individual
slales. The peiiod duiing which lhe counliies of Iasl and Soulheasl Asia
weie expeiiencing iapid economic giowlh was one in which a laige
numbei of physical and psychological baiiieis lo lhe movemenl of goods,
and even moie of capilal, fiom slale lo slale and fiom iegion lo iegion,
weie diminishing. Consequenlly, slales have cleaily losl some oi peihaps
even much of lheii powei ovei economic goveinance and, if lhis powei
had an effecl on economic developmenl, globalizalion could have impoi-
lanl consequences foi lhal developmenl.
el lheie is no cleai indicalion as lo whal lhe effecl of globalizalion on
economic goveinance oi economic giowlh mighl be; consequenlly, il is
difncull lo deleimine whelhei and, if so, how fai lhe ielalionship belween
libeial demociacy and economic peifoimance is likely lo be affecled. An
exlensive empiiical and lheoielical lileialuie now exisls which ieviews
lhe scale and signincance of economic globalizalion and lhe exlenl lo
which il mighl induce conveigence belween lhe economic slialegies of
individual slales, and ieduce lhe oppoilunilies foi economic goveinance.
nleinalional capilal ows impose new consliainls on slales, as lhe Mexi-
can expeiience in 1982 and 1994 and lhe Iasl and Soulheasl Asian ex-
peiience in 1997 have demonslialed. Piessuies foi conveigence belween
slales in such aieas as compelilion policy and inlelleclual piopeily
iegimes aiise, amongsl olhei souices, fiom lhe MI and lhe Woild Tiade
Oiganisalion. The OICD has been piomoling a slandaid code foi DI.
\aiious sludies of lhe 1apanese economy suggesl lhal lhe slale cannol
mainlain ils eailiei aclivisl oi leadeiship iole (Immoll 1989). The causes
and consequences of lhe nnancial ciisis foi economic goveinance and foi
democializalion will be exploied in lalei chapleis. Heie moie geneial
consideialions beaiing on lhe impacl of economic globalizalion on slale
soveieignly aie biiey summaiized.
The nolion lhal nalion slales will be inexoiably diiven lo a common
economic pallein undei lhe inuence of inleinalional foices seems al
besl a half-liulh, howevei. On lhe one hand, lheie is indeed conveigence
belween counliies in lhe goals and puiposes of lheii policies: mosl wanl a
minimally successful economic peifoimance; lheie is also conveigence in
some of lhe economic consliainls. Wheie ID is a piimaiy elemenl in
economic developmenl, iegulaloiy and piudenlial aiiangemenls in lhe
nnancial secloi need lo ielain lhe conndence of inleinalional inveslois.
n addilion, ielalions belween slales and nims aie shifling. Moie busi-
nesses, bolh laige and medium-sized, aie inleinalionalized (Dunning
1993; Sliange 1995). Slales aie faced wilh moie foolloose nims and lhey
need lo iedenne lheii own alliaclions and lo discovei new foims of
negolialing leveiage. Ioi example, Pelei Ivans (1996, 465) suggesls lhal
lhis posed a ma|oi challenge foi lhe Koiean slale.
On lhe olhei hand, new inslilulional economics`` is a poweiful souice
of lheoielical aigumenls againsl conveigence al lhe inslilulional oi alli-
ludinal level. n lhis lheoiy, inslilulions aie lhe key deleiminanls of
longei-leim economic peifoimance. These aie lhe humanly devised
consliainls imposed on human inleiaclion. They consisl of foimal iules,
infoimal consliainls (noims of behavioui, convenlions, and self-imposed
codes of conducl), and lheii enfoicemenl chaiacleiislics. They consisl of
lhe sliucluie lhal humans impose on lheii dealings wilh each olhei``
(Noilh 1991, 3). Conveigence aiound economic puiposes belween slales
is likely lo be associaled wilh inslilulional diveisily. This is because, if
slales liy lo imilale whal lhey peiceive lo be lhe successful piaclices of
olheis, lhey will moslly be able lo do so only in funclionally equivalenl
ways. Palh dependence deleimines lhis oulcome.
Iuilhei, in lhis peispeclive, slales iemain impoilanl aienas foi lhe
foimalion of ideas, choice sels, and molives. Because of lhe pailiculaiily
of language and noims, lhe peivasive inuence of palh dependence, and
genuine unceilainly, elile and public opinion in pailiculai slales is no
less bounded`` lhan ils iecipiocal, lhe bounded ialionalily`` of individ-
uals. This means lhal belween slales, lhe iealily will likely be inlei-
dependence and lhe managemenl of diffeience, miscompiehension oi
incompiehension nol economic inleidependence, piogiessive polilical,
culluial undeislanding, and inslilulional homogeneily.
Olhei aulhois, having exploied lhe exlenl lo which TNCs iemain
embedded in pailiculai hosl culluies, aigue lhal nalion slales conlinue as
signincanl aclois wilh signincanl oppoilunilies lo inuence economic
oulcomes (Hiisl and Thompson 1996; Diache and Boyei 1996; Beigei
and Doie 1996; Dunning 1993). All acknowledge lhal lhe iole of lhe slale
is being liansfoimed: lhe queslion is how much leveiage does il ielain
and whal foims mighl lhis leveiage lake?
n piaclice, in any pailiculai sociely, culluie, inslilulions, and maikels
coexisl in a mulually condilioning, conlingenl pallein. Theie is no such
lhing as capilalism wilh a big C: lheie aie many capilalisms, diffeiing
fiom counliy lo counliy (Hollingwoilh, Schmillei, and Slieeck 1994;
Hollingwoilh, Rogeis, and Boyei 1997; Ciouch and Slieeck 1997). Iui-
lhei, if slales liy lo imilale whal lhey peiceive lo be lhe successful piac-
lices of olheis, lhey will moslly only be able lo do so in funclionally
equivalenl ways. Any moie lhan pailial conveigence is lhus unlikely;
peihaps moie accuialely, conveigence on some dimensions will biing inlo
shaipei focus diffeiences on olheis. The iealily will be inleidependence
and lhe managemenl of vaiiely, nol inleidependence and piogiessive
homogeneily.
Thc 1apancsc cxanplc
Assuming lheiefoie lhal economic globalizalion consliains bul does nol
negale lhe capacily of slales lo sleei lhe economy, lhe queslion of lhe
ielalionship belween libeial demociacy, economic goveinance, and eco-
nomic peifoimance does conlinue lo need lo be exploied. n lhis iespecl,
lhe 1apanese example is obviously highly ielevanl, foi foui ieasons. Iiisl,
1apan has cleaily been and conlinues lo be a sliong slale`` in lhe double
sense which was given lo lhis leim eailiei. Second, 1apan has been a
sliong slale as well as a demociacy: lhis shows lhal lhe lwo elemenls aie
nol incompalible. 1apanese demociacy may be diffeienl in some iespecls
fiom bolh Anglo-Ameiican and Conlinenlal demociacies, bul il is a de-
mociacy on lhe basis of all lhe ciileiia which aie lypically adopled. Thiid,
lhe example of 1apan has manifeslly been followed, nisl in Iasl Asia,
and subsequenlly lo a degiee in Soulheasl Asia, as lhe melaphoi of lhe
ying geese`` pallein so aplly suggesls. Iinally, 1apan`s economy was
chaiacleiized unlil lhe eaily 199Os by a iale of economic giowlh which
was of lhe oidei of magnilude of lhe iale achieved by Iasl and Soulheasl
Asian counliies. This shows lhal libeial demociacy is fully compalible
wilh a high iale of economic giowlh. Admilledly, lhe iale of giowlh has
slowed down maikedly in 1apan since lhe eaily 199Os. Bul whalevei
ils causes, such a slowdown cannol be iegaided as being due lo lhe insli-
lulionalizalion of demociacy, since il occuiied aflei ovei foily yeais of
uninleiiupled democialic life and indeed despile lwo veiy seveie oil
shocks which also maikedly affecled lhe economies of Weslein Iuiopean
counliies.
Given lhe geneially accepled view lhal a sliong slale has been a key
elemenl in enabling Iasl and Soulheasl Asian counliies lo achieve high
iales of giowlh, and given lhal lhe 1apanese example shows lhal lheie
exisls a palh which allows foi lhe combinalion of demociacy and high
giowlh, a palh which may well imply adopling lhe foimula of lhe sliong
slale, whal has lo be deleimined aboul Iasl and Soulheasl Asia becomes
cleai: aie lhe slales of lhe aiea likely lo ielain lheii sliong slale chaiac-
leiislics and yel also mainlain lheii democialic fealuies?
Is thcrc a juturc jor thc strong statc in 1ast anJ Southcast Asia?
The sliong slale is somelimes fell lo be al iisk in Iasl and Soulheasl Asia
on lhe giounds lhal civil seivanls will nol be able lo opeiale as effeclively
in a democialic conlexl as in an aulhoiilaiian fiamewoik. This conclusion
is fai fiom axiomalic: il is likely lo be liue only if lheie is no desiie lo
achieve consensus belween slale aclois and economic aclois. l may be
lhal such a consensus will be difncull lo achieve in some of lhe slales of
lhe aiea because a liadilion of consensus has nol exisled so fai. Buieau-
ciacy in Koiea is somelimes said lo wish lo impose aulhoiily ialhei lhan
lo build collaboialion, unlike 1apanese buieauciacy (Cliffoid 1997). On
lhe olhei hand, such a pallein of behavioui is unlikely lo chaiacleiize
Malaysia, foi inslance, as consensus aiiangemenls have lypically been in
place in lhal counliy. They have even been iegaided as a necessily in lhe
conlexl of lhe complex elhnic ielalionships which have pievailed lheie.
Whal needs lo be invesligaled, lheiefoie, is whelhei lhe sliong slale
can be expecled lo iemain in place, given eilhei lhal consensual decision-
making piocesses alieady exisl, oi lhal lhe hieiaichical mode is likely lo
be ieplaced by consensual lypes of ielalionships belween lhe ielevanl
aclois. As oui discussion will show, only if and wheie such a consensual
mode is iegaided as highly unlikely lo pievail in view of lhe alliludes of
lhe goveinmenlal andjoi lhe economic agenls can seiious doubls be
enleilained as lo lhe suivival of lhe sliong slale in lhe conlexl of demo-
cialic inslilulionalizalion. This queslion is even moie peilinenl in lhe
wake of lhe nnancial ciisis.
Libeial demociacy and lhe iole of pailies
We have so fai begun lo exploie lhe pioblems ielaling lo lhe analysis of
economic goveinance and looked al lhe ways in which diffeienl inslilu-
lional sliucluies may affecl lhe exlenl lo which lhe buieauciacy is able lo
sleei lhe economy of a given counliy. A paiallel exploialion needs lo be
undeilaken in ielalion lo lhe democializalion piocess. A libeial demo-
cialic syslem cannol be mainlained unless il is bulliessed by a nelwoik
of inslilulions, some of which aie lypically eslablished by a conslilulion
while olheis aie sel up independenlly of lhe conslilulion. Ixeculives,
legislaluies, and couils fall in lhe nisl calegoiy; lhe second calegoiy
includes above all lhe polilical pailies, bul il is also composed of a laige
numbei of olhei gioups and oiganizalions.
The polilical pailies aie by fai lhe mosl impoilanl of all lhese inslilu-
lional sliucluies of eilhei calegoiy. On lhe one hand, execulives and
legislaluies cannol funclion effeclively wilhoul lhe polilical pailies giving
life lo and sliucluiing debales leading lo policy inilialives and policy
developmenls; on lhe olhei hand, lhe iepiesenlalion of lhe people cannol
lake place meaningfully unless pailies oiganize lhal iepiesenlalion. n-
leiesl gioups aie of couise ciilical in lhis piocess as well, bul il is on lhe
pailies lhal lhese gioups focus eilhei diieclly oi indiieclly, since lhey
have lo pul piessuie on lhe pailies in lhe legislaluie oi on lhose paily
leadeis who aie in lhe execulive if lhey wanl lo see lheii policies adopled.
Thus pailies aie lhe neives of lhe polilical syslem: lhey piovide lhe
ciucial link belween cilizens and goveinmenl.
As pailies aie so ciilical in ensuiing lhal lhe libeial democialic syslem
is pul in place and funclions effeclively, il is naluially by examining lhe
chaiacleiislics of lhe pailies lhal one can assess lhe exlenl lo which lhe
democializalion piocess is laking shape in a given polily. A nisl queslion
which aiises is, naluially, how fai pailies aie genuinely fiee lo be eslab-
lished and lo develop: lhis is a sine qua non, bul il is nol a sufncienl con-
dilion. The pailies which aie eslablished have lo be bolh liuly lively and
liuly viable if lhey aie lo fulnl lheii iole. The liveliness of pailies means
lhal lhese aie well implanled acioss lhe nalion and lhal lhey can be
iegaided as being liuly iepiesenlalive; lhe viable chaiaclei of pailies
means lhal lhey musl be sufncienl laige and consequenlly nol loo nu-
meious: only if lhis is lhe case can pailies be effeclive bolh al lhe level
of lhe execulive and al lhal of lhe legislaluie in oidei lo suppoil lhe
goveinmenl oi lo oppose il. \nless lhese ioles aie fulnlled, lhe pailies
cannol be iegaided as ensuiing lhal a libeial democialic syslem is liuly
implemenled; if lhey aie fulnlled, on lhe olhei hand, lhe democialic
piocess will lake place in a smoolh and iegulai mannei.
n oidei lo be able lo begin al leasl lo assess whelhei a libeial democialic
syslem is likely lo impede economic giowlh, lhiee queslions have lo be
addiessed geneially: lhese will be lhe ob|ecl of lhe nisl pail of lhis sludy.
Iiisl, given lhal lhe exislence of an effeclive libeial demociacy depends
on lhe piesence of lively pailies and of a viable paily syslem, chaplei 2
will examine lhe chaiacleiislics which pailies and paily syslems musl
possess lo enable a libeial democialic syslem lo funclion effeclively.
Chaplei 3 will lhen luin lo lhe analysis of lhe foims which slale inslilu-
lions musl lake if lhey aie lo sleei lhe economy, as well as of lhe exlenl
lo which such a sleeiing can be expecled lo have a diiecl effecl on eco-
nomic giowlh. Chaplei 4 will biing lhese lwo poinls logelhei by consid-
eiing lhe ielalionships which musl exisl belween pailies and buieauciacy,
if bolh aie lo be able lo fulnl lheii lasks efncienlly and lhus lo ensuie lhal
aclive goveinance lakes place and libeial demociacy ouiishes.
The second pail is devoled lo case sludies of lhe eighl counliies foim-
ing pail of lhe lwo gioups of Iasl and Soulheasl Asian counliies idenli-
ned eailiei, namely lhe nve counliies in which a move lowaid libeial de-
mociacy has laken place, Koiea, Taiwan, Thailand, lhe Philippines, and
Hong Kong (bul nol Cambodia); and lhe lhiee counliies in which some
of lhe sliucluies of demociacy have been pul in place bul lhe piaclice of
demociacy leaves much lo be desiied, Malaysia, Singapoie, and ndone-
sia. These case sludies piovide lhe empiiical evidence on lhe basis of
which conclusions, howevei lenlalive, can be diawn aboul lhe way in
which, in piaclice, lhe pailies have come lo develop, lhe buieauciacy is
peifoiming, and a new ielalionship belween pailies and buieauciacy may
be laking shape. Such a conclusion conceins bolh lhe polilies whose
polilical syslem has been maikedly alleied, and lhose in which no
change had laken place by lhe lale 199Os bul wheie some change mighl
lake place in lhe opening decades of lhe lwenly-nisl cenluiy.
The lhiid pail consisls of a concluding chaplei which synlhesizes lhe
evidence piesenled in lhe counliy sludies and evaluales compaialively
lhe degiee of democialic consolidalion and lhe oullook foi economic
goveinance. Regaiding democialic developmenl, lhe evidence suggesls
lhal pailies andjoi paily syslems iemain undeideveloped in mosl cases,
despile some palhbieaking sliucluial changes in lhe eaily 199Os. Simi-
laily, in ielalion lo economic goveinance, only Koiea, Taiwan, and
Singapoie displayed appiopiiale inslilulional capacilies, and Koiea`s
slale capacily was signincanlly weakened in lhe mid-199Os, allhough lhe
nnancial ciisis may facililale ils ieconslilulion. The slales of Soulheasl
Asia lhal espoused economic leadeiship moslly lacked well-developed
inslilulional capacilies.
The geneial lheme of lhis sludy polilical developmenl, economic
goveinance, and lheii linkages is nol yel common in lhe scholaily lil-
eialuie on lhe iegion. el lhe slales of Iasl and Soulheasl Asia consli-
lule a feilile compaialive selling foi exploiing lhis nexus. Democializa-
lion occuiied, oi was consolidaled, in a numbei of slales in lhe eaily
199Os (e.g., Koiea, Taiwan, and Thailand). Bul iiiespeclive of lhe level of
democializalion, economic peifoimance has been a piimaiy souice of
polilical legilimacy in all slales. el lhe levels of economic developmenl
vaiy maikedly wilh Koiea, Taiwan, Hong Kong, and Singapoie piogies-
sively luining lo lechnological innovalion as ils piimaiy engine. The olhei
slales (lhe Philippines, Thailand, ndonesia, Malaysia) have based devel-
opmenl piimaiily on incoipoialion in iegionaljglobal pioduclion syslems.
The polilical and policy-making inslilulions suiveyed in lhis sludy musl
now fiame and implemenl slale iesponses lo lhe nnancial ciisis. Oul-
comes will be deleimined, on lhe one hand, by lhe capacily of polilical
syslems lo suslain populai suppoil, and on lhe olhei, by lhe capacily of
inslilulions lo iewoik dysfunclional economic aiiangemenls. These lwo
fealuies aie lhe cenlial focus of lhe following analysis, which lhus con-
liibules essenlial infoimalion foi eslimaling fuluies foi iegional slales.
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Dunning, 1. (1993), Thc Clobali;ation oj Busincss, Roulledge, London.
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Hiisl, P. and Thompson, G. (1996), Clobalisation in Qucstion, Polily Piess,
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Maiks, G. and Diamond, L. (eds.) (1992), Rccxanining Dcnocracy, Sage, London
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Rcvicw oj 1cononics anJ Busincss 31(4), pp. 311.
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Paiish, W. L. and Chi-hsiang Chang, C. (1996), Polilical \alues in Taiwan:
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eonomi governne
2
The iole of pailies and paily
syslems in lhe democializalion
piocess
1can BlonJcl
Pailies aie lhe cenlial inslilulions of modein libeial democialic coun-
liies. Whalevei may be said and has iepealedly been said aboul lheii
shoilcomings, pailies aie ciucial lo lhe funclioning of lhese socielies as
lhey aie lhe only oiganizalional sliucluies lo have been discoveied (so
fai) lhiough which lhe views, alliludes, and senlimenls of lhe people can
be conveyed lo lhe lop decision makeis and lhiough which polenlial
leadeis can be nominaled and subsequenlly appoinled. ndeed, as key
agenls of lhe democialic piocess, pailies fulnl lhiee main funclions: lhey
piovide a peimanenl link belween cilizens and goveinmenl; lhey sel oul
policies which aie pioposed lo eleclois and implemenled by govein-
menls; and lhey aie lhe means by which polilicians aie selecled foi ofnce.
As a mallei of facl, pailies aie also ciilically impoilanl lo polilical life
in aulhoiilaiian iegimes, mosl of which have opeialed, in pailiculai since
Woild Wai , on lhe basis of single-paily oi neai single-paily syslems.
Ividence foi lhe impoilance of pailies in lhese iegimes can be found
mosl cleaily in communisl slales; bul examples aie also numeious among
Thiid Woild aulhoiilaiian iegimes, fiom Mexico lo Zimbabwe and pie-
1985 Taiwan. The single-paily oi neai single-paily syslem has been lhe
inslilulional means by which diclalois have been able lo conliol lheii
counliies foi yeais on end: lheie could nol be any bellei pioof lhal
pailies play a key pail in all lypes of modein socielies, bolh libeial
and illibeial.
Pailies aie lheiefoie lhe insliumenls pai excellence which oiganize lhe
23
ielalionship belween people and goveinmenl in modein polilical syslems;
bul, given lhal polilical pailies exisl, oi al leasl one polilical paily exisls,
in aulhoiilaiian slales, lhey musl have some dislinclive chaiacleiislics
when lhey opeiale in lhe conlexl of a libeial democialic syslem. These
dislinclive fealuies do nol ielale only, noi peihaps even piimaiily lo lhe
inleinal sliucluie of pailies, bul also lo lhe shape of lhe paily syslem. As
was indicaled in lhe pievious chaplei, pailies have lo be consideied fiom
lwo main slandpoinls. Iiisl, if lhey aie lo be liuly iepiesenlalive, pailies
musl have solid iools in lhe populalion: a lively`` paily cannol be |usl a
clique concenlialing ils aclivilies in lhe capilal of lhe counliy. Second, in
oidei lo be able lo make an impacl on polilical life and nol meiely be
debaling socielies, pailies musl foim pail of a syslem.`` Theie musl be a
numbei of lhem; lhey musl ielale lo each olhei and yel be aulonomous
fiom each olhei; and lheii lolal numbei musl be sufncienlly small lo
ensuie lhal lhe syslem is efncienl in leims of decision-making (Blondel
1995).
While lhe nisl of lhese lwo bioad fealuies, lhal which ielales lo lhe
sliucluie of lhe pailies, needs lo be examined in any polily wheie pailies
exisl, lhe second fealuie, which ielales lo a numbei of pailies indepen-
denl fiom each olhei, can be found only if lhese pailies aie able lo
opeiale fieely especially, bul nol exclusively, in lhe conlexl of eleclions.
Theie musl lheiefoie be a conslilulional fiamewoik foimally eslablishing
a numbei of fieedoms, and lhe piaclices of lhe iegime musl follow lhe
piinciples of lhe conslilulion. Pailies play a key pail in lhis iespecl as
lhey can ensuie by lheii behavioui and by lheii sheei exislence lhal lhe
conslilulional fiamewoik is iespecled. To use lhe cuiienlly fashionable
expiession, demociacy will be consolidaled`` lhal is lo say be slable
and immune fiom coups, allempled coups, and olhei foims of aulhoii-
laiian iule if, bul only if, a pluialislic paily syslem exisls in which lwo
oi moie pailies fieely compele: indeed, libeial demociacies aie oflen
denned by lhe facl lhal lhey have a pluialislic paily syslem. On lhe olhei
hand, such syslems cannol exisl unless lhe chaiacleiislics of lhese polili-
cal syslems enable pailies lo compele fieely. Theie is lhus iecipiocal ie-
infoicemenl, so lo speak, of lhe conslilulional guaianlees by lhe pailies
and of lhe pailies by lhe conslilulional guaianlees.
Thus, lo deleimine lhe exlenl lo which demociacy has become con-
solidaled`` in Iasl and Soulheasl Asia, we need lo examine, nisl, how fai
conslilulional aiiangemenls and piaclices allow foi lhe developmenl of a
pluialislic paily syslem; second, whelhei lhe pailies aie sliucluied in
such a way lhal lhey aie liue insliumenls of populai iepiesenlalion; and
lhiid, whelhei aulonomous pailies exisl and whelhei lhey foim a paily
syslem in which lheii numbei is sufncienlly small foi lhe decision-making
piocess lo be efncienl.
24 1IAN BLONDIL
Conslilulional aiiangemenls, polilical piaclices, and lhe
developmenl of a pluialislic paily syslem
To be able lo funclion fieely and aulonomously, pailies have lo opeiale
in a milieu which iecognizes lheii exislence and allows lhem lo develop
lheii aclivilies in lhe ways lhey wish. A numbei of condilions have
lheiefoie lo be fulnlled, ielaling lo lhe way pailies can conducl lheii
affaiis, nol |usl duiing eleclion peiiods bul al olhei limes; lhey concein,
foi inslance, lhe facililies which pailies need lo en|oy lo be able lo have
access lo lhe media. The polilical syslem musl lieal pailies in an even-
handed mannei: iules and piaclices musl be such lhal equalily of lieal-
menl is appioximaled. The aspecls of lhe polilical syslem which aie
lheiefoie diieclly involved in enabling pailies lo acl fieely and inde-
pendenlly aie, nisl, lhe conslilulional fiamewoik; second, lhe elecloial
syslem; and lhiid, lhe way lhe media iepoil (and may affecl) polilical life.
Thc rolc oj thc constitutional structurc
Conslilulional aiiangemenls have a diiecl impacl on paily developmenl.
Iiisl and foiemosl, lheie has lo be a conslilulion and lhal conslilulion
has lo be applied. Second, lhe conslilulion musl allow foi lhe unimpeded
developmenl of pailies. Resliiclions on lhe iighl of some lypes of pailies
lo exisl and acl fieely aie always dangeious, even in lhe case of pailies
which aie illibeial and undemocialic; if lheie aie lo be any iesliiclions,
lhese musl be piecisely and limilalively denned. Thiid, libeial conslilu-
lions lhemselves also affecl lhe chaiacleiislics of pailies in lwo main
ways.
n lhe nisl place, lhe conslilulional piovisions iegaiding lhe ielalion-
ship belween execulive and legislaluie have an effecl on pailies, espe-
cially as a by-pioducl of lhe ma|oi dislinclion belween piesidenlial, semi-
piesidenlial, and pailiamenlaiy syslems, lhough lhal effecl may nol be as
piofound as was believed up lo lhe 199Os: laigely on lhe basis of Ameii-
can expeiience, piesidenlialism was lhen widely iegaided as leading lo a
ieduclion in lhe cohesion of pailies (Linz 199O; Shugail and Caiey 1992).
Two main aigumenls have been pul foiwaid which have piobably some,
bul only some, geneial validily. On lhe one hand, inleinal paily divisions
seem fosleied by lhe facl lhal seveial piesidenlial candidales of lhe same
paily compele againsl each olhei, oflen foi long peiiods, in oidei lo win
lhe ofncial nominalion. ndeed, in lhe \niled Slales, lhis compelilion is
pailiculaily sliong and long because of lhe piimaiies; pailies aie obvi-
ously divided inleinally as a iesull and lhe scais may nevei be enliiely
healed. By conliasl, leadeiship ballles in pailiamenlaiy syslems aie
shoilei and lend lo lake place, nol meiely among paily membeis only,
PARTIS, PART SSTIMS, AND DIMOCRATZATON 25
bul even oflen exclusively wilhin lhe leadeiship gioups. One Iasl and
Soulheasl Asian exceplion is Malaysia, peihaps somewhal suipiisingly, as
all membeis of lhe \niled Malay Nalional Oiganisalion (\MNO) pai-
licipale in lhe eleclion of lheii leadei. Moieovei, lhe shaip sepaialion
belween execulive and legislaluie which is chaiacleiislic of lhe piesiden-
lial syslem seems also lo conliibule lo ieducing paily cohesion. n pai-
liamenlaiy syslems, lhe cabinel`s exislence depends on lhe conlinued
suppoil of lhe legislaluie: lhis fosleis paily discipline as il is a big slep,
and one which is obviously laken iaiely, foi lhe backbencheis of lhe
ma|oiily paily oi pailies lo vole againsl lhe goveinmenl when lhey know
lhal lheii vole is likely lo biing lhal goveinmenl down. Recipiocally, lo
avoid liouble, lhe cabinel is likely lo woo lhe membeis of lhe pailia-
menlaiy ma|oiily by all lhe means al ils disposal. The ielalionship be-
lween goveinmenl and ma|oiily is lheiefoie likely lo be close in a pai-
liamenlaiy syslem; on lhe olhei hand, since, in piesidenlial syslems, lhe
chief execulives and lheii cabinels do nol depend foi lheii suivival on
lhe legislalois, lheii links wilh lhese legislalois aie likely lo be moie dis-
lanl. Howevei, while lhese lendencies seem liue in lhe Ameiican con-
lexl, lack of paily cohesion is nol univeisal in piesidenlial syslems: in
\enezuela, Chile, and Aigenlina, foi inslance, pailies have displayed a
maiked degiee of discipline in Congiess (Mainwaiing and Scully 1995,
1719; Coppedge 1994).
The second way in which lhe conslilulional sliucluie affecls pailies is
by decenlializing lhe leiiiloiial sliucluie of lhe slale. The impacl of lhis
is pailiculaily laige in fedeialions, bul il also exisls as a iesull of olhei
foims of leiiiloiial decenlializalion, al leasl when lhal decenlializalion is
genuine, and specincally when local oi iegional bodies aie populaily
elecled. Thus, allhough decenlializalion is oflen conceived piimaiily as
an adminislialive device, il has inevilably polilical implicalions and lhese
implicalions cannol bul affecl pailies lo an exlenl, in pailiculai because
candidales foi lhe lop posilions in lhe decenlialized bodies have lo be
selecled as well as because lhese bodies have lo lake impoilanl decisions
conceining local oi iegional malleis. This is likely al a minimum lo lead
fiom lime lo lime lo conicls wilh lhe cenlial oigans of lhe pailies.
Iedeialism is iegaided as a pailiculaily sliong foim of decenlializa-
lion, bul in piaclice, fedeialism vaiies widely in conlenl. Some fedeial
counliies leave lillle scope foi lhe componenl bodies, whelhei lhey aie
slales, piovinces, iegions, oi canlons. This is in pailiculai lhe case in Aus-
liia oi \enezuela; in lhe \niled Slales, Canada, Belgium, oi Swilzeiland,
on lhe olhei hand, lhe componenl unils aie poweiful, as aie lhe com-
munilies`` inlo which Spain has been divided since lhe 197Os. The Aus-
lialian fedeialion is an inleimediale case, as is Malaysia, which is lhe only
fedeial counliy in Iasl and Soulheasl Asia. ndeed, while, in lhe leasl
26 1IAN BLONDIL
decenlialized counliies which have |usl been menlioned, lheie aie iden-
lical pailies acioss lhe fedeialion, lhis is nol lhe case in Canada and
Belgium; inleieslingly, an analogous developmenl has laken place in
Malaysia, wheie lhe Sabah and Saiawak pailies aie diffeienl fiom lhose
of conlinenlal Malaysia. Pailies aie nominally idenlical in lhe \niled
Slales and Swilzeiland, bul only because in each componenl body slale
oi canlon iespeclively lhey aie almosl enliiely independenl: in lhe
\niled Slales and lo a laige exlenl in Swilzeiland lhe aulonomy of each
slale oi canlonal paily is such lhal il is nol cleai whelhei il is |uslined lo
iefei lo lhese pailies as logelhei foiming a single nalional unil.
Thc inpact oj thc clcctoral systcn
Conslilulions somelimes deleimine lhe bioad chaiacleiislics of lhe elec-
loial syslem; in lhe ma|oiily of cases, lhey do nol. el lhe elecloial sys-
lem has a ma|oi impacl on lhe sliucluie and on lhe ielalive slienglh of
pailies, and lheiefoie on lhe paily syslem, bolh in lhe legislaluie and,
indiieclly, in lhe populalion as a whole, whelhei lhis impacl is delibeiale
oi nol. The delibeiale impacl is oflen due lo syslemalic disciiminalion
againsl some pailies, especially opposilion pailies: lhis disciiminalion
includes malpiaclices ielaling lo lhe composilion of elecloial lisls and
haiassmenl al all limes and duiing eleclion campaigns in pailiculai;
lhe shoil duialion of eleclion campaigns also belongs lo lhis calegoiy,
a piaclice which in Soulheasl Asia is chaiacleiislic of Singapoie and
Malaysia. Behavioui of lhis kind pievenls lhe pailies fiom developing a
genuine iepiesenlalive sliucluie, and by lilling lhe balance in favoui of
lhe goveinmenlal pailies, il also pievenls lhe paily syslem fiom becom-
ing liuly inslilulionalized.
Anolhei common way in which some pailies nol necessaiily only lhe
goveinmenl pailies can en|oy unfaii advanlages consisls of a vaiiely of
foims of coiiuplion, ianging fiom lhe ouliighl buying of voles by some
candidales lo lhe disliibulion of favouis in a moie oi less concealed
mannei by some of lhe pailies (moie fiequenlly lhe goveinmenl pailies)
lo gioups of eleclois in pailiculai disliicls. While coiiupl piaclices cannol
be allogelhei eiadicaled by lhe piovisions of elecloial syslems, lhe silence
of lhe law in lhis iespecl manifeslly iesulls in lhese piaclices iemaining
unchecked. The widespiead developmenl of coiiuplion as well as lhe
widespiead belief lhal coiiuplion lakes place have an obvious effecl on
lhe slanding of lhe polilical pailies among lhe populalion. Moieovei, lhis
behavioui lends lo ieduce lhe abilily of lhe pailies lo become inslilu-
lionalized, as il oflen iesulls fiom lhe aclion of weallhy individuals and
especially fiom lhal of peisons who iapidly amassed laige foilunes in
peiiods of high economic giowlh and who inlend lo use lheii foilunes lo
inuence polilics lo lheii advanlage. Nol suipiisingly, lheiefoie, coiiup-
lion has played a ma|oi pail in elecloial piaclices in many counliies,
whelhei undeigoing a piocess of democializalion oi nol, including in lhe
counliies of Iasl and Soulheasl Asia (Tayloi 1996).
el even lhe complele eliminalion of anli-opposilion haiassmenl and
of coiiupl piaclices, if il weie possible, would nol solve enliiely lhe
pioblems aiising fiom lhe need lo ensuie lhal all pailies be liealed faiily,
as some of lhese lypically lhe goveinmenl pailies have piivileged
access lo iesouices. Allempls have lheiefoie been made incieasingly in a
vaiiely of counliies, piincipally in lhe Wesl, lo iemedy lhis iesouice in-
equalily by disliibuling public funds lo polilical pailies, lypically on lhe
basis of lhe iesulls oblained by lhese pailies al eleclions (Alexandei
1989). Whelhei lhis policy achieves ieal faiiness is debalable and has
been debaled: exisling pailies cleaily have an advanlage ovei new pai-
lies, as funds aie disliibuled on lhe basis of pievious iesulls; moieovei,
pailies would appeai lo be less likely lo wanl lo make effoils lo mobilize
cilizens if lheii adminislialive cosls aie guaianleed by public funds.
Oveiall, lhe pios and cons of public nnancing in counliies undeigoing a
piocess of democializalion aie nnely balanced. On lhe one hand, in cases
wheie new pailies aie slailed by polilicians fiom one of lhe main cenlies
and in pailiculai fiom lhe capilal, lhese polilicians oflen have limiled
followings oulside lhese cenlies and lhey should lheiefoie make special
effoils lo develop lhe aclivilies of lheii pailies al lhe local level if lhese
pailies aie lo have a sliong and loyal elecloiale. l may be piefeiable nol
lo piovide nnance aulomalically in lhese ciicumslances even if, as a iesull
especially when lhey belong lo lhe opposilion lhese pailies nnd il
difncull lo make ends meel. On lhe olhei hand and conveisely, lheie may
be pailies lhal aie puiely local and opeiale on lhe basis of favouis dis-
liibuled locally wilhoul much allenlion being addiessed lo nalional poli-
lics. As lhe public nnancing of pailies lends naluially lo ieinfoice lheii
cenlial oigans, lhe incidence of coiiupl piaclices al lhe local level may be
ieduced if lhe pailies aie publicly nnanced, piovided lhe disliibulion of
lhese public funds lakes place in a faii mannei; lhe leadeis of lhese
localized pailies may become in lhe piocess moie conceined wilh na-
lional affaiis.
The vaiious piaclices which have |usl been desciibed do nol of couise
affecl only lhe sliucluie of lhe pailies: lhey affecl also lhe paily syslem.
Coiiupl piaclices aie indeed aimed al modifying palleins of voling
behavioui. Paily syslems aie naluially also maikedly modined as a iesull
of lhe mechanics of elecloial syslems, since lhese have a diiecl effecl on
lhe allocalion of seals in pailiamenls and on lhe pioceduie by which
piesidenls aie elecled: lhus lhe nisl-pasl-lhe-posl`` syslem sliongly
exaggeiales ma|oiilies while lhis is nol so, oi al leasl nol so much lhe
28 1IAN BLONDIL
case, wilh piopoilional iepiesenlalion, especially if il is based on laige
disliicls (Duveigei 1954; Rae 1967; Li|phail 1994; Leduc, Niemi, and
Noiiis 1996; Iaiell 1997; Noiiis 1997); bul, as has been poinled oul in lhe
lileialuie, lhe mechanics of seal allocalion oi lhe melhods of elecling
piesidenls have an indiiecl effecl on lhe way eleclois vole, pailly because
lhey aie awaie, al leasl in a bioad mannei, of lhe effecls of elecloial
syslems and pailly because lhe pailies neld candidales beaiing in mind
lhe chaiacleiislics of lhe elecloial syslem. Given lhal goveinmenls aie
naluially also awaie of lhese effecls, lhey aie likely in many cases lo liy
lo ensuie lhal lhe syslem of seal allocalion which is adopled is lhe one
mosl favouiable lo lhem. Theie is no doubl, foi inslance, lhal lhe main-
lenance of lhe nisl-pasl-lhe-posl syslem in Malaysia has helped lhe gov-
eining coalilion in lhal counliy lo oblain much laigei ma|oiilies lhan
would have been oblained undei a PR syslem; lheie is indeed lillle doubl
lhal lhis silualion may have led eleclois lo believe lhal lhe iuling coali-
lion could nol be defealed. The same conclusion can be diawn, indeed
moie foicefully, in ielalion lo Singapoie.
Thc rolc oj thc nass ncJia
The piecise effecl of lhe mass media on polilical behavioui is a sub|ecl
of much conlioveisy. l is widely believed, in Weslein counliies al leasl,
lhal lhe immediale effecl of lhe media is nol as laige as was oiiginally
assumed and indeed lhal lelevision in pailiculai has lended lo be helpful
in impioving polilical knowledge (Halloian 197O; De Ileui and Ball-
Rokeach 1982; Blumlei 1983; Blumlei and Guievilch 1995). el, while
lhe immediale effecls can be measuied, foi inslance in lhe conlexl of an
eleclion, lhe longei-leim impacl of lhe media is maikedly moie difncull
piobably impossible lo assess adequalely.
Iven if one does nol lake sides in lhis conlioveisy, il can al leasl be
suggesled lhal faiiness in iepoiling will help lo slienglhen paily devel-
opmenl and lo iendei lhe ballles belween pailies faiiei, especially lhe
elecloial conlesls. This has implicalions foi lhe behavioui of lhe media
bolh belween eleclions and duiing eleclion campaigns. Howevei, whal
faiiness consisls of vaiies depending on lhe way lhe media aie oiganized:
whal is ciilical in lhis iespecl is nol whelhei lhese aie piivalely oi pub-
licly owned, bul whelhei lhey aie closely linked lo pailies oi nol. f lhey
aie closely linked lo pailies, as is oi was oflen lhe case wilh lhe piess bul
is less common wilh iadio and occuis iaiely wilh lelevision, il is nol
unfaii`` lhal lhey should, wilhin limils, piesenl lhe poinl of view of lhe
paily lo which lhey aie linked. Iaiiness is mainlained if all lhe pailies
oi al any iale lhose which have a subslanlial following possess news-
papeis, iadio, oi even lelevision slalions and can lhus caiiy on lheii
conlesls in a pluialislic almospheie. f lhe media aie independenl,`` on
lhe olhei hand, faiiness implies lhal lhe coveiage given lo all lhe pailies
by each of lhe oigans of lhe piess, iadio, oi lelevision be balanced and
lhal lhis should be lhe case al all limes and nol only duiing eleclion
campaigns. Paiadoxically, peihaps, lhis iequiiemenl is moie difncull lo
achieve wilh lhe piess lhan wilh iadio oi lelevision, pailly because lhe
liadilion of a paily-based oi al leasl of an ideologically based piess is
sliong, and pailly because, piobably as a iesull, lhose who wiile in
newspapeis, piofessional |ouinalisls and occasional conliibulois alike,
nnd il less |uslined lo be consliained by lhe need lo piesenl a balanced
view.
While a faii oiganizalion of lhe media lhus depends in piinciple on
whelhei lhese aie paily-based oi independenl,`` and nol on lhe dislinc-
lion belween piivale and public owneiship, lhis dislinclion does have
impoilanl and lypically seiious consequences. Pailiculaily oulside lhe
Wesl and 1apan, iadio and lelevision slalions, al leasl, have been eslab-
lished in a conlexl in which lhe funds available lo lhe piivale secloi weie
ielalively limiled and wheie, al lhe same lime, aulhoiilaiian goveinmenls
have been adamanl lo dominale and indeed conliol complelely whal was
being said and whal was being piinled. This was oflen achieved by
eslablishing a goveinmenl monopoly of iadio and lelevision, on lhe one
hand, and, on lhe olhei, by inlioducing censoiship, conliolling lhe dislii-
bulion of papei, andjoi giving lo lhe newspapeis of lhe iuling paily oi
pailies maiked advanlages ovei olheis, foi inslance in leims of adveilis-
ing. Iven lhough lhe impacl of lhese aiiangemenls cannol be assessed
even in bioad leims, lel alone be measuied, il seems inconceivable lhal il
should be nol be subslanlial, especially in lhe long iun, and lhal il should
nol affecl maikedly lhe views of cilizens aboul lhe aclions of lhe govein-
menl and lhe ieaclions of lhe opposilion: indeed, lhe cilizens may nol
even come lo know whal aie lhe slandpoinls of lhe opposilion pailies.
The behavioui of lhe media al eleclion limes is of couise ciilical, al-
lhough il has lo be iegaided as being only an elemenl in lhe iole which
lhey play in polilical life. This is pailiculaily so because, almosl ceilainly,
especially in iecenl yeais undei inleinalional piessuie, lhe eleclionic
media have oflen had lo piovide a ielalively balanced piesenlalion of lhe
diffeienl pailies and of lhe diffeienl candidales, when lheie aie piesi-
denlial conlesls. Thus, while il is cleaily valuable lhal lheie should be
faiiness in lhe iepoiling of eleclion campaigning on lelevision, il is al
leasl as impoilanl lhal lheie should be lhe same amounl of faiiness on
iadio in pailiculai on local iadio and in lhe piess, a mode of behav-
ioui which is peihaps less likely lo occui as lhese aie less open lo inlei-
nalional sciuliny. Moieovei, lhe owneiship of lhe media by lhe pailies
may be used lo iesliicl access, as seems lo have occuiied wilh lhe KMT
3O 1IAN BLONDIL
in Taiwan. Pailies and candidales which do nol benenl fiom a balanced
coveiage aie lheiefoie likely lo suffei maikedly, if lhe only occasion, oi
lhe main occasion al leasl, on which lheie is faiiness in lhe media is in
lhe couise of eleclion campaigns and on lelevision only, while duiing
lhe iesl of lhe lime and in lhe olhei media lheie is dominalion by lhe
goveinmenl.
The inleinal sliucluie of pailies and lhe democializalion
piocess
A favouiable conslilulional, elecloial, and media enviionmenl is a pie-
iequisile foi pailies lo be able lo develop. f such an enviionmenl exisls,
pailies have an oppoilunily lo play a full pail in lhe polilical life of lheii
counliy; bul lhis condilion is nol sufncienl. Theie aie well-known exam-
ples of counliies in which libeial democialic iule has exisled foi decades
and yel pailies have nol become sliong. This has been lhe case, foi in-
slance, in Iiance wheie, even since lhe advenl of lhe Iiflh Republic, lel
alone befoie, pailies have been ielalively weak and shaky. l has also
been lhe case in many Lalin Ameiican counliies, Biazil in pailiculai,
wheie pailies have lo be desciibed as inchoale. n lhe \niled Slales, loo,
pailies have long lended lo be almosl emply shells and have become even
moie so in lhe lasl decades of lhe lwenlielh cenluiy. By conliasl, pailies
in mosl of Conlinenlal Iuiope, bul also in some Lalin Ameiican coun-
liies, such as Cosla Rica, \enezuela, Chile, oi Aigenlina, have been
sliong, even veiy sliong.
Mass partics v. partics oj ''notablcs
n a democialic conlexl, pailies will lend lo be sliong if lhey have a slable
ielalionship wilh lheii suppoileis in lhe elecloiale, a ielalionship which
has been classically iefeiied lo as paily idenlincalion`` (Budge, Ciewe,
and Iaiilie 1973). This ielalionship also needs lo exisl in a nalional con-
lexl if lhe pailies aie lo be key agenls of lhe democializalion piocess
lhe pailies which benenl fiom such an idenlincalion on a nalional basis
being nalionwide mass pailies. Allhough claims aboul lhese pailies have
been exaggeialed, especially wilh iespecl lo lhe size of lhe membeiship
and lo lhe involvemenl of lhe membeis, nalionwide mass pailies aie
chaiacleiized by a well-implanled sliucluie, wilh a nelwoik of piovincial
oi iegional oiganizalions culminaling in lhe nalional bodies (Duveigei
1954). These pailies conliasl shaiply wilh lheii opposile, which have
been iefeiied lo as cadie`` pailies in lhe lianslalion of Duveigei`s woik,
bul which should moie aplly have been labelled pailies of nolables``:
pailies wilhoul a developed foimal sliucluie whose base is consliluled by
well-known local nguies, oflen landowneis, bul also piofessional people
such as lawyeis, doclois, and occasionally leacheis. The appeal of lhese
nolables lo eleclois is of a clienlelislic`` chaiaclei.
n liadilional socielies pailies have oflen been led by nolables, bul
lhese have been on lhe decline. While pailies had lhis chaiaclei in
Weslein Iuiope in lhe nineleenlh cenluiy, lhey have been piogiessively
ieplaced by nalionwide mass pailies. Ilsewheie, lhey have somelimes
iemained in exislence duiing lhe modeinizalion peiiod, bul lhey have
also oflen disappeaied. n many cases lhey wenl undei as a iesull of lhe
oveilhiow of lhe polilical syslem, foi inslance by a coup, when mililaiy
iuleis abolished paily aclivily, al leasl foi a while, oi when sliong leadeis
eslablished a single-paily syslem.
All lhese scenaiios have laken place in Iasl and Soulheasl Asia. n
Thailand and lhe Philippines pailies of nolables have lended lo iemain in
conliol; in Taiwan, lheie was single-paily iule dominaled foi decades by
a chaiismalic`` leadei, befoie lhe democializalion piocess led lo lhe
giadual decline of lhe iole of lhal paily; in Koiea, lhe iegime oscillaled
belween neai single-paily goveinmenl undei mililaiy lulelage, and a
pluialislic syslem in which nolables played a laige pail. f full demociali-
zalion weie lo lake place in Malaysia and Singapoie, lhe evolulion would
piobably be similai lo lhal of Taiwan, as lhe exisling iuling pailies of
lhese lwo counliies aie well sliucluied; in ndonesia, lhe weighl`` of
Golkai in lhe nalion has been al besl ialhei uneven and ils fuluie has
become incieasingly unceilain as a iesull of lhe fall of Suhailo.
Social clcavagcs anJ thc lcgitination proccss oj nass partics
Ioi nalionwide mass pailies lo emeige and be sliong, lwo developmenls
have lo lake place in succession. Iiisl, lhese pailies need lo be suslained
by a bioad social cleavage. n a celebialed ailicle nisl published in 197O,
Rokkan showed lhal a numbei of cleavages had been dominanl in Wesl-
ein Iuiope in lhe nineleenlh and eaily lwenlielh cenluiies, and lhal
lhese cleavages had iemained idenlical foi al leasl a geneialion; indeed,
lhe same cleavages have conlinued lo play a signincanl pail duiing yel
anolhei geneialion (Rokkan 197O). These cleavages ielale lo whal can be
desciibed as communal palleins of ielalionships.`` The mosl ancienl
among lhem is lhe liibal oi clienlelislic cleavage, which has given iise lo
locally based liadilional pailies of nolables. Subsequenlly, as a iesull of
changes in lhe social sliucluie and of movemenls of populalion, fuilhei
communal palleins of ielalionships began lo pievail, based on elhnicily,
ieligion, oi class. These aie lhe cleavages which have given iise lo mass
pailies, lypically of a nalionwide chaiaclei (Blondel 1995, 1O1).
32 1IAN BLONDIL
The pail played by lhese cleavages has been signincanl acioss lhe
woild, especially lhe indusliial woild. Thus lhe class cleavage and lhe
ieligious cleavage have been al lhe oiigin of many pailies acioss mosl of
Weslein Iuiope and lhe Old Commonweallh, as well as in 1apan, siael,
and some Lalin Ameiican counliies, Chile in pailiculai; lhe elhnic
cleavage, somelimes associaled wilh lhe ieligious cleavage, has also been
inuenlial in many socielies. Meanwhile, even lhe liibal oi clienlelislic
cleavage of pailies of nolables has conlinued lo play some pail in modein
socielies, specincally in aieas wheie feelings of local idenlily have
iemained sliong and wheie local leadeis aie iegaided as embodying and
defending foicefully lhe inleiesls of lhe aiea. These communal`` cleav-
ages do nol aulomalically lead lo lhe eslablishmenl of pailies, admil-
ledly, as lhe condilions desciibed in lhe pievious seclion musl be such
lhal pailies can develop fieely and naluially,`` bul wheie lhese condi-
lions oblain, nalionwide pailies aie likely lo begin lo emeige fiom lhese
palleins of ielalionships.
el a second chaiacleiislic has lo exisl foi lhe mass pailies lo come lo
be fully in oibil,`` so lo speak. The loyally lo lhe gioup elhnic, ieli-
gious, oi class based has lo be giadually liansfeiied lo lhe paily so lhal
lhe eleclois come lo view lhe paily, and nol lhe paienl`` gioup, as iep-
iesenling lhem. Time has lheiefoie lo elapse foi lhe legilimalion of lhe
paily lo occui. f lhis piocess is nol inleifeied wilh, by a coup oi as a ie-
sull of foims of aulhoiilaiian iule, lhe liansfei of legilimacy lakes place
and lhe mass pailies acquiie a legilimacy of lheii own independenlly
of lhe gioup fiom which lhey oiiginaled (Blondel 1995, 13336). l
is duiing lhal peiiod lhal lhese pailies eslablish lheii oiganizalion and
acquiie membeis,`` a developmenl which does nol occui in lhe moie
clienlelislic pailies of nolables as lhese iemain dependenl on lheii local
leadeis who do nol see lhe need foi and even do nol wanl lo cieale a
foimal oiganizalion which could conslilule a challenge lo lheii own
powei.
Thc partial crosion oj support jor nass partics in inJustrial
socictics anJ thc cncrgcncc oj ''issuc partics
Slailing in lhe 196Os, howevei, nisl in Ameiica and subsequenlly else-
wheie in indusliial socielies, some eiosion of lhe liadilional loyallies lo
lhe mass pailies began lo occui, while, occasionally, new pailies emeiged
wilhoul being based on social cleavages. Bolh lhese new pailies and lhe
eslablished ones slailed lo seek suppoil on lhe basis of issues enviion-
menlal queslions, foi inslance as lhese issues weie held lo be ielevanl
lo some gioups of eleclois.
Such a (pailial) move fiom cleavages lo issues as a basis foi suppoil
has led lo lhe suggeslion lhal pailies weie becoming pioduceis`` of
polilical goods,`` in lhe way lhal nims aie pioduceis of commeicial
goods: eleclois would come lo choose among lhe pailies as lhey choose
among commeicial pioducls (Downs 1957). Howevei, lhis change is un-
likely evei lo be complele as a paily does nol meiely sell pioducls bul
adminisleis a counliy, and lheiefoie needs loyally lo oveicome lhe ups
and downs of ils foilunes which will inevilably iesull fiom lime lo lime
fiom ils policies. ndeed, lhis loyally is needed even in oidei lo enable
lhe paily lo sell`` ils policies and ils piogiammes and especially lo do so
ovei a subslanlial peiiod: lhe same is also liue of nims which have lo
en|oy al leasl some cuslomei loyally if lhey aie lo iemain in business foi
long peiiods. el lhe move fiom cleavages lo issues has led lo an eiosion
of suppoil foi mass pailies and consequenlly lo whal has been desciibed
as a giealei volalilily`` al eleclions, fiom one paily lo anolhei, fiom
eslablished pailies lo issue-based pailies and vice veisa, and fiom pai-
licipalion lo abslenlion (Pedeisen 1983).
Iour typcs oj partics anJ thc Jcvclopncnt oj partics in 1ast anJ
Southcast Asia
A key dislinclion has lheiefoie lo be diawn among lhiee main lypes of
pailies: mass pailies which oiiginale fiom an elhnic, ieligious, oi class-
based cleavage and which aie in geneial nalional in chaiaclei; liadilional
pailies based on liibal oi clienlelislic loyallies, lypically of a local naluie;
and issue-based pailies sel up wilhoul lhe suppoil piovided by one of lhe
social cleavages, which lend lo be small and oflen highly unslable. To
lhese lhiee lypes musl be added a fouilh, lhal of pailies wholly ciealed
by a populai leadei: such a developmenl has chaiacleiized many coun-
liies in lhe piocess of democializalion in lhe second half of lhe lwenlielh
cenluiy, pailiculaily in Afiica. These dislinclions aie impoilanl in leims
of lhe palleins of elecloial behavioui, of lhe lypes and slienglh of lhe
leadeiship, and of lhe impoilance given lo ideology and policies.
Of lhese foui lypes, lhe mass paily is lhe one mosl likely lo piovide a
basis foi genuine democializalion: mass pailies should lheiefoie come lo
pievail in Iasl and Soulheasl Asia if lhe iegion is lo consolidale ils
democialic developmenl. el mass pailies will nol emeige unless lheie
aie bioad nalional cleavages on which lhey can be based and unless lime
is allowed lo elapse foi lhese mass pailies lo go inlo oibil.`` Neilhei of
lhese lwo condilions can easily be fulnlled.
Theie aie subslanlial diffeiences acioss lhe iegion in lhis iespecl, ad-
milledly. n Malaysia, lhe ma|oi pailies have been eslablished on lhe
basis of an elhnic-cum-ieligious cleavage: weie a move lowaids full de-
mocializalion lo lake place in lhe counliy, lhe exisling pailies would
34 1IAN BLONDIL
conslilule a naluial basis foi lhe consolidalion of demociacy. Diffeiences
of a nalional`` chaiaclei appeai also lo accounl lo a laige exlenl foi lhe
division belween lhe lwo main pailies of democialic Taiwan: lhis is likely
lo lead lo lhe consolidalion of lhe iegime. On lhe olhei hand, in Koiea,
lhe Philippines, and Thailand, lhe basis of paily divisions appeais lo be
piimaiily clienlelislic and unslable alliances aie likely lo conlinue lo
pievail, while lhe fuluie of pailies in Singapoie and ndonesia iemains
highly unceilain so long as no move lowaids full democializalion is
made.
1caJcrship
The naluie of lhe leadeiship is maikedly affecled bolh by lhe naluie of
lhe pailies and by lhe conslilulional aiiangemenls. The way succession
lakes place, lhe exlenl of slabilily of cabinels, and lhe powei of leadeis
diffei depending on whelhei lhe counliy has mainly mass pailies, pailies
of nolables, issue pailies, oi pailies eslablished by leadeis on lhe basis
of lheii populaiily. Leadeiship chaiacleiislics diffei also piofoundly
depending on whelhei lhe iegime is pailiamenlaiy oi piesidenlial, espe-
cially wilhin lhe pailies which come lo belong, if only fiom lime lo lime,
lo lhe goveinmenl.
Leadeiship suffeis in lhose pailiamenlaiy syslems in which pailies aie
numeious oi inleinally divided: in such cases, goveinmenlal inslabilily is
chionic and lhe effeclive powei of leadeis is limiled oi unceilain. The
numbei of candidales foi lhe leadeiship of lhe pailies and of lhe gov-
einmenl is laige, eilhei because lhe pailies aie small and lheie aie many
of lhem oi because, when lheie aie few of lhem, lhey aie maikedly div-
ided inleinally, lypically inlo faclions of a local oi iegional chaiaclei.
Leadeiship ballles lend lo be foughl eilhei in oi aiound a pailiamenl
which is |ealous of ils pieiogalives: il is in pailiamenl lhal goveinmenls
aie made and unmade, laws aie passed, and lhe budgel is adopled.
Leadeiship is lheiefoie moslly ad hoc, is lypically liansienl, and emeiges
on lhe basis of deals sliuck lo solve pioblems as lhey aiise. n Iasl and
Soulheasl Asia, Thailand has lypically suffeied fiom weak pailies opei-
aling in lhe conlexl of a pailiamenlaiy syslem.
On lhe olhei hand, leadeis aie likely lo be sliong and lo iemain in of-
nce foi long peiiods in pailiamenlaiy syslems in which pailies have a
laige elecloial suppoil and aie nalional in chaiaclei. Leadeiship conlesls
wilhin such pailies may occasionally be lense, bul lhey aie likely lo be
iesolved quickly, al leasl in lhe paily oi pailies which belong lo lhe gov-
einmenl. f lhese paily leadeis aie even only modeialely successful in lhe
conducl of public affaiis, lhey aie likely lo en|oy consideiable aulonomy
while in ofnce, especially when one paily is laige enough lo foim lhe
goveinmenl on ils own; lhey aie oflen, bul nol always, less poweiful and
less aulonomous if lhey aie in a coalilion, since lhey have lhen lo sliike
compiomises wilh lheii pailneis, unless one of lhe pailneis in lhe coali-
lion is dominanl as is lypically lhe case in Geimany. An example of
sliong pailiamenlaiy leadeiship in Iasl and Soulheasl Asia is piovided
by Malaysia, wheie leadeiship conlesls wilhin lhe ma|oi Malay paily,
\MNO, have occasionally been lense, bul wheie lhese conlesls have in
no way affecled lhe powei of leadeis once lhey weie elecled.
Piesidenlial syslems iendei pioblems of leadeiship succession and sla-
bilily less dependenl on lhe naluie of lhe pailies al leasl, on lhal of lhe
paily lo which lhe piesidenl belongs. Iixed leims lhus ensuie lhal lhe
chief execulive iemains in ofnce even wheie pailies do nol have a na-
lional appeal, foi inslance if lhey aie divided nalionally because lhey aie
clienlelislic; nxed leims also ensuie lhal leadeiship conlesls in lhe paily
which conliols lhe execulive occui (noimally) only lowaids lhe end of lhe
lenuie peiiod and nol al iandom inleivals. el, wilh localized clienlelislic
pailies, lhe numbei of candidales foi lhe piesidenlial nominalion and foi
lhe subsequenl piesidenlial eleclion may be veiy laige and none of lhese
candidales may come lo oblain a subslanlial piopoilion of lhe voles, as
has occuiied in lhe Philippines, especially in 1992, al lhe second eleclion
aflei lhe ouslei of Maicos: lhe iesull may well be a loss of aulhoiily of
lhe chief execulive. Thus lhe piesidenlial syslem biings aboul solulions lo
only some of lhe pioblems iesulling fiom lhe absence of well-eslablished
and disciplined pailies, as a piesidenl who cannol iely on lhe suppoil
of a slable nalional paily base expeiiences conlinual difncullies wilh lhe
legislaluie. n Iasl and Soulheasl Asia, Taiwan is lhe one fully libeial
democialic piesidenlial counliy in which pailies aie sufncienlly well
eslablished foi lhe chief execulive lo be able lo en|oy sliong and loyal
suppoil.
IJcologics, progranncs, anJ policics. ''Irogrannatic anJ
''rcprcscntativc partics
Pailies obviously diffei shaiply in lheii appioach lo policy-making. Al
one exlieme, lheie aie pailies which wish lo biing aboul a compiehensive
piogiamme of iefoims; al lhe olhei, lheie aie pailies which aie essen-
lially conceined wilh managing lhe slalus quo; in belween, many pailies
hope lo implemenl lheii policies bul also have an eye on lheii populaiily.
Pailies can lhus be divided inlo lhiee bioad gioups fiom lhe poinl of
view of lheii piogiammes and policies. Those lhal have a cleai ideology
which lhey liy lo implemenl can be labelled piogiammalic``; lhose
which lend lo be mainly conceined wilh ensuiing lhal lhey keep lhe
suppoil of lheii eleclois have been labelled calch-all`` by adheienls of
36 1IAN BLONDIL
lhe commonly held view lhal lhe eia of ideology has ended (Kiichheimei
1966; Bell 1961), bul which could peihaps bellei be leimed iepiesenla-
live``; and lhose which have no nxed policies al all can be desciibed as
inchoale.`` The nisl gioup includes lhe mass pailies as lhey weie oiigi-
nally conceived, in pailiculai on lhe Lefl; lhe second gioup is composed
of lhe iepiesenlalive mass pailies; and lhe lhiid gioup includes among
olheis lhe pailies which lend lo be clienlelislic and wilhin which local
leadeis play a ma|oi pail.
Goveinmenlal piogiammes and policies can suffei wheie pailies aie
inchoale, especially in lhe conlexl of pailiamenlaiy syslems, bul also in
piesidenlial syslems. Theie is likely lo be obsliuclion on lheii pail, oi al
leasl much ob|eclion lo a sliong policy line. On lhe olhei hand, pailies
which aie highly piogiammalic aie oflen viewed as iigid, a silualion
which may aiise (and has oflen been ciilicized foi being likely lo aiise)
wilh sliongly oiganized mass pailies, in pailiculai lhose of lhe Lefl
(Michels 1911j1962).
As a mallei of facl, such a iigidily of piogiammalic pailies in a pluial-
islic Weslein conlexl is moie a mylh lhan a iealily: while il could be
found somelimes lo exisl when lhese pailies weie in lhe opposilion, il has
always been iaie when lhe same pailies came lo be in goveinmenl. To an
exlenl, lhe eiosion of suppoil suffeied by many Weslein Iuiopean pai-
lies has acceleialed lhe move lowaids lhe abandonmenl of ideological
puiily and of piogiammalic iigidily, bul even wilhoul lheii social base
being eioded, indeed well befoie ideology was said lo be in decline, lhe
mass pailies of Weslein Iuiope displayed exibilily. They did so foi lwo
main ieasons. Iiisl, as we noled, lhe leadeiship of goveining mass pailies
is lypically able lo en|oy consideiable aulonomy, in pail because lhe vic-
loiy of lhe paily is oflen due lo lhe leadei`s populaiily. This fealuie does
nol dale solely fiom lhe second half of lhe lwenlielh cenluiy bul can be
obseived alieady in lhe nineleenlh cenluiy, in Biilain foi inslance, and il
is common in successful mass pailies. While lheie may be inleinal oppo-
silion and even ma|oi conicls wilhin lhese pailies, leadeis who aie vic-
loiious al lhe polls aie likely lo be able lo impose lheii views. Second,
mass pailies have had fiom veiy eaily on lo lake inlo accounl lhe mood
of lhe elecloiale and in pailiculai of lhal fiaclion of lhe elecloiale which
appeaied lo have been mosl insliumenlal lo lheii vicloiy. This led lo
Weslein Iuiopean mass pailies being viewed as calch-all`` inslead of
ideological; bul, while lhe expiession was coined in lhe middle of lhe
lwenlielh cenluiy, lhe phenomenon had in iealily begun lo occui eailiei.
Repiesenlalive mass pailies, as we have leimed lhe calch-all`` pailies,
aie lhus moie exible lhan lhe piogiammalic mass pailies. They aie
lheiefoie valuable insliumenls foi goveinmenlal policy-making in lhe
counliies in which lhe buieauciacy plays a key, if vaiying, pail in eco-
nomic goveinance, as in lhe case of Iasl and Soulheasl Asia. While pai-
lies which aie inleinally divided because of lheii inchoale oi clienlelislic
chaiaclei, and because of lhe laige numbei of compeling leadeis and
subleadeis which chaiacleiizes lhem, aie unable lo mainlain a consislenl
policy line, iepiesenlalive mass pailies wilh highly visible leadeis aie
mosl likely lo sliike compiomises designed lo secuie lheii global inlei-
esls. These inleiesls consisl, indeed, in pail simply in implemenling lheii
piogiamme; lhey also consisl in ensuiing lhal lhey slay in powei, as lhis is
a sine qua non if lhey aie lo even begin lo implemenl lheii piogiamme.
Ilexible iepiesenlalive mass pailies have lheiefoie lo become lhe
noim in Iasl and Soulheasl Asia if democializalion is lo pioceed
smoolhly in lhe aiea and lake inlo accounl al leasl lhe bioad senlimenls
of lhe populalion. Such pailies cannol be eslablished ailincially wheie
bioad social cleavages do nol give iise lo lhem, howevei. By lhe lale
199Os, Taiwan was lhe only counliy of lhe aiea in which lhe piocess of
democializalion was laking place wilh pailies which had lhis iepiesenla-
live chaiaclei. Ilsewheie, lheiefoie, difncullies can be expecled lo aiise.
The only hope would be foi clienlelism lo decline giadually, foi localised
pailies lo gel,`` so lo speak, as lhese become less conceined wilh local
pioblems and feel obliged lo adopl and slick lo a nalional policy line.
This developmenl is peihaps nol veiy likely bul il could occui if some al
leasl of lhe paily leadeis weie lo iecognize lhal, foi lheii counliies lo
iemain slable and democialic, lhe pailies musl have a well-developed
sliucluie wilhin lhe populalion and endeavoui lo piomole policies bioad
enough lo appeal lo subslanlial seclions of lhe elecloiale and yel exible
enough lo be iealislic. Alleinalively, lhe paily leadeis mighl feel lhal
bioad nalional policies aie a way of consolidaling lheii peisonal appeal
on moie secuie foundalions.
Paily syslems
Thc two jorns oj party conpctition
The piocess of democialic consolidalion implies nol only lhal pailies be
sliong and lively bul lhal lhey foim a syslem in which no componenl is so
dominanl lhal lhe olheis become salelliles oi aie maiginal; foi lhe exlenl
of liveliness of lhe paily sliucluie ilself has an impacl on lhe exlenl of
inslilulionalizalion of a pluialislic paily syslem. f lhe pailies aie weak
and almosl inchoale, lhe paily syslem is also weak; if, al lhe olhei ex-
lieme, one of lhe pailies is so sliong lhal il oveishadows all lhe olheis,
lhe paily syslem is nol pluialislic. Ioi lhe paily syslem lo be bolh lively
and pluialislic, lhe pailies have lo be sliong, bul nol oveiwhelmingly so.
38 1IAN BLONDIL
Moieovei, foi lhe paily syslem lo be genuinely pluialislic, lheie has
lo be ieal compelilion among ils componenls. Compelilion can vaiy be-
lween lwo exliemes. l can be in effecl a slale of wai belween sliongly
opposed aimies`` when lhe pailies aie so close lo lhe social cleavages
fiom which lhey emeiged lhal lhey have no wish lo appeal lo eleclois
linked lo olhei cleavages: lhus elhnic oi ieligious pailies may meiely be
lhe moulhpieces of lhe elhnic oi ieligious gioups fiom which lhey pio-
ceed. Al lhe olhei exlieme, compelilion may iesemble lhe conlesls in
which nims engage in oidei lo sell lheii pioducls. This is likely lo occui
when each paily is anxious lo alliacl new eleclois by piopounding pio-
giammes and policies which may appeal lo lhose who weie pieviously
lheii opponenls. n iealily, mosl mass pailies lend lo follow an inleime-
diale couise belween lhese lwo exliemes: lhey wish lo ielain lheii liadi-
lional suppoileis while also making inioads inlo lhe leiiiloiy of lheii
compelilois. Thus, foi lhe eleclois, issues come lo play a pail alongside
loyally lo a gioup.
The evolulion of mass pailies fiom suppoil based on loyally lo suppoil
based on bolh loyally and issues has cleai advanlages foi lhe develop-
menl of a slable paily syslem. Given lhe loyally which eleclois slill feel
foi lheii`` pailies, lhe paily syslem is likely lo become inslilulionalized
and lo display a low level of volalilily. n pailiculai, lheie aie unlikely lo
be paily splils in which some seclions of one oiganizalion leave in oidei
lo |oin anolhei, an occuiience which, on lhe conliaiy, lends lo be found
ialhei fiequenlly among localized clienlelislic pailies: il is lhe absence of
basic nalional gioup loyallies which accounls foi lhe many splils which
have laken place in lhe democializing counliies of Iasl and Soulheasl
Asia, foi inslance in Thailand, in Koiea, oi in lhe Philippines, and even lo
some exlenl in Taiwan. The limiled chaiaclei of lhe basic loyallies lo
bioad social gioups iendeis leadeis and subleadeis less hesilanl lo divide
lheii pailies and lo allempl lo foim new ones.
On lhe olhei hand, only if lheie is a mix of gioup-based loyallies and of
suppoil based on issues can a paily syslem funclion efncienlly. f pailies
aie almosl enliiely oiienled lo a sliong cleavage of a communal chaiac-
lei, of an elhnic oi ieligious kind in pailiculai, lension is likely lo be high
among lhe pailies and lhe pluialislic iegime may be difncull lo mainlain
and may be oveilhiown. This kind of lension has oflen chaiacleiized
pluial socielies,`` a laige numbei of which have succumbed lo mililaiy
iegimes oi lo single-paily diclaloiships, in pailiculai in Afiica bul also in
Asia (Rabushka and Shepsle 1971; \anhanen 1997). n iealily, lhe difn-
cullies expeiienced by Belgium and Canada in allempling lo oveicome
lheii elhnolinguislic pioblems show lhal lensions of lhis kind aie nol
connned lo counliies al a lowei level of socio-economic developmenl. On
lhe olhei hand, allhough Malaysia slops somewhal shoil of being fully a
libeial demociacy, a degiee of pluialism has been mainlained in lhe
conlexl of a sociely in which deep elhnic conicls could have laken place
and mighl have iesulled in a full-blown diclaloiship being inslalled.
The consolidalion of libeial demociacy appeais lo iequiie a move
away fiom a lype of paily syslem connguialion in which each componenl
is lied lo a bioad social cleavage lowaids one in which lhe weighl of lhese
cleavages is balanced by lhe pail played by issues. The paily syslem musl
lheiefoie go successively lhiough lwo phases. l musl nisl be eslablished
on lhe basis of bioad social gioups oi gioupings giving each paily a slable
suppoil in lhe ielalion lo lhe olheis; lhen, lhe link belween pailies and
social gioups has lo be loosened somewhal so lhal genuine compelilion
lakes place among lhe pailies, each of which lhen becomes anxious lo
gain lhe voles of middle-of-lhe-ioad eleclois who aie nol oi no longei
wholly commilled lo lolal loyally lo lhe social gioup lo which lhey belong.
Moieovei, lhe move fiom lhe nisl lo lhe second phase should nol be so
slow lhal each paily nnds il haid lo leave lhe oibil of ils oiiginal cleav-
age, a difncully which has been expeiienced in Noilhein ieland foi dec-
ades and may be in lhe piocess of being expeiienced in Malaysia. f lhe
move fiom lhe nisl lo lhe second phase lakes place ielalively iapidly, on
lhe olhei hand, lhe syslem will be inslilulionalized qua syslem, lhal is lo
say lhe populalion will view lhe pailies as being in genuine, bul civi-
lized`` and faii compelilion, and lhe condilions foi lhe consolidalion of
demociacy will be mel. Theie is lhen inleiplay belween lhe pailies as lhe
inuence of social cleavages on lhe pailies declines; inslead of lheie being
a slale of wai belween oiganizalions feaiing each olhei and viewing each
olhei as diie enemies, lheie will meiely be conlesls. el pasl loyallies will
iemain sufncienlly sliong belween al leasl many of lhe voleis and lheii``
pailies foi uclualions in lhe elecloial foilunes of lhe pailies belonging
lo lhe syslem lo iemain ielalively small.
Typcs oj party systcns
Pluialislic paily syslems depend lheiefoie on lhe naluie and lhe slienglh
of lhe social cleavages in lhe counliy, as well as on lhe sliucluie, leadei-
ship, and piogiammalic slandpoinls of lhe pailies which compose lhem.
el paily syslems also diffei fiom each olhei, and diffei maikedly, as a
iesull of bolh lhe numbei and lhe basic elecloial suppoil of lhose com-
ponenl oiganizalions which can be deemed lo be signincanl,`` lhal is,
able lo play an effeclive pail in lhe policy-making piocess of lhe counliy.
Naluially, lhe moie pailies lheie aie in a legislaluie, lhe smallei lhey aie
in size and lhe laigei is lhe numbei of signincanl pailies. ndeed, if lhe
policies and piogiammes of veiy small pailies aie such lhal lhese come lo
be slialegically placed in lhe connguialion of lhe oveiall syslem, lhese
4O 1IAN BLONDIL
small pailies, loo, may be signincanl even wheie lheie aie few laige ones:
lhus small nalionalisl pailies have somelimes benenled fiom such a posi-
lion in Weslein Iuiope, Biilain, and Spain, foi inslance. el lhe numbei
of signincanl pailies iemains ielalively small in consolidaled libeial
demociacies: il ianges fiom lwo oi lhiee lo peihaps six oi seven.
f numbei and ielalive size aie laken inlo accounl, pluialislic paily
syslems can be divided inlo foui bioad lypes: lwo-paily syslems, lwo-and-
a-half-paily syslems, mulli-paily syslems wilh a dominanl paily, and
mulli-paily syslems wilhoul a dominanl paily. n lhe nisl gioup, lwo
moie oi less equal pailies dominale lhe scene, Biilain being a case in
poinl. n lhe second, lheie aie lwo laige pailies and a much smallei lhiid
one, bul lhis lhiid paily oflen holds lhe balance of powei: lhis has been
foi a long lime lhe silualion in Geimany. n lhe lhiid gioup, lheie aie
foui oi nve signincanl pailies, bul one of lhem is as laige oi almosl as
laige as all lhe olheis logelhei, a connguialion which has been chaiac-
leiislic of seveial Scandinavian counliies, and in pailiculai of Sweden.
Iinally, in lhe fouilh gioup, lheie aie lhe same numbei of liuly signin-
canl pailies, bul all of lhem aie of aboul equal slienglh and aie lheiefoie
ialhei small, Swilzeiland being lhe aichelype in lhis calegoiy. This foui-
fold classincalion was nisl developed foi Weslein paily syslems, bul il
has also lended lo coiiespond in bioad leims, lo paily syslem conng-
uialions nol |usl in Weslein counliies, bul in olhei demociacies, in pai-
liculai 1apan, siael, and mosl Commonweallh and Lalin Ameiican
demociacies (Blondel 1968; Blondel 1995, 17O72; Sailoii 1976).
Admilledly, in counliies in lhe piocess of democializalion, especially
oulside lhe Commonweallh, and pailiculaily in lhe eaily slages of lhis
piocess, lheie has oflen been a single paily oi a paily which is so domi-
nanl lhal il oveiwhelms all lhe olheis and lieals lhem eilhei as iiielevanl
oi as salelliles: lhis was lhe case foi a long lime in Mexico. As such a
dominanl single paily should decline befoie lhe paily syslem becomes
genuinely pluialislic and comes close lo one of lhe foui calegoiies which
have |usl been desciibed, lhe democializalion piocess always lakes lime:
in Taiwan, foi inslance, lhe evolulion began in lhe second half of lhe
198Os and was nol complele by lhe lale 199Os. n lhe inleivening peiiod,
duiing which lhe slienglh of lhe conliolling`` single paily is eioded bul
is slill laige, lhal paily conlinues lo hold an abnoimal`` posilion in lhe
paily syslem connguialion.
n lhe Iasl and Soulheasl Asian conlexl, lhe paily syslems of lhe
counliies in lhe piocess of democializalion have iemained volalile as lhe
elecloial foilunes of lhe componenls of lhese syslems have been sub|ecl
lo wide uclualions. Taiwan is lhe exceplion: il is slowly moving lowaids
a lwo-and-a-half-paily syslem oi lowaids a mulli-paily syslem wilh a
dominanl paily. n Koiea, lhe Philippines, and above all in Thailand, on
lhe olhei hand, lhe inslilulionalizalion of lhe paily syslem seems slill
ialhei iemole: lhe consolidalion of demociacy seems lheiefoie also
somewhal pioblemalic in lhese counliies. Admilledly, lheie weie no
signs al lhe end of lhe lwenlielh cenluiy suggesling lhal lhe democialic
piocess mighl be halled; bul lheie weie no signs eilhei lhal a slable paily
syslem was aboul lo be eslablished. This is manifeslly due lo lhe facl lhal,
in lhese lhiee counliies, in conliasl lo Taiwan, pailies have nol been
based on a nalional social cleavage and lhe bond belween some of lhe
pailies and lheii eleclois has lypically been clienlelislic and localized.
AJvcrsarial v. consociational party systcns
The cases of Malaysia and lo a lessei exlenl of Singapoie suggesl lhal
paily syslems can move fiom lhe nisl phase lo a diffeienl second phase,
howevei, wilh impoilanl implicalions foi lhe sliucluie and composilion
of lhe nalional goveinmenl. The piocess of consolidalion of demociacy
which has been desciibed so fai assumes lhal lhe paily syslem musl ie-
main compelilive because polilics is inheienlly coniclual: lhe pluialislic
conlexl meiely civilizes`` and domeslicales`` lhese conicls. n such a
model of libeial democialic polilics, lhe ielalionship belween lhe pailies
is adveisaiial. This is lhe model which has chaiacleiised Anglo-Saxon
counliies in geneial and Biilain in pailiculai (Iinei 1975; Li|phail 1984).
The olhei model of pluialisl libeial demociacy is based, nol on com-
pelilion, bul on associalion oi accommodalion,`` as Li|phail has labelled
il (Li|phail 1977). nslead of behaving as nims do in a maikel, pailies can
decide lo collaboiale. When leadeis of lhe main social gioups iecognize
lhal none of lhem can win and indeed lhal allempling lo be vicloiious
would be dangeious foi lhe veiy exislence of lhe polily because lhe
cleavages aie fundamenlally exclusive, compelilion seems inappiopiiale
and lhe solulion seems lo be lo move lowaids a consocialional`` model,
somelimes desciibed by Li|phail as consensual`` piobably exaggei-
aledly, as nol all lhe pailies, nol even all lhe signincanl pailies, lypically
belong lo lhe aiiangemenl. Such a model has been shown lo chaiacleiize
a numbei of Conlinenlal counliies, in pailiculai Belgium, lhe Nelheilands,
Swilzeiland, and, wilh vaiialions and inleimillenlly, Ausliia (Li|phail
1984).
ndeed, as lhe links foiged in lhis mannei aie veiy sliong, il has come
lo be suggesled lhal lhe pailies foimed in iealily a cailel aiming by a
vaiiely of means al iemaining indennilely in (oi veiy neai) powei. One of
lhese means is lhe disliibulion of subslanlial amounls of public funds lo
lhe polilical pailies, lhose belonging lo lhe cailel being lhe laigesl bene-
nciaiies since lhey happen also lo be lhe laigesl pailies (Kalz and Maii
42 1IAN BLONDIL
1995). While lhe concepl of a paily cailel may be somewhal exaggeialed,
il does highlighl lhe facl lhal lhe same pailies lend lo woik logelhei lo
iun a counliy and, in doing so, help each olhei lo mainlain lhe inuence
which, foi decades, lhey have come lo exeicise.
As a mallei of facl, lhe adveisaiial and lhe consocialional models aie
in iealily lwo exlieme poles of a conlinuum: consolidaled paily syslems
can lake many inleimediale foims, depending on whelhei lhe syslem is
wholly adveisaiial (as lwo-paily syslems oflen, bul nol always, aie) oi
wholly consocialional (as mulli-paily syslems aie moie likely lo be bul
aie nol always). n a ceilain sense, lhe Malaysian expeiimenl pailakes of
bolh models and is liuly inleimediale: lheie is bolh an opposilion lo lhe
goveinmenlal coalilion and a consocialional coalilion composed of pai-
lies iepiesenling lhe key social cleavages in lhe sociely. This is indeed
why il is difncull lo deleimine whelhei Malaysia is lo be iegaided as being
in lhe piocess of consolidaling demociacy oi iemains oulside lhe demo-
cialic fiamewoik allogelhei. The pailies, al leasl lhe main pailies which
belong lo lhe goveinmenlal coalilion, aie manifeslly inslilulionalized; yel
lhe accommodalion which lakes place among lhese pailies is accom-
panied by a vaiiely of piaclices which make il veiy difncull foi pailies nol
belonging oi nol wanling lo belong lo lhal coalilion lo compele wilh il on
faii leims. So long as lhis occuis, il is difncull lo conclude lhal lhe con-
solidalion piocess has liuly laken place. el lhis does nol mean lhal ac-
commodalion and consocialionalism do nol conslilule a ioule lowaids
lhis consolidalion piocess, as lhe evidence fiom a numbei of Weslein
counliies cleaily indicales, especially wheie il seems veiy difncull, if nol
impossible, lo ieduce lhe inlensily of bioad social cleavages wilhin lhe
populalion and lheiefoie lheii effecl on lhe ielalionship belween eleclois
and lheii`` pailies.
Pailies aie lools: lhey can be used lo foslei demociacy, bul lhey can also
be used and oflen aie used lo pievenl demociacy fiom being eslab-
lished. Allhough lhey lhen appeai lo foige a link belween people and
goveinmenl, lhis is al besl in oidei lo mobilize lhe populalion in lhe full
mililaiy sense of lhe woid ialhei lhan in oidei lo achieve iepiesenlalion.
el lively and funclioning pailies aie needed if demociacy is lo be
eslablished and consolidaled, lhough lhe ways in which lhey help lo
consolidale demociacy aie complex and ialhei loiluous. Pailies cannol
consolidale demociacy if lhey aie nol lhemselves inslilulionalized, lhal is
lo say if lhey do nol have piofound iools in lhe sociely as a iesull of
which lhey come lo be genuinely in communicalion wilh lheii eleclois,
and lhus bolh iepiesenl lhem and aie able lo lead lhem. Ioi lhis lo be
achieved, howevei, pailies have lo be liuly dislincl fiom each olhei. The
link belween a paily and ils suppoileis is sliong only if lhese suppoileis
aie veiy disinclined lo |oin olhei pailies; lhey will be disinclined lo do so
if lhey aie maikedly opposed lo lhese pailies. Al lhe same lime, libeial
demociacy cannol funclion unless lhe pailies loleiale each olhei and in-
deed come lo collaboiale wilh each olhei ovei al leasl some malleis.
Hence lhe key difncully which lhe queslion of consolidalion of democ-
iacy poses: lheie musl be enough opposilion among lhe pailies foi
loyallies lo be sliong, bul lheie musl also be enough loleialion foi a
climale of libeialism lo pievail.
This conliadicloiy pull is encapsulaled in lhe paily syslem, as lhis
deleimines bolh lhe diffeiences and lhe links which exisl among lhe pai-
lies. These links can be sliongei oi loosei. The mode may be one of ac-
commodalion oi one of adveisaiial polilics; bul lhe accommodalion musl
nol be so close lhal pailies foim a cailel and come lo dominale lhe
sociely. Noi should lhe adveisaiial piaclices be so biulal lhal lhe paily
syslem is in conslanl dangei of bieaking up and of giving way lo lhe
aulhoiilaiian dominalion of one paily ovei lhe olheis.
Theie is an inevilable lension in lhe piocess of consolidalion of de-
mociacy. This lension is accenlualed if anolhei elemenl is piesenl in lhe
equalion, lhe goal of economic developmenl. Ioi lhe paily syslem lo
enable economic developmenl lo lake place iegulaily and al a iapid pace,
a numbei of consliainls have lo be imposed on lhe naluie and chaiaclei
of lhe ballles which lhe pailies nghl. The pailies have lo iespecl ceilain
policy ob|eclives and lhey have lo be piepaied lo exlend accommodalion
lo a diffeienl oigan of lhe policy-making piocess, lhe buieauciacy. As
economic developmenl has been foi decades lhe numbei one goal which
lhe polilies of Iasl and Soulheasl Asia have puisued, lhe democializa-
lion piocess is unlikely lo be successful in lhese counliies unless lhe pai-
lies liuly make lhal goal lheii own. We musl lheiefoie examine lhe
chaiacleiislics of economic goveinance in lhe Iasl and Soulheasl Asian
conlexl befoie consideiing whelhei lheie is liulh in lhe idea lhal libeial
demociacy mighl impede economic developmenl.
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Bell, D. (1961), Thc 1nJ oj IJcology, Colliei, New oik.
44 1IAN BLONDIL
Blondel, 1. (1968), Paily Syslems and Palleins of Goveinmenl in Weslein
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Paily Demociacy: The Imeigence of lhe Cailel Paily,`` Iarty Iolitics 1, pp. 528.
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5969.
Li|phail, A. (1977), Thc Iolitics oj AcconnoJation, \niveisily of Califoinia
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(1984), Dcnocracics, ale \niveisily Piess, New Haven, Conn.
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Lipsel, S. M. (1983), Iolitical Man, Heinemann, London.
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Osliogoiski, M. (19O2), Dcnocracy anJ thc Organi;ation oj Iolitical Iartics,
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Pedeisen, M. (1983), Changing Palleins of Ilecloial \olalilily in Iuiopean
Paily Syslems 19481977: Ixploialions in Ixplanalion,`` in H. Daaldei and
P. Maii (eds.), Vcstcrn 1uropcan Iarty Systcns, Sage, Los Angeles, Calif.
Rabushka, A. A. and Shepsle, K. A. (1971), Iolitics in Ilural Socictics, Meiiill,
Columbus, Ohio.
Rae, D. (1967), Thc Iolitical Conscqucnccs oj 1lcctoral 1aws, ale \niveisily
Piess, New Haven, Conn.
Rokkan, S. (197O), Citi;cns, 1lcctions, Iartics, \niveisilelsfoilagel, Oslo.
Sailoii, G. (1976), Iartics anJ Iarty Systcns, Cambiidge \niveisily Piess, Cam-
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147 Statcs, 19801988, Ciane Russak, New oik.
46 1IAN BLONDIL
3
Iconomic goveinance and
economic peifoimance
Ian Marsh
This chaplei consideis economic goveinance bolh as a kind of ideal lype
and as il has occuiied in lhe slales of Iasl and Soulheasl Asia. Thiee
issues aie exploied. The nisl is lhe link belween economic goveinance
and economic peifoimance. Theoiies lhal specify causalilies deduclively
and empiiical sludies lhal do so induclively aie ieviewed and polenlial
causal links aie opeialionalized. Second, using lhese calegoiies and vaii-
ables as a fiamewoik, lhe aclual piaclice of economic goveinance in a
numbei of Iasl and Soulheasl Asian slales is skelched, essenlially as an
indicalive exeicise. Thiid, lhe exlenl lo which palleins of economic gov-
einance aie common amongsl slales of lhe iegion is assessed and lhe
piincipal piessuies affecling lhis aclivily aie summaiized. This will enable
us, in lhe nexl chaplei, lo considei lhe impacl of democializalion on
economic goveinance.
\nlil lhe nnancial ieveise of 1997, lhe slales of Iasl and Soulheasl
Asia had a iemaikable iecoid of economic achievemenl. The 1997 ciisis
began in lhe nnancial secloi and affecled lhose slales wilh giealesl de-
pendence on foieign inveslmenl (Thailand, ndonesia, Philippines, Ma-
laysia) andjoi wilh exlensive shoil-leim boiiowings (Koiea). The pieda-
loiy possibililies of Koiea`s chaebol had alieady been iecognised (Ivans
1995; Cliffoid 1997; Iinsl 1996). Similaily, lhe iole of money polilics`` in
Malaysia, of piedalion and ienl seeking in ndonesia, and of coiiuplion
in Thailand weie acknowledged (e.g., Gomez and 1omo 1997; Gomez
1998). These sliucluial condilions weie nol lhe only elemenls in lhe cii-
47
sis. Olhei ingiedienls included: lhe enlhusiasm wilh which nnancial insli-
lulions lenl funds lo iegional companies and inleimediaiies; change in
lhe ielalive compeliliveness of affecled slales (pailiculaily following
China`s 1995 devalualion); and lhe capacily of slales lo upgiade lechno-
logically in slep wilh iising wage iales (Thuiow 1998; Radelel and Sachs
1997; Wade 1998). Lalei analysis may idenlify olhei causes. The imme-
diale consequence is a ieduclion in lhe expeclalions foi giowlh in lhe
affecled slales and in lhe iegion as a whole (Woild Bank 1998). The MI
has iequiied affecled slales lo implemenl budgelaiy, nnancial secloi, and
olhei inslilulional changes. The medium-leim oullook depends on how
individual polilical syslems absoib lhe lwin piessuies of iecession and
inslilulional change. Moie dislanlly, a Chinese devalualion oi a slump in
1apan would compound lhe difncullies of adaplalion.
el pioduclive capacily of Iasl and Soulheasl Asia iemains sliong.
The iegion as a whole has dominaled global oulpul of a vaiiely of manu-
facluied pioducls. Ioi example, in 1994, iegional pioduclion amounled
lo ovei 6O pei cenl of woild pioduclion of iadiolape playeis, \CRs,
bicycles, miciowave ovens, coloui T\s, aii condilioneis, iefiigeialois,
walches, and ships, and |usl undei 4O pei cenl of woild pioduclion of
aulomobiles and sleel manufacluies (Nikkci Vcckly, 3 Oclobei 1994).
Ixpoil-led indusliializalion has been lhe engine of economic develop-
menl. n luin, lhis has slimulaled lhe giowlh of domeslic capilal, infia-
sliucluie, and consumei goods maikels, culminaling in lhe 1997 bubble.
Save foi Hong Kong, goveinmenl has laken an aclive pail in economic
managemenl in all lhe slales of indusliializing Asia (Sliglilz 1996). The
expeiience of 1apan piovided a model foi Taiwan and Koiea (Kim el al.
1995). The diffeienl ciicumslances of Soulheasl Asian slales have cii-
cumsciibed 1apan`s ielevance lo lhem. Iconomic globalizalion, mani-
fesled vividly in lhe evenls of 1997, is a consliaining elemenl. This is lhe
conlexl foi exploiing lhe links belween economic goveinance and eco-
nomic peifoimance. On lhe basis of vaiying peispeclives diawn mainly
fiom economics bul also fiom polilical science and fiom such ecleclic
appioaches as business slialegy, a subslanlial body of empiiical woik
aboul economic goveinance in iegional slales has emeiged. Howevei,
compaiison and synlhesis is difncull, nol leasl because of diffeienl piem-
ises and diffeienl melhodologies. Neveilheless, iecenl developmenls in
inslilulional and evolulionaiy economics have begun lo piovide a link,
and a common fiamewoik can peihaps be exploied. n pailiculai, lhe
lallei lheoiizes lhe causal linkage belween economic goveinance and
economic peifoimance, albeil al a high level of geneialily. Meanwhile, lhe
empiiical lileialuie suggesls some of lhe delailed elemenls allhough lhe
evenls of 1997 suggesl ils incompleleness.
One lhieshold diffeience in economic goveinance belween individual
48 AN MARSH
slales of lhe iegion aiises fiom lhe duialion and level of lheii economic
peifoimance and lhe piimaiy souice of inveslmenl. n lhis peispeclive,
lhe eighl slales coveied in lhis sludy fall inlo lhiee calegoiies. The nisl
gioup is composed of Singapoie, Koiea, Hong Kong, and Taiwan. These
slales have en|oyed suslained giowlh, al leasl since lhe sevenlies; all foui
iemain signincanl global compelilois in eleclionics, compuling, and in-
foimalion lechnology (T), and aie seeking posilions in advanced lech-
nology seclois: wilh lhe exceplion of Singapoie, indigenous nims, nol
DI, have been lhe engine of developmenl. n lhis gioup, Koiea alone
was immedialely affecled by lhe 1997 ciisis. The counliies of lhe second
calegoiy, Malaysia, ndonesia, and Thailand, expeiienced acceleialed
developmenl aflei lhe Plaza Accoids of 1986. To a laige degiee lhese
slales have become pioduclion siles foi indusliies fiom 1apan. They ie-
main undeideveloped by compaiison wilh lhose of lhe pievious gioup:
even if lhey suslained giowlh iales of 7 pei cenl p.a., il would have laken
Malaysia 17 yeais, Thailand 22 yeais, and ndonesia 46 yeais lo achieve
Koiea`s 199O pei capila income (Macnlyie 1994a, 16). Iinally, lhe Phil-
ippines is in a lhiid calegoiy as ils expeiience of developmenl dales fiom
lhe eaily 199Os. All lhe slales in lhe lasl lwo gioups weie implicaled in
lhe 1997 ciisis.
Iconomic goveinance and economic peifoimance: Theoiy
Thc statc as a Jistinctivc lcarning cnvironncnt
Sludies of economic peifoimance based in neoclassical economics dis-
counl lhe iole of lhe slale beyond lhe eslablishmenl of a libeial maikel
syslem, appiopiiale nscal and monelaiy sellings, and skills developmenl
(Kiugman 1994): lhese deduclive analyses lheiefoie conlesl lhe link be-
lween economic goveinance and peifoimance. Sludies which emphasize
lhe iole of slale inslilulions lypically geneialize fiom empiiical appiaisals
of aiiangemenls and aie lheiefoie essenlially induclive. Howevei, evo-
lulionaiy and inslilulional economics have added new dimensions lo lhe
case foi asseiling lhal lheie is a causal link belween economic govei-
nance and economic peifoimance on lhe basis of a fiamewoik consislenl
wilh lhe hisloiical iecoid of oplimal solulions oflen ignoied; efncienl
solulions iaiely ieplicaled; decline expeiienced as oflen as developmenl;
and limiled conveigence belween slales and belween nims fiom diffeienl
slales.
Bolh evolulionaiy and inslilulional economics shaie lhe piemise lhal
lhe aclois (nims, slale agencies, polilicians, cilizens) make lheii choices
on lhe basis of bounded ialionalily and genuine unceilainly: palh de-
ICONOMC GO\IRNANCI AND ICONOMC PIRIORMANCI 49
pendence lhus becomes a key inuence in developmenl. n addilion,
inslilulional economics focuses on liansaclion cosls, which aie indeed
held lo be lhe decisive inuence in long-leim peifoimance. Douglass
Noilh pioposes adaplive efnciency`` as lhe ielevanl noim. This em-
bodies lhe willingness of a sociely lo acquiie knowledge and leaining, lo
induce innovalion, lo undeilake iisk and ciealive aclivily of all soils, as
well as iesolve pioblems and bolllenecks of lhe sociely lhiough lime``
(Noilh 1992, 8O).
1ellisoning lhe neoclassical model of choice opens up lhe issue of lhe
genesis and piopagalion of lhe molives and ideas which guide business
nims, cilizens, oiganized inleiesls, lhe polilical leadeiship, and lhe bu-
ieauciacy. Accoiding lo Noilh, lhe slale and lhe polilical syslem moie
geneially inuence whal aclois idenlify as ielevanl infoimalion and how
lhey galhei, piocess, and acl on lhe lallei (Noilh 1992, 76, 111).
Tiansaclion cosls aie also ciilical causal vaiiables. These aiise in mea-
suiing lhe valued alliibules of whal is being exchanged, of piolecling
iighls, and of enfoicing agieemenls. The polily is lhe selling in which
liusl (an infoimal consliainl) and ciedible commilmenls (a foimal con-
sliainl) can be mobilized: lhe level of liusl and ciedible commilmenls,
among olheis, deleimines lhe liansaclion cosls lo be faced by nims in lhe
maikel.
Theie aie lhus al leasl foui bioad ways in which economic goveinance
mighl conliibule lo economic peifoimance: nisl, aclions conliibuling lo
lhe geneialion of ideas, choice sels, and molives; second, aclions ieducing
liansaclion cosls; lhiid, aclions slimulaling ciealivily, innovalion, and
skills; and, fouilh, aclions inhibiling andjoi coiiecling goveinmenl
failuie.
A ciilical lhieshold conceins lhe chaiacleiislics of lhe slale as a leain-
ing syslem and of lhe polily as a leaining enviionmenl. To play an effec-
live pail in economic peifoimance, lhe slale musl conslilule a selling in
which, despile bounded ialionalily and unceilainly, dislinclive infoima-
lion can be galheied and dislinclive peispeclives fiamed (Kelm 1996;
Maish 1995). f lhe infoimalion and peispeclives geneialed fiom lhe
slale cannol be dislinguished fiom lhose of piivale aclois, lhe slale`s iole
is obviously weakened, if nol even negaled; ils capacily foi leadeiship
and foi acling as a calalysl in seleclive inleivenlions is maikedly affecled.
The slale`s leaining and leaching capacilies aiise fiom lwo bioad
souices. The nisl is lhe public policy agenda: il is lhe deposil of an
exlended hisloiical piocess, which laigely deleimines lhe queslions
addiessed in lechnical analysis and lhe conlexl in which lhis occuis. Pei-
haps moie impoilanlly, lhis piocess also deleimines peilinenl values. n
luin, lhe public policy agenda affecls lhe spalial and lempoial compie-
5O AN MARSH
hensiveness and ieach of lhe slale`s infoimalion galheiing and |udge-
menls. l also affecls lhe slale`s conceplion of ils disseminalion and mo-
bilizalion lask.
The second souice of dislinclive slale capacilies aiises fiom lhe insli-
lulions lhiough which lhe bioadei communily and pailiculai inleiesls aie
mobilized and infoimalion is disseminaled. These, loo, aie hisloiical
deposils. The piesence and impacl of lhese lwo faclois can be exploied
compaialively and empiiically (Hall and Tayloi 1996; Sleinmo el al.
1993). n geneial, lhe scope of polilics and lhe iole of lhe slale in slialegic
socio-economic developmenls is lhe basis foi diffeienlialing lhe infoima-
lion geneialed and lhe peispeclive foimed by piivale and public aclois.
Thiid, lhe diffeienl conceplions of lheii iole held by diffeienl slales can
be assessed lhiough such faclois as lhe economic, social, and olhei issues
on lhe public agenda, lhe lempoial hoiizon wilhin which peispeclives aie
fiamed, and lhe iange of values and iemedies convenlionally iecognized
as ielevanl: lhese aie lhe ideas in good cuiiency`` (Schon 1971).
Iouilh and nnally, depending on how lhe slale consliues ils iole, il
mighl be expecled lo have diffeienl molives fiom lhose of business
oiganizalions in galheiing infoimalion and fiaming peispeclives. ndeed,
how lhe slale consliues ils iole may be an impoilanl conslilulive elemenl
in lhe foimalion of business molives, ideas, and choice sels.
The slale is nol only an agenl of scanning and discoveiy: il is also a
conslilulive selling foi lhe foimalion of lhe molives, choice sels, and
ideas of piivale aclois. The slale is a kind of leaining syslem wilhin which
piivale aclois aie silualed and in which lhey pailicipale. Bolh lhiough
lhe dislinclive infoimalion and peispeclives il galheis and lhiough ils
specinc aulhoiilalive iole in infoimalion disseminalion and inleiesl and
cilizen mobilizalion, lhe slale is an impoilanl polenlial inuence on lhe
molives, ideas, and choice sels of piivale aclois, whelhei lhey aie indi-
vidual cilizens oi business nims. The slale`s impacl on lhese ielalionships
is biokeied by bolh a vaiiely of media and a hosl of inleimediaiy asso-
cialions and inslilulions.
Dcvclopncntal statc thcory
These pioposilions aboul lhe causes of longei-leim economic peifoi-
mance and aboul lhe dislincliveness of lhe slale as a leaining enviion-
menl piovide a link lo lhe induclive lileialuie on whal aie leimed
developmenlal slales.`` Al lhe coie of developmenlal slales is an elabo-
iale piaclice of economic goveinance. Desciiplions of economic govei-
nance aie available in lhe lileialuie on goveined maikels`` (Wade
199O), goveined inleidependence`` (Weiss and Hobson 1995), and
embeddedness`` (Ivans 1992, 1995). These sludies deal wilh slale pen-
elialion of, oi embeddedness`` in lhe suiiounding sociely and specin-
cally wilh business-goveinmenl ielalions, as well as wilh slale sleeiing``
capacilies. Bioadei communily mobilizalion on behalf of developmenlal
goals has also been menlioned as an addilional causal elemenl in longei-
leim economic peifoimance (Campos and Rool 1996). These concepls
suggesl ways in which lhe absliacl nolion of economic goveinance mighl
be opeialionalized.
Busincss-govcrnncnt collaboration
Ivans (1995) idenlines al leasl lhiee ciileiia foi effeclive collaboialion
belween business and lhe slale: lhe foiums available foi inleiaclion; lhe
souices of inuence al lhe disposal of lhe slale; and lhe capacily of busi-
ness lo pailicipale in lhese exchanges. The nisl ciileiion is consliluled by
lhe modes of exchange: il iefeis lo lhe inslilulional aiiangemenls lhiough
which inleiaclion belween goveinmenl and business lakes place. 1apan,
foi inslance, lhe paiadigm case, is chaiacleiized by deep foimal and in-
foimal exchanges (Okimolo 1989; McMillan 1996). Aiiangemenls lhal
aie moie oi less elaboiale and moie oi less collaboialive have been
idenlined in lhe olhei slales of lhe aiea.
The second ciileiion is consliluled by lhe iesouices available lo lhe
slale lo inuence behavioui in ils exchanges wilh business. These include
coeicive, indiiecl, and coopeialive insliumenls. Legal aulhoiily piovides
coeicive inuence; lhe abilily lo allocale capilal oi specinc lax oi subsidy
aiiangemenls mighl conslilule indiiecl inuence; and piovision of valued
infoimalion conslilules lhe lhiid souice of inuence. Commenlalois have
poinled lo a move fiom lhe foimei lo lhe lallei modes as ielalionships
develop fiom a diieclive lowaids a moie collaboialive pallein. Slales
wilh collaboialive business-goveinmenl ielalions possess an aiiay of de-
libeialive councils.
The lhiid ciileiion conceins lhe exlenl lo which business is oiganized
in associalions. These mighl be moie oi less independenl fiom lhe slale,
bul oiganizalion and iepiesenlalion aie essenlial foi effeclive inleiaclion:
an alomized business secloi would nol be able lo enlei inlo oi mainlain
oideied ielalions.
The iole of laboui, which has nol geneially been liealed as a pailnei
of equivalenl slanding lo business, mighl also be noled. Ioi example, in
1apan, aflei inilial uniesl, inlegialion was laigely accomplished al lhe
nim level lhiough enleipiise unions. Wage decisions aie co-oidinaled
lhiough lhe annual Shunto iound (Sako 1997). Analogous aiiangemenls
exisl in Singapoie, Taiwan, and Thailand. Koiean laboui ielalions aie
moie luibulenl, and unions aie handled diffeienlly in ndonesia and
Malaysia.
52 AN MARSH
Statc autonony
Iconomic goveinance also involves whal is leimed slale aulonomy. f lhe
slale is lo play a calalylic iole, il musl display a capacily foi independenl
slialegic and laclical planning. This piocess mighl be moie oi less col-
laboialive and moie oi less ileialive; bul lhe iequiiemenl lhal lhe slale
be able lo lake an independenl view of ils slialegic economic piioiilies is
fundamenlal.
Ivans (1995) enumeiales lhiee condilions foi slale aulonomy lo be
iealized wilhoul ienl seeking. The nisl is consliluled by slialegic inslilu-
lions (see also Wade 199O, 32223). Diiecling inslilulions musl be able lo
evaluale longei-leim economic piioiilies and piopose goals, al leasl as a
conliibulion lo a subsequenl debale. The slale musl have al ils disposal
inslilulions lhal can fiame a view aboul ils desiied economic fuluie. This
has been lhe classic iole of MT in 1apan. The second condilion is bu-
ieaucialic pieslige, which is iequiied lo iendei a public seivice caieei
valued and iespecled and lheiefoie able lo alliacl lalenled and qualined
ieciuils. n Confucian slales, lhis pieslige is giounded in a liadilion of
buieaucialic social leadeiship; in olhei cases equivalenl aiiangemenls
need lo be piesenl. The lhiid condilion is buieaucialic inlegialion: lal-
enled buieaucials mighl olheiwise be alliacled lo exlend lheii peisonal
powei oi lheii luif`` al lhe expense of laigei public goals. An csprit Jc
corps and a sense of common puipose sliong enough lo counleiacl lhese
lendencies needs lo exisl in lhe elile buieauciacy: lhis could be mainlained
lhiough socializalion, in moie maleiial ways, oi bolh.
Theie is a fouilh condilion of slale aulonomy, moieovei, as lhe lhiee
fealuies which have |usl been desciibed could be piesenl in slales in
which lheie aie no slialegic economic oi sliucluial aims: manifesl eco-
nomic piioiilies aie a sign lhal such aims exisl. These piioiilies mighl
emeige in lhiee aieas al leasl: lhe idenlincalion and oicheslialion of
aclion ielaling lo giowlh seclois (fiom lhe peispeclive of employmenl,
oulpul, oi liade); lhe idenlincalion and oicheslialion of aclion foi lhe
developmenl and commeicializalion of new lechnologies; and lhe elabo-
ialion of mechanisms designed lo ease lhe difncullies of declining indus-
liies. Impiiical sludies allesl lo aclivilies of all lhiee of lhese lypes in
1apan (Tillon 1996), allhough lheie is disagieemenl wilh iespecl lo lhe
second of lhese lypes (Callon 1995).
Technology developmenl has been pailiculaily signincanl in conlii-
buling lo iegional economic giowlh. The slale has played a pail, moie oi
less diieclly, in ils slimulalion (Hobday 1995; Mallhews 1997a). Reveise
engineeiing has been an effeclive calching-up slialegy (Magazinei and
Palinkin 1995, 2355O), and Wade (1992) |udges lhis lo have been cenlial
lo lhe economic success of lhe slales of lhe aiea: lale indusliialisalion . . .
has been a polilical piocess shaped by lhe exigencies of masleiing (and
leaining) alieady exisling lechnologies.`` This slialegy has become less
effeclive because of lhe impacl of micioeleclionics on bolh pioducl and
pioduclion piocesses (Beinaid and Ravenhill 1995, 1712O9; Hobday
1995). nnovalion has been found lo pose special challenges lo pailiculai
slales (e.g. Koiea, Iinsl 1996).
SharcJ growth
Shaied giowlh as a dislinclive fealuie of slales of lhe aiea is noled as an
impoilanl fealuie in a numbei of sludies; income disliibulion dala also
poinl lo lhe ielalive success of lhis slialegy (Woild Bank 1993; Campos
and Rool 1996). This slialegy has been said lo iesull fiom lhe need foi
legilimacy on lhe pail of lhe polilical leadeiship, as Wade slales: Whal
should be al lhe heail of a polilics of economic giowlh |isj iuleis` and
would be iuleis` calculalions, lhal is how lhey allempl lo secuie suppoil,
by whal mix of policies designed lo appeal lo which gioups, wilh whal
polilical success, and al whal polilical cosl`` (1992, 3O9).
Iconomic goveinance and economic peifoimance: Piaclice
f we concenliale on inslilulional analysis, foui bioad faclois accounling
foi economic peifoimance can be idenlined: lhe developmenl of appio-
piiale ideas, choice sels, and molives; lhe minimizalion of liansaclion
cosls; lhe encouiagemenl of innovalion, ciealivily, and skills; and lhe
minimizalion and subsequenl coiieclion of goveinmenlal failuie. These
foui faclois piovide lhe basic headings foi lhe following suivey of Iasl
and Soulheasl Asian piaclice. The subheadings wilhin each of lhe foui
basic headings aie diawn fiom lhe developmenlal slale analysis.
Hong Kong is nol consideied in delail because of lhe dislinclive chai-
aclei of ils appioach lo policy-making. As a mallei of facl, lwo sludies of
Hong Kong`s fuluie economic slialegy ieach conliaiy conclusions aboul
whal lhe slale should do, one iecommending an aclive and seleclive iole
(Beigei and Leslei 1997) and lhe olhei piessing foi lhe mainlenance of
lhe exisling appioach (Iniighl el al. 1996).
IJcas, choicc scts, anJ notivcs
Accoiding lo Gaiiell and Weingasl, lhe capacily of ideas lo facililale co-
opeialion is a funclion of lhiee faclois, i) lhe gains lo be expecled fiom
co-opeialion among a ielevanl sel of playeis, ii) an idea which expiesses
lhese gains fiom co-opeialion, and iii) a mechanism devised lo lianslale
54 AN MARSH
lhe idea inlo a shaied belief syslem so as lo affecl expeclalions and hence
behavioui`` (1993, 2O35).
deas mighl be deployed al bolh nalional and secloial levels. Al lhe
nalional level, lhe slale mighl champion longei-leim socio-economic
ob|eclives and mobilize populai suppoil on lheii behalf; lhis mighl be
expecled lo inuence lhe expeclalions of individual cilizens and lheii
undeislanding of lhe sleps which have lo be laken in oidei lhal lhe
desiied oulcomes be achieved. n pailiculai, linkages belween lhe na-
lional and lhe global economy mighl be bellei undeislood and lhe
implicalions accepled. Meanwhile, lhe polenlial posilive-sum chaiaclei of
lhe nalional socio-economic pio|ecl mighl be ailiculaled and ils leims
afnimed. These poinls would be expiessed in leims appiopiiale lo lhe
pailiculai polilical culluie oi olhei souices of noimalive aulhoiily; lhey
would have lo be subslanlialed by lechnical analysis.
Al lhe secloial level, lhese bioad puiposes would need lo be lianslaled
inlo piogiammes: similai oulcomes in leims of ideas, choice sels, and
molives mighl be slimulaled in lhis way. The piocess would have lo be
collaboialive and iecipiocal: commilmenl would lhus be buill and lhe
piocess of adaplalion eased. While unanimily would be neilhei achieved
noi expecled, a ma|oiily coalilion would be eslablished and mainlained.
IJcas, choicc scts, anJ notivcs at thc national lcvcl
Al leasl nve elemenls of goveinance mighl conliibule lo lhe developmenl
of ideas, choice sels, and molives al lhe nalional level: lhe eslablishmenl
of slialegic social and economic goals; elile economic agencies iesponsi-
ble foi denning and ienning lhese goals; leadeiship consensus; aclive ad-
vocacy; and appiopiiale oulcomes.
strategic socio-economic goals
Theie is evidence of lhe adoplion of bioad socio-economic goals by all
slales, lhough wilh vaiying degiees of explicil ailiculalion. Ioi example,
accoiding lo Kim, in 1apan, lhe idea of calching up and suipassing lhe
Wesl (oitsukc, oikosc) was geneially accepled lhioughoul lhe populalion,
including by lhe elile of lhe iuling paily. . . . l was lhe peivasive anxiely
aiising fiom juan (insecuiily) lhal helped mobilise lhe people. . . . The
slale adopled lhe piinciple of shaied giowlh`` (Kim el al. 1995, 515).
n lhe case of Koiea, Campos and Rool suggesl, Ioi economic giowlh
lo be a subslilule foi legilimacy il had lo be liansfoimed inlo a symbol. . . .
lhal symbol in Koiea was . . . double digil GNP giowlh . . . lhe Koiean
scoie in lhe iace lo calch up wilh 1apan`` (1996, 34). n ielalion lo Sin-
gapoie, Khong (1995, 112) suggesls lhal Lee soughl lo legilimise his iule
lhiough lhe piomise of economic peifoimance`` and Cheng and Haggaid
suggesl lhal Taiwan adopled lhe piinciple of shaied giowlh fiom 1949
(1992, 22). Similai condilions exisled in Soulheasl Asia. n Thailand,
Saiil |uslined his 1958 coup as essenlial foi bolh secuiily and develop-
menl; Macnlyie suggesls lhal Suhailo also soughl legilimacy by piomis-
ing economic giowlh (1994b, 242); in Malaysia`s case, Gomez and 1omo
suggesl lhal iedisliibulion has been given piioiily ovei giowlh (1997).
elite agencies
n emulalion of 1apan`s MT, elile agencies conceined wilh lhe slialegic
economic oi socio-economic oulcomes have been sel up in eveiy slale.
Theii effecliveness, howevei, vaiies widely. Sliong agencies include Sin-
gapoie`s Minisliy of Tiade; Koiea`s Iconomic Planning Boaid, and since
1995 lhe Minisliy of Iinance and lhe Iconomy (Lee 1997); and Tai-
wan`s Council of Iconomic Planning and Developmenl and lhe ndusliial
Sliucluie Buieau in lhe Minisliy of Iconomic Affaiis. Paiallel agencies
can be idenlined in Soulheasl Asian slales, bul vaiious sludies suggesl
lhey aie much less well insulaled fiom polilical piessuies andjoi much
less aulhoiilalive in lhe public policy piocess lhan lhose noled above
(Gomez and 1omo 1997; Macnlyie 1994). n Malaysia, slialegic policy-
making is concenlialed in lhe Iconomic Planning \nil in lhe Piime
Minislei`s Depailmenl. This has a slaff of aiound 8O piofessionals, of
whom 9O pei cenl have al leasl a maslei`s degiee. The nslilule of Slia-
legic and nleinalional Sludies (SS) is a quasi-independenl lhink lank
associaled wilh lhe goveinmenl; il was pailiculaily aclive in lhe devel-
opmenl of lhe bioadei 2O2O`` vision, and is also lhe co-oidinaling agency
wilh lhe peak nalional business oiganizalion, lhe Malaysia Business
Council.
ndonesia`s slialegic agencies include lhe Nalional Planning Agency
(Bappenas), lhe Minisliy of Iinance, and lhe nveslmenl Co-oidinalion
Boaid. An Agency foi Slialegic ndusliies was eslablished in 1984; ils
iole has since expanded lo managing slale-owned slialegic indusliies in
lhe aieas of lianspoilalion, infoimalion, lelecommunicalions, and elec-
lionics.
Theie aie foui elile agencies in Thailand: lhe Nalional Iconomic and
Social Developmenl Boaid (NISDB), lhe Bank of Thailand, lhe Boaid
of nveslmenls, and lhe Buieau of lhe Budgel in lhe Minisliy of Iinance.
The NISDB was eslablished in 1959 and is diiecled by a 15-membei
commillee including key public execulives, lhe goveinoi of lhe Bank of
Thailand, lhe secielaiy-geneial of lhe Civil Seivice Commission, lhe di-
iecloi of lhe Buieau of lhe Budgel, lhe diiecloi-geneial of lhe Iiscal
Policy Ofnce, lhe secielaiy-geneial of lhe NISDB, and nine membeis
appoinled by lhe Cabinel. Theie is also a 1oinl PublicjPiivale Secloi
Consullalive Commillee (N1PPCC), eslablished in 198O by lhe NISDB,
56 AN MARSH
which idenlines issues affecling economic developmenl. Iinally, in lhe
Philippines, lhe elile agencies include lhe Depailmenl of Iinance, lhe
cenlial bank, lhe Depailmenl of Tiade and ndusliy, and lhe Nalional
Iconomic Developmenl Aulhoiily (\elasco, lhis volume; also Riveia
1996).
The cenlial slialegic agencies in each slale aie iesponsible foi lhe
piepaialion and disseminalion of longei-leim plans. Wilh lhe exceplion
of Thailand, lhe Philippines, and ndonesia, pio|eclions aie based on in-
dusliial sliucluie oulcomes, nol economic magniludes; lhey will lheiefoie
be examined in lhe nexl seclion. Singapoie has begun lo expeiimenl wilh
scenaiio planning as lhe basis foi a ievision of ils developmenl slialegy
(Schwailz 1991).
n slales wheie slialegic agencies aie sliongesl, goveinmenl seivice
conlinues lo be an elile aclivily associaled wilh high social pieslige. n
1apan, law giaduales fiom Tokyo \niveisily conslilule 14 pei cenl of lhe
applicanls bul 35 lo 4O pei cenl of lhe inlake. Similaily, in Koiea, 55 pei
cenl of lhe inlake comes fiom Seoul Nalional \niveisily and 45 pei cenl
fiom lwo piesligious Seoul high schools; engineeis piedominale in Tai-
wan`s ndusliial Developmenl Buieau; and Singapoie iewaids ils civil
seivanls well, wilh public secloi salaiies . . . highei on aveiage lhan pii-
vale secloi salaiies and highei lhan salaiies of equivalenl senioi ofncials
in lhe \S`` (Campos and Rool 1996, 143).
The ielalionship belween lhe elile buieauciacy and lhe polilical lead-
eiship vaiies belween slales. n ielalion lo 1apan, noguchi suggesls lhal
lhe nalional buieauciacy does nol seem lo be ieady lo ielinquish ils
powei. . . . il is lhe only feasible agenl foi making lhe body polilic iea-
sonably cohesive`` (1997). The silualion in Iasl and Soulheasl Asia vaiies
in lhis iespecl. n Koiea, public policy powei is concenlialed in lhe
piesidenl`s hands and lhe buieauciacy plays a less independenl iole lhan
in 1apan, allhough Mallhews suggesls buieaucialic aulhoiily may be
ieasseiled in lhe wake of lhe nnancial ciisis (1998). Taiwan and Singa-
poie aie inleimediale belween Koiea and 1apan.
n Soulheasl Asia, lhe silualion is again diffeienl. Ioi example, in
Thailand lhe buieaucialic elile is dislanl fiom polilical inuence, as a ie-
sull of civil seivice liadilions eslablished undei lhe absolule monaichy,
while pailiamenl has a minimal iole in deleimining public spending, even
lhough elecled polilicians aie inuenlial in implemenling policies. This
division of ioles belween execulive and legislalois has given lechnocials
scope lo puisue a conseivalive macioeconomic agenda. These lend lo
disliusl lhe line minisliies, believing lhal lhey aie dominaled by naiiow
buieaucialic and polilical inleiesls`` (Chiislenson el al. 1993, 24). In-
demic coiiuplion al lhese levels and conlinuing mililaiy inuence did
impede economic developmenl unlil lhe collapse of 1997. (Suchil 1996;
Anek 1996). The independenl slanding of lhe Bank of Thailand was
compiomised in a coiiuplion scandal in 1996. n lhe Philippines, lhe elile
buieauciacy has ielained ils aulonomy.
leadership consensus
Taiwan, Koiea, Thailand, Malaysia, and lhe Philippines all have polilical
opposilion pailies, none of which opposes lhe slialegy of economic
giowlh and all of which suppoil an aclivisl slale. n Singapoie and ndo-
nesia, lhe opposilion is nol signincanl, as was alieady indicaled in lhe
pievious chaplei.
active advocacy
Delailed evidence of lhe sleps laken wilhin each slale lo mobilize lhe
sociely on behalf of developmenlal ob|eclives iemains lo be galheied.
Befoie lhe nnancial ciisis, and oslensibly al leasl, Malaysia appeais lo
have gone fuilhesl by elaboialing lhiee componenls, a vision,`` len-yeai
oulline plans, and a nve-yeai opeialing plan. n 1991, Vision 2020,
adopled by lhe goveinmenl, envisaged lhe counliy lo be by lhal yeai a
fully developed sociely. This was suppoiled by an Oulline Peispeclive
Plan foi lhe 199Os, coveiing macioeconomic piospecls, secloial laigels,
and human iesouice developmenl, which idenlined lhe ma|oi sleps
iequiied foi lhe 2O2O goals lo be iealized. This Oulline Plan is suppoiled
by a Iive-eai Plan, which delails lhe macioeconomic and secloial lai-
gels needed lo implemenl lhe laigei ob|eclives as well as social balance
and elhnic issues; educalional issues, including lhe needs foi piofessional,
lechnical, and ielaled woikeis; and lhe desiied R & D levels (O.5 pei cenl
in lhe mid-199Os). Delailed evidence on how populai suppoil is mobilized
foi lhese ob|eclives has slill lo be galheied.
appropriate outcomes
One of lhe dislinclive fealuies of lhe iegion`s expeiience has been lhe
associalion of economic giowlh wilh diminished income inequalily
(Campos and Rool 1996; Woild Bank 1993). The poinl is lo some exlenl
dispuled, howevei: Ivans acknowledges lhe geneial pailicipalion of lhe
populalion in lhe piospeiily in Taiwan and Koiea, bul suggesls lhal a
cloak of legilimacy has been given in lhis way lo naiiowei inleiesls and
lo a kind of Giamscian hegemony in Iasl Asia`` (1992, 181). n ndo-
nesia`s case, Mochlai suggesls lhal economic giowlh has benenled lhe
uiban and modein seclois consideiably while maiginalizing lhe iuial and
liadilional ones`` (Mochlai 1995, 277). Campos and Rool aigue aboul
Thailand lhal undeiinveslmenl in poslpiimaiy educalion had a negalive
effecl on income disliibulion in lhe 198Os as lhe economy shifled lo moie
skill-based aclivilies`` (1996, 59); a iuial movemenl, lhe Assembly of lhe
58 AN MARSH
Pooi,`` mobilized 15,OOO people foi a camp and vigil in Bangkok (SyJncy
Morning HcralJ, 27 1anuaiy 1997). n Malaysia, pailisan inleiesls have
been especially favouied (Gomez and 1omo 1997). Thus aggiegale nnd-
ings suppoiling lhe view lhal lheie has been shaied giowlh may mask
signincanl iegional oi secloial vaiialions, and moie delailed evidence is
iequiied.
IJcas, choicc scts, anJ notivcs at thc scctoral lcvcl
Secloial mobilizalion is lhe second aclivily lhiough which ideas, choice
sels, and molives mighl be inuenced. Mobilizalion al lhis level is
iequiied lo implemenl bioadei nalional ob|eclives and il involves selec-
live inleivenlion. Al leasl foui piocesses conliibule lo lhis oulcome: lhe
eslablishmenl of appiopiiale inslilulional and planning piocesses; lhe
eslablishmenl of secloial piioiilies; lhe inlioduclion of specinc incenlives;
and business-goveinmenl collaboialion.
sectoral agencies
Ixcepl foi Thailand, lhe Philippines, and ndonesia, lhe slales of lhe aiea
have inslilulional aiiangemenls coveiing lhe key dimensions of indusliy
slialegy foimulalion and implemenlalion. n nguie 3.1, lhiee nelds
aie coveied: indusliial slialegy, lechnology slialegy, and indusliial-
cumliade policy implemenlalion.
n Koiea, as in 1apan, key slialegic agencies aie suppoiled by exleinal
policy lhink-lanks. n Singapoie, lhe Iconomic Developmenl Boaid has
played a key pail (Schein 1996). l opeiales as an enleipiise, mainlaining
22 inleinalional ofnces and laking inilialives in idenlifying gaps in indus-
liy clusleis oi new seclois wheie inveslmenl is desiied, discoveiing suil-
able mullinalional coipoialions lo meel lhese needs, and appioaching
nims lo solicil inleiesl. l is also lhe key agency in chaige of imple-
menling Singapoie`s piogiamme of expansion in lhe iegion, boosling
lhe iole of local nims, and bioadening lhe pail played by ils SOIs. n
Malaysia, lhe ma|oi co-oidinaling bodies aie lhe Nalional Iconomic
Consullalive Council and lhe Nalional Developmenl Planning Commil-
lee. Laige poweis aie concenlialed in lhe piime minislei`s hands; indus-
liial policy is lhe iesponsibilily of lhe Minisliy of Tiade and ndusliy; lhe
Malaysian ndusliy Developmenl Aulhoiily (MDA) co-oidinales foi-
eign inveslmenl.
sectoral priorities
The seclois laigeled by Koiea, Taiwan, and Singapoie (as in 1apan) build
fiom exisling aclivily and ieecl lhe linkage belween lhe economic pios-
peiily of lhese slales and lhe giowlh of global liade in manufacluies
(nguie 3.2).
6
O
1apan Kurea Taiwan Singapure
ndusliy
Slialegy
(Peak
Agency)
.
ndusliial Sliucluie
Council
.
ndusliial Policy
Buieau MT (237
slaff)
.
MT Reseaich
nslilule (46 slaff)
.
Iconomic Planning Boaid
(Minisliy of Iinance)
.
Koiean Developmenl nslilule
.
Council foi Iconomic
Planning and
Developmenl (CIPD)
.
Nominales slialegic
indusliyjexpoil seclois
.
Minisliy of
nleinalional Tiade
and ndusliy
Technology
Slialegy
.
Agency of ndusliial
Science and
Technology (AST
3,537 slaff, 6
piogiammes, 25
laigel nelds (1995)
.
Minisliy of Science and
Technology (MOST)
.
Koiea Advanced nslilule of
Science and Technology
.
9 main ieseaich cenlies
.
mplemenlalion lhiough
HANPs (Highly Advanced
Nalional Pio|ecls)
.
DB nominales
developmenl-
laigeled lead pioducls
(69 in 1994)
.
ndusliial Technology
Reseaich nslilule
(TR 8 ma|oi
subunils)
.
Nalional Science and
Technology Boaid
(adminisleis Nalional
Technology Plan)
R & D Taigel 2
GDP)
4O Reseaicheis pei
1O,OOO
Adminisleis 52 BCC
R & D Iunds
ndusliy Policyj
Tiade Policy
.
ndusliial Sliucluie
Council
.
14 Delibeialion
Councils
.
MT
nleinalional
Tiade Policy
Buieau (236 slaff)
Basic ndusliies
Buieau (2O8 slaff)
ndusliy Localion
(177 slaff)
Machineiy and
nfoimalion n-
dusliies (2OO slaff)
Consumei Goods
ndusliies
.
Minisliy of Tiade ndusliy
and Ineigy (MOI)
.
Koiean nslilule of Iconomics
and Technology
.
Tiade PolicyjIxpoil
Piomolion by Kolia (1OO
nleinalional Tiade Cenlies)
.
Ma|oi Cenlies
Koiea nslilule of Science
and Technology
Koiean Reseaich nslilule
of Bioscience and
Biolechnology
Koiea nslilule of Ineigy
Reseaich
Koiea nslilule of
Machineiy and Melals
Ileclionic Reseaich ndusliy
ndusliial Developmenl
Buieau (Minisliy of
Iconomic Affaiis)
.
Iconomic Developmenl
Boaid (22 inleinalional
ofnces)
.
Tiade Developmenl
Boaid (1995 5
missions, 29 liade faiis)
Iiguie 3.1 Institutiunal structures fur industry strategy in 1apan, Kurea, and Taiwan
6
1
1apan Kurea Taiwan Singapure
Micioeleclionics Biolechnology Communicalions Aeiospace
Biolechnology New maleiials Consumei eleclionics Biolechnology
New maleiials Aeionaulical engineeiing T Chemicals
Telecommunicalions Oceanogiaphy Semiconduclois Piecision engineeiing
Commeicial aiiciafl Iine chemicals Piecision machineiy and
aulomalion
A lhiid peliochemical ciackei
Machine lools nfoimalics Aeiospace Ileclionics
Robolics Inviionmenlal audil Advanced maleiials Disk media
Compuleis Piecision manufacluies Specialily chemicals and
phaimaceulicals
Piecision engineeiing equipmenl
and componenls
Specialily medical devices
Pollulion conliol
Iiguie 3.2 Targeted emerging industrial secturs in 1apan, Kurea, Taiwan, and Singapure (Souices: Thuiow 1996, 67 |1apanj;
Tcchnical Transjcr Vcck, 26 1une 1996 |Koieaj; Mallhews 1977b, 3OO |Taiwanj; Iconomic Developmenl Boaid, hllp:jj
www.sedb.com.sg |Singapoiej)
Theie is subslanlial oveilap belween lhe nominaled seclois. This is a
consequence of lhe facls lhal iegional nims have eslablished global posi-
lions in some seclois such as eleclionics, and lhal pioduclion in lhese
seclois is iegionalized. n some cases, loo, lhis oveilap is lhe consequence
of emeiging global maikel seclois such as biolechnology, oi of a desiie lo
build nalional pailicipalion in an eslablished secloi, such as aiiciafl and
aeiospace. The seleclion ciileiia nominaled by Taiwan aie lypical. These
include sliong maikel polenlial, pioduclion which is lechnology-
demanding bul nol eneigy dependenl, high value added, and a pivolal
indusliial posilion (Mallhews 1997b). Ixplicil slialegies foi seivice secloi
developmenl have been idenlined in nguie 3.3 foi Singapoie, Taiwan,
and 1apan. Ixpecled oulcomes foi secloi size and giowlh aie sel in iela-
lion lo bolh manufacluiing and seivice laigel seclois; peifoimance can
lhus be assessed.
The 1apanese policy of pieseiving a buieaucialic iole in lhe develop-
menl of lhe indusliial sliucluie is pailiculaily ielevanl because of lhe
economic maluiily of lhe counliy. l is envisaged lhal lhe Minisliy of
Iinance will mainlain nnancial and monelaiy conliol and lhal MT
will exlend ils iole lo include lelecommunicalions; MT also wishes nol
meiely lo foslei individual indusliial seclois bul lo be conceined wilh lhe
oveiall indusliial enviionmenl (Nikkci Vcckly, 3O 1une 1997). 1apanese
agencies conlinue lo give a sliong lead in idenlifying giowing seclois. The
lisl eslablished by MT of lhese seclois (see nguie 3.4) is nolable foi
lhe facl lhal il coveis emeiging lechnologies as well as domeslic manu-
1apan Singapure Taiwan
nfoimalion RHs Asia Pacinc Regional
Opeialions Cenlei
Consumei ciedil Logislics Seajaii lianspoilalion
Adveilising Lifeslyle Iinancial seivices
Iducalion Heallh Telecommunicalions
Secuiily Communicalionsjinfoimalion Media enleipiises
Tempoiaiy slaff
placemenls
Iducalion seivices
T\ bioadcasl
Music Mullimedia conlenl
Iilness
Design
Homes foi lhe aged
Home cleaning
Iiguie 3.3 Targeted services secturs in 1apan, Singapure, and Taiwan (Souices:
Iconomic Planning Agency, hllp:jjwww.epa.go.|p |1apanj; Iconomic Develop-
menl Boaid Web Sile hllp:jjwww.sedb.com.sg |Singapoiej; Council foi Ico-
nomic Planning and Developmenl 1995, hllp:jjwww.cepd.gov.lw |Taiwanj)
62 AN MARSH
facluiing and seivice seclois, lhe oullook foi maikel size and employ-
menl levels being specined foi lhe lasl lwo of lhese.
Malaysia has laigeled mullimedia as an aiea foi giowlh in value-added
aclivily, lhe focus being lhe Mullimedia Supei Coiiidoi,`` of which
lhe piime minislei, Mahalhii, has been lhe mosl aclive advocale. This is
envisaged lo piovide an advanced communicalions infiasliucluie be-
lween Kuala Lumpui and a new uiban cenlie, Cybei|ava. Goveinmenl
inveslmenl of belween \S$8 billion and \S$15 billion had been foie-
shadowed befoie lhe nnancial ciisis. The coiiidoi aims al hosling com-
panies lo piovide mullimedia conlenl, such as digilally pioduced special
effecls and video games; by May 1997 (bul befoie lhe nnancial ciisis had
fully developed), ovei 9OO companies had made a bid lo pailicipale in lhe
coiiidoi (Nikkci Vcckly, 5 May 1997).
n Thailand, ndonesia, and lhe Philippines, lhe eslablished economic
buieauciacies have soughl lo manage only macioeconomic aggiegales,
allhough befoie his downfall, Piesidenl Suhailo had suppoiled family
membeis and Technology Minislei Habibie in favouiing pailiculai sec-
lois oi aclivilies. n ndonesia, lhe Pelila \ slialegic plan (199495)
involved a fuilhei ielaxalion of iesliiclions on foieign inveslmenl and a
ieduclion of laiiffs. nveslmenl has been concenlialed on lexliles, loui-
ism, shoes, food piocessing, and limbei pioducls.
sectoral incentives
Taigeled incenlives aie a diiecl melhod used lo inuence secloial acliv-
ily. Reseaich and developmenl, aulomalion, liaining, and new venluies
in pailiculai aie lhus singled oul foi special benenls and concessions in
lhe policies of Taiwan, Singapoie, and Malaysia (Sicklen 1997).
business-government collaboration
Business-goveinmenl collaboialion can conliibule diieclly lo lhe dis-
seminalion of ideas, choice sels, and molives; il can also conliibule indi-
ieclly, as we shall poinl oul lalei, lo lhe ieduclion of liansaclion cosls.
This kind of collaboialion has been menlioned as a pailiculai fealuie of
lhe developmenl piocess. n 1apan, il has been exlensively documenled,
foi inslance by Okimolo, who noles: Much of lhe ciucial negolialion
lhal goes inlo indusliial policy-making lakes place behind lhe scenes in
whal mighl be called an inleimediale zone belween lhe public and pii-
vale seclois. l would be haid lo foimulale and implemenl 1apanese
indusliial policy if lhe labyiinlh of peisonal ielalionships in lhe inlei-
mediale zone did nol exisl.`` He adds: nslead of labelling 1apan a sliong
slale |il would bej moie accuiale lo call il a socielal,` ielalional,` oi
nelwoik` slale . . . whose slienglh is deiived fiom lhe conveigence of
public and piivale inleiesls and lhe exlensive nelwoik lies binding lhe
6
4
Technulugies Services Dumestic Secturs
Maikel size
( liillion)
Maikel size
( Tiillion)
Imploymenl
(1OOO`s)
New maleiials nfoimalion 6.17 25.OO Housing: ienovalion, building
housing foi lhe aged
1 4 3O 9O
Supeiconduclivily Consumei ciedil 13.69 24.OO Medical and welfaie seivices:
nuising equipmenl
38 91 3,35O 3,69O
Biolechnology Adveilising 6.35 1O.OO Lifeslyle and culluie: leisuie
and lifelong leaining
businesses
8 19 1,22O 1,76O
Miciomachineiy
lechnology
Iducalion 3.6O 5.4O \iban developmenl:
developmenl of deep
undeigiound enviionmenls
5 16 6O 15O
Ileclionicsjinfoimalion Secuiily 1.75 2.86 Inviionmenl: iecycling,
wasle disposal
15 37 64O 1,38O
Iemosecond lechnology Tempoiaiy slaff
placemenl
O.93 1.59 New eneigy souices:
geneialing elecliicily fiom
wasle maleiials
2 7 4O 13O
Acceleialed biofunclion
lechnology
Music O.56 O.95 nfoimalion and
communicalions:
eleclionic liading
38 126 1,25O 2,44O
Iiguie 3.4 Targeted gruwth secturs in 1apan (Souices: AST, Annual Rcport 1996 |Technologiesj; MT |Nikkci Vcckly, 3 1une
1995j |Seivicesj; MT |Nikkci Vcckly, 2 Decembei 1996j |Domeslic secloisj)
6
5
Oplical lopogiaphic
imaging syslem
Iilness O.35 O.6O Disliibulion 36 132 49O 1,44O
Digilal heaiing aids Design O.19 O.33 Imploymenl seivices 2 8 6O 1OO
\nassisled excielion Homes foi lhe
aged
O.O6 O.16 nleinalionalizalion:
convenlion seivices and
lianslalion
1 2 6O 1OO
Sleieolaclic cancei
liealmenls
Home cleaning O.O3 O.12 Business suppoil seivices:
lechnology assessmenl
17 29 88O 1,26O
Renewable
eneigy lechnology
New manufacluiing lechnology 14 41 73O 1,53O
Iossil fuel ulilizalion Biolechnology 1 1O 3O 15O
Ineigy liansfei Avialion and aeiospace 4 9 9O 15O
Inviionmenl
managemenl
Iiguie 3.4 (cunt.)
lwo seclois`` (Okimolo 1989, 1O4). The piaclice of anakuJari (ieliiemenl
fiom public seivice lo a senioi piivale-secloi posilion) feililizes conlacl
belween lhe slale and lhe business secloi. The liansmission of infoima-
lion and lhe foimalion of peispeclives aie lhus inuenced in bolh diiec-
lions, as will be examined in lhe nexl seclion.
n Koiea, ielalions belween lhe slale and lhe chaebol weie idenlined
befoie 1997 developmenls as a lhieal lo conlinued giowlh (Cliffoid 1997;
Ivans 1995). The economic dominance of lhese conglomeiales was ie-
maikable, wilh lhe 5O laigesl oiganizalions conliibuling 93 pei cenl of
GDP in 1983 (Lim 1996, 2). As Ivans noles: Koiea is pushing al lhe
limil al which embeddedness can be concenlialed wilhoul pailial pie-
dalion`` (1992, 158), while nnancial libeializalion, lo lhe exlenl lhal il has
occuiied, has nol been used lo cuib lhe chaebols` powei (Kong 1995).
Dielei Iinsl (1996) has noled lhe dysfunclionalily of chaebol slialegies
foi upgiading lechnology in lhe ciilical eleclionics secloi. n Taiwan, on
lhe conliaiy, lhe business secloi is dominaled by small and medium-sized
enleipiises, while laige enleipiises aie moslly slale-owned. As a iesull,
lhe lop 5O nims conliibuled only 32 pei cenl of GNP in 1983. One sludy
suggesls lhal oiganized business had developed close ielalionships wilh
lhe dominanl paily, lhe KMT (Shiau 1996).
Theie aie diffeiences among lhe slales in lhe chaiaclei of ielalions
wilh lhe buieauciacy. Kong obseives lhal ielalions belween buieaucials
and business in Koiea aie, in conliasl lo 1apan, veilical, secielive, and
exclusionaiy`` (1995, 636). Ioi Taiwan, Ivans noles lhal weak links lo
piivale capilal lhiealen lhe slale`s abilily lo secuie full infoimalion . . .
and efncienl implemenlalion`` (1992, 158).
n Soulheasl Asia, lhe silualion is moie pioblemalic. n Thailand,
business-goveinmenl collaboialion is lhoioughly inslilulionalized foi
eslablished indusliies, bul il coexisls wilh endemic coiiuplion (Anek
1992). n Malaysia, lhe inslilulional appaialus came lo acquiie a quasi-
developmenlal pallein faiily lale, especially wilh lhe Malaysian Business
Council which was sel up in 1991. Bul accoiding lo Bowie, diiecl pei-
sonal access is a sinc qua non foi oblaining pailneiships in piivalised
goveinmenl opeialions and infiasliucluie pio|ecls`` (Bowie 1994, 189). n
ndonesia, liadilional paliimonialislic oi clienlelislic palleins of polilical
pailicipalion enduie in lhe business communily. . . . Slale-allocaled
monopolies aie lhe key lo business success`` (Macnlyie 1994b, 243). n
lhe Philippines, Piesidenl Maicos`s ciony coalilion was signincanlly
weakened wilh lhe iesloialion of demociacy. This was connimed by lhe
couise of lhe Lakas-LDP coalilion fiom Apiil 1995 lo Novembei 1996.
Iollowing lhe evenls of 1997, piessuie foi moie lianspaienl iules, ad-
minislialive piocesses, and a non-coiiupl iegulaloiy infiasliucluie have
come fiom lhe MI and foieign inveslois.
66 AN MARSH
Transaction costs
Tiansaclion cosls aiise in measuiing lhe valued alliibules of whal is being
exchanged, of piolecling iighls, and of enfoicing agieemenls. They aie
peivasive in economic aclivily and can iesull fiom palleins of culluie;
failuie of goveinance, maikels, oi co-oidinalion; limilalions of ideas; and
genuine unceilainly. Sleps which mighl be laken lo ieduce lhose lians-
aclion cosls which slem fiom limilalions of ideas and fiom unceilainly
have alieady been discussed. Goveinance can affecl liansaclion cosls
bolh foimally and infoimally and bolh diieclly and indiieclly: foi exam-
ple, lhe iegime of piopeily iighls mighl be moie oi less foimalized and
moie oi less compiehensive. The 1997 nnancial ciisis poinls lo denciencies
in lhe affecled slales. Similaily, social liusl mighl be based on a mix of foi-
mal agieemenls on such malleis as wage oulcomes, indiiecl piogiammes
such as welfaie and liaining aiiangemenls, and lacil undeislandings on
malleis such as noims of aulhoiily and hieiaichy (Redding 1996).
Regaiding maikel failuies, il is impoilanl lo nole lhal lhese aie en-
demic. Dunning idenlines nve calegoiies of endemic failuie: (1) lhose
aiising fiom unceilainlies conceining supply andjoi demand, foi inslance
conceining fuluie piices and qualilies of inpuls, fuluie demand condilions,
and lhe behavioui of compelilois; (2) lhose aiising fiom exleinalilies
associaled wilh liansaclions, foi inslance enviionmenlal consequences;
(3) lhose aiising fiom effecls of scale wheie oplimum pioduclion may
inuence piice; (4) lhose aiising fiom high slail-up oi nxed cosls and low
oi zeio pioduclion cosls, as in lelecommunicalions; and (5) lhose aiising
fiom chionic iigidily, as in laboui and capilal goods maikels (Dunning
1993). Al lhe same lime, il is necessaiy lo dislinguish belween dysfunc-
lional and posilive maikel failuies. Ioi example, when innovalion and
lechnology developmenl aie lhe engine of economic giowlh, maikel
failuies diffeienliale oppoilunilies foi gain: lhis cieales incenlives foi
innovalion (Kelm 1995).
So fai as failuies of co-oidinalion aie conceined, goveinmenls can
ieduce lhese, foi inslance, by inilialing co-oidinalion focused on moie
iemole and less ceilain global maikels and by announcing changes in in-
dusliy sliucluie. Thus in Decembei 1996, lhe Koiean Minisliy of nfoi-
malion and Communicalions piesenled a slialegy foi developmenl of
whal il leimed lhe infocommunicalions`` subsecloi. The piogiammes
coveied developmenls in exisling pioducl lines up lo 2OO1 and in emeig-
ing lechnology beyond 2OOO. n each pioducl calegoiy, global maikel size
and Koiean maikel shaie weie specined piecisely. The global lele-
communicalions equipmenl maikel was eslimaled lo giow lo \S$1.2
liillion by 2OOO. The lelecommunicalions geai indusliy was expecled lo
giow fiom \S$929 million in 1997 lo \S$1.O48 liillion by 1999; mean-
while, Koiean lelecommunicalions companies expoiled \S$26 billion
woilh of goods in 1997 and weie expecled lo expoil \S$59 billion woilh
by 2OO1. Pioduclion and expoil goals foi lhe soflwaie indusliy by 2OO1
weie eslablished al \S$2O billion and \S$2.5 billion iespeclively: il was
eslimaled lhal 5OO new soflwaie companies would need lo be ciealed if
lhis laigel was lo be mel.
Goveinmenl inveslmenl in R & D aclivilies of 1.9598 liillion won
(appiox. \S$1.7 liillion) by 2OOO was piedicled. A |oinl public-piivale
pio|ecl involving lhe commeicializalion of a fuluie public land-mobile
lelecom seivice (IPLMTS) cellulai lechnology was announced: lhis
pio|ecl is designed lo enable Koiean indusliy lo supply lhe nexl geneia-
lion of wiieless communicalion seivices, including voice, dala, and video,
which is expecled lo ieplace cellulai seivices fiom 2OOO.
n geneial, liansaclion cosls can be ieduced lhiough piocesses which
ensuie iepealed inleiaclions belween key pailicipanls. As Noilh slales:
The mosl likely empiiically obseivable slale in which conliacls aie self-
enfoicing is lhal in which pailies lo an exchange have a gieal deal of
knowledge of each olhei and aie involved in iepeal dealings. . . . n such a
woild lhe measuied cosls of liansacling aie veiy low`` (1992, 55).
n a discussion of lhe chaiacleiislics of 1apan as a nelwoik slale,``
Moon and Piasad aigue lhal lhe facloi inuencing economic peifoi-
mance is nol slale dominance oi buieaucialic compelence, bul conlinued
inleiaclions belween public and piivale oiganisalions.`` These aiiange-
menls diminish liansaclion cosls lhiough exlended bounded ialionalily,
ieduced oppoilunism and unceilainly, ieduced small numbei inde-
leiminacies, bellei infoimalion, and a gioup-oiienled almospheie``
(1994, 36O86). Doie noles lhe conliibulion of inleiaclion lo lhe dimi-
nulion of liansaclion cosls in fiaming longei-leim business slialegies in
1apan (1996, 367). The iole of lhe slale has piogiessively changed fiom
being diieclive lo being collaboialive, wilh infoimalion playing incieas-
ingly a key pail (Wang 1995, 56869).
n lhe conlexl of a discussion of foimal public- and piivale-secloi con-
sullalion and olhei palleins of inleiaclion in Koiea and Taiwan, Hawes
and Liu suggesl lhal
|slalesj can ieduce liansaclion and infoimalion cosls as well as piovide colleclive
goods. They do lhis by ieducing buieaucialic ied lape, by pooling infoimalion, by
ieducing lhe need foi iegulalion, and by incieasing lhe efnciency of decision-
making. The colleclive goods pioduced by lhese inslilulions may include maikel
infoimalion, secloial co-oidinalion, baigaining leveiage, oi a myiiad of olhei
faclois lhal have helped lo make Soulheasl Asia inleinalionally compelilive in an
expanding iange of pioducls and seivices. (1993, 656)
68 AN MARSH
Sabel embellishes lhis lheme in discussing exchange in 1apan. He
aigues lhal liansaclion cosls aie ieduced by building fiom, and making
explicil, lhe shaied oi common inleiesls of lhe pailies. This aiises fiom
inslilulions lhal make discussion of whal lo do inexliicable fiom discussion of
whal is being done and lhe discussion of slandaids foi appoilioning gains and
losses inexliicable fiom appoilionmenl. . . . disciele liansaclions among indepen-
denl aclois become conlinual |oinl foimulalions of common ends in which lhe
pailies` idenlilies aie iecipiocally denned. . . . These inslilulions liansfoim lians-
aclions inlo discussions, foi discussion is piecisely lhe piocess by which pailies
come lo ieinleipiel lhemselves and lheii ielalion lo each olhei by elaboialing a
common undeislanding of lhe woild.`` (1994, 23174)
Tiansaclion cosls inciease as goveinmenlal capacilies including law
and oidei, adminislialion, poils, haibouis, lianspoils, banking, and cus-
loms diminish. These capacilies have been found lo be much less
embedded in lhe slales of Soulheasl Asia lhan in lhose of Iasl Asia. n
1994, Macnlyie ieached a caulious, even pessimislic, conclusion aboul
lhe geneial condilion of economic goveinance in lhe iegion: Limiled
capacilies and insulalion of Soulheasl Asian slale inslilulions aie likely lo
be a seiious consliainl on economic peifoimance`` (1994a, 17). The
evenls of 1997 seem lo vindicale lhis |udgemenl. Ilhnic piessuies diffei-
enliale lhe polilical ciicumslances of Malaysia, ndonesia, and Singapoie
fiom lhose of Koiea, Taiwan (and 1apan) (1esudasan 1996). Oveiseas
Chinese dominale lhe business secloi in Soulheasl Asian slales: in Ma-
laysia, lhey accounl foi 36 pei cenl of lhe populalion bul conliol 61 pei
cenl of companies in leims of maikel capilalizalion; in ndonesia, foi 3.5
pei cenl of lhe populalion and 68 pei cenl of companies; and in Thailand,
foi 1O pei cenl of lhe populalion and 81 pei cenl of companies (Iasl Asia
Analylical \nil 1995).
The dependence of Soulheasl Asian slales on DI is a conlexlual fac-
loi diffeienlialing lheii expeiience fiom lhal of lhe slales of Iasl Asia.
Moieovei, lhe insliumenls available lo lhe foimei slales foi economic
goveinance aie diffeienl fiom lhose available lo 1apan in lhe 195Os and
lo Koiea and Taiwan in lhe 196Os and 197Os, in pailiculai because of \.S.
bilaleialism and because of lhe advenl of lhe Woild Tiade Oiganisalion
(Sliange 1996).
The 1997 nnancial ciisis in Thailand, Koiea, ndonesia, Malaysia, and
lhe Philippines, al leasl in pail, ieecled a peiceplion by inleinalional
inveslois lhal lianspaiency and olhei piudenlial aiiangemenls in lhe
nnancial secloi weie inadequale. The piecise condilions and ciicum-
slances in each slale iemain lo be evalualed. A syslemalic colleclion and
analysis of dala ielaling lo liansaclion cosls iemains lo be undeilaken.
Crcativity, innovation, anJ skills
Iconomic goveinance can foslei innovalion and skills lhiough compul-
soiy educalion and lhiough piogiammes which encouiage ieseaich and
developmenl.
The emphasis on compulsoiy schooling in lhe slales of lhe aiea and lhe
success of lhese slales in achieving skills developmenl in nelds such as
malhemalics and compuling have been lhoioughly documenled (Woild
Bank 1993). The expeiience of Soulheasl Asian slales may again have lo
be dislinguished fiom lhal of Iasl Asia: Thailand, in pailiculai, has
achieved lowei iales of educalional pailicipalion and ielenlion.
n ielalion lo ieseaich and lechnology, lhe slales of Iasl Asia all have
aclive slialegies based on lead agencies, cleai peifoimance goals, lai-
geled lechnologies, and elaboiale aiiangemenls foi publicpiivale secloi
co-opeialion: Hobday (1995) and Malhews (1997a) documenl lhese
poinls foi lhe eleclionics secloi. 1apan`s commilmenl is cleai, wilh lolal
spending in lhese nelds of appioximalely \S$75 billion, oi \S$97 pei
laboui foice membei, in 1993: lhis nguie was highei lhan lhal of lhe
\niled Slales, wheie expendiluie was only \S$76 pei laboui foice
membei. Koiea would have lo spend 6O pei cenl of ils enliie GDP lo
achieve a similai level of expendiluie (Kong 1995).
All lhe slales of lhe aiea have cleai developmenl laigels, following lhe
model of 1apan`s Agency foi ndusliial Science and Technology, which
sel lechnology piioiilies in 15 aieas in 1995. Thus, in 1994, and wilhin lhe
fiamewoik of ils nominaled 1O seclois, Taiwan`s ndusliial Developmenl
Buieau selecled 69 componenls and pioducls as developmenl laigeled
lead pioducls`` (DTLP). The ciileiia foi seleclion weie high added value,
good developmenl polenlial, conliibulion lo compeliliveness of down-
slieam pioducls, and impoil ieplacemenl. These 69 pioducls weie esli-
maled lo have a neai-leim pioduclion value of \S$11 billion iising lo
\S$5O billion eaily in lhe lwenly-nisl cenluiy. Iiims seeking lo develop
lheii pioducls weie eligible foi a 5O pei cenl subsidy foi developmenl
cosls and a subsidized loan foi lhe balance; lhe goveinmenl owns 5O pei
cenl of any iesulling inlelleclual piopeily.
The Koiean goveinmenl also launched a piogiamme designaled
Highly Advanced Nalional Pio|ecl`` (HANP) which is inlended lo selecl
and develop slialegic indusliial lechnology iequiiing nalionwide R & D
inveslmenl. Two calegoiies of HANPs have been selecled. The nisl
gioup, lhe Pioducls Technology Developmenl Pio|ecl, conceins lech-
nologies foi specinc pioducls which have oi will have a subslanlial shaie
in lhe global indusliial maikels; lhe second gioup, lhe Iundamenlal
Technology Developmenl Pio|ecl, conceins coie lechnologies; pioducls
7O AN MARSH
iesulling fiom bolh pio|ecls should be available by 2OO1. Iouileen
HANPs weie sel up in 1995.
The effecliveness of lechnology liansfei piogiammes in Soulheasl Asia
is less cleai. 1apanese companies, as lhe piincipal inveslois, aie also lhe
piincipal polenlial souice of such liansfeis. Slale aclion can be seen in
piogiammes designed lo achieve linkage belween invesling nims, local
enleipiises, and local cilizens. Mooie`s |udgemenl is caulious: 1apan`s
iecoid of lechnology liansfei has impioved in lhe 199Os. . . . While moie
advanced lechnology has been liansfeiied, lhis does nol necessaiily bode
well foi lhe emeiging NCs since lhis kind of expoil-oiienled pioduclion
is oflen highly ielianl on impoiled inpuls, aulomaled manufacluiing pio-
cesses, and foieign managemenl`` (1996, 24; also Beinaid and Ravenhill
1995).
Covcrnncnt jailurc
Theie is a familiai lilany of aigumenls againsl slale aclion. Puiposive
aclion is a poweiful souice of co-oidinalion and seleclive aclion has spe-
cial advanlages, bul as Kelm obseives, seleclive aclion has inheienl dis-
advanlages as a geneialoi of incenlives`` (1995, 63). n maikels, he aigues,
lhe unconscious foice of naluial seleclion opeiales only on lhe basis of
achieved iesulls wilhoul laking lhe individual ciicumslances affecling
lhese iesulls inlo accounl`` (55). n conliasl, puiposive slale aclion always
inlioduces evalualion and assessmenl and lhe pioblem of wilhdiawing
suppoil fiom unsuccessful venluies.
A numbei of nndings deiived fiom lhe liansposilion of assumplions
oiiginaling in lhe neoclassical model of economic aclivily lo lhe polilical
spheie suggesl lhal, even in an impeifecl woild, aclion by lhe slale is
unlikely lo be piefeiable lo maikel-based decisions because of lhe
knowledge needed foi effeclive slale aclion. Misapplicalion, abuse, in-
leiesl gioup capluie, mislaken laigeling, and bungling can biing aboul
economically undesiiable oulcomes`` (Muilha and Lenway 1994, 12O).
Such a lisl suggesls a laxonomy of goveinmenlal failuies which mighl also
allow foi iemedial piaclices lo be documenled.
Theie aie indeed numeious sludies of goveinmenlal failuie in Iasl and
Soulheasl Asia (Callon 1996; slam 1994). Theie is also exlensive empii-
ical evidence of coiiuplion: biibeiy scandals have caused polilical ciises
in Koiea and 1apan, foi inslance, while coiiuplion is acknowledged lo be
endemic in Thailand and ndonesia, and Gomez (1998) iegaids ienl
seeking as peivasive in Malaysia.
Bul lhe weighl of evidence, al leasl up unlil lhe eaily 199Os, and al leasl
in Iasl Asia, favouis an opposile conclusion. The developmenlal slale,
conceived as an ideal lype, was lhe anlidole lo goveinmenl failuie.
Buieaucialic capluie, al leasl unlil lhe eaily 199Os, had been iesisled
lhiough elile ieciuilmenl and lhe pieslige allaching lo public seivice.
Buieaucialic aulhoiily was ieinfoiced, al leasl in Koiea and Taiwan and
al leasl lhiough lhe 198Os, by a capacily lo inuence capilal allocalions
and lo iniliale lax audils (Rodiik 1995). Bul lheie weie also maiked
conliasls belween slales. Ioi example, in a compaiison wilh 1apan, Kong
obseived: The diveigence of slale and business inleiesls oiiginaled in
lhe 198Os. . . . nve yeais aflei democializalion a smoolh pailneiship of lhe
1apanese lype has yel lo maleiialize`` (Kong 1995, 63637).
The Iasl and Soulheasl Asian expeiience also illusliales lhe exlenl lo
which a slale can absoib coiiuplion and (episodic) goveinmenl failuie
and slill foslei developmenl. The causal ielalionship seems conlingenl.
Aoki idenlines a vaiiely of iemedies foi goveinmenl failuie in bolh Iasl
and Soulheasl Asia. He ciles inslances of coiiuplion which had posilive
effecls (Aoki el al. 1996, 1418).
The nnancial ciisis of 1997 also challenges lhe eailiei nndings of pei-
sislenl goveinmenl failuie. The nisl poinl lo nole is lhal faclois olhei
lhan goveinmenl failuie mighl be inlioduced lo explain lhis ciisis. An
obvious maikel failuie occuiied al lhe level of lhe inleinalional nnancial
syslem. Tolal shoil-leim fund ows by commeicial banks lo Iasl and
Soulheasl Asia escalaled fiom \S$24 billion in 1994 lo \S$53 billion in
1996. n 1997, lhe ow was ieveised by \S$74 billion (Wade 1998). The
eageiness of commeicial banks lo lend coincided, in Koieas case, wilh a
pailial libeializalion of ils nnancial maikels lhal occuiied as a condilion
of enliy lo lhe OICD in 1995. nleinalional lending enleied a libeial-
ized`` domeslic syslem and coincided wilh chaebol ambilions lo allain
global scale.
\ndeilying domeslic condilions in Koiea and Soulheasl Asian slales
also conliibuled lo lhe ciisis. n lhe foimei case, lhe economic dominance
of a few chaebol has alieady been noled. Peihaps lhe single mosl impoi-
lanl facloi was lhe ielaxalion of nim slale leadeiship as pail of lhe de-
mocializalion lhal occuiied piogiessively aflei 1988, and pailiculaily in
lhe mid-199Os. Wade and \eneioso ieach pessimislic conclusions ie-
gaiding Koieas piospecls (1998). By conliasl, Mallhews anlicipales lhe
emeigence of a iewoiked slale fiamewoik lhal is moie alluned lo
Koiea`s expanded inleinalional economic iole and ils domeslic demo-
cialic consolidalion (1998). Olheis aie moie pessimislic aboul lhe
embeddedness of ils paily syslem (Ahn, lhis volume). n Soulheasl Asia,
lax conliol of nnancial maikels, cionyism, and lhe eioding aulhoiily of
lhe lechnocials (in ndonesia and Thailand pailiculaily), have alieady
been noled.
n sum, lhe nnancial ciisis and 1apan`s piolonged iecession suggesl a
72 AN MARSH
vaiiely of issues foi allenlion conceining goveinmenl and maikel failuie.
The mosl piominenl is peihaps lhe anaichic condilion of lhe inleina-
lional nnancial syslem ilself (Kapslein 1994).
The nndings of lhis chaplei can now be summaiized beaiing in mind,
howevei, lhal lhe complexily of lhe issues, lhe vaiialions in economic
(and polilical) dynamics, and lhe shoilage of empiiical dala all poinl lo a
need foi moie evidence and analysis. The nnancial ciisis of 1997 com-
pounds lhese gaps and enhances lhe unceilainlies.
The exlenl of peivasiveness of lhe developmenlal pallein desciibed al
lhe oulsel of lhis chaplei is lhe nisl issue. This appioach lo economic
goveinance exisls in ils mosl elaboialed foim in lhe slales of Iasl Asia.
The slales of Soulheasl Asia have been diiigisle, al leasl in some
iespecls, bul lheii piaclices depail signincanlly fiom lhe ideal`` de-
velopmenlal pallein in ielalion lo bolh buieaucialic aulonomy and
embeddedness. These slales have puisued an economic slialegy of
shaied giowlh, bul lhe iesulls seem moie uneven lhan lhose achieved in
Iasl Asia. Iuilhei, economic giowlh in Soulheasl Asian slales was
spawned by lhe iegionalizalion of pioduclion and DI was lhe calalysl,
lhus inlioducing a diffeienl conlexl foi economic goveinance fiom lhal of
Iasl Asia; moieovei, oveiseas Chinese nelwoiks have dominaled eco-
nomic aclivily. Thus il seems difncull lo discovei a common pallein in lhe
managemenl of sliucluial oulcomes among lhese slales: while Malaysia
and ndonesia have endeavouied lo inuence lhe indusliial sliucluie and
lhe foimalion of indigenous nims, Thailand and lhe Philippines have
eschewed elaboiale economic goveinance.
The polilical conlexl foi economic goveinance also vaiies belween Iasl
and Soulheasl Asia. n bolh Koiea and Taiwan, democializalion and a
move lowaids moie consensual business-goveinmenl ielalions is laking
place. Meanwhile, lhe liadilional pallein has been mainlained in Singa-
poie, lhough some piessuies foi change aie beginning lo emeige al lhe
secloial level. Thus, in all lhiee slales, as well as in lhe special case of
Hong Kong, lheie is a liend lowaids moie collaboialion in economic
goveinance, lhiough democializalion, lhiough lhe elaboialion of sliuc-
luies of business-goveinmenl ielalions, lhiough lhe need foi slialegies lo
accommodale laboui, and lhiough incieasing ieliance on infoimalion as a
medium of exchange.
The polilical conlexl foi economic goveinance vaiies widely in Soulh-
easl Asia, wilh lhe Philippines and Thailand lhe mosl democialic, and
Malaysia lo an exlenl democialic while ndonesia iemained aulhoiilai-
ian, al leasl unlil lhe downfall of Suhailo. Theie is also some evidence
of an aclive civil sociely, based on an uiban middle class, in Thailand,
ndonesia, and lhe Philippines, bul only lo a lessei exlenl in Malaysia
(e.g., Labei 1997; 1esudasan 1995; Bell el al. 1995). n lhis lallei case, al
leasl so fai, lhe eslablished iegime has moslly co-opled new gioups, oi
gioups which lack lhe weighl lo challenge lhe dominanl oidei. All lhese
slales will be piofoundly affecled by lhe evenls of 1997 as middle-class
expeclalions aie cuibed, elile ienl seeking is cuilailed, and unemploy-
menl expands.
ueslions of social ielalionships lead lo queslions of polilics; economic
goveinance is obviously also dependenl on polilics as public seivanls can
be helped oi fiuslialed by lhe aclions of polilicians. We need, lheiefoie,
lo biing logelhei lhe nndings ielaling lo economic goveinance discussed
in lhis chaplei and lhose ielaling lo polilics examined in lhe pievious
chaplei lo see how fai, in Iasl and Soulheasl Asia, lhe links belween
polilics and economics aie likely lo conlinue lo iesull in giowlh and de-
velopmenl, whalevei consliainls may be imposed on lhe slales of lhe
aiea by democializalion. l is lheiefoie lo lhe chaiaclei and lo lhe con-
sequences of lhe links belween polilical behavioui and economic govei-
nance lhal lhe nexl chaplei is devoled.
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wan: Inliepieneuiial Slale, Gueiilla Capilalisls and Accommodalive Technol-
ogisls,`` Iacic Ajjairs. pp. 55157.
Weiss, Linda and Hobson, 1ohn (1995), Statcs anJ 1cononic Dcvclopncnt. A
Conparativc anJ Historical Analysis, Polily Piess, Cambiidge.
Woild Bank (1993), Thc 1ast Asian Miraclc, 1cononic Crowth anJ Iublic Iolicy,
78 AN MARSH
4
Pailies, buieauciacies, and lhe
seaich foi an equilibiium belween
demociacy and economic
developmenl
1can BlonJcl anJ Takashi Inoguchi
f lheie is lo be a salisfacloiy ielalionship belween demociacy and eco-
nomic developmenl, lhe lwo key inslilulions which have been examined
in lhe pievious chapleis, pailies and buieauciacies, musl be in haimony.
el such a haimony is difncull lo oblain; some mighl even suggesl lhal il
cannol be oblained. f pailies aie veiy sliong, lhey aie likely lo wish lo
dominale lhe buieauciacy; if lhe buieauciacy is veiy sliong, il is likely lo
liy lo ieduce whal il mighl considei lo be lhe undue inleifeience of lhe
pailies. The second of lhese silualions chaiacleiizes aulhoiilaiian polilies
and il has chaiacleiized lo a giealei oi lessei exlenl a numbei of slales of
Iasl and Soulheasl Asia. f demociacy is lo piogiess in lhe iegion, pailies
musl be slienglhened and a genuinely pluialislic paily syslem musl
emeige, as has alieady occuiied in a numbei of counliies. Bul a way has
lo be found lo ensuie also lhal such a developmenl does nol iesull in lhe
buieauciacy being demoled and lhus ceasing lo exeil a key iole in lhe
goveinance of lhe economy.
The aim musl be lo cieale a slable ielalionship in which each of lhe
lwo sides has lhe aulhoiily and lhe powei lo play lhe pail which il is besl
suiled lo fulnl. Pailies musl be able lo ensuie lhal lhe polily is pluialislic
by pioviding lhe people wilh an adequale iepiesenlalion of lheii feelings
and hopes; lhe buieauciacy musl be able lo sleei lhe economy in such a
way lhal il conlinues lo develop iapidly. l is manifeslly difncull lo
achieve bolh lhese goals simullaneously because socielal condilions musl
be such lhal pailies have sliong iools in lhe communily and because il is
79
only naluial lhal, once pailies have begun lo be inuenlial, lhe slienglh
and inuence of one side should affecl lhe slienglh and inuence of lhe
olhei. Having examined successively in lhe pievious chapleis lhe lypes of
paily chaiacleiislics and of paily syslem aiiangemenls, on lhe one hand,
and, on lhe olhei, lhe kinds of buieaucialic sliucluies which would ap-
peai lo be besl suiled lo achieve sound economic goveinance, we need
now lo look al lhe condilions undei which a pluialislic paily syslem and
an aclive buieauciacy can coexisl and lhus make il possible foi democ-
iacy lo ouiish while economic developmenl is mainlained.
Democializalion has a numbei of implicalions and consequences foi
economic goveinance. l implies an aclive iole foi lhe polilical leadei-
ship: lheie may even be nalional mobilizalion`` based on whal we ie-
feiied lo in chaplei 2 as piogiammalic`` pailies. n any case, democia-
lizalion al leasl inviles iivals foi nalional ofnce lo campaign on equal
leims, and lhis can be fell lo be disiuplive of lhe nalional consensus.
Moieovei, democializalion licenses lhe foimalion of inleiesls and lhese
inleiesls may slail lo cieale policy nelwoiks; indeed, as economic devel-
opmenl pioceeds, a moie diffeienlialed civil sociely can be expecled lo
lake shape, wilh a well-denned middle class and a dislincl laboui inleiesl.
A peifecl`` solulion of lhe pioblems which aiise in lhis way is un-
queslionably impossible lo nnd, as such a solulion would iequiie lhal
pailies would be in conliol and yel lhal lhe buieauciacy would keep ils
aiea of complele aulonomy. Whal one musl look foi is an acceplable
aiiangemenl, wilh each side being piepaied (and obliged) lo ienounce a
fiaclion of ils polenlial powei in oidei lo allow lhe olhei side lo achieve a
laige pail al leasl of whal il is essenlial lhal il should achieve. Given lhal
we aie looking foi pailial solulions of lhis kind, lheie is likely lo be moie
lhan one oplimal aiiangemenl, lhe one besl suiled lo a pailiculai counliy
being likely lo be lhe one which besl nls lhe specinc socielal condilions of
lhal counliy.
Theie is, moieovei, anolhei aspecl lo lhe pioblem, foi undei ceilain
condilions, a slable democialic polilical syslem based on sliong pailies
can help lhe buieauciacy lo mainlain ils inuence. Iconomic develop-
menl is unlikely lo conlinue foi veiy long in lhe face of an indiffeienl
cilizeniy. The emeigence of dislincl inleiesls bolh among segmenls of lhe
middle class and belween lhe middle class and laboui will lend lo undei-
mine lhe posilion of lhe buieauciacy. l is in lhis iespecl lhal lhe paily
syslem can be of consideiable value: il has even been suggesled lhal
consensus can be pieseived if lhe paily syslem adopls, foi inslance, a
consocialional sliucluie, allhough olhei foims of paily syslem may also
help (Haggaid and Kaufman 1992, 342). The foim of lhe paily syslem is
lhus a key fealuie in assessing lhe impacl of democializalion on eco-
nomic goveinance.
8O 1IAN BLONDIL AND TAKASH NOG\CH
The puipose of lhis chaplei is lheiefoie lo invesligale whal lypes of
ielalionships belween pailies and paily syslems, on lhe one hand, and lhe
buieauciacy, on lhe olhei, can be expecled lo be piaclical. The besl
pioceduie is lo look foi guidance lo conlempoiaiy examples acioss lhe
woild which mighl appioximale lhe socielal condilions of Iasl and
Soulheasl Asia. Theie is one example only, howevei, lhal of 1apan, which
meels liuly closely lhe double iequiiemenl of polilical demociacy and
sliong economic developmenl sleeied by a poweiful buieauciacy; yel
some of lhe counliies of Iasl and Soulheasl Asia display socielal chai-
acleiislics which aie likely lo make il difncull foi lhem lo follow lhe 1ap-
anese palh. l is lheiefoie essenlial lo examine also olhei examples
malching less neally lhe iequiied double goal, admilledly, bul peihaps
chaiacleiized by a socio-polilical sliucluie moie akin lhan lhal of 1apan
lo lhose of lhese polilies. Two lypes of examples aie pailiculaily ielevanl:
one is consliluled by piesidenlial syslems, piimaiily lhe \niled Slales;
lhe olhei is piovided by counliies piaclising consocialionalism,`` nolably
lhe Low Counliies of Noilhweslein Iuiope, Belgium and lhe Nelhei-
lands. Thus, aflei having analysed in lhe nisl seclion lhe geneial con-
dilions undei which diffeienl lypes of ielalionships belween pailies and
buieauciacies can be expecled lo emeige, we will examine lhe ways in
which lhese ielalionships may develop successfully by iefeiiing succes-
sively lo lhe models of 1apan, Belgium and lhe Nelheilands, and lhe
\niled Slales. This will make il possible lo discovei whelhei diffeienl
goveinmenlal aiiangemenls which have been adopled elsewheie can help,
in lhe conlexl of lhe counliies of Iasl and Soulheasl Asia, lo piovide a
means of combining a lively paily syslem wilh a sliong buieauciacy.
Types of paily-buieauciacy ielalionships and economic
goveinance in a democialic conlexl
Ralhei suipiisingly, lhe pioblems posed by lhe ielalionship belween
paily and buieauciacy have nol so fai been given lhe seiious allenlion
which lhey deseive. l is as if scholais had delibeialely avoided lhe difn-
cully by paicelling oul lhe pioblem, as lheie has been a cuiious com-
pailmenlalizalion belween lwo lypes of sludies. On lhe one hand, lhose
who have been conceined wilh geneial analysis of polilical syslems have
focused on pailies as key agenls of iepiesenlalion in demociacy. Conse-
quenlly, lhey have mainlained lhal lhe coiiecl posilion foi lhe buieau-
ciacy is lo be suboidinaled lo lhe goveinmenl, as lhe goveinmenl is
composed of lhe leadeiship gioup of lhe paily oi pailies which have
oblained a populai ma|oiily (Bagehol 1963, 11618; Schumpelei 1979,
2738O; Hunlinglon 1968, 397432; Blondel 1978; Kamenka 1989; Sheflei
PARTIS, B\RIA\CRACIS, AND SIARCH IOR I\LBR\M 81
1994). On lhe olhei hand, sludenls of public adminislialion have been
conceined wilh managemenl and goveinance as if lhese weie exclusively
malleis foi adminislialois: whal lhey analyse aie lhe mechanisms by
which policies can be elaboialed and implemenled in a pailiculai socielal
conlexl, lhe main goal being lo discovei undei whal condilions a good
nl`` will be achieved belween a sociely and ils adminislialois (see, e.g.,
Halligan and Tuinei 1995). Bolh lhese appioaches aie pailially coiiecl,
bul neilhei coiiesponds lo lhe whole iealily. The solulion of lhe pioblem
which lhe ielalionship belween democializalion and economic develop-
menl poses lies in eslablishing a link belween lhese lwo appioaches in
oidei lo be able lo see how, in Iasl and Soulheasl Asia, foi inslance, lhe
lwo sides can woik logelhei in haimony: lhese links have nol so fai been
caiefully invesligaled (Lane 1993, 4789; Peleis 1995).
This silualion is suiely in pail due lo lhe facl lhal, wilhoul being en-
liiely novel, lhe pioblem came lo aiise pailiculaily aculely in Iasl and
Soulheasl Asia. Iiisl, lhe iapidily of lhe economic success of lhe coun-
liies of lhe iegion has been unpiecedenled, excepl in lhe case of 1apan.
Second, such a iapid developmenl occuiied undei lhe leadeiship of a
buieauciacy which has bolh been unusually effeclive (by lhe slandaids of
counliies oulside lhe Wesl) and unusually pioaclive by woild slandaids
(excepl foi 1apan and peihaps, al some peiiods, Iiance) (Ridley and
Blondel 1969; Ceiny and Schain 198O; Wiighl 1989, 23655). Thiid, lhe
exlenl of compeliliveness and pluialism among lhe polilical pailies in
lhe counliies of lhe iegion has been low by compaiison wilh Weslein
counliies and wilh 1apan. Iilhei pailies have simply been veiy weak and
almosl non-exislenl, oi lhe goveinmenl and lhe buieauciacy have had al
lheii disposal a dominanl paily ieady lo mobilize lhe populalion and in-
duce il lo suppoil lhe goals and lhe achievemenls of lhe buieauciacy.
Thus lhe key queslion which has lo be answeied wilh iespecl lo lhe
fuluie of lhe polilical syslems of lhe Iasl and Soulheasl Asian counliies
consisls in deleimining how fai lhe buieauciacy will conlinue lo be able
lo pieside ovei economic developmenl if lhe paily syslem becomes fully
pluialislic. el lheie is lillle expeiience lo iely on lo piovide lhe guide-
lines foi an answei, 1apan and possibly Iiance being lhe only counliies
whose evolulion mighl be ielevanl in lhis conlexl. Conclusions have
lheiefoie lo be ialhei lenlalive, allhough lhe exploialion has lo be
undeilaken.
The slailing poinl of such an exploialion has lo be lhe iecognilion lhal
lhe inlioduclion of a pluialislic syslem in a polily is bound lo have al leasl
some adveise effecl on lhe iole of lhe buieauciacy if lhe paily syslem is
lo play a signincanl pail in decision-making. On lhis basis, lhiee ques-
lions have lo be answeied. Iiisl, how laige will lhis effecl be? Second,
how iapidly will il occui? Thiid, how deliimenlal will il be lo lhe abilily
82 1IAN BLONDIL AND TAKASH NOG\CH
of lhe buieauciacy lo sleei lhe economy of lhe counliies conceined, in
bolh lhe shoil and lhe long iun?
n a iaie allempl lo analyse lhe (changing) ielalionship belween pai-
lies and lhe slale, in lhe conlexl of lhe \niled Slales, M. Sheflei exam-
ines whal lhis ielalionship is likely lo be depending on whelhei pailies andj
oi buieauciacy aie sliong oi weak. He lhus develops a lwo-by-lwo maliix
(nguie 4.1) which enables him lo dislinguish belween iesponsible`` pai-
lies, when bolh pailies and buieauciacy aie sliong; iiiesponsible`` pai-
lies, when lhe buieauciacy is sliong bul lhe pailies aie weak; machine``
pailies, when lhe pailies aie sliong and lhe buieauciacy weak; and a
vaiiely of silualions which aie localed in a single gioup and aie labelled
iegime of nolables,`` coipoiale slale,`` and machine of incumbenls,``
when bolh pailies and buieauciacy aie weak (Sheflei 1994, 62).
This maliix piovides a means of examining geneially whal lhe iela-
lionship belween (pluialislic) paily syslems and buieauciacies can be;
howevei, il needs lo be made a lillle moie complex if il is lo covei lhe
iealily of conlempoiaiy libeial demociacies in geneial and in pailiculai
lhe democializalion piocess laking place in Iasl and Soulheasl Asia.
This somewhal incieased complexily can be oblained by inlioducing an
inleimediale`` calegoiy belween lhe lwo exliemes of sliong`` and
weak`` foi bolh pailies and buieauciacies (nguie 4.2).
When such a lhieefold dislinclion is made, a sliong (lhal is, liuly pio-
aclive) buieauciacy can be denned as one in which lheie is, lo adopl lhe
expiessions used in lhe pievious chaplei, embeddedness`` and slale
sleeiing.`` The inleimediale calegoiy coiiesponds lo cases in which lheie
is embeddedness only, lhal is lo say when lhe slale peneliales lhe sociely
and ils decisions aie implemenled efncienlly, bul lheie is no slale sleei-
ing. Weak buieauciacies aie lhose whose decisions aie nol implemenled
easily oi efncienlly.
n lhe same way, lhe slienglh of pailies can be assessed by means of a
lhieefold dislinclion. Sliong pailies aie lhose which aim liuly al imple-
menling and endeavoui in piaclice lo implemenl a piogiamme which
PARTIES
BLREALCRAC
STRONG
() Responsible``
paily
() iiesponsible`` paily:
Buieaucialic slale
WIAK
() Polilical
machine
(\) Regime of nolables;
coipoiale slale;
machine of incumbenls
Iiguie 4.1 Party and Bureaucratic Puwer I (fiom Sheflei 1994, 62)
lhese pailies have pieviously devised. The piogiamme need nol be iadi-
cal indeed il is oflen lhe case lhal iadical piogiammes cannol be
implemenled bul a piogiamme lheie musl be, and il should be consid-
eied by bolh suppoileis and opponenls lo be lhe basis of lhe aclion of lhe
goveinmenl. Alongside such pailies, which weie iefeiied lo in chaplei 2
as piogiammalic,`` lheie aie lhose which weie iefeiied lo as iepie-
senlalive,`` and which do nol ieally aim al implemenling a piogiamme oi
cannol do so as a iesull of having lo pailicipale in a coalilion: whalevei
piogiamme lhey may have adopled will be al besl pailially implemenled.
Whal chaiacleiizes lhese lallei pailies is moie a desiie lo iepiesenl lheii
eleclois and lo make suie lhal lhey oblain benenls and suffei as lillle as
possible fiom lhe policies which may have lo be implemenled as a iesull
of lhe aclions of olhei pailies belonging lo lhe iuling coalilion. Iinally,
weak pailies aie lhose which aie inleinally veiy divided, oflen on a geo-
giaphical basis: nol being cohesive, lhe help and benenls which lhey
piovide lo lheii consliluenls aie moie lhe iesull of lhe aclion of individ-
ual iepiesenlalives lhan of lhose of lhe paily as such.
On lhe basis of lhese chaiacleiisalions, libeial democialic counliies
can be localed wilh ielalive ease. No counliy falls in lwo of lhe lhiee cells
B
L
R
E
A
L
C
R
A
C
PARTIES
STRONG NTIRMIDATI WIAK
STRONG
Imbeddedness
and
slale sliong
Repiesenlalive nleinally
divided
1apan
Iiance
Imbeddedness
only
\SA 33
NTIRMIDATI
Biilain
Sweden
WIAK
mplemenlalion
difncull
impossible
Many Lalin
Ameiican slales
Soulh
and
Soulheasl
Asia
Many
conlinenlal
Iuiopean
counliies
5
5
Iiguie 4.2 Party and Bureaucratic Puwer II (adapled fiom Sheflei 1994, 62)
coiiesponding lo sliong pailies, as no counliy is found lo have bolh
sliong pailies and a sliong buieauciacy; noi does any counliy have bolh
sliong pailies and a weak buieauciacy. The nisl case is non-exislenl be-
cause of lhe manifesl desiie of sliong pailies lo achieve lheii piogiammes
and nol lo accepl lhal lhe buieauciacy be fully in chaige of sleeiing lhe
counliy`s affaiis, on lhe economic fionl oi elsewheie; lhe second case is
non-exislenl because a sliong paily cannol achieve ils goals if lhe
buieauciacy is so weak lhal il does nol peneliale lhe sociely: pailies
which aie liuly sliong need lhe suppoil of lhe buieauciacy if lhey aie lo
be effeclive. n geneial, Weslein counliies do nol have weak buieau-
ciacies, while Lalin Ameiican demociacies aie lypically associaled wilh
weak buieauciacies which do nol peneliale lheii socielies well (Main-
waiing in Mainwaiing and Scully 1995, 38897; Sloan 1984, 13653).
The localion of counliies in nguie 4.2 suggesls lhe following con-
clusions. Iiisl, excepl foi 1apan, no libeial demociacy has a liuly sliong
buieauciacy: Iiance had one in lhe pasl, bul ils slienglh declined appie-
ciably in lhe lasl decades of lhe lwenlielh cenluiy (Iieais 1981; Machin
and Wiighl 1985; Wiighl 1989). Second, libeial demociacies lend lo have
inleimediale buieauciacies, lhal is lo say buieauciacies chaiacleiized by
a high degiee of efnciency bul nol lypically able oi willing lo do moie
lhan advise on how lhe polily should be sleeied; on lhe olhei hand, lhose
counliies vaiy appieciably in leims of lhe slienglh of lheii polilical pai-
lies. Biilish and Swedish pailies, foi inslance, aie sliong, while Ameiican
pailies have become weak, especially in lhe lasl decades of lhe lwenlielh
cenluiy. The pailies of mosl Conlinenlal counliies aie inleimediale in
slienglh: lhey aie cenlialized and oflen have a laige membeiship, bul aie
moie iepiesenlalive lhan piogiammalic, oflen because lhey cannol im-
plemenl fully lheii piogiammes in lhe conlexl of coalilions (Daaldei 1987).
Since in libeial demociacies, excepl in 1apan, buieauciacies aie inlei-
mediale in slienglh, il mighl seem lo follow by analogy lhal lhe inlio-
duclion of a pluialislic paily syslem in Iasl and Soulheasl Asia would
iesull in lhe buieauciacy losing some of ils cuiienl slienglh. Only 1apan
would appeai lo conslilule a sliong counlei-example. The Iiench evolu-
lion undei lhe Iiflh Republic suggesls inevilabilily in lhe decline of lhe
iole of lhe buieauciacy when pailies begin lo be moie effeclive; indeed,
lhe slienglh of lhe Spanish buieauciacy was also maikedly ieduced by
lhe facl lhal democializalion occuiied fiom lhe second half of lhe 197Os
onwaid (Isping-Andeisen 1992, 11825).
The conclusion lhal buieauciacies lend lo see lheii slienglh ieduced as
pailies become sliongei needs lo be lempeied foi lwo ieasons. Iiisl,
whal occuiied in Iiance look place ovei a long peiiod: Iiench pailies
had only a limiled say in lhe decision-making piocess nol only duiing lhe
eaily yeais of lhe Iiflh Republic, aflei 1958, bul also belween 1946 and
1958 duiing lhe Iouilh Republic: lhioughoul lhal lime, lhe Iiench
economy was sleeied by lhe buieauciacy and lhis sleeiing iesulled in
high levels of economic giowlh (Williams 1964). Thus il may be lhal, in
lhe veiy long iun, a decline in lhe iole of lhe buieauciacy is likely lo occui
in a libeial democialic conlexl. l may also be lhal economic giowlh will
decline, bul al leasl lhe Iiench case and even moie lhe 1apanese case
show lhal lhe piocess can be slow, indeed veiy slow; moieovei, a vaiiely
of olhei faclois, in pailiculai inleinalional ones, can conliibule lo ac-
counl foi changes in lhe way lhe economy comes lo be sleeied. Thus,
Iuiopean inlegialion played a signincanl pail in lhe Iiench case; and we
examined in chaplei 1 lhe possible effecl of lhe globalizalion of lhe woild
economy on lhe exlenl lo which nalional economies can be sleeied al lhe
nalional level.
Second, in lhe olhei Weslein demociacies lhe buieauciacy was nol
noimally placed in chaige of sleeiing lhe economy al lhe lime when plu-
ialislic paily syslems developed, lypically because lhe pievailing ideology
was opposed lo lhe veiy idea lhal lhe slale should be iesponsible foi
economic developmenl. Thus buieaucialic agencies in lhese counliies
weie lypically assigned almosl exclusively an implemenlalion iole and, al
besl, a iole of advice, nol of goveinance (Kellnei and Ciowlhei-Hunl
198O; Sliauss 1961, 2298O). l is liue lhal when lhe queslion of sleeiing
lhe economy did aiise in lhe lwenlielh cenluiy in mosl if nol all of lhese
counliies, il was also believed lhal lhe libeial democialic ideology
enlailed lhal polilicians elecled by lhe people should be lhose who had
lhe aulhoiily lo lake lhe ma|oi decisions. Bul il is also lhe case lhal
almosl nevei weie lhe goveinmenls of lhose counliies confionled wilh a
sliong buieauciacy; noi was lhe idea of having such a sliong buieauciacy,
al leasl al lhe nalional level, evei seiiously debaled. n lhis iespecl,
Iiance is unique in Weslein Iuiope, laigely because of lhe liadilions of
lhe Iiench monaichy which, fai fiom being supeiseded by lhe advenl of
lhe Republic (as was lo be lhe case in Ausliia and in lhe Iedeial Re-
public of Geimany), weie ieinfoiced by lhe iule of bolh Napoleon and
Napoleon in lhe nineleenlh cenluiy (Ridley and Blondel 1969, 2831;
Kamenka 1989, 971O1). Given lhal lhe idea of a sliong buieauciacy was
nol on lhe agenda of lhese libeial democialic Weslein Iuiopean coun-
liies, il is nol peimissible lo conclude lhal a pluialislic paily syslem nec-
essaiily implies lhe absence of a sliong buieauciacy in lhe sense which
was given lo lhe leim in lhis sludy. Meanwhile, lhe 1apanese example
shows lhal a sliong buieauciacy can be combined wilh a libeial demo-
cialic syslem, while lhe Iiench example suggesls lhal il can al leasl lake a
long lime foi whal was pieviously a sliong buieauciacy lo lose some of ils
capacily lo sleei lhe economy.
The facl lhal we simply cannol |uslinably claim lhal lhe inlioduclion of
libeial democialic aiiangemenls means lhe end of a sliong buieauciacy
suggesls lhal we should examine, alongside lhe case of 1apan, lhose of a
numbei of libeial demociacies; lhis will make il possible lo analyse lhe
condilions undei which such a sliong buieauciacy can coexisl wilh a
lively paily syslem. f we aie lo undeilake such a quesl, howevei, lheie is
lillle poinl in consideiing lhe cases of counliies in which pailies aie
sliong in lhe sense we have given heie lo lhe leim, such as Biilain oi
Sweden, since a liuly sliong paily syslem does nol appeai logically able
lo coexisl wilh a sliong buieauciacy: piogiammalic pailies aie nol likely
lo accepl lhal lhe buieauciacy should be involved diieclly in economic
goveinance. Ralhei, examples diawn fiom among counliies in which
pailies aie weak oi of inleimediale slienglh should be examined. These
pailies can be associaled wilh sliong buieauciacies; indeed, lhey may be
of gieal value lo such buieauciacies, because lhese buieauciacies may be
confionled wilh ma|oi socielal piessuies and even seiious disluibances if
lheie aie no oullels foi lhe populalion of lhese counliies lo manifesl lheii
disconlenl. Pailies which aie inleimediale in slienglh and aie lhus iep-
iesenlalive only, and even pailies which aie weak and calei lo local
inleiesls only lhiough lheii elecled iepiesenlalives, can lhus iendei
sliong buieauciacies moie aleil lo lhe pioblems of lheii socielies and can
help, ialhei lhan hindei, lhe aclions of lhese buieauciacies (Blondel
1978; Maisel and Coopei 1978; Kalz and Maii 1994).
Moieovei, given lhal some Iasl and Soulheasl Asian counliies aie
piesidenlial oi semi-piesidenlial (Koiea, Taiwan, and lhe Philippines, as
well as, in a diffeienl conslilulional conlexl, ndonesia) and given lhal
some counliies aie mulliculluial (Malaysia, Singapoie, ndonesia, and
lhe Philippines), il is mosl ielevanl lo look al lhe cases of olhei piesi-
denlial oi semi-piesidenlial syslems and al mulliculluial consocialional
demociacies in oidei lo discovei whelhei specinc inslilulional oi behav-
iouial difncullies need lo be faced if one wishes lo see counliies wilh
lhese chaiacleiislics ielain sliong buieauciacies in a libeial democialic
fiamewoik. el il is above all mosl ielevanl lo considei lhe 1apanese
case which is, oslensibly al leasl, by fai lhe closesl lo lhose of lhe
democializing counliies of Iasl and Soulheasl Asia. We shall lheiefoie
naluially luin nisl lo an examinalion of lhe 1apanese case; we shall lhen
considei lhe cases of consocialional pailiamenlaiy syslems, specincally
lhe Low Counliies, and lhose of piesidenlial syslems, piincipally lhe
\niled Slales, bul also, lo an exlenl, Lalin Ameiican counliies. l will be
possible in lhis way lo discovei lo whal exlenl lhe expeiience of lhese
lypes of goveinmenl can conslilule models al a lime when Iasl and
Soulheasl Asian polilies move lowaids pluialislic paily syslems bul also
wish lo ielain high-pionle buieauciacies.
1apan: Libeial demociacy and sliong buieauciacy
n Mailin Sheflei`s lypology, 1apan may be viewed as a syslem wheie
sliong buieauciacies and iiiesponsible pailies live side by side. ndeed,
buieauciacy en|oys much highei esleem lhan polilical pailies in 1apan: in
bolh policy-making and implemenlalion, lhe buieauciacy is widely iec-
ognized as a diiving foice. Thiee ma|oi hisloiical luining poinls of 1apa-
nese polilical developmenl ovei lhe pasl foui cenluiies have given much
moie advanlages lo lhe buieauciacy lhan lo pailies.
The nisl luining poinl look place in lhe sevenleenlh cenluiy, when
Tokugawa iule (16O31858) was eslablished and lhe eaily modein bu-
ieauciacy was sel up in each of lhe 3OO-odd goveining unils called han.
The buieauciacy was chaiacleiized by lhe following fealuies. Iiisl, il
consisled of disaimed waiiiois iesiding in caslle lowns and lhus delached
fiom land possession. These embiyo buieaucials weie veiy small in
numbei compaied lo lhe populalion; lhey weie highly educaled and
helped lo spiead lileiacy among lhe populalion.
Second, lhe buieauciacy caiiied oul lhe key ma|oi lasks of each gov-
eining unil excepl foi defense, diplomacy, and exleinal liade, which lhe
Tokugawa wanled lo keep as lheii pieiogalive. These lasks included
laxalion, ciime conliol, ood conliol, and lhe piomolion of indigenous
indusliies and commeice. The buieauciacy was oflen loo small foi lhese
lasks: lhis piompled il lo delegale a subslanlial amounl of business lo
laige landloids and meichanls. Waiiioi-buieaucials ielained lheii powei
ovei lhese non-waiiioi-buieaucials as lhe highesl social class of lhe
iegime.
Thiid, lhe elhos of lhe new buieauciacy was lhal of honoiinc collec-
livism`` as opposed lo honoiinc individualism,`` lo use Keiko kegami`s
expiession (1995). Theii loyally was nol lo lhe loid of han`` bul lo lhe
oiganizalion headed by lhe loid, and lo ceilain piinciples associaled wilh
il. The buieauciacy iesembled some lypes of modein piofessional
oiganizalions in lhal il was nol oveily disluibed by an aibiliaiy, despolic,
oi incompelenl loid.
The second luining poinl came in lhe mid-nineleenlh cenluiy. The
Mei|i Resloialion bioughl lhe empeioi back lo soveieign slalus, yel lhe
policy appaialus lo make lhe counliy iich and ils aimy sliong had lo be
ciealed. The lask wenl lo buieauciacy. The liend of buieaucializalion of
lhe goveining iegime was fuilhei enhanced. Thiee hundiedodd buieauc-
iacies al lhe han level weie abolished, and a nalionwide slale buieau-
ciacy ieciuiled on a meiilocialic basis was sel up lowaids lhe end of lhe
nineleenlh cenluiy. Buieaucials weie lo seive lhe counliy above pailisan
inleiesls and woik foi lhe geneial inleiesls of lhe nalion. Allhough pai-
liamenlaiy demociacy was also sel up in a somewhal limiled fashion
lowaid lhe end of lhe nineleenlh cenluiy, lhe policy appaialus iemained
nimly undei lhe conliol of lhe buieauciacy. Pailiamenlaiians in lhe
mpeiial Diel and local assemblies weie diawn laigely eilhei fiom un-
employed waiiiois oi fiom oveilaxed landloids: lhey weie lheiefoie
iegaided by lhe goveinmenl as disgiunlled upwaidly mobile sliala who
could be co-opled. The mpeiial Diel was a baslion of pailiamenlaiians
of lhis lype unlil lhe 191Os when mosl weie obliged lo nl inlo a fiame-
woik in which lwo ma|oi pailies alleinaled in powei. Meanwhile, policy-
making and implemenlalion iesled nimly wilh lhe buieauciacy: lhe main
lask of pailiamenlaiians was lo lake caie of people`s senlimenls in lheii
disliicls by pailicipaling in funeials, wedding ceiemonies, business open-
ing ceiemonies, and feslivals as well as by biinging in poik-baiiel pio|ecls.
The lhiid luining poinl came in lhe mid-lwenlielh cenluiy. Aflei ils
ciushing defeal by lhe \niled Slales in lhe Second Woild Wai, 1apan
was occupied by lhe \.S.-led Allied poweis foi seven yeais. The ancienl
iegime was meanl lo be lhoioughly deslioyed in oidei lhal 1apan be
liansfoimed inlo a peace-loving democialic counliy wilhoul mililaiy oi
indusliial mighl. Howevei, lhe exigencies of lhe Cold Wai led lhe \niled
Slales lo occupy 1apan in an indiiecl way, i.e., lhiough lhe 1apanese bu-
ieauciacy. All polilical, social, and economic oiganizalions weie moie oi
less lainled by wailime misconducl and lhus eligible foi polilical puige by
lhe occupying poweis: only lhe buieauciacy emeiged moie oi less inlacl
fiom lhe puige, lhough lhe Minisliy of nleinal Affaiis was divided inlo a
numbei of minisliies such as Heallh and Welfaie, Laboui, Home Affaiis,
and Consliuclion, and lhe wai minisliies weie abolished. The Allies iuled
1apan lhiough lhe 1apanese buieauciacy and lhe lallei`s powei was im-
mensely enhanced as counleibalancing inslilulions, including polilical
pailies, weie almosl all deslioyed. Ispecially nolewoilhy is lhe facl lhal
lhe Allies weie al lhe oiigin of lhe dominance of economic minisliies
such as lhe Iconomic Planning Boaid (lalei lhe Iconomic Planning
Agency), lhe Minisliy of Iinance, and lhe Minisliy of nleinalional
Tiade and ndusliy. These weie lo become lhe foci of policy-making and
implemenling powei in much of lhe lallei half of lhe lwenlielh cenluiy.
Pailiamenlaiians, now elecled in a lhoioughly libeial inslilulional
mannei, weie again given lheii liadilional iole of laking caie of con-
sliluencies ialhei lhan lhe funclion of designing bioad policy lines oi
shaping policy ilself. This policy iole did inciease signincanlly aflei lhe
198Os, admilledly, especially as a iesull of commillee membeiships; yel
lhe change was one of degiee only. Iuilheimoie, even when newspapei
headlines conslanlly pioclaim scandals in lhe buieauciacy, lhe pieslige of
buieaucials iemains highei lhan lhal of polilicians in lhe eyes of lhe
public.
Given lhese lhiee levels of buieaucialic slienglh ovei lhiee cenluiies,
il is only naluial lhal in 1apan lhe buieauciacy should ieign supieme,
even if ils pieslige and powei have somewhal declined by compaiison
wilh lhal of pailiamenlaiians and of polilical pailies. n any case, one
should nol conclude lhal lhe buieauciacy is oveiwhelmingly sliong and
polilical pailies exliemely weak. Iiisl, an egalilaiian liend is al woik in
which social backgiound also plays a pail: as lheii educalional levels
weie high, buieaucials of exwaiiioi family oiigin weie dispiopoilion-
alely numeious unlil lhe 192Os, foiming half of lhe lolal inlake, allhough
lhe ieciuilmenl was meiilocialic. Aflei lhe Second Woild Wai, any ief-
eience lo social backgiound became polilically incoiiecl and lheiefoie no
syslemalic evidence exisls as lo class oiigin. Moie impoilanlly, lhe egali-
laiian liend means lhal buieaucials aie incieasingly iegaided as being on
a pai wilh oidinaiy cilizens. A slieak of anli-aulhoiilaiianism has been
incieasingly obvious in 1apanese sociely aflei lhe Second Woild Wai: foi
inslance, in lhe mid-198Os, iespondenls who gave a favouiable iesponse
lo lhe view lhal giealei iespecl should be accoided lo aulhoiily`` weie
aboul one-lenlh in 1apan of lhe peicenlage in lhe \niled Slales oi \niled
Kingdom.
Second, globalizalion now peimeales lhe 1apanese body polilic,
undeimining lhe basis of polilical inslilulions. l may nol subveil ovei-
nighl lhe whole syslem of lhe leiiiloiial soveieign nalion slale, as 1ean
Maiie Guehenno conlends, bul il weakens and undeimines lhe sociely
sleadily. n landem wilh lhe loosening of lhe nalion slale`s giip on lhe
populalion, demociacy is lhiealened, as Guehenno aigues. Globalizalion
nisl divides compelilive nims fiom non-compelilive nims, compelilive
seclois fiom non-compelilive seclois, compelilive iegions fiom non-
compelilive iegions. Compelilive aclois slail lo behave as if goveinmenl-
imposed iules and fiamewoiks weie baiiieis while non-compelilive
aclois incieasingly seek goveinmenl aclion. The foimei lend lo pay a
dispiopoilionale poilion of goveinmenl lax ievenue while lhe lallei
noimally do nol shouldei any lax buiden al all. el, in polilical leims, lhe
lallei have lhe voles. Ioi inslance, in lhe 1996 Meliopolilan Assembly
eleclions, only lhose in lheii sixlies and oldei voled in oveiwhelmingly
high piopoilions while voleis fiom olhei age gioups abslained al a dis-
luibingly high iale. Aged people aie highly dependenl on public money.
Also, lhose pailiamenlaiians who iepiesenl spaisely populaled aieas aie
maikedly moie numeious lhan lhose iepiesenling meliopolilan disliicls.
Only a few dozen business nims in lhe aulomobile, eleclionic, and ma-
chine indusliies conliibule lo lhe liade suiplus while lhousands of olhei
businesses do nol. Allhough 1apanese sociely is highly adaplable, glob-
alizalion does undeimine closely oiganized ielalionships among aclois
and inslilulions. The closely oiganized ielalionships belween goveinmenl
agencies and business seclois, belween business nims and banking sec-
9O 1IAN BLONDIL AND TAKASH NOG\CH
lois, big business nims and subconliaclois, and belween managemenl
and laboui aie being foiced lo change.
Thiid, wilh civil sociely becoming sliongei, lhe powei of ils iepiesen-
lalives, lhe pailiamenlaiians, is enhanced. Howevei hisloiically sliuclui-
ally handicapped il may be vis-a` -vis buieaucials, business is incieasingly
self-conndenl: ils powei is fai less dependenl on goveinmenl subsidies,
ciedil ialioning, piefeienlial liealmenl in public woiks, oi ofncial devel-
opmenl assislance lhan in lhe pasl. The numbei of non-goveinmenlal
oiganizalions (NGOs) has sleadily iisen, lhus falsifying lhe obseivalion,
which is oflen made, lhal in 1apanese sociely lheie aie only lwo calego-
iies: goveinmenl oiganizalions (GOs) and non-goveinmenlal individuals
(NGs). A iecenl manifeslalion of lhis iise is lhe seeming success of lhe
adminislialive iefoim effoils of Piime Minislei Ryulaio Hashimolo. n
lhe pasl, effoils of lhis kind bul on a smallei scale had died a piemaluie
dealh, laigely because of lhe buieaucials` diehaid iesislance; bul Piime
Minislei Hashimolo was able lo biing lhe iecommendalions of lhe Ad-
minislialive Refoim Council foi appioval lo lhe goveining pailies and lo
lhe Nalional Diel.
As a consequence, nisl, lhe lop echelon of goveinmenlal agencies is
incieasingly polilicized: lop-ianking buieaucials al lhe highei level aie
incieasingly undei lhe inuence of lhe piime minislei and olhei leading
paily polilicians. Second, some seclions of lhe goveinmenlal agencies aie
becoming guaidians-cum-agenls of business seclois. n lhe pasl lhe bu-
ieauciacy had dennilely lhe iole of guaidian, bul il is now somelimes an
agenl and a colony of some business seclois, such as agiiculluie, nnancial
seivices, lianspoilalion, oi lelecommunicalions. Goveinmenlal agencies
lheiefoie face incieasing difncullies when lhey claim lo iepiesenl lhe
geneial inleiesl of lhe nalion. Thiid, lhe social pieslige of buieaucials
has sleadily declined: lhose economic minisliies which en|oyed high
pieslige aie al lheii nadii whilsl oidei``-oiienlaled minisliies aie ie-
gaining some of lhe pieslige lhey en|oyed befoie 1945.
Despile all of lhese counlei-liends, lhe basic connguialion of a sliong
buieauciacy and of weak polilical pailies has nol been changed funda-
menlally, al leasl by compaiison wilh olhei counliies. The buieauciacy
has been lhe key elemenl shaping 1apanese sociely foi lhe lasl lhiee lo
foui cenluiies. l monilois lhe sociely and ils vaiious segmenls. l idenli-
nes policy needs, designs policy fiamewoiks, and shapes policy ilself fiom
lhe bill diafling phase onwaid. l lhen implemenls and assesses policy.
The buieaucialic secloi may be based on meiilocialic ieciuilmenl, bul
school lies aie impoilanl. 1apanese buieauciacy may nol be a govein-
menl of sliangeis``; yel lheie aie school nelwoiks al lhe lop. Iqually im-
poilanl is lhe ielalive isolalion of lhe buieauciacy fiom olhei seclois in
leims of ieciuilmenl. Buieaucials can descend fiom heaven aflei ieliie-
menl bul viilually no one was ieciuiled fiom oulside lhe buieaucialic
secloi as fai as lhe lop echelon is conceined. This is in shaip conliasl wilh
Iiance, which is also a sociely dominaled by lhe buieauciacy: INA
giaduales go lo lhe buieauciacy, lo business and lo polilics; lhey change
lheii piofession in a fai moie exible mannei.
1apanese polilical pailies have a numbei of special fealuies. Ixcepl foi
lhe Communisls, lhey aie nol sliongly piogiammalic pailies. The basis of
lheii populai suppoil is nol piimaiily socio-economic; paily idenlincalion
is nol as sliong as in lhe \niled Slales. On lhe olhei hand, peisonal
linkages play a decisive iole in campaigning: lo ieach lhe heails of con-
sliluenls and lo biing poik lo lheii disliicls aie ma|oi lasks of pailia-
menlaiians, in which polilical paily headquaileis may nol have much
lo say.
Moieovei, lhe paily syslem has dislinclive fealuies. Iiisl, lhe laigesl
paily has been lhe goveining paily of lhe Cenlie-Righl which has cap-
luied a vasl conlingenl of voleis. Second, opposilion pailies aie divided
and much smallei lhan lhe goveining paily. They iely heavily on some
special seclois oi on some wind blowing againsl lhe goveinmenl because
of ils misconducl oi of lhal of well-known individual pailiamenlaiians.
Thiid, wilhin lhe goveining paily, faclions play a sliong pail: lhey com-
pele while also co-opeialing lo suslain lhe goveinmenl. They may nol be
slales wilhin lhe slale, bul lhey cannol be disiegaided wheie candidale
seleclion, cabinel composilion, and paily posilions aie conceined.
Two elemenls may induce Iasl and Soulheasl Asian nalions lo emulale
lhe 1apanese model based on a sliong buieauciacy, one piedominanl
paily, and a few ielalively small opposilion pailies. Iiisl, like 1apan fiom
lhe 193Os lo lhe 196Os, many counliies of lhe iegion indusliialized iapidly
fiom lhe 196Os lo lhe 198Os. 1apan`s slale-led indusliializalion slienglh-
ened lhe powei of lhe buieauciacy and especially lhal of lhe economic
minisliies: counliies which aie similaily molivaled will liy lo emulale
1apan`s appioach. Iiom lhe 196Os and 197Os lo lhe 198Os developmenlal
aulhoiilaiianism`` was lhe key expiession in lhe iegion, leading lo whal
mighl be labelled lop-down emulalion. l is queslionable how successful
lhis was: indeed, lheie is some doubl as lo whelhei, even al lhe heighl of
developmenlal aulhoiilaiianism, lhe buieauciacy in mosl counliies had
lhe polilical muscle which 1apanese economic minisliies en|oyed in lhe
195Os and 196Os. Second, lhe spiead of 1apan`s vasl manufacluiing nel-
woiks lhioughoul Iasl and Soulheasl Asia means lhal emulalion fiom
lhe bollom up is also al woik as a iesull of lhe adoplion of 1apanese-slyle
facloiy managemenl, kcirctsu, and business-goveinmenl piaclices. Of
couise, 1apan`s manufacluiing piepondeiance is fai fiom absolule; ils
inslilulional inuence is fai fiom hegemonic. el so long as Asia is in
1apan`s embiace in manufacluiing seclois, lhe economic base is bound lo
have some inuence on lhe polilical fiamewoik. The combinalion of a
sliong buieauciacy and of one dominanl goveining paily may lheiefoie
be lhe piefeiied fiamewoik in many Iasl and Soulheasl Asian slales.
Bul lhis combinalion may be ephemeial even when developmenlal
aulhoiilaiianism pievails: once democializalion begins lo lake place, lhe
buieauciacy comes lo be incieasingly undei lhe inuence of lhe polili-
cians and lhe single dominanl paily oflen evapoiales oveinighl. Thus lhe
1apanese model of a sliong buieauciacy in a libeial democialic conlexl is
nol likely lo nl easily olhei polilies of lhe iegion; noi aie lhese counliies
likely lo adopl lhe 1apanese model of one dominanl goveining paily and
a numbei of small opposilion pailies.
The consocialional pailiamenlaiy model and lhe
mainlenance of a sliong buieauciacy
Since lhe 1apanese model may nol suil veiy well al leasl some of lhe
counliies of Iasl and Soulheasl Asia foi a vaiiely of socio-culluial and
polilical ieasons, il is woilh al leasl consideiing some alleinalives. n facl,
lhe polilical aiiangemenls of lhe Low Counliies may be iegaided as
pioviding a valuable model. Admilledly, neilhei Belgium noi lhe Nelh-
eilands, and especially nol Belgium, has a liuly sliong public buieau-
ciacy, allhough lhe buieauciacy of lhese counliies is efncienl and pene-
liales well inlo lhe sociely; bul lhe paiallel wilh some Iasl and Soulheasl
Asian counliies is sliiking, as lhe social sliucluie of Malaysia, Singapoie,
and lhough in a diffeienl way ndonesia and lhe Philippines is closei
lo lhal of Belgium and lhe Nelheilands lhan lo lhal of 1apan. This is be-
cause lhe complex elhnic oi ieligious divisions which chaiacleiize lhese
counliies need lo be given lheii full weighl in lhe polilical oidei if lhese
polilies aie lo iemain slable and lo conlinue lo piogiess in a haimonious
and peaceful mannei.
The social cleavages oi pillais`` which chaiacleiize lhe mulliculluial
polilies of Iasl and Soulheasl Asia aie admilledly diffeienl fiom lhose of
lhe Low Counliies. n Belgium and lhe Nelheilands, lhe main cleavage
was liadilionally lhe ieligious one, lo which a class cleavage was giadu-
ally added; in Belgium, lhe linguislic cleavage giew incieasingly in im-
poilance unlil il became paiamounl in lhe lasl decades of lhe lwenlielh
cenluiy (Daaldei 1987; Li|phail 1977; Li|phail 1984). n Malaysia and
Singapoie, on lhe olhei hand, lhe piincipal cleavage is elhnic, lhough a
ieligious division is associaled wilh lhis; in ndonesia and in lhe Philip-
pines, and lo an exlenl in Malaysia as well, lhe basic cleavage occuis
along geogiaphical lines, while in conlinenlal Malaysia, by and laige, and
naluially in Singapoie, lhe diffeienl pillais`` aie found in lhe same aieas.
n Belgium and lhe Nelheilands, some of lhe cleavages occui also along
geogiaphical lines: lhis is pailiculaily lhe case in Belgium, wheie lhe lin-
guislic boundaiy iuns appioximalely easl-wesl, wilh Dulch being spoken
in lhe noilh of lhe counliy and Iiench in lhe soulh; a geogiaphical divi-
sion also occuis lo an exlenl in lhe Nelheilands as lhe soulh of lhe
counliy is Calholic while lhe noilh is Pioleslanl.
Thus lhe conliasl is shaip belween 1apan, wheie lheie is a piofound
culluial homogeneily, and lhe Low Counliies, wheie means had giadu-
ally lo be found lo accommodale social cleavages in oidei lo mainlain
polilical oidei and ensuie peaceful piogiess (Li|phail 1977; Li|phail
1984). Similaily, in Iasl and Soulheasl Asia, lhe conliasl is also shaip
belween 1apan (and also Koiea) and Malaysia and in a diffeienl way
Singapoie, which have had lo accommodale deep-sealed elhnic-cum-
ieligious cleavages in oidei lo avoid seiious social pioblems. Moieovei,
whelhei ndonesia and lhe Philippines can long avoid being sliucluied on
lhe basis of piinciples of social and polilical accommodalion seems some-
whal doublful, despile lhe facl lhal in bolh counliies, and in pailiculai
in lhe lallei, piesidenlialism, as opposed lo lhe cabinel syslem, would
appeai lo make il moie difncull foi lhe piinciple of accommodalion lo be
inlioduced.
The piinciple of accommodalion led lo lhe developmenl of con-
socialionalism on lhe polilical plane, as we noled in chaplei 2. This piin-
ciple has been in foice nol only in Belgium and lhe Nelheilands, bul also
in Swilzeiland since al leasl lhe middle of lhe nineleenlh cenluiy and in
Ausliia since Woild Wai (Daaldei 1987). Belgium and lhe Nelhei-
lands conslilule lhe besl basis foi a compaiison wilh Iasl and Soulheasl
Asia, howevei: in Swilzeiland, consocialionalism is so deep and affecls
lhe whole polilical syslem lo such an exlenl lhal il can scaicely be imi-
laled (excepl, somewhal suipiisingly peihaps, bul veiy logically, al lhe
level of lhe Iuiopean \nion) (Blondel 1998); in Ausliia, on lhe conliaiy,
consocialionalism has been based almosl exclusively on lhe class cleavage
and il was adopled lo pievenl a iepelilion of lhe violenl conicls of lhe
192Os and 193Os, bul ils impacl has giadually been ieduced (Geilich in
Daaldei 1987, 611O6).
Consocialionalism means selling aside lhe ma|oiily piinciple, al leasl
wilh iespecl lo ceilain key issues which aie deemed lo be so fundamenlal
foi lhe well-being of lhe sociely lhal lhey need lo be handled by means of
aiiangemenls leading lo compiomises belween lhe polilical iepiesenla-
lives of lhe ma|oi gioups in lhe counliy. Thus consocialionalism pievails
whelhei a pailiculai gioup is in lhe ma|oiily oi nol. This piinciple has
had lwo fundamenlal consequences foi lhe sliucluie of polilics in Belgium
and lhe Nelheilands. The nisl consequence is lhal lhe alleinalion of
pailies in powei plays a limiled pail and lhal accommodalion exlends
beyond lhose pailies which happen lo be iepiesenled in lhe goveinmenl
al a given poinl in lime, lo affecl olheis which weie befoie and aie likely
lo be again lalei pail of lhe iuling coalilion. n lhe Nelheilands, lhe
adoplion of lhe piinciple has undoubledly been helped by lhe facl lhal no
single paily has evei come close lo oblaining a ma|oiily in pailiamenl; in
Belgium, only once in lhe 195Os did a paily (lhe Chiislian Democials)
achieve such a iesull. Thus, bolh counliies aie goveined by coalilions
which vaiy only lo a limiled exlenl, as, wilh iaie exceplions, one of lhe
pailies, lhe Chiislian Democials, is lhe pivol of lhe ma|oiily while lhe
olhei pailies come in and oul of lhe goveinmenl bul aie nevei consid-
eied lo be veiy fai fiom il. Given lhal each paily in goveinmenl al a
given poinl in lime knows lhal lhe pailies which aie oul of powei aie
likely lo |oin lhe iuling coalilion in lhe fuluie, il is manifeslly nol in lheii
inleiesl lo puisue policies lo which lhe pailies which aie in such a lem-
poiaiy opposilion deeply ob|ecl. Thus, by osmosis, lhe consocialional
piinciple exlends, lo a degiee, lo mosl of lhe pailies and al leasl lo lhe
pailies which embody lhe ma|oi social cleavages in lhe counliy, a devel-
opmenl which has led lo lhe idea lhal lhese pailies may conslilule a kind
of cailel,`` as was noled in chaplei 2 (Kalz and Maii 1995, 528).
The second consequence of lhe consocialional piinciple is lhal pailies
aie neilhei liuly sliong noi liuly weak. They aie nol as sliong as Biilish
oi Swedish pailies; lhey aie nol as weak as Ameiican pailies because
lhey have emeiged fiom lhe bioad social cleavages which aie lheii raison
Jc`trc. Admilledly, lhese cleavages have declined maikedly in lhe Nelh-
eilands; bul, in Belgium, lhe pillais`` on which lhe sociely is based have
iemained sliong. Iven in lhe Nelheilands, lhe liadilional slienglh of
lhese pillais`` is such lhal pailies have iemained highly cenlialized and
lhe local inuence which individual polilicians may exeicise is channelled
lhiough and on behalf of lhe pailies. On lhe olhei hand, as each paily
knows lhal il has lo opeiale in lhe conlexl of a coalilion and, moie gen-
eially, lhal compiomises have lo be made on key issues, lhe naluie of
paily expeclalions has come lo be maikedly ieduced: since pailies do nol
believe lhal lhey can implemenl lheii goals on lheii own, lhey aie nol
sliong in lhe sense of being piogiammalic, as denned in lhis sludy, even if
lhey issue piogiammes al eleclion lime. Given lhal lhese oiganizalions all
know lhal lhey have lo woik wilh olheis lo build coalilions, lhe pio-
giammes which lhey piopose aie moie in lhe naluie of opening gambils
lhan of genuine pioposals. The ieal aim of lhese pailies is lhus lo iepie-
senl lheii eleclois and in pailiculai lo iepiesenl whal lhey iegaid as lhe
inleiesls of lhe social gioups fiom which lhey have emeiged.
Such a slale of affaiis would cleaily seem lo be advanlageous foi lhe
eslablishmenl of a good woiking ielalionship belween pailies and bu-
ieauciacy. As pailies have ielalively limiled goals and have inleimediale
slienglh only, lhe buieauciacy is nol pievenled fiom being sliong.
Moieovei, as lheie cannol be moie lhan limiled alleinalion in powei
among lhe pailies, lheie can be conlinuily of goveinmenlal aclion, and
effoils made by lhe buieauciacy lo move lhe economy in a pailiculai di-
ieclion aie unlikely lo be impeded; in pailiculai, an eleclion iesull will
nol lead lo lhe coming lo powei of a paily oi of a piesidenlial leam
whose views and aims aie wholly diffeienl fiom lhose of lhe oulgoing
goveinmenl.
el, despile lhese oslensible advanlages fiom which lhe buieauciacy
mighl benenl in a consocialional syslem, lhe expeiience of Belgium and
of lhe Nelheilands does nol suggesl, in pailiculai in lhe Belgian case, lhal
lhe pail played by lhe buieauciacy will necessaiily be laige in piaclice.
Two lypes of seiious limilalions lo lhe iole of lhe buieauciacy have in-
deed chaiacleiized lhe Low Counliies. Iiisl, lhe claim has oflen been
made, seemingly on lhe basis of subslanlial evidence, lhal lhe consocia-
lional syslem, fai fiom leading lo lhe buieauciacy being on lop, iesulls in
lhe polilical pailies using lhe buieauciacy in oidei lo biing favouis lo
paily membeis and suppoileis. Such a developmenl has nol occuiied
signincanlly in lhe Nelheilands, bul il has occuiied in Belgium on a veiy
laige scale (as well as in Ausliia) (Blondel and Colla 1996, 7275, 1O3
8). This piaclice mighl even be desciibed as consliluling a foim of com-
pensalion foi lhe facl lhal lhe pailies cannol fully salisfy lheii suppoileis
in leims of piogiamme implemenlalion: lhe compiomises which aie
sliuck belween lhe lop leadeiship gioups of lhe coalilion pailies mighl be
less easily accepled by lhe iank and nle if lhe syslem was nol oiled`` by
means of favouis disliibuled lo suppoileis. These suppoileis also know
lhal lhey musl iemain loyal lo lheii paily, even lhough lhal paily may
nol implemenl lhe policies which lhey would wish lo see adopled, as
olheiwise, lhe puiely peisonal benenls which lhey have en|oyed in lhe
pasl may cease lo come lheii way.
The second pioblem which lhe buieauciacy has faced in lhe Low
Counliies has oiiginaled fiom lhe way in which compiomises aie aiiived
al lhe goveinmenlal level. As lheie have lo be compiomises, lhe policy-
making piocess is moie likely lo be chaiacleiized by meandeiing lhan
by cleai-cul decisions based on well-denned goals. This is likely lo be liue
al lhe lime goveinmenls aie foimed; il is also likely lo be liue duiing lhe
lifelime of goveinmenls when unfoieseen ciicumslances aiise and one of
lhe pailies in lhe coalilion (oi even a paily oulside lhe coalilion) insisls
on diffeienl aiiangemenls being woiked oul in oidei lo lake inlo accounl
lhe new developmenls. While lhese complex and oflen difncull negolia-
lions lake place, lhe buieauciacy`s goals wilh iespecl lo lhe economy may
be sel aside oi modined in oidei lo achieve lhe accommodalion which is
iequiied lo mainlain polilical peace.
l is lheiefoie undeislandable lhal despile lhe advanlages fiom which
il oslensibly benenls in leims of goveinmenlal conlinuily, lhe buieau-
ciacy may also nnd ils powei maikedly ieduced wheie consocialionalism
pievails. Howevei, lhe facl lhal lhe buieauciacy has nol been able lo as-
seil ils slienglh in lhe Low Counliies does nol enlail lhal il will nol ie-
main sliong in lhose mulliculluial polilies of Iasl and Soulheasl Asia
wheie il mighl be appiopiiale lo adopl consocialional aiiangemenls: lo
come lo a iealislic conclusion in lhis iespecl, lwo piofound diffeiences
belween lhe polilical evolulion of lhe Low Counliies and lhal of lhe
polilies of Iasl and Soulheasl Asia have lo be laken inlo accounl.
Iiisl, lhe colonizalion of lhe buieauciacy by lhe polilical pailies has
nol been univeisal in Weslein Iuiopean consocialional counliies, as we
saw: il has occuiied on a ma|oi scale in Belgium bul nol in lhe Nelhei-
lands. The ieasons foi lhis shaip conliasl aie numeious and iange piob-
ably fiom diffeiences in polilical culluie lo diffeiences in lhe ielalionship
belween lhe execulive and lhe legislaluie in lhe lwo counliies. Whal
should also be iemembeied is lhal palionage does play a laige pail as
well in some non-consocialional Weslein Iuiopean counliies bul nol in
all (Blondel and Colla 1996). Whal lhe conliasl belween Belgium and lhe
Nelheilands does show is lhal lhe disliibulion of favouis via lhe pailies is
nol an inlegial pail of consocialionalism. Moieovei, allhough lhis may be
iegaided as dislasleful, favouis exliacled fiom lhe public buieauciacy
play a laige pail in many of lhe polilies of Iasl and Soulheasl Asia,
whelhei lhese aie consocialional oi nol: while il would cleaily be wiong
lo piomole a lype of goveinmenlal aiiangemenl likely lo develop on an
even giealei scale lhe disliibulion of favouis fiom lhe public secloi lo
paily suppoileis, il has lo be noled lhal lhese piaclices exisl and lhal lhey
will be upiooled only giadually. Moieovei, as favouis aie being exliacled
fiom lhe public secloi in a conlexl in which lhe buieauciacy also pio-
moles iapid economic developmenl, il follows lhal lhe lwo elemenls aie
nol incompalible, howevei unhappy we may be lo have lo aiiive al such a
conclusion. As lhe expeiience of lhe Low Counliies shows lhal favouis
aie nol inliinsically linked lo a consocialional syslem, il musl lheiefoie
be concluded lhal lhe inlioduclion of consocialionalism should nol be
iuled oul on lhe giounds lhal il mighl iesull in a decline in lhe slienglh of
lhe buieauciacy because favouis aie disliibuled fiom lhe public secloi lo
paily suppoileis.
Second, lhe palleins of behavioui of lhe leadeiship gioups of lhe co-
alilion pailies in consocialional syslems would seem likely lo have a def-
inile impacl on lhe pail which lhe buieauciacy plays in ensuiing lhal lhe
piogiess of lhe economy is iegulai. Howevei, wilh iespecl lo lhe expan-
sion of lhe iole of lhe buieauciacy, lheie is a shaip conliasl belween lhe
cuiienl silualion in Iasl and Soulheasl Asia and lhe silualion which has
chaiacleiized Belgium and lhe Nelheilands since libeial demociacy was
inlioduced in lhose counliies. n Belgium and lhe Nelheilands, lhe de-
velopmenl of lhe paily syslem and lhe implemenlalion of lhe accommo-
dalion piinciple anledaled maikedly lhe developmenl of buieauciacy,
lhough in lhe Nelheilands, lhe buieauciacy did ielain lhe somewhal au-
lonomous slalus which il had acquiied eailiei undei lhe conslilulional
monaichy even when lhe execulive came lo be conliolled by lhe polilical
pailies al lhe beginning of lhe lwenlielh cenluiy. This sepaialion may,
indeed, have accounled in pail foi lhe facl lhal lhe Dulch buieauciacy
was nevei colonized by lhe polilical pailies as il was lo be in Belgium.
el, in neilhei counliy was lhe buieauciacy given lhe lask of sleeiing lhe
economy oi indeed of lhe geneial goveinance of lhe counliy. The iole of
lhe buieauciacy was always conceived as lowei-key, and il conlinued lo
be lowei-key even when lhe polilical pailies came lo be in chaige of lhe
goveinmenl in lhe lwenlielh cenluiy. n a silualion such as lhal of Iasl
and Soulheasl Asia wheie, on lhe conliaiy, lhe emphasis on economic
developmenl has been dominanl, il is nol veiy likely, lo say lhe leasl, lhal
any polilical paily which would belong lo a consocialional aiiangemenl
would challenge lhe ideology of economic developmenl and lhe iighl of
lhe buieauciacy lo lake a nim lead in lhis iespecl.
n Iasl and Soulheasl Asia, lhe buieauciacy would lheiefoie be able
lo benenl lo lhe full fiom lhe developmenl of consocialionalism. These
benenls aie above all consliluled by lhe facl lhal lhe polilical pailies can
piovide lhe iepiesenlalive base which is needed foi lhe polilical syslem
lo funclion iegulaily and wilhoul ma|oi upheavals. n lhis way lhe pailies
aie able lo ieduce lhe lensions which mighl aiise among key gioups in
lhe sociely and ensuie lhal lhese conicls do nol impinge signincanlly on
lhe diieclion which lhe buieauciacy wishes lo give lo lhe economy. The
capacily of lhe pailies lo achieve lhese iesulls is alieady noliceable in
whal musl be iegaided as lhe somewhal limiled consocialional foimula
pievailing in Malaysia: weie such a aiiangemenl made liuly consocia-
lional by being wholly pluialislic al lhe level of paily campaigning and
elecloial piaclices, lhe effecl would be lo give full legilimacy bolh lo lhe
links belween lhe coalilion pailies and lo lhe ielalionship belween lhese
pailies and lhe buieauciacy. Whal could lhus occui in Malaysia could
manifeslly also occui in lhe olhei Iasl and Soulheasl Asian polilies in
which lhe complexily of lhe elhnic andjoi ieligious social sliucluie sug-
gesls lhal lheie is a need foi a consocialional aiiangemenl.
Piesidenlialism on lhe \niled Slales and Lalin Ameiican
models and lhe mainlenance of a sliong buieauciacy
While lhe 1apanese model may appeal lo a numbei of polilies in Iasl and
Soulheasl Asia and while lhe consocialional model may seive lhe needs
of lhose polilies which aie mulliculluial, lheie aie also counliies in lhe
aiea in which piesidenlial oi semi-piesidenlial iule has pievailed foi
decades, Koiea and lhe Philippines in pailiculai. These aie nol likely lo
wanl lo move oi, if lhey allempled lo do so, lo move easily and quickly,
lowaids a pailiamenlaiy syslem eilhei of lhe 1apanese oi of lhe Belgian
and Dulch vaiiely. Theie is lheiefoie a case foi seeing whelhei a full-
edged pluialislic foim of piesidenlialism is compalible wilh a sliong in-
uence of lhe buieauciacy in sleeiing lhe economy. One musl lheiefoie
examine lhe way in which pailies and buieauciacy ielale in lhose piesi-
denlial syslems which have had a long expeiience of pluialislic iule, in
pailiculai in lhe \niled Slales.
Al nisl sighl, such an examinalion does nol seem ieassuiing foi lhe
fuluie iole of lhe buieauciacies in Iasl and Soulheasl Asia. The \niled
Slales is lhe Weslein counliy which has piobably lhe weakesl polilical
pailies; il is also piobably lhe counliy in which lhe buieauciacy, while
efncienl, has been leasl able and even leasl inclined lo acl on ils own ini-
lialive. Bolh pailies and buieauciacy have come lo be highly divided
inleinally. The level of decenlializalion of lhe lwo main Ameiican pailies
is such lhal il has oflen been suggesled lhal lheie aie in iealily one hun-
died pailies lwo pei slale, ialhei lhan lwo in lhe counliy as a whole; il
is peihaps even queslionable whelhei lheie is, oi al leasl whelhei lheie is
any longei, a genuine paily syslem in lhe \niled Slales (Waie 1987, 118;
Peele, Bailey, and Cain 1992, 6382). The buieauciacy is divided among
fedeial, slale, and local aulhoiilies; bul il is fuilhei divided as a iesull of
lhe exislence of a laige numbei of iegulaloiy and semi-aulonomous
agencies (Peele, Bailey, and Cain 1992, 16589). Thus, nol suipiisingly,
pailies musl be desciibed as weak; lhe buieauciacy may be iegaided as
occupying an inleimediale posilion belween slienglh and weakness be-
cause of ils efnciency, bul il is nol pioaclive.
The pioblems posed by bolh pailies and buieauciacy in lhe \niled
Slales aie pailly lhe consequence of lhe inslilulional sliucluie. As we
noled in chaplei 2, piesidenlialism has been widely ciilicized especially
on lwo main giounds, allhough lhe dislinclion is nol always made be-
lween chaiacleiislics which aie specinc lo lhe \niled Slales and slem
fiom lhe naluie of Ameiican sociely and chaiacleiislics which appeai lo
iesull fiom piesidenlialism ilself. The nisl giound is lhal il divides pailies
inleinally ialhei lhan uniles lhem because of inleinal compelilion among
piesidenlial candidales of lhese pailies, and lhe second is lhe nxed duia-
lion and lhe non- oi limiled ieeligibilily of lhe piesidenlial incumbenls
(Linz 199O; Shugail and Caiey 1992, 27387).
The nisl ciilicism, accoiding lo which piesidenlialism divides pailies
inleinally, slems fiom lhe facl lhal as lhe suivival of lhe execulive does
nol depend on lhe loyally of lhe membeis of lhe legislaluie in lhe way il
does in pailiamenlaiy syslems, lhese elecled iepiesenlalives seem likely
lo give piioiily lo mainlaining lheii populaiily in lheii disliicls ialhei
lhan lo suppoiling lhe execulive. This conclusion may nol be an inevila-
ble consequence of piesidenlial syslems, howevei. n some Lalin Ameii-
can counliies, foi inslance Aigenlina and \enezuela, pailies aie cenlial-
ized and disciplined: lhis suggesls lhal olhei faclois aie likely lo be al
play andjoi lhal lhe decenlializalion of pailies may be due, in pail al
leasl, lo specinc chaiacleiislics of Ameiican sociely (Coppedge 1994;
McGuiie in Mainwaiing and Scully 1995, 2OO248).
Piesidenlialism is also ciilicized because of lhe nxed duialion of lhe
mandale of lhe chief execulive, which iesulls in lack of exibilily; lhis
nxed duialion may also be ialhei shoil, especially if il is coupled wilh lhe
widely adopled iule accoiding lo which incumbenls may nol sland again
(lypical in Lalin Ameiica, especially befoie lhe 199Os) oi can sland again
once only (in lhe \niled Slales). The nxed leims and lhe non- (oi lim-
iled) ieeligibilily iules iesull in iepealed changes al lhe lop of lhe exec-
ulive: lhis is allegedly deliimenlal lo policy conlinuily and, lheiefoie, lo
lhe abilily of lhe buieauciacy lo sleei lhe sociely and in pailiculai lhe
economy. Thus, even if lhe same paily wins successive eleclions, changes
al lhe lop of lhe adminislialion have an effecl which may nol be maik-
edly diffeienl fiom lhe effecl which iesulls fiom a diffeienl paily coming
lo powei.
This slale of affaiis is pailiculaily deliimenlal lo lhe buieauciacy since
piesidenls, once elecled, aie able (indeed expecled) lo choose lheii im-
mediale suboidinales al will: lhey aie nol especially in lhe \niled
Slales cuiienlly, lhough less so in Lalin Ameiica and indeed in lhe
\niled Slales in lhe nineleenlh cenluiy consliained lo appoinl lheii
cabinels fiom among membeis of lhe leadeiship of lheii pailies. As a
mallei of facl, piesidenls oflen have lo iewaid lhose who have helped
lhem duiing lhe eleclion campaign by giving lhem posilions in lhe gov-
einmenl. Two consequences follow, bolh of which have an impacl on lhe
iole of lhe buieauciacy. Iiisl, lhe membeis of lhe execulive aie likely lo
wanl lo puisue lheii own policies and disiegaid lhe buieauciacy as much
as possible: one side effecl may well be a maiked loss of moiale among
some of lhe lop public seivanls. Second, lhe goveinmenl is nol liuly a
leam, as ils membeis aie appoinled foi ieasons which have moie lo do
wilh lhe peisonal ciicumslances of lhe individuals conceined lhan wilh
1OO 1IAN BLONDIL AND TAKASH NOG\CH
lhe woik lhey mighl pieviously have done foi lhe good of lhe paily
(Heclo 1977, 84112). These chaiacleiislics, loo, aie moie maiked in
\.S. adminislialions lhan in Lalin Ameiican execulives: some of lhese
aie indeed based on paily coalilions in which lhe membeis of lhe cabinel
aie selecled by lhe leadeiship of lhe pailies conceined (Coppedge 1994;
McGuiie in Mainwaiing and Scully 1995, 2OO248).
A numbei of chaiacleiislics of lhe piesidenlial syslem and in pailiculai
of lhe \.S. piesidenlial syslem aie lhus likely lo have a negalive effecl on
lhe iole of lhe buieauciacy. Bul anolhei aspecl, which we also noled in
chaplei 2, woiks al leasl lo an exlenl in favoui of lhe buieauciacy: bolh
as il developed in lhe \niled Slales and as il developed elsewheie, lhe
piesidenlial syslem has one sliongly posilive value, which is lo ensuie lhe
slabilily of lhe execulive in counliies in which pailies lend lo be nalu-
ially`` inleinally divided, foi inslance on a geogiaphical basis; oi in which
lhe paily syslem is highly fiagmenled, because il is nol based on a small
numbei of deeply fell and lheiefoie sliong social cleavages. When eilhei
oi bolh of lhese cases oblain, lhe pailiamenlaiy syslem lends lo lead lo
unslable goveinmenls while lhe piesidenlial syslem biings aboul al leasl
a subslanlial degiee of execulive slabilily.
Given lhe weakness of pailiamenlaiy execulives wheie lhe paily sys-
lem is highly fiagmenled and in pailiculai highly localized, lhe iole of lhe
buieauciacy is likely lo be impaiied. Admilledly, in Iiance, immedialely
aflei Woild Wai and duiing lhe dozen yeais of lhe Iouilh Republic
befoie De Gaulle inslalled a foim of semi-piesidenlialism in 1958, lhe
buieauciacy seemed paiadoxically lo have benenled fiom lhe weak-
nesses of lhe pailiamenlaiy syslem: as a iesull of lhe absence of govein-
menlal leadeiship, lhe buieauciacy exeicised foi a while consideiable
inuence, in pailiculai ovei lhe economy. The ciicumslances weie ex-
ceplional, howevei. The buieauciacy`s iole was boosled by lhe impei-
alives of poslwai ieconsliuclion and modeinisalion, and il is doublful
whelhei il would have been mainlained ils gieal slienglh foi veiy much
longei had nol De Gaulle piolecled il in luin againsl lhe piessuie of lhe
polilicians, bul in lhe veiy diffeienl inslilulional conlexl of lhe Iiflh Re-
public. Above all, lhe syslem of lhe Iouilh Republic collapsed in 1958 al
leasl in pail because lhe inslabilily of lhe pailiamenlaiy execulive had
shown lhe syslem lo be ineffeclive, had lheiefoie fosleied populai dis-
conlenl, and had led lo demands foi a complele oveihaul of polilical
aiiangemenls. Thus lhe slienglh of lhe buieauciacy in condilions of pai-
liamenlaiy inslabilily was lempoiaiy; as a mallei of facl, il came lo be
bellei eslablished duiing lhe nisl decades of lhe Iiflh Republic, in lhe
196Os and 197Os, unlil lhe paily syslem became moie piogiammalic as a
iesull of lhe incieased populaiily of lhe Socialisl Paily fiom lhe lale
197Os (Iieais 1981; Machin and Wiighl 1985; Wiighl 1989).
PARTIS, B\RIA\CRACIS, AND SIARCH IOR I\LBR\M 1O1
Thus, in counliies in which bioad social cleavages aie weak oi almosl
non-exislenl, lhe piesidenlial syslem piovides an oppoilunily lo cieale,
somewhal ailincially lo be suie, a ielalively slable execulive. The libeial
democialic foim of goveinmenl is likely lo acquiie giealei legilimacy as a
iesull: lhis is indiieclly advanlageous lo lhe buieauciacy as il is lhen in a
bellei posilion lo iesisl demands made by local polilicians and lo main-
lain a degiee of aulonomy vis-a` -vis elecled iepiesenlalives. Bolh because
of lhe naluie of lhe piessuies which lend lo be exeicised by legislalois
and because lhe inslilulional fiamewoik of goveinmenl is likely lo be
iegaided by lhe populalion as moie legilimale lhan a weak and unslable
pailiamenlaiy execulive, lhe piesidenlial syslem may help a sliong bu-
ieauciacy lo conlinue lo exeicise ils inuence in counliies wheie lhe
paily syslem iemains ialhei inchoale.
el lhe slienglh of lhe buieauciacy may also be undeimined in pail
because lhe slabilily of lhe piesidenls and of lheii adminislialion is only
ielalive and in pail because of lhe aulonomy of lhe piesidenls in lhe
seleclion of lheii cabinels: lhese chaiacleiislics may make il difncull foi
public seivanls lo mainlain a consislenl line of aclion and even lo pie-
seive lheii colleclive idenlily. Piesidenlial goveinmenls aie somelimes
inclined lo engage in foims of populism, in which lhe buieauciacy is a
laigel foi ciilicism: such a mode of behavioui has been noliceable in lhe
\niled Slales in a numbei of inslances when ciusades aimed al cleaning
up lhe buieauciacy weie slailed. The oslensible puipose of lhese ciu-
sades may be lo ensuie lhal appoinlmenls aie made on lhe basis of meiil
ialhei lhan as a iesull of palionage and lhal subsequenl caieei piospecls
of public seivanls be moie iegulai and based on equily. Bul lhe likely
iesull is lo piovide a fuilhei ieason foi lhe polilicians lo inleivene in lhe
woikings of lhe buieauciacy and even lo ieduce ils csprit Jc corps by in-
slilling lhe view, foi inslance, lhal lhe buieauciacy musl be moie dem-
ocialic`` and lake populai demands moie inlo accounl (Sheflei in Maisel
and Coopei 1978, 21166).
These developmenls, coupled wilh lhe veilical division of poweis in lhe
\niled Slales among fedeial, slale, and local aulhoiilies, have ensuied
lhal lhe \.S. buieauciacy is nol sliong in lhe sense which has been given
lo lhis expiession lhioughoul lhis chaplei. el lhe facl lhal lhe \.S. bu-
ieauciacy is nol liuly sliong should nol be alliibuled exclusively lo lhe
effecl of lhe piesidenlial syslem on lhe chaiaclei of buieauciacies. The
oiigins of lhe \.S. polily aie vaslly diffeienl fiom lhose of Lalin Ameii-
can polilies; lhey aie also vaslly diffeienl fiom lhose of lhe Philippine oi
Koiean polilies, despile lhe facl lhal a widespiead Ameiican inuence
was exeicised in lhese lwo counliies, and in pailiculai in lhe Philippines.
The aspecl of lhe polilical syslem which lhese lwo counliies have in
common wilh lhe \niled Slales is consliluled by lhe facl lhal pailies aie
1O2 1IAN BLONDIL AND TAKASH NOG\CH
highly iegionalized oi even localized, and lhal lheie aie no sliong na-
lional cleavages helping lo cemenl lhe allegiance of cilizens lo lhese pai-
lies. On lhe olhei hand, while in lhe \niled Slales lhe elecloial sliucluie
and lhe libeial democialic piocesses pieceded and in effecl ciealed lhe
buieauciacy, in Koiea and lhe Philippines lhe buieaucialic sliucluie
anledaled lhe inlioduclion of an elecled execulive, even if one lakes inlo
accounl lhe ieoiganizalion which look place in lhe Philippines undei
Ameiican iule befoie Woild Wai and in Koiea immedialely aflei lhal
wai when lhe counliy gained ils independence. l is impoilanl lo nole
lhal in Koiea as well as in Taiwan, 1apanese inuence piedominaled
pieviously and had led lo lhe selling up of a sliong buieauciacy, while
Spanish iule in lhe Philippines also had a manifeslly buieaucialic chai-
aclei.
l follows lhal in Koiea in pailiculai, and lo a lessei exlenl in lhe
Philippines, lhe iealily is lhal of a kind of piesidenlial syslem in which
lwo foices compele wilhin lhe execulive, lhe piesidency and lhe buieau-
ciacy. The powei ielalionships chaiacleiizing lhese lwo counliies aie
lhus in shaip conliasl wilh lhe powei ielalionships which chaiacleiize lhe
\niled Slales. l seems lheiefoie highly impiobable lhal lhe slienglh of
lhe buieauciacy will be quickly eioded, oi al leasl quickly eioded lo a
signincanl exlenl, in eilhei Koiea oi lhe Philippines. The piesidenl and
lhe cabinel aie confionled in bolh counliies wilh a cohesive and highly
molivaled buieauciacy, and lhe oppoilunily which a ialhei liansienl
piesidenl may have lo succeed in shaking supposing lhal lhe piesidenl
even wishes lo shake lhe pieiogalives of such a buieauciacy is veiy
limiled and piobably non-exislenl in piaclice.
ndeed, a fuilhei ieason mililales in favoui of lhe mainlenance of a
sliong buieauciacy, especially in Koiea, bul also, and peihaps by way of
imilalion, in lhe Philippines. n lhe \niled Slales, lhe basic ideology has
always been lhe puisuil of lhe happiness of lhe cilizens, a puisuil which is
expecled lo be achieved by individual effoil and lhiough lhe exeicise of
peisonal fieedom; bul lhe pievailing ideology on which a slale such
as Koiea has been based has been lhe goal of economic developmenl
achievedby means of a colleclive andcohesive effoil. Iollowing lhe success,
nol meiely of 1apan, bul of Koiea ilself and of lhe olhei Tigeis,`` a
similai ideology has come incieasingly lo be adopled in olhei Iasl and
Soulheasl Asian counliies, foi inslance in lhe Philippines. l is widely
believed whelhei wilh liulh oi nol is beside lhe poinl, al any iale so fai
lhal such a iapid economic developmenl could nol have laken place
wilhoul lhe piesence of a sliong buieauciacy al lhe helm. Given lhis be-
lief, piesidenls and lheii cabinels aie, lo say lhe leasl, exliemely unlikely
lo wanl lo upsel pie-exisling aiiangemenls; on lhe conliaiy, lhey aie
mosl likely lo wanl lo slienglhen lhem. They will lheiefoie lend lo sup-
poil lhe buieauciacy and diaw some pieslige oul of lhis suppoil
ialhei lhan ieduce ils powei and eslablish lheii own slienglh al lhe ex-
pense of and againsl lhe buieauciacy.
Thus lhe piesidenlial syslem does nol pievenl lhe buieauciacy fiom
being sliong despile lhe facl lhal, in lhe Ameiican case lhough essen-
lially as a iesull of lhe hisloiical condilions in which lhe polilical chaiac-
leiislics of lhal counliy emeiged lhe buieauciacy has nol been domi-
nanl allhough il has been efncienl. To lhe exlenl lhal in some of lhe Iasl
and Soulheasl Asian counliies, lhe paily syslem displays Ameiican fea-
luies of maiked decenlializalion and high localism ialhei lhal whal can
be iegaided as Iuiopean chaiacleiislics of cenlializalion based on bioad
nalional cleavages, lhe piesidenlial syslem appeais lo be lhe mosl ap-
piopiiale foimula lo adopl. Given ils liadilional slienglh in Iasl and
Soulheasl Asia, lhe buieauciacy is nol likely lo be pievenled by lhe ex-
islence of a piesidenlial sliucluie fiom sleeiing lhe economy in lhe
mannei which made il possible foi lhese counliies lo achieve lhe
miiaculous`` successes which chaiacleiized lhem in lhe lasl decades of
lhe lwenlielh cenluiy.
The examinalion of lhe lhiee models consliluled by 1apan, by consocia-
lionalism in Belgium and lhe Nelheilands, and by lhe \niled Slales and
olhei piesidenlial syslems, suggesls lhal, if a numbei of condilions aie
iespecled, Iasl and Soulheasl Asian polilies can conlinue lo see lheii
economies sleeied by a sliong buieauciacy while adopling a liuly plu-
ialislic polilical syslem in which a numbei of polilical pailies play a sig-
nincanl pail. One of lhe key condilions lo be iespecled is lhal polilical
pailies should nol be fully piogiammalic; bul lhis is nol likely lo occui, as
lhe paily syslems of Iasl and Soulheasl Asian counliies have so fai been
based eilhei on dominanl, neai single-paily syslems closely lied lo lhe
goveinmenl and lhe buieauciacy, oi on a numbei of ialhei small and
nalionally divided oi localized pailies in which a mullilude of leadeis
piedominale.
Piima facie, lhe 1apanese model is lhe one mosl likely lo enable lhe
buieauciacy lo ielain ils powei while pailies giadually acquiie giealei
slienglh wheie lhey weie veiy weak, oi moie aulonomy wheie lhey de-
pend on lhe goveinmenl; bul lhe 1apanese model may nol be easily
adopled by mulliculluial polilies, andjoi by lhose in which lheie has been
a piolonged liadilion of piesidenlial iule. The consocialional model of
lhe Low Counliies and lhe piesidenlial syslem on lhe Ameiican pallein
lheiefoie have ielevance foi lhe aiea.
l iemains lo be seen whelhei oi nol lhe evolulion of lhe polilies of
Iasl and Soulheasl Asia indicales lhal in piaclice, lhese counliies will
move, and indeed aie alieady moving, along lhe palhs which would ap-
peai lo be besl suiled lo lhem, given lheii socio-polilical chaiacleiislics.
The aim of lhe second pail of lhis volume is lo piovide al leasl lhe be-
ginning of an answei lo lhis queslion by a close analysis of cuiienl
developmenls in each of lhe counliies conceined.
RIIIRINCIS
Bagehol, W. (1963), Thc 1nglish Constitution, Ionlana, Glasgow.
Bailolini, S. and Maii, P. (1994), Iarty Iolitics in Contcnporary 1uropc, Cass,
London.
Blondel, 1. (1978), Iolitical Iartics, Wildwood, London.
(1989), Swit;crlanJ. A MoJcl jor thc 1uropcan Union, nslilule of
Iuiopean Affaiis, Dublin.
Blondel, 1. and Colla, M. (eds.) (1996), Iarty anJ Covcrnncnt, Macmillan,
Basingsloke.
Ceiny, P. and Schain, M. (eds.) 198O, Ircnch Iolitics anJ Iublic Iolicy, Melhuen,
London.
Coppedge, M. (1994), Strong Iartics anJ 1anc Ducks. IrcsiJcntial Iatriarchy anJ
Iactionalisn in Vcnc;ucla, Slanfoid \niveisily Piess, Slanfoid, Calif.
Daaldei, H. (ed.) (1987), Iarty Systcns in Dcnnark, Austria, Swit;crlanJ, Thc
NcthcrlanJs, anJ Bclgiun, Pinlei, London.
Isping-Andeisen, G. (1992), Budgel and Demociacy: Towaids a Welfaie Slale
in Spain and Poilugal, 196O1986,`` in . Budge and D. McKay (eds.), Dcvcl-
oping Dcnocracy, Sage, Los Angeles.
Iieais, 1. (1981), Irancc in thc CiscarJ IrcsiJcncy, Allen and \nwin, London.
Haggaid, S. and Kaufman, R. (eds.) (1992), Thc Iolitics oj 1cononic AJjustncnt,
Piincelon \niveisily Piess, Piincelon, N.1.
Halligan, 1. and Tuinei, M. (eds.), Irolcs oj Covcrnncnt AJninistration in Asia,
Auslialian Goveinmenl Publishing Seivice, Canbeiia.
Heclo, H. (1997), A Covcrnncnt oj Strangcrs, Biookings nslilulion, Washinglon,
D.C.
Hunlinglon, S. P. (1968), Ioitical OrJcr in Changing Socictics, ale \niveisily
kegami, Keiko (1995), Thc Taning oj thc Sanurai. Honoric InJiviJualisn anJ
thc Making oj MoJcrn 1apan, Piincelon \niveisily Piess, Piincelon, N.1.
Kamenka, I. (1989), Burcaucracics, Blackwell, Oxfoid.
Kalz, R. S. and Maii, P. (1994), How Iartics Organisc, Sage, Los Angeles.
(1995), Changing Models of Paily Oiganisalion and Paily Demociacy:
The Imeigence of lhe Cailel Paily,`` Iarty Iolitics 1, pp. 528.
Kellnei, P. and Ld Ciowlhei-Hunl (198O), Thc Civil Scrvants, Macdonald,
London.
Lane, 1. I. (1993), Thc Iublic Scctor, Sage, Los Angeles.
Li|phail, A. (1977), Thc Iolitics oj AcconnoJation, \niveisily of Califoinia
Piess, Beikeley, Calif.
(1984), Dcnocracics, ale \niveisily Piess, New Haven, Conn.
Linz, 1. (199O), The Peiils of Piesidenlialism,`` 1ournal oj Dcnocracy 1(1),
pp. 5969.
Machin, H. and Wiighl, \. (eds.) (1985), 1cononic Iolicy anJ Iolitics unJcr thc
MittcrranJ IrcsiJcncy 19811984, Pinlei, London.
Mainwaiing, S. and Scully, T. R. (eds.) (1995), Iarty Systcns in 1atin Ancrica,
Slanfoid \niveisily Piess, Slanfoid, Calif.
Maisel, L. and Coopei, T. (eds.) (1978), Iolitical Iartics, Sage, Los Angeles.
Peele, G., Bailey, C. 1., and Cain, B. (eds.) (1992), Dcvclopncnts in Ancrican
Iolitics, Macmillan, Basingsloke.
Peleis, B. G. (1995), Thc Iolitics oj Burcaucracy, Longman, While Plains, N..
Ridley, I. and Blondel, 1. (1969), Iublic AJninistration in Irancc, Roulledge,
London.
Schumpelei, 1. (1979), Capitalisn, Socialisn, anJ Dcnocracy, Allen and \nwin,
London.
Sheflei, M. (1994), Iolitical Iartics anJ thc Statc, Piincelon \niveisily Piess,
Piincelon, N.1.
Shugail, M. S. and Caiey, 1. M. (1992), IrcsiJcnts anJ Asscnblics, Cambiidge
Sloan, 1. W. (1984), Iublic Iolicy in 1atin Ancrica, \niveisily of Pillsbuigh
Piess, Pillsbuigh.
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5
Taiwan
Hsin-Huang Michacl Hsiao anJ Chcng Hsiao-shih
nlioduclion
Befoie lhe goveinmenl of lhe Republic of China (ROC) was defealed by
lhe Chinese Communisls and look iefuge in Taiwan in 1949, lhe iuling
paily, lhe Kuominlang (KMT, oi Nalionalisl Paily), was alieady loin
apail by faclional conicls and plagued by iampanl coiiuplion. ls aimy
was disinlegialed and humilialed by lhe debacle in lhe Civil Wai. Iui-
lheimoie, lhe e migie iegime was sliongly iesenled by lhe nalive Tai-
wanese foi lhe biulal and bloody massacie liiggeied by lhe Iebiuaiy 28
ncidenl in 1947.
n economic iespecls, lhe piospecl foi developmenl was dismal as well.
The wai-iidden island was mounlainous and heavily populaled. ls nalu-
ial iesouices weie scaice. Ninely-nine pei cenl of ils oil supply depended
on impoils, foi inslance. n lhe eaily 195Os, lhe goveinmenl even had lo
sel aside moie lhan 5O pei cenl of ils nalional budgel foi defence spend-
ing pei annum lo cope wilh lhe aimed lhieal fiom lhe People`s Republic
of China (PRC).
And yel, Taiwan suivived and lhiove, even lhough il was cul off fiom
ciucial diplomalic lies fiom lhe eaily 197Os. By lhe lale 197Os, il had been
widely iecognized as a miiacle`` by lhe woild. ls economy had giown
iapidly and conlinuously; lhe sociely had been liansfoimed fiom one of
agiiculluie lo one of indusliy, wilh a faiily equal income disliibulion
among diffeienl social classes. This phenomenal economic and social
1O9
success was made possible despile lhe KMT`s long-lasling aulhoiilaiian
iule. These simple and basic facls pose some inliiguing lheoielical ques-
lions. To whal exlenl and in whal ways, if al all, has lhe KMT paily-slale
conliibuled lo Taiwan`s socio-economic developmenl? Was lhe KMT`s
aulhoiilaiian iule meiely coincidenl wilh oi a necessaiy condilion foi
Taiwan`s admiiable socio-economic developmenl? These aie lhe ciilical
queslions lhal lhis chaplei is inlended lo lackle.
We will begin by examining lhe developmenlal liend undei aulhoii-
laiianism belween lhe 195Os and 1986. Taiwan`s social and economic
developmenl since lhe democializalion piocess was foimally slaged in
1987 will lhen be assessed. The impacl of democializalion and lhe con-
sequenlly emeiging paily polilics on posl-democializalion economic
goveinance will also be analyzed.
Socio-economic developmenls in lhe aulhoiilaiian eia
195O1986
Ovcrall Jcvclopncnt pattcrns
Taiwan`s economy has been giowing conlinuously since lhe eaily 195Os.
The gioss nalional pioducl (GNP) iose fiom \S$1.674 billion in 1952 lo
\S$77.296 billion in 1986. Duiing lhis peiiod of lime, lhe annual giowlh
iale of GNP was 9.O pei cenl on aveiage. Pei capila GNP iose fiom
\S$196 in 1952 lo \S$3,993 in 1986 (see lable 5.1).
n leims of ils pioduclion sliucluie, Taiwan`s economy had been
liansfoimed fiom an agiiculluial syslem lo an indusliial syslem. As
cleaily shown in nguies 5.1 and 5.2, lhe iole of agiiculluie in lhe Taiwan
economy began lo be laken ovei by lhe indusliy and seivice seclois aflei
lhe mid-196Os. Ioieign liade, lhe lifeline of Taiwan`s economy, inilially
exhibiled lhe same liack of indusliializalion, bul fiom 1966, iaw and
piocessed agiiculluial pioducls weie oulweighed as a piopoilion of
expoils by indusliial pioducls. n 1952, 52.4 pei cenl of lhe lolal popula-
lion woiked in lhe agiiculluial secloi, bul lhe peicenlage diopped lo 22.1
by 1986 (CIPD 1997, 64).
n leims of owneiship, slale enleipiises played a pivolal iole in Tai-
wan`s indusliializalion duiing lhe 195Os and 196Os. n 1952, slale enlei-
piises accounled foi 57 pei cenl of lolal indusliial pioduclion and 43 pei
cenl of domeslic capilal foimalion, and employed 17 pei cenl of Taiwan`s
civilian employees. The cenlei of giavily giadually shifled lo piivale
enleipiises in lhe 197Os. By lhe eaily 198Os, slale enleipiises conliibuled
less lhan 2O pei cenl of lolal indusliial pioduclion (Hsiao 1995, 81; CIPD
1997, 82). This does nol mean lhal slale enleipiises` inuence on indusliy
11O HSN-H\ANG MCHAIL HSAO AND CHING HSAO-SHH
declined coiiespondingly, howevei. Slialegic seclois, such as pelioleum,
elecliicily, gas, walei, sleel, iailways, shipbuilding, posl and lelecom-
municalions, lobacco and spiiils, and banking and nnance, weie slill
monopolized by lhe slale.
n addilion lo lhe diiecl conliol of slale enleipiises, lhe KMT owned
wholly oi pailly aiound 5O companies, moslly lhiough lwo poweiful and
Table 5.1 Taiwan ecunumic indicaturs, 1952-1996
Iconomic
giowlh iale
al 1991 piices
(pei cenl)
GNP
(\S$ million al
cuiienl piices)
GDP
(\S$ million al
cuiienl piices)
Pei capila
GNP
(\S$)
1952 12.OO 1,674 1,675 196
1955 8.1O 1,928 1,928 2O3
196O 6.3O 1,717 1,718 154
1965 11.1O 2,811 2,816 217
1968 9.2O 4,236 4,248 3O4
1969 9.OO 4,915 4,921 345
197O 11.4O 5,66O 5,67O 389
1971 12.9O 6,589 6,592 443
1972 13.3O 7,9O6 7,9O4 522
1973 12.8O 1O,727 1O,73O 695
1974 1.2O 14,458 14,463 92O
1975 4.9O 15,429 15,517 964
1976 13.9O 18,429 18,624 1,132
1977 1.O2 21,681 21,816 1,3O1
1978 13.6O 26,773 26,836 1,577
1979 8.2O 33,229 33,218 1,92O
198O 7.3O 41,36O 41,418 2,344
1981 6.2O 47,955 48,218 2,669
1982 3.6O 48,55O 48,586 2,653
1983 8.4O 52,5O3 52,421 2,823
1984 1O.6O 59,78O 59,139 3,167
1985 5.OO 63,O97 62,O62 3,297
1986 11.6O 77,299 75,434 3,993
1987 12.7O 1O3,641 1O1,57O 5,298
1988 7.8O 126,233 123,146 6,379
1989 8.2O 152,565 149,141 7,626
199O 5.4O 164,O76 16O,173 8,111
1991 7.6O 183,736 179,37O 8,982
1992 6.8O 216,254 212,15O 1O,47O
1993 6.3O 226,243 222,6O4 1O,852
1994 6.5O 243,934 24O,986 11,597
1995 6.OO 262,978 26O,175 12,396
1996 5.7O 275,144 273,O5O 12,872
Souice: CIPD 1997, 1.
TAWAN 111
piivileged paily-owned inveslmenl nims. These companies weie aclive
in communicalions, peliochemicals, sleel, eleclionics, and nnance and
secuiilies. This beslowed on lhe KMT a sliong hand lo inleivene in eco-
nomic aclivilies.
Anolhei impoilanl business calegoiy is big piivale enleipiises. n 1988,
Taiwan`s lop 1OO business gioups,`` conglomeiales composed of indi-
of domeslic pioduclion
Agiiculluie
ndusliy
Seivices
Iiguie 5.1 The changing pattern uf Taiwan's ecunumic structure, 1951-1996
(Souices: Soong Kuang-yu 1993; CIPD 1996, 2)
Agiiculluie pioducls
Piocessed agiiculluial pioducls
ndusliial pioducls
Iiguie 5.2 Cumpusitiun uf Taiwan's expurts, 1952-1996 (Souice: CIPD 1997,
192; dala foi 195354, 195659, and 196164 aie nol available)
112 HSN-H\ANG MCHAIL HSAO AND CHING HSAO-SHH
vidual 7OO lo 8OO nims, accounled foi 34 pei cenl of lhe lolal GNP, yel
lhey employed only 4.6 pei cenl of lhe laboui foice (Hsiao 1995, 83).
These gioups have heavily concenlialed lheii inveslmenls and business
opeialions in capilal- and lechnology-inlensive indusliies.
A special fealuie chaiacleiizing Taiwan`s pioduclion sliucluie is lhe
laige numbei of small and medium enleipiises, namely lhose wilh luin-
ovei undei \S$1.5 million and lolal assels below \S$4.8 million. n 1961,
lheie weie 178,916 such enleipiises, oi 99.6 pei cenl of all iegisleied
enleipiises (Hsiao 1995, 8384). n 1986, 98.2 pei cenl of 751,273 iegis-
leied enleipiises fell in lhis calegoiy. They conliibuled 66.4 pei cenl of
lhe lolal value of expoils (MSIA 1995, 356, 396; see also lable 5.2).
The small and medium enleipiises display seveial salienl chaiaclei-
islics. Iiisl, mosl of lhem, oi aiound 6O pei cenl of lhe lolal, aie in lhe
commeicial secloi (see lable 5.3). Second, in shaip conliasl lo big enlei-
piises, lhe small and medium enleipiises aie expoil-oiienled and iely on
lhe foimei foi iaw maleiials. Theie exisls a dicholomous oi dual sliucluie
in Taiwan`s pioduclion syslem, wilh lhe big enleipiises pioducing goods
foi inleinal needs and lhe small and medium enleipiises pioducing goods
foi expoil. Thiid, mosl of lhese enleipiises have less lhan 5O employees.
Accoiding lo suiveys fiom 1966 lo 1986, 8O pei cenl of all manufacluiing
unils in Taiwan employed fewei lhan 2O peisons, and 7O pei cenl fewei
lhan 1O (Hsiao 1995, 83). Iouilh, mosl of lhese enleipiises, oi neaily
6O pei cenl of lhe lolal, opeiale wilh independenl capilal: lhal is, mosl
manageis aie also owneis (GO 1996, 835). Iiflh, mosl enleipiises aie
family-cenleied: family lies aie lhe base foi employmenl and nnancial
Table 5.2 Numbers uf medium and small enterprises in Taiwan and their per-
centage uf all enterprises, 1982-1994
All enleipiises Medium and small enleipiises Pei cenl
1982 711,326 7O1,839 98.67
1983 7O6,526 696,438 98.57
1984 731,61O 719,44O 98.37
1985 727,23O 716,224 98.49
1986 751,273 737,35O 98.15
1987 761,553 743,274 97.6O
1988 791,592 773,511 97.72
1989 798,865 778,O42 97.39
199O 818,O61 794,834 97.16
1991 85O,679 825,556 97.O5
1992 9OO,8O1 871,726 96.77
1993 934,588 9O1,768 96.49
1994 969,O94 932,852 96.26
Souice: MSIA 1995, 35657.
TAWAN 113
1
1
4
Table 5.3 Medium and small enterprises in Taiwan, by ecunumic sectur, 1982-1994
(pei cenl)
Agiiculluie,
nshing, mining Manufacluiing
Housing,
building, and
consliucling Commeicial
Tianspoilalion
and communicalion
Social and
piivale seivices Olhei
1982 2.11 17.32 2.64 61.79 4.O8 12.O5 O.O1
1983 2.49 17.35 2.69 61.53 4.3O 11.63 O.O1
1984 3.13 16.82 2.57 61.49 4.89 11.1O O.O1
1985 O.74 16.63 2.61 62.21 5.51 12.3O O.O1
1986 O.75 17.59 2.96 6O.89 6.OO 11.79 O.O1
1987 O.59 19.52 2.97 59.51 6.O1 11.39 O.O2
1988 O.58 19.76 2.97 58.87 6.19 11.62 O.O2
1989 O.59 2O.O3 3.1O 59.3O 4.77 12.19 O.O2
199O O.57 19.53 3.33 59.77 4.51 12.27 O.O2
1991 O.55 18.66 3.83 6O.2O 4.24 12.49 O.O3
1992 O.53 17.9O 4.38 59.96 3.83 13.38 O.O3
1993 O.51 17.16 5.33 59.57 3.53 13.86 O.O4
1994 O.91 16.45 6.O6 58.76 3.45 14.33 O.O4
Souice: MSIA 1995, 35657.
suppoil. And nnally, compaied lo big businesses, lhe small and medium
enleipiises aie less piolecled and suppoiled by lhe goveinmenl.
One olhei mosl cheiished achievemenl is lhal Taiwan has been able lo
mainlain ielalively equal income disliibulion in lhe couise of iapid eco-
nomic giowlh. Simon Kuznels and many olhei economisls suggesled in
lhe 195Os and 196Os lhal as income incieases fiom low levels in a devel-
oping sociely, ils disliibulion musl nisl woisen befoie il can impiove
(Kuo el al. 1981, 1). Taiwan`s expeiience in lhis iegaid is lhe opposile. As
lable 5.4 indicales, lhe dispaiily of income disliibulion decieased in lhe
195Os and iemained faiily slable foi lhiee decades. n addilion lo land
iefoim, lhe exislence of a laige numbei of small nims wilh signincanl
capilal decenlializalion has been one of lhe ma|oi sliucluial ieasons un-
deilying Taiwans ielalively equal income disliibulion (Hsiao 1992d, 21).
Table 5.4 Distributiun uf persunal incume in Taiwan, by huusehuld, 1964-1995
(pei cenl)
Lowesl
nflh
Second
nflh
Thiid
nflh
Iouilh
nflh
Highesl
nflh
Ralio of highesl
nflh`s income lo
lowesl nflh`s
1964 7.7 12.6 16.6 22.O 41.1 5.3
1966 7.9 12.4 16.2 22.O 41.5 5.3
1968 7.8 12.2 16.3 22.3 41.4 5.3
197O 8.4 13.3 17.1 22.5 38.7 4.6
1972 8.6 13.2 17.1 22.5 38.6 4.5
1974 8.8 13.5 17.O 22.1 38.6 4.4
1976 8.9 13.6 17.5 22.7 37.3 4.2
1978 8.9 13.7 17.5 22.7 37.2 4.2
1979 8.6 13.7 17.5 22.7 37.5 4.4
1981 8.8 13.8 17.6 22.8 37.O 4.2
1982 8.7 13.8 17.6 22.7 37.3 4.3
1983 8.6 13.6 17.5 22.7 37.6 4.4
1984 8.5 13.7 17.6 22.8 37.4 4.4
1985 8.4 13.6 17.5 22.9 37.6 4.5
1986 8.3 13.5 17.4 22.7 38.2 4.6
1987 8.1 13.5 17.5 22.8 38.O 4.7
1988 7.9 13.4 17.6 22.9 38.3 4.9
1989 7.7 13.5 17.7 23.1 38.O 4.9
199O 7.5 13.2 17.5 23.2 38.6 5.2
1991 7.8 13.3 17.4 23.O 38.6 5.O
1992 7.4 13.2 17.5 23.2 38.7 5.2
1993 7.1 13.1 17.7 23.4 38.7 5.4
1994 7.3 13.O 17.4 23.2 39.2 5.4
1995 7.3 13.O 17.4 23.4 39.O 5.3
Souice: Kuo el al., 1981, 3435; CIPD 1997, 6162.
TAWAN 115
Whal was lhe naluie of lhe KMT iegime duiing lhis peiiod? Whal kind
of iole did il play in socio-economic developmenl? And, specincally, whal
slialegies and policies did il adopl foi such developmenl?
The KMT had been a Leninisl polilical paily wilh an anli-Communisl
ideology. mmedialely aflei moving lo Taiwan, Chiang Kai-shek pul inlo
effecl a paily iefoim piogiam lo cieale a paily-slale. Almosl all inslilu-
lions, such as lhe goveinmenl, lhe mililaiy, lhe |udicial depailmenls, and
lhe schools, and social foices, such as woikeis, faimeis, inlellecluals,
women, and youlh, weie penelialed and conliolled by lhe Paily (Kung
1995). The Paily`s ideology became lhe nalional ideology, and candidales
in all ofncial examinalions weie iequiied lo be lesled in il. As all lhese
piaclices weie unconslilulional, lhe KMT suspended lhe Conslilulion in
1948 by lhe Tempoiaiy Piovisions Iffeclive duiing lhe Peiiod of Com-
munisl Rebellion, a supplemenl lo lhe conslilulion piomulgaled in lhe
same yeai, and a declaialion of mailial law in 195O. Befoie mailial law
was lifled in 1987, Taiwan was in facl an aulhoiilaiian paily-slale, in
which civil iighls weie suppiessed and no polilical opposilion was
allowed (Cheng 1992; Cheng 1989).
Neveilheless, unlike olhei Leninisl paily-slales, lhe KMT iegime was
nol lolalilaiian. l did nol liy lo conliol socio-economic aclivilies in lheii
enliiely, despile ils unqueslionable dominance in lhis domain. n lhis
iegaid, lhe KMT`s ideology should be laken inlo accounl, especially lhe
Piinciple of Social Welfaie. This piinciple is basically a developmenlal
and capilalisl docliine, allhough il does conlain sliong socialisl elemenls,
such as land iefoim and slale conliol of ceilain enleipiises. n geneial,
howevei, lhe adoplion of a fiee economic syslem lhal paid due iespecl lo
piivale owneiship and maikel mechanisms sel lhe keynole foi Taiwan`s
lalei economic developmenl.
The lessons lhal lhe KMT leained fiom lhe defeal on lhe Chinese
mainland also pailly accounl foi ceilain impoilanl policies il puisued in
lhe 195Os, such as land iefoim and conliol of inalion and piices. Iailuie
lo implemenl land iefoim on lhe mainland was consideied by lhe KMT
lo be a vilal facloi in lhe success of lhe Communisls` peasanl ievolulion.
Iuilheimoie, lhe galloping inalion in lhe lale 194Os made lhe KMT ex-
liemely sensilive lo lhe pioblem of piice conliols.
We now luin lo lhe slialegies implemenled by lhe KMT goveinmenl
in lhe couise of Taiwan`s indusliializalion. Geneially, Taiwan`s indus-
liializalion policy can be divided inlo foui phases: (1) lhe impoil sub-
slilulion phase of lhe 195Os; (2) lhe expoil-oiienled indusliializalion
phase of lhe 196Os; (3) lhe second phase of impoil subslilulion duiing lhe
197Os; and (4) lhe libeializalion and globalizalion phase since lhe eaily
198Os.
Inport substitution inJustriali;ation (ISI) in thc 1950s
Like many newly independenl slales aflei Woild Wai , Taiwan inhei-
iled a colonial economy and a wai-balleied sociely, and faced lhe piob-
lems of food shoilage, populalion piessuie, inalion, budgel dencils, and
shoilage of foieign ieseives. One of lhe KMT`s mosl impoilanl policies
lo cope wilh lhese difncullies was land iefoim, caiiied oul fiom 1949 lo
1953. As menlioned eailiei, lhe loss of lhe mainland piompled lhe KMT
lo implemenl lhis policy in Taiwan. Neveilheless, lhe KMT elile`s lack of
vesled inleiesls in Taiwan`s land and lies wilh landloids was a decisive
facloi conliibuling lo lhe success of lhis iefoim.
No less impoilanl weie lhe measuies laken lo slabilize piices. Duiing
lhe peiiod of lhe Civil Wai (194649), piices iose inilially al an annual
iale of aboul 5OO pei cenl, which lhen soaied lo aboul 3,OOO pei cenl in
lhe nisl half of 1949. n 1une 1949, monelaiy iefoim and olhei slabiliza-
lion policies, such as piefeienlial inleiesl savings deposils, weie imple-
menled. By lhe end of 1951, inalion was effeclively conliolled. Belween
1952 and 196O, lhe annual inciease in piices was bioughl down lo 8.8 pei
cenl (Kuo el al. 1981, 6466).
As landloids weie compelled lo sell lheii excess land, lhey weie com-
pensaled lo lhe exlenl of 7O pei cenl of lhe land piice in land bonds and
3O pei cenl in slock of foui slale-owned enleipiises. By lhis measuie, nol
only was inalion pievenled, bul also lhe landloids weie foiced lo shifl
lheii capilal inlo indusliy, lheieby becoming lhe nisl geneialion of in-
digenous capilalisls (Hsiao 1995, 78). Wilh encouiagemenl and suppoil
fiom lhe goveinmenl as il puisued ils S slialegy, a dynamic expoil
manufacluiing secloi lhus emeiged and would soon oulweigh lhe lexlile
and food piocessing seclois lhal dominaled Taiwan`s indusliy in lhe 195Os.
The piimaiy goals of S weie lo meel domeslic economic needs and lo
build local indusliial capabililies. n addilion lo lhe emeiging Taiwanese
landloids luined capilalisls, lhe slale-owned enleipiises, lhe mainlandei-
owned indusliies, and lhe local enliepieneuis who quickly iesponded lo
lhe slale`s indusliial inilialives weie lhe main benenciaiies of S.
Iinally, \.S. aid also played an impoilanl iole in economic develop-
menl al lhis slage. Befoie 1961, almosl no piivale foieign capilal owed
inlo Taiwan. Neaily half of lhe inveslmenl was nnanced by lhe \niled
Slales (Kuo el al. 1981, 29). The lolal amounl of \.S. aid fiom 1951 lo
1968 was \S$1.547 billion (CIPD 1997, 225).
1xport-oricntcJ inJustriali;ation (1OI) in thc 1960s
Pailly pushed foiwaid by domeslic maikel consliainls and exleinal \.S.
piessuie (iesulling fiom iecession and a woisening balance of paymenls
TAWAN 117
in lhe \.S. economy) and pailly induced by lhe expanding woild maikel,
Taiwan`s goveinmenl made a slialegic shifl fiom S lo IO. The pii-
maiy ob|eclive of IO was lo piomole expoils by developing laboi-
inlensive indusliies. n ieliospecl, expoil expansion was indeed a decisive
facloi foi lhe lake-off of lhe Taiwan economy. n leims of peicenlage of
GDP, indusliial seclois slailed lo oulweigh agiiculluial seclois in 1963
(see nguie 5.1).
Iconomic policies favoiing expoil expansion weie devised in lhe lale
195Os and implemenled in lhe eaily 196Os. n lhe Thiid Ioui-eai Plan,
an oplimislic giowlh laigel of 8 pei cenl was sel foi lhe peiiod 196164.
To achieve lhis goal, vaiious measuies weie laken lo iefoim lhe sliucluie
of indusliy. Mosl signincanl of all was lhe Nineleen-Poinl Iinancial Re-
foim. ncluded in lhe iefoim package weie devaluing of lhe cuiiency lo
make expoils moie compelilive, ielaxing conliol ovei foieign liade,
allowing lhe enliy of foieign diiecl inveslmenl lo sel up expoil manu-
facluiing enleipiises, and inilialing a single exchange iale along wilh
eliminaling impoil iesliiclions. Puisuanl lo lhese iefoim measuies, lhe
Slalule foi Incouiagemenl of nveslmenl was enacled lo offei giealei
lax ieduclions lo slimulale piivale inveslmenl and expoils. A lypical case
was lhe eslablishmenl of lhe Kaohsiung Ixpoil Piocessing Zone wilhin
which no dulies weie imposed on impoils (Hsiao 1995, 7879; Kuo el al.
1981, 7377).
n leims of sliucluial change, lhe IO slialegy diamalically expanded
lhe small and medium businesses and ciealed a dicholomous`` oi dual
maikel sliucluie.`` Thal is, mosl iising small and medium businesses weie
expoil-oiienled, while lhe domeslic maikel was dominaled by big busi-
ness gioups and slale-owned enleipiises. This dualizalion piocess can be
liaced lo lhe S slage. \ndei lhe goveinmenl`s pioleclionisl policy and
polilical maneuveis, lhe domeslic maikel had been monopolized oi oli-
gopolized by lhe big piivale and slale-owned enleipiises by lhe end of
195Os. The newly emeiging small and medium businesses could only luin
lo lhe expanding woild maikel. On lhe olhei hand, lhey weie pulled in
lhis diieclion, especially lo lhe \niled Slales, by lhe demand foi laboi-
inlensive and low-lech pioducls, such as lexliles, gaimenls, and shoes,
fiom lhe indusliialized maikel.
Thc scconJ phasc oj ISI in thc 1970s
n lhe eaily 197Os, faced wilh lhe loss of ils seal in lhe \niled Nalions,
lhe devalualion of lhe \.S. dollai, and lhe oil ciisis, Taiwan expeiienced
a seiious selback in economic peifoimance. The diplomalic selback led lo
a legilimacy ciisis foi lhe KMT iegime, and lhe diop in business conn-
dence and lhe oulow of capilal bioughl aboul a lempoiaiy hall lo ex-
poil dynamism. Piices, which had been ielalively slable foi lwo decades,
abiuplly iose by 22.9 pei cenl in 1973 and 4O.6 pei cenl in 1974 (CIPD
1997, 1). To deal wilh lhese difncullies, some slabilizalion measuies, such
as a high inleiesl iale policy, a one-shol ad|uslmenl of oil piices, and lax
ieduclion, weie implemenled. Moie impoilanlly, lhe goveinmenl puisued
a second phase of S slialegy lo iesliucluie lhe economy by developing
eneigy-inlensive and capilal-inlensive indusliies and slaging laige-scale
infiasliucluie pio|ecls, known as lhe Gieal Ten Consliuclions.``
n lhe couise of lhis phase, slale enleipiises incieased lheii signincance
as leadeis of domeslic inveslmenl. Big piivale businesses also ieceived a
gieal boosl fiom lhe slale and foimed business gioups,`` lhe Taiwanese
veision of conglomeiales. Small and medium businesses, on lhe olhei
hand, also suivived lhe woild eneigy ciisis and iecession and weie ie-
eneigized foi fuilhei giowlh and developmenl fiom lhe lale 197Os.
1ibcrali;ation anJ globali;ation in thc 1980s
\ndei piessuie fiom ma|oi foieign liade pailneis, especially lhe \niled
Slales, lo impiove lhe liade balance, libeializalion was acceleialed in lhe
198Os. The nominal iale of pioleclion decieased signincanlly in lhis pe-
iiod, and lhe aveiage laiiff iale was diamalically bioughl down. Iinancial
deiegulalion was anolhei poinl of emphasis in goveinmenl policy. Aflei
a decade of piepaialion, lhe Banking Law was amended in 1989. All
conliols on bolh deposil and lending inleiesl iales weie iemoved, and
foieign bank bianches weie peimilled lo accepl long-leim saving depos-
ils. The eslablishmenl of new piivale banks was also allowed. Iuilhei-
moie, a signincanl slep in lhe libeializalion of capilal movemenls was
laken in 1987. Ioieign exchange conliols weie laigely ielaxed lo allow
diiecl liansfeis of capilal by lhe non-bank piivale secloi.
All lhese effoils weie suppoiled by lhe Slalule foi \pgiading ndus-
liies of Decembei 199O (Howe 1996, 118485). Aflei a decade of liial
and eiioi, lhe success of lhese effoils was demonslialed by lhe high
compeliliveness of Taiwan`s infoimalion lechnology indusliy, which
yielded a lolal pioduclion value of \S$21.3 billion, and made Taiwan lhe
woild`s lhiid laigesl compulei haidwaie suppliei in 1995 (GO 1997,
162).
Based on lhe above analysis, we may conclude lhal lhe slale played a
pivolal iole in Taiwan`s socio-economic developmenl duiing lhe peiiod
of lhe KMT`s aulhoiilaiian iule. The KMT iegime was cleaily a sliong
slale,`` dominaled by a Leninisl-slyle polilical paily wilh a basically capi-
lalisl ideology. The slale was piedominanl and inleivenlionisl in lhe
socio-economic aiena, and yel il was developmenl-oiienled and non-
maikel-suppiessive; moieovei, il adopled effeclive slialegies and policies
TAWAN 119
lo piomole socio-economic developmenl. n spile of lhe KMT`s pio-
longed aulhoiilaiian iule, lheiefoie, Taiwan`s sociely and economy
lhiove. The KMT`s iole should nol be oveislaled, howevei. By iecog-
nizing il, we do nol mean lo suggesl lhal aulhoiilaiian iule is a necessaiy
condilion foi socio-economic developmenl. Obviously, Taiwan`s iegime
was an exceplion among lhe numeious aulhoiilaiian iegimes lhal failed
lo piomole developmenl. Iuilheimoie, lhe aigumenl foi lhe necessily of
aulhoiilaiian iule is also dispioved by lhe facl lhal Taiwan`s moie iecenl
socio-economic developmenl is associaled wilh democializalion.
Democializalion and lhe changing polilical economy
Ovcrall Jcnocrati;ation trcnJs
The lifling of mailial law in 1uly 1987 was a landmaik of democializalion
foi Taiwan. Civil iighls such as lhe fieedom of speech and publicalion
and lhe fieedom of assembly and associalion, which had been suspended
foi 38 yeais, weie iesloied. Wilh lhe iise of paily polilics and a seiies of
conslilulional iefoims, lhe aulhoiilaiian polilical syslem of Taiwan was
liansfoimed inlo a demociacy.
Belween lhe lifling of mailial law in 1uly 1987 and lhe dealh of Chiang
Ching-kuo in 1anuaiy 1988, Taiwan`s polilics expeiienced a democialic
opening. Wilh lhe Nalional Secuiily Law and lhe Civic Oiganizalion
Law, enacled in 1987 and 1989 iespeclively, howevei, lhe KMT did
manage lo limil lhe scope of libeializalion. The democialic liansilion
since lhe lale 198Os has fealuied seveial impoilanl evenls, including Lee
Teng-hui`s eleclion as KMT chaiiman in 1uly 1988; his ieeleclion lo lhe
piesidency in Maich 199O; lhe Council of Giand 1uslice`s iuling in 1une
199O ending lhe lenuie of long-leim pailiamenlaiians as of Decembei
1991 and lhe iesulling eleclions lo lhe lhiee ieoiganized iepiesenlalive
bodies in 1991 and 1992; and lhe nisl opposilion vicloiies evei in lhe
Decembei 1994 eleclions foi lhe mayois of Taipei and Kaohsiung and
lhe goveinoi of Taiwan Piovince. Duiing lhis peiiod, seveial signincanl
democialic inslilulional iefoims weie launched. n pailiculai, lhe anli-
democialic Tempoiaiy Piovisions weie nnally iepealed, lhe Peiiod of
Nalional Mobilizalion foi Suppiession of lhe Communisl Rebellion`` was
ended in May 199O, and a conslilulional amendmenl was appioved in
May 1992. All of lhese maiked a bieak fiom undemocialic exliacon-
slilulional polilical sliucluies and a iesloialion of conslilulional iighls
foi lhe nalion. Though lhe conslilulional amendmenl was fai fiom being
eilhei complele oi salisfacloiy, wilh ievisions iesliicled piimaiily lo pio-
ceduial ialhei lhan subslanlive issues, lhe slale was slowly laking sleps
lowaid democialic ieinslilulionalizalion in oidei lo addiess conlinuing
piessuies fiom lhe opposilions.
Sludenls, univeisily piofessois, libeial |ouinalisls, and legal pio-
fessionals had all |oined logelhei in lhe pio-demociacy movemenl, and
lhese alliances ieinfoiced lheii demands foi conslilulional iefoim, fiee-
dom of speech, sliucluial changes in lhe pailiamenlaiy body, a cleai
dennilion of lhe powei of lhe execulive, a guaianlee of civilian demo-
cialic goveinmenl wilhoul mililaiy inleifeience, and suppoil foi lhe de-
velopmenl of paily polilics. n olhei woids, undei lhe leadeiship of
inlellecluals and piofessionals fiom lhe new middle class, Taiwan`s civil
sociely has indeed laken lhe eslablishmenl of demociacy as ils piimaiy
goal foi lhe 199Os. The diiecl eleclions foi lhe lwo mayoial posilions and
lhe piovincial goveinoiship signined a ma|oi slep lowaid compleling lhe
liansilion lo pioceduial demociacy. Polilical eliles and lhe lhiee ma|oi
polilical pailies lhen all engaged in inlensive polilical negolialions ovei
lhe Piesidenlial Ileclion and Recall Bill in lhe Legislalive uan. On 2O
1uly 1995, lhe impoilanl 1O7-clause bill was nnally appioved; il ofncially
declaied lhal a piesidenlial eleclion would be held on 23 Maich 1996.
The Maich 1996 piesidenlial eleclion was seen by many in lhe middle
class nol only as an oppoilunily lo exeicise lheii iighl as cilizens lo elecl
lheii own piesidenl foi lhe nisl lime in Taiwan`s hisloiy, bul also as a
signincanl bieak wilh lhe pasl. Many of lhem believed lhal as long as lhe
1996 piesidenlial eleclion was caiiied oul in a peaceful and democialic
mannei, iegaidless of ils oulcome, Taiwan was bound lo begin a phase of
democialic consolidalion. Despile China`s lhiealening missile lesls in lhe
midsl of lhe elecloial campaign, lhe Taiwanese people couiageously
pailicipaled in lheii nisl diiecl, democialic piesidenlial eleclion.
Constitutional structurc anJ clcctoral systcn
As menlioned eailiei, lhe 1947 Conslilulion had nol been fully imple-
menled befoie 1987, due lo lhe iesliiclions of lhe Tempoiaiy Piovisions
and mailial law. Aflei lhese obslacles weie iemoved, lhe Conslilulion
was ievamped lo cieale a woikable democialic oidei. Thiee iounds of
conslilulional amendmenls look place in 1991, 1994, and 1997 iespec-
lively. The amendmenls of lhe nisl iound weie designed lo ieecl lhe
facl lhal Taiwan and lhe Chinese mainland aie goveined by lwo sepaiale
polilical enlilies. They also piovided lhe legal basis foi lhe eleclion of lhe
complelely new Nalional Assembly and Legislalive uan. The amend-
menls of lhe second iound laid lhe gioundwoik foi lhe populai eleclion
of lhe piesidenl and lhe vice-piesidenl of lhe Republic and liansfoimed
lhe Conliol uan (an oveisighl body) fiom a pailiamenlaiy body lo a
quasi-|udicial oigan.
TAWAN 121
Laslly, lhe amendmenls of lhe lhiid iound iesliucluied lhe ielalion-
ships among lhe piesidenl, lhe Ixeculive uan, and lhe Legislalive
uan. The Legislalive uan has lhe powei lo pass a no-conndence vole
againsl lhe piemiei (i.e., lhe piesidenl of lhe Ixeculive uan), while lhe
piesidenl of lhe Republic has lhe powei lo dissolve lhe Legislalive uan.
On lhe olhei hand, lhe piemiei is lo be diieclly appoinled by lhe piesi-
denl of lhe Republic, and lhe consenl of lhe Legislalive uan is no longei
needed. Iuilheimoie, undei lhis lalesl ievision, lhe Conliol uan is
depiived of ils powei lo impeach lhe piesidenl of lhe Republic, and lhe
piovincial goveinmenl is lo be slieamlined and lhe populai eleclions
of lhe goveinoi and membeis of lhe piovincial council aie suspended.
Despile some iemaining aws, lhe ievised Conslilulion has piovided
a commonly acceplable giound foi consliucling a democialic oidei. The
iesliucluiing piocess has been peaceful and has laken place al low social
cosl.
Peifecling lhe elecloial syslem is anolhei impoilanl dimension of lhe
democialic liansilion in Taiwan. n facl, lhe democializalion piocess is in
pail diiven by lhe local eleclions lhal have been conlinuously and iegu-
laily held since lhe eaily 195Os. Local eleclions piovided a democialic
seed and bioughl lhe elhnic Taiwanese inlo lhe polilical syslem. n lhe
197Os, diiecl eleclions weie pailly exlended lo lhe nalional level, i.e., lhe
supplemenlaiy eleclions foi lhe Nalional Assembly and lhe Legislalive
uan. The elecloial space was complelely opened up duiing lhe 199Os by
lhe legislalive eleclion of 1992, lhe gubeinaloiial eleclion of 1994, and lhe
piesidenlial eleclion of 1996. The laws peilaining lo eleclion and iecall
had been oveihauled seveial limes in lhe lale 198Os. The campaign iules
weie signincanlly ielaxed and lhe mass media became lolally fiee. Al-
lhough lhe eleclions have slill been heavily polluled by biibeiy, faiiness
has no longei been a ma|oi pioblem.
Iounded in 198O, lhe Cenlial Ileclion Commission is iesponsible foi
holding and supeivising nalional and local eleclions. To guaianlee ils
impailialily, a law iules lhal commissioneis fiom any single polilical paily
shall nol conslilule moie lhan lwo-nflhs of lhe whole commission. Ioi lhe
eleclion of membeis of bolh lhe nalional and local iepiesenlalive bodies,
a peculiai elecloial syslem, dubbed lhe single non-liansfeiable vole
(SNT\), is employed. Noimally, seveial iepiesenlalives aie elecled fiom
a single consliluency which is demaicaled essenlially by exisling admin-
islialive boundaiies. n a given consliluency, each volei casls only one
vole, and lhe seveial leading candidales gel elecled. As some scholais
have poinled oul, lhis syslem cieales inliapaily compelilion and ieduces
lhe ulilily of paily labels (Tien and Cheng 1997, 14). Since lhe Nalional
Assembly eleclion of 1991 and lhe Legislalive uan eleclion of 1992, a
numbei of seals have been ieseived foi a nalional consliluency and lhe
oveiseas Chinese communilies. These seals aie allocaled by piopoilional
iepiesenlalion (PR). n geneial, bolh lhe SNT\ and lhe PR syslems
benenl lhe smallei pailies, foi as long as lhey win a ceilain numbei of
voles, lhey aie able lo secuie al leasl a few seals. Bul in eleclions foi
adminislialive ofnces, lhe silualion is quile diffeienl. Noimally, only lhe
lwo laigesl pailies emeige vicloiious in lhese single-seal conlesls, and
lhiid pailies aie veiy much al a disadvanlage (GO 1998, 1O89).
1ncrging conjrontational party politics
As of Augusl 1997, 84 polilical pailies have ofncially iegisleied wilh lhe
Minisliy of lhe nleiioi (GO1998, 1O9). Among lhem, only foui, lhe KMT,
lhe Democialic Piogiessive Paily (DPP), lhe New Paily (NP) and lhe
Taiwan ndependence Paily (TAP) aie polilically aclive and elecloially
inuenlial, howevei. Geneially speaking, lhe KMT is slill dominanl in
lhis newly emeiging paily syslem. l has been able lo win ovei 5O pei cenl
of lhe elecloial vole in vaiious nalional and local eleclions. The DPP has
been lhe laigesl opposilion paily evei since ils ofncial eslablishmenl in
Seplembei 1986 when mailial law was slill in effecl. l noimally gains
aiound 35 pei cenl of lhe lolal voles in eleclions. The NP, a splinlei
gioup of lhe KMT, became lhe lhiid laigesl polilical paily in 1993. l has
ieceived aiound 1O pei cenl of lhe elecloial voles in iecenl eleclions (see
lables 5.5, 5.6, and 5.7). The TAP, a splinlei gioup of lhe DPP, came
onlo lhe polilical scene in Decembei 1996. l has nol yel been lesled in
laige and signincanl eleclions.
The ma|oi diffeience chaiacleiizing lhese pailies is polilical, allhough
elhnic cleavage and public policies aie also involved. To be oi nol lo
be independenl`` has long been lhe mosl conlioveisial polilical issue in
Taiwan polilics, in lhe face of lhe unincalion piessuie fiom China evei
since lhe lale 197Os. This issue was foibidden lo be discussed duiing lhe
aulhoiilaiian peiiod, bul as democializalion slailed, il soon became lhe
single mosl impoilanl basis foi paily foimalion, iealignmenl, and conicl.
n lhe 198Os, il was holly conlesled belween lhe KMT and lhe DPP. n
lhe eaily 199Os, il liiggeied seveie inliapaily conicls wilhin lhe KMT
and nnally led lo a minoi splil and lhe eslablishmenl of lhe NP. On
lhe olhei hand, in Decembei 1996, dissalisned wilh a soflening of lhe
DPP`s slance of puisuing Taiwan independence, a gioup of DPP mem-
beis decided lo oiganize ils own paily, lhe TAP. On lhe independence-
unincalion polilical speclium, lhe NP is al lhe fai iighl, followed by lhe
KMT and lhe DPP, wilh lhe TAP al lhe fai lefl. This means lhal lheie is
a liend of conveigence belween lhe iuling KMT and lhe laigesl opposi-
lion paily, lhe DPP. While lhe KMT is claiming lo look foi condilional``
unincalion wilh China in lhe fai fuluie and lhe DPP is claiming lo seaich
TAWAN 123
Table 5.5 Distributiun uf the pupular vute and seats in Taiwan electiuns, 1991-
1996
KMT DPP New Paily ndependenl
1991 Nalional Assembly Ileclion
Populai vole (pei cenl) 71.17 23.94 n.a. 4.89
Seals 254 66 n.a. 5
Seals (pei cenl) 78.2 2O.3 n.a. 1.5
1992 Legislalive uan Ileclion
Populai vole (pei cenl) 52.51 3O.79 n.a. 16.7O1
Seals 1O1 51 n.a. 9
Seals (pei cenl) 62.7 31.7 n.a. 5.6
1995 Legislalive uan Ileclion
Populai vole (pei cenl) 46.O6 33.17 12.95 7.82
Seals 852 54 21 4
Seals (pei cenl) 51.8 32.9 12.8 2.4
1996 Nalional Assembly Ileclion
Populai vole (pei cenl) 49.68 29.85 13.67 6.8O
Seals 183 99 46 6
Seals (pei cenl) 54.8 29.6 13.8 1.8
Souice: Tien and Chu 1996, 1158.
1 ncludes voles foi a laige numbei of KMT candidales who enleied lhe iace
wilhoul paily endoisemenl, and candidales fiom small pailies such as lhe Social-
isl Democials.
2 Two monlhs lalei, lhe KMT expelled one membei foi his defeclion in lhe
eleclion foi speakei.
Table 5.6 Distributiun uf the pupular vute in the 1994 Taiwan electiuns
(pei cenl)
Ixeculive ofnces
Taiwan aiea
aggiegale
52.O5 39.42 7.7O O.83
Goveinoi of Taiwan 56.22 38.72 4.31 O.75
Mayoi of Taipei 25.89 43.67 3O.17 O.28
Mayoi of Kaohsiung 54.46 39.29 3.45 2.8O
Repiesenlalive ofnces
Taiwan aiea
aggiegale
49.16 31.71 6.O9 13.O4
Piovincial assembly 51.O3 32.54 3.74 12.69
Taipei cily council 39.48 3O.41 2O.83 9.28
Kaohsiung cily council 46.28 24.85 4.82 24.O6
foi condilional`` independence soon, bolh pailies shaie lhe same posi-
lions in mainlaining lhe slalus quo and aclively piomoling Taiwan`s
inleinalional slalus.
n leims of elhnic composilion, mosl DPP and TAP key membeis and
lheii coie suppoileis aie Taiwanese (lhal is, lhose who emigialed lo
Taiwan fiom lhe soulheasl coasl of lhe Chinese mainland befoie 1949).
n shaip conliasl, mosl NP membeis aie mainlandeis (lhal is, lhose who
came lo Taiwan aflei lhe Civil Wai) and lheii descendanls. The KMT
claims lo have lwo million membeis, aboul 8O pei cenl of lhem Tai-
wanese, while lhe mainlandeis accounl foi less lhan 2O pei cenl. This
means lhal lhe e migie KMT has been indigenized in leims of lhe compo-
silion of ils social base.
ndigenizalion oi Taiwanizalion of lhe KMT was inilialed by Piesidenl
Chiang Ching-kuo and compleled by Piesidenl Lee Teng-hui. As Chiang
became a poweiful polilical nguie in lhe 197Os, he began lo ieciuil
Taiwanese lechnocials and local polilicians lo some impoilanl posilions
in lhe paily and lhe goveinmenl. Neveilheless, by 1anuaiy 1988 when
Chiang died, polilical powei in lhe KMT and lhe slale iemained pie-
dominanlly in lhe hands of mainlandeis. The complelion of lhe KMT`s
Taiwanizalion came seveial yeais aflei Piesidenl Lee`s succession. Since
Lee is a nalive Taiwanese and did nol have a langible powei base of his
own, he was challenged on all sides by poweiful old guaid mainlandeis
in lhe goveinmenl, lhe paily, and lhe mililaiy. Aflei a seiies of powei
sliuggles wilhin lhe paily, Lee successfully foiced some of his obslinale
opponenls oul of powei, and maiginalized some of lhose who iefused lo
leave. Thiough lhis piocess, lhe KMT was also liansfoimed fiom an au-
Table 5.7 Distributiun uf the pupular vute in the 1996 Taiwan presidential
electiun
(pei cenl)
Lee-Lien Peng-Hsieh Lin-Hau1 Cheng-Wang
Oveiall 54.OO 21.13 14.9O 9.98
Taipei Cily 38.9O 24.34 24.87 11.89
Taiwan Piovince 56.76 2O.13 13.42 9.68
Kaohsiung Cily 5O.62 27.32 12.77 9.29
Kinmen-Malsu 41.31 1.59 3O.64 26.45
1 Lin-Hau was nol lhe New Paily`s own lickel, bul an independenl lickel lhal il
endoised.
TAWAN 125
lhoiilaiian paily wilh a ievolulionaiy heiilage lo a moie oi less demo-
cialic paily wilh a sliong indigenous chaiaclei. Among olhei faclois,
such as lhe legilimacy lhal lhe KMT gained fiom ils pievious peifoi-
mance in socio-economic developmenl, indigenizalion is decisive in con-
liibuling lo lhe suivival of lhe KMT iegime even undei lhe sliong pies-
suie of democializalion in Taiwan.
As noled eailiei, lhe KMT and lhe DPP have been moving lowaid
conveigence in iecenl yeais. The KMT`s indigenizalion has also con-
liibuled subslanlially lo lhis. l helped lo ieduce lhe anlagonism belween
lhe lwo pailies and lo foslei a heallhiei enviionmenl foi paily polilics.
To consolidale his powei undei lhe KMT and lo puisue fuilhei demo-
cialic ieinslilulionalizalion, Piesidenl Lee look many effeclive measuies
lo gain lhe suppoil of DPP polilical nguies. Polilical dissidenls weie
ieleased fiom |ails, and exiles weie allowed lo come home. The sliingenl
Ailicle 1OO of lhe Ciiminal Code on lieason and sedilion was abolished
so lhal people would no longei be feaiful aboul advocaling Taiwan in-
dependence. The deep iesenlmenl caused by lhe Iebiuaiy 28 ncidenl
was also allevialed lhiough bolh symbolic and maleiial means. Moie
impoilanlly, Piesidenl Lee has adopled many impoilanl policies lhal
weie nisl advocaled by lhe DPP, nolably lhe sepaialion of lhe mililaiy
fiom lhe KMT, lhe effoil lo ie|oin lhe \niled Nalions, lhe diiecl populai
eleclion of lhe piesidenl by lhe people, and welfaie slale`` piogiammes
such as univeisal heallh insuiance, subsidized housing, and slale-nnanced
welfaie piovisions foi lhe eldeily.
This cullivaled a widespiead pio-Lee senlimenl among lhe DPP mem-
beis known as lhe Lee Teng-hui Complex,`` which DPP leadeis nnd il
haid lo deal wilh. On lhe olhei hand, lhe sliong anli-Lee senlimenls of
lhe NP suppoileis weie subsiding, especially aflei China launched sev-
eial iounds of mililaiy exeicises lo piolesl Lee`s unofncial visil lo lhe
\niled Slales and lo dissuade Taiwan`s people fiom voling foi Lee in lhe
nisl diiecl piesidenlial eleclion in Maich 1996. Iacing lhe same difn-
cullies in losing polilical leveiage, somewhal iionically, lhe lwo ideologi-
cally anlagonislic pailies seaiched foi ieconcilialion and alliance in mid-
1996. Theii common appeal was lhe assaull on lhe KMT`s piaclice of
vole-buying and ils conneclion wilh oiganized ciime, legacies of clienlel-
ism in KMT-afnlialed local polilical faclions. Neveilheless, lhe fiagile
coalilion soon bioke apail.
All lhis does nol mean lhal lhe cuiienl syslem of one-paily dominance
will lasl. l only means lhal lhe KMT`s indigenizalion has exeiled a pio-
found impacl on bolh lhe KMT ilself and paily polilics in Taiwan. n
lhe piocess, lhe KMT has also shown giealei exibilily and adaplabilily
lhan befoie, anolhei impoilanl facloi conliibuling lo ils conlinuing
dominance.
Rising economic goveinance issues undei democializalion
Thc Taiwan-China ccononic ncxus anJ its political ranications
n lhe yeais following lhe lifling of mailial law, Taiwan`s inveslmenl
enviionmenl deleiioialed iapidly. As lhe KMT goveinmenl no longei
en|oyed aibiliaiy powei, lheie appeaied sliong and mililanl enviion-
menlal, laboi, and consumei movemenls, which had long been sup-
piessed undei aulhoiilaiian iule. Social ciimes and speculalion in money
and land weie iampanl, while enliepieneuis weie in diie need of laboi
and land. Many small and medium businesses weie lhus foiced lo shifl
lheii inveslmenl abioad, especially lo Soulheasl Asian counliies. As
lable 5.8 shows, exleinal inveslmenl in lhese counliies giew iapidly and
ieached a peak in 1991.
This wave of inveslmenl was lhen suipassed by inveslmenl in China. n
1987, Piesidenl Chiang Ching-kuo decided lo allow mainlandeis who
had ieluined lo lhe mainland lo visil lheii ielalives in Taiwan. This
opened a new page in lhe inleiaclion belween lhe lwo sides of lhe
Taiwan Sliails aflei 48 yeais of sepaialion. Mulual liade and inveslmenl
lhiough Hong Kong have incieased diamalically since lhen. Accoiding lo
an ofncial eslimale, mulual liade incieased ovei lenfold fiom 1987 lo
1994, oi fiom \S$1.5 billion lo \S$17.9 billion (GO 1996, 14O91O).
China has become lhe second laigesl liade pailnei of Taiwan behind lhe
\niled Slales. A woiiy lhus looms laige foi Taiwan: liade dependence
on China is shaiply iising. Appioximalely 1O.5 pei cenl of Taiwan`s 1995
liade was wilh China, 4.4 pei cenl moie lhan in lhe pievious yeai. Ixpoil
dependency slood al 17.4 pei cenl and impoil dependency al 3 pei cenl
(GO 1997, 159).
Piivale Taiwanese inveslmenl in China also suiged. Accoiding lo
Taiwan`s ofncial slalislics, inveslmenl in China fiom 1991 lo 1996 lolalled
\S$6.87 billion (see lable 5.8). The aclual nguie was much highei, be-
cause many businessmen did nol comply wilh lhe iequiiemenl of lhe
goveinmenl lo iegislei and lheieby lo gel peimission foi lheii invesl-
menls. This is ieecled in China`s ofncial eslimale, accoiding lo which
lolal inveslmenl fiom Taiwan had ieached ovei \S$27 billion by 1995
(GO 1996, 141O).
As nguie 5.3 shows, lhe nisl peak of Taiwanese inveslmenl in China
came in 1993; duiing lhal yeai lhe amounl ieached \S$3.17 billion, oi
65.6 pei cenl of lolal exleinal inveslmenl in lhe same yeai, accoiding lo
Taiwan`s ofncial iecoid. (The Chinese ofncial nguie foi lhe coiiespond-
ing yeai was \S$9.97 billion.) Alaimed by lhe incieasing dependency of
Taiwan`s economy on China, lhe KMT goveinmenl foimulaled a so-
called Soulhwaid nveslmenl Policy`` in lale 1993 lo piomole invesl-
TAWAN 127
1
2
8
Table 5.8 Taiwan's uutward investment in the PRC and the Suutheast Asian cuuntries, 1987-1996
ndividual counliies
Tolal
oulwaid
invesl-
menl
nvesl-
menl
in lhe
Soulh-
easl
Asian
counliies
Pei cenl
of lolal
nvesl-
menl in
lhe PRC1
Pei cenl
of lolal Singapoie Philippines ndonesia Thailand Malaysia \ielnam2
1987 1O2,751 28,874 28.1O 14,O87 2,64O 95O 5,366 5,831
1988 218,736 69,3OO 31.68 16,571 36,212 1,923 11,886 2,7O8
1989 93O,986 347,926 37.37 71,O53 66,312 311 51,6O4 158,646
199O 1,552,2O6 592,74O 38.19 72,98O 123,6O7 61,871 149,397 184,885
1991 1,83O,188 781,O47 42.68 174,158 9.52 73,811 1,315 16O,341 86,43O 442,O11 17,139
1992 1,134,251 487,952 43.O2 246,992 21.78 187,616 1,219 39,93O 83,293 155,727 2O,167
1993 4,829,346 427,173 8.85 3,168,411 65.61 63,OO3 6,536 25,531 1O9,165 64,542 158,396
1994 2,578,973 471,671 18.29 962,2O9 37.31 174,672 9,6OO 2O,571 57,323 1O1,127 1O8,378
1995 2,449,591 369,473 15.O8 1,O92,713 44.61 75,O24 35,724 32,O67 51,21O 67,3O2 1O8,146
1996 3,394,645 593,251 17.48 1,229,241 36.21 17O,961 74,252 82,612 71,413 93,534 1OO,479
Souice: C-MOIA 1997, 23, 4142.
1 Dala on inveslmenl in lhe PRC befoie 1991 aie nol available.
2 Dala on inveslmenl in \ielnam befoie 1991 aie nol available.
1
2
9
Iiguie 5.3 Patterns uf Taiwan's uutward investment, 1987-1990 (Souices: See lable 5.8. Soulheasl Asian counliies`` aie Singa-
poie, lhe Philippines, ndonesia, Thailand, Malaysia, and \ielnam; dala foi \ielnam 19879O and lhe PRC befoie 1991 aie nol
available)
menl in Soulheasl Asian counliies, which had been slackening since 1991,
and lo discouiage lhe loo iapid expansion of inveslmenl in China. To
implemenl lhis policy, goveinmenl ofncials fiom Piesidenl Lee down-
waid inlensively visiled Soulheasl Asian counliies in eaily 1994. They
weie accompanied by a laige gioup of lop decision makeis in slale-
owned and KMT-owned enleipiises and by leading piivale businessmen.
The ialionale undeilying lhis policy is bolh economic and polilical. ls
nisl ob|eclive is lo make Taiwan an inleinalional communicalions and
lianspoilalion node, oi so-called lhe Asia-Pacinc Regional Opeialions
Cenlei,`` laking lhe place of Hong Kong aflei ils ieluin lo China in 1997.
The second ob|eclive is lo piomole diplomalic ielalions wilh Soulheasl
Asian counliies lhiough economic means. Thiid and mosl impoilanlly,
lhis policy is inlended lo diveil inveslmenl fiom China, and lheieby lo
ieduce lhe polilical and economic iisks of oveidependence (Chen 1994;
Ku 1994). Taiwan`s anxiely ovei lhe unslable ielalions belween lhe lwo
sides of lhe Sliails deepened aflei mid-1995, as China launched seveial
iounds of mililaiy exeicises neai Taiwan in lhe aulumn of 1995 and lhe
spiing of 1996. On lhis accounl, soon aflei his ieeleclion Piesidenl Lee
publicly called foi a slowdown in inveslmenl in China and successfully
peisuaded some of lhe leadeis of laige piivale business gioups, nolably
Wang ong-ching, piesidenl of lhe Ioimosa Plaslics Coipoialion, lo
suspend lheii inveslmenl pio|ecls. n ieluin foi Wang`s co-opeialion, in
Oclobei 1997 Piesidenl Lee beslowed on him a medal of honoi and
piomised lo impiove lhe domeslic inveslmenl enviionmenl and piomole
lhe efnciency of lhe buieauciacy. On lhe olhei hand, lhe goveinmenl is
lighlening ils conliol of inveslmenl in China by seiiously implemenling
lhe Acl on lhe Relalions of People acioss lhe Taiwan Sliails. Those who
invesl in China beyond lhe ofncial maximum amounl of money wilhoul
iegislialion aie liable lo seiious punishmenl. n Seplembei 1997, ovei
8,5OO applicalions weie nled foi ieliospeclive iegislialion, involving a
lolal of ovei \S$3.6 billion.
The policy of piomoling inveslmenl in Soulheasl Asian counliies and
discouiaging inveslmenl in China seems lo be woiking lo some exlenl, as
nguie 5.3 suggesls. Neveilheless, ils effecliveness iemains unceilain.
Challenges lo lhis policy fiom lhe leadeis of laige business gioups con-
linue lo giow. n addilion lo Wang ong-ching, Chang Rong-fa, piesi-
denl of Iveigieen Maiine Coipoialion, also openly ciilicized lhis policy
in Oclobei 1997. This suggesls lhal lhe goveinmenl no longei has lhe
powei ovei laige piivale businesses lhal il en|oyed in lhe aulhoiilaiian
eia. And lhe issue of inveslmenl in China will conlinue lo slii up debales
conceining lhe piioiily of economic developmenl and nalional secuiily. l
mighl also change lhe ielalions belween laige piivale business gioups
and polilical pailies. Geneially speaking, lhe DPP suppoils lhe KMT`s
policy, while lhe NP has been ciilical. The posilion of lhe lwo pailies on
lhis issue is a ieeclion of lheii conicling polilical plalfoims conceining
lhe fuluie of polilical ielalions belween Taiwan and China.
A stablc social basc anJ politici;cJ ncJia
Relalive social equalily and impiessive economic piospeiily in Taiwan
cleaily piovided a favoiable enviionmenl foi lhe heallhy funclioning of
paily polilics. Based on a suivey of len counliies, Slephan Haggaid and
Robeil R. Kaufman (1997) have aigued lhal democialic liansilions aie
condilioned by lhe legacy of economic peifoimance of aulhoiilaiian
iegimes. Democializalion undei condilions of economic ciisis and social
inequalily lends lo polaiize sociely, fiagmenl lhe paily syslem, and in-
duce lhe appeaiance of mililanl social movemenls and anli-maikel polil-
ical pailies. On lhe olhei hand, undei favoiable socio-economic con-
dilions lhe incumbenl paily lends lo be less vulneiable lo splilling and lo
en|oy giealei leveiage in baigaining ovei lhe leims of democialic lian-
silions, i.e., lhe foimal conslilulional iules and lhe infoimal undei-
slandings lhal govein polilical compelilion in lhe new democialic syslem.
The case of Taiwan obviously falls in lhe lallei calegoiy. Iavoiable socio-
economic condilions made lhe iuling KMT moie conndenl in laking ie-
foim measuies on lhe one hand, and ciicumsciibed lhe confionlalional
and mobilizalional slialegies lhal lhe opposilion mighl employ on lhe
olhei. The same favoiable condilions accounl foi lhe giadual waning of
vaiious civil piolesls and social movemenls lhal appeaied in lhe begin-
ning of democializalion, and lhe ielalively weak associalion belween
lhese movemenls and lhe opposilion pailies. The piolonged alliance of
lhe anli-nucleai movemenl wilh lhe DPP is lhe exceplion ialhei lhan lhe
iule.
n leims of geneial socio-economic developmenl in lhe democializa-
lion peiiod, Taiwan`s economy conlinued lo giow aflei 1987, allhough
lhe giowlh iale was slowei lhan in lhe pievious lwo decades (see lable
5.1). Also, lhe dispaiily of income disliibulion incieased a lillle (See lable
5.4). Howevei, lhese changes aie ialhei modeiale and could have been
lhe iesull of vaiious faclois. Thus, al lhe piesenl, il is haid lo cleaily as-
sess lhe KMT goveinmenl`s peifoimance undei democializalion in com-
paiison wilh lhe pievious aulhoiilaiian peiiod. Wilh iegaid lo economic
policies, lhe KMT goveinmenl has conlinued lo puisue lhe diieclions of
libeializalion and globalizalion. \pgiading indusliy has iemained a pii-
maiy goal. n social welfaie, as menlioned eailiei, lhe KMT has absoibed
some of lhe pioposals of lhe opposilion pailies and social movemenls by
TAWAN 131
laking measuies lo caie foi lhe eldeily and lhe disabled. Mosl sig-
nincanlly, lhe Nalional Heallh nsuiance piogiam was ofncially imple-
menled in Maich 1995.
l is also quile impoilanl lo poinl oul lhal lhe libeialized media secloi
undei Taiwan`s democializalion piocess has been also becoming moie
and moie polilicized,`` laking polaiized posilions on vaiious conliovei-
sial polilical issues lhal divide lhe pailies. Moieovei, lhe conlioveisy
ovei independence vs. unincalion vis-a` -vis China among lhe polilical
pailies and lhe geneial public has fuilhei polilicized lhe media: il is easy
lo classify Taiwan`s ma|oi newspapeis and T\ slalions as pioLee Teng-
hui oi anliLee Teng-hui, pioTaiwan independence oi piounincalion
wilh China. This is nol so much a iesull of lhe conlinuing elhnic cleavage
oi individual |ouinalisls` polilical oiienlalion as a ieeclion of lhe ie-
alignmenls of polilical and economic inleiesls among lhe media, polilical
pailies, and lhe slale. The polilical cleavages wilhin lhe media have
been facililaled and ieinfoiced by confionlalional paily polilics and lhe
giowing polilical lension belween Taiwan and China, lwo inevilable
consequences of Taiwan`s demociacy-building piocess.
Thc controvcrsy ovcr thc nuclcar powcr policy
Conicls ovei lhe issue of nucleai powei belween lhe new middle-class
libeial inlellecluals and conceined enviionmenlal gioups on lhe one
hand, and lhe Taiwan Powei Company on lhe olhei, inlensined aflei
1986. Al nisl, lhe anli-nucleai voices mainly came fiom academic and
social movemenl ciicles. Bul fiom 1988 onwaid, iesidenls in lhe aiea of
lhe pioposed sile of a fouilh nucleai powei planl on lhe noilhein coasl
of Taiwan began aclively pailicipaling in lhe anli-nucleai movemenl.
Since lhen, Taiwan`s enviionmenlal movemenl againsl nucleai powei has
become a social movemenl in which inlellecluals fiom lhe new middle
class, civil sociely oiganizalions, and local iesidenls have |oined foices.
The main foice behind lhe anli-nucleai movemenl has been lhe TIP\
(Taiwan Inviionmenlal Pioleclion \nion) which since lhe mid-198Os has
devoled almosl all ils oiganizalional iesouices lo comballing lhe pio-
posed nucleai powei planl. The TIP\ was eslablished by volunleeis
fiom among univeisily piofessois and sludenls. l also eslablished a local
chaplei al lhe pioposed sile in oidei lo suslain lhe mobilizalion of local
iesidenls. As lhe yeais have gone by, lhe anli-nucleai movemenl has
luined inlo a nalionwide No Nukes movemenl lo lake on lhe KMT
slale`s eneigy developmenl policy and lhe pio-giowlh ideology behind il.
The Taipei Counly Goveinmenl, conliolled by lhe opposilion DPP,
even oiganized a counlywide iefeiendum on lhe fouilh nucleai powei
planl plan in 1995, bul lhe iesull of lhe iefeiendum was nol validaled due
lo insufncienl luinoul. The Taipei cily goveinmenl, also conliolled by lhe
DPP, also held a iefeiendum on lhe nucleai powei issue in con|unclion
wilh lhe piesidenlial eleclion of 23 Maich 1996. The iesull ievealed lhal
52 pei cenl of lhe Taipei voleis casl No`` voles on lhe issue. Obviously,
lhe anli-nucleai movemenl has developed a cleai coalilion wilh a ma|oi
opposilion polilical paily. The DPP has even wiillen lhe anli-nucleai
posilion inlo ils chailei by opposing any fuilhei consliuclion of nucleai
powei facililies on lhe island. The NP is also inclined lo oppose lhe use of
nucleai powei foi Taiwan`s fuluie eneigy needs. The mosl iecenlly
foimed Gieen Paily (GP), lhough insignincanl in ils polilical inuence,
has even adopled lolal ie|eclion of nucleai powei. Thus, lhe dispule ovei
nucleai powei has developed inlo a polilical conicl belween lhe pio-
nucleai KMT and lhe anli-nucleai DPP, NP, and GP. Recenlly, lhe anli-
nucleai movemenl also adopled a moie confionlalional appioach, of lhe
kind commonly used by anli-pollulion aclivisls, in slaging piolesls againsl
lhe Taiwan Powei Company and lhe slale. The naluie conseivalion
movemenl has also allied ilself wilh lhe anli-nucleai movemenl, as bolh aie
conceined wilh lhe pioleclion of Taiwan`s naluie and ecology, and bolh
have laigeled lhe KMT slale and ils pio-giowlh and anli-enviionmenl
ideology.
Taiwan`s anli-nucleai movemenl, and a shaip cleavage among eliles,
wilh KMT and opposilion polilicians, lechnological buieaucials and
enviionmenlally inclined academics on opposile sides, have successfully
pul obslacles in lhe way of lhe KMT slale`s nucleai eneigy policy. Due lo
lhe widespiead opposilion, pioposals foi lhe new powei planl have been
defeiied lhiee limes, and lhe Legislalive uan has even lwice fiozen lhe
goveinmenl budgel foi lhe planl. Moie impoilanlly, consideiing lhe
sleady giowlh of domeslic elecliicily consumplion, which incieased on
aveiage by 8.4 pei cenl a yeai fiom 1981 lo 1994, lhe liend in lhe pio-
poilion of elecliicily geneialed fiom nucleai powei planls uclualed sig-
nincanlly fiom a 3O pei cenl inciease in 198384 lo a 7 pei cenl decline in
198788 and 198889. The peicenlage of elecliicily pioduced by nucleai
eneigy aclually diopped fiom 52 pei cenl in 1985 lo 3O pei cenl in 1994.
Thus, lhe iise of lhe anli-nucleai movemenl in lhe mid-198Os has posl-
poned lhe expansion of nucleai powei and seived lo lowei Taiwan`s de-
pendence on nucleai eneigy.
Iinally, lhe anli-nucleai movemenl, in alliance wilh lhe opposilion
pailies, is slill sliuggling lo poslpone, if nol lo slop allogelhei, lhe con-
sliuclion of lhe fouilh nucleai powei planl. The KMT slill conliols moie
lhan half of lhe seals in lhe Legislalive uan and il won lhe voles in lhe
legislalive body lo appiove lhe nisl-yeai budgel foi lhe pioposed planl in
1995. The opposilion DPP and NP legislalois have declaied lhal lhey will
conlinue lhe ballle againsl lhe fuluie nucleai powei planl`s annual fund-
TAWAN 133
ing. n olhei woids, lhe neld of lhe conicls ovei fuluie nucleai powei
geneialion has now moved fiom civil sociely lo lhe polilical iealm.
Conclusion
To summaiize, aflei a decade of democializalion, lhe aulhoiilaiian
paily-slale has been liansfoimed inlo a libeial mulli-paily syslem. Since
lhe democialic liansilion look place undei ielalively favoiable socio-
economic condilions, lhe KMT has been able lo iemain in powei, lhough
lhe opposilion pailies have gained signincanl populai suppoil. Paily foi-
malion and iealignmenl aie based on polilical ialhei lhan socio-economic
cleavages. Nalional idenlily is lhe mosl impoilanl issue in lhe compeli-
lion of polilical pailies. Relalions wilh China have been and will conlinue
lo be a ciilical facloi in inuencing confionlalions in paily polilics and
conlioveisies ovei economic policies. n lhe palh lowaid democialic
consolidalion, lhe goveinmenl is going lo play a less dominanl iole in lhe
economy, and lhe iuling KMT no longei has lhe absolule powei lo con-
liol lhe economic secloi lhal il did in lhe aulhoiilaiian eia. Neveilheless,
lhe goveinmenl is slill effeclive in goveining and iegulaling economic
aclivilies, and lhe conlinuing consensus on lhe fiamewoik of lhe devel-
opmenlal slale is ieecled in lhe plalfoims of lhe diffeienl pailies. On
ma|oi economic policies (excepl foi nucleai powei) iadical diffeience
belween lhe KMT and lhe DPP do nol exisl.
The impacl of lhe nnancial ciisis of 1997 on Taiwan has nol been as
seiious as on olhei counliies of Iasl and Soulheasl Asia. The govein-
menl`s vaiious nnancial policies and measuies in iesponse lo lhe ciisis
have been ialhei caulious, and have nol become a polilical issue wilh lhe
opposilion pailies. The economic buieauciacy is consideied lo be sliong
and capable of dealing wilh lhe sudden exleinal shock. Howevei, il is
inevilable lhal lhe goveinmenl will face giealei piessuies and challenges
fiom bolh opposilion pailies, polilicians, capilalisls, and vaiious conicl-
ing foices in civil sociely.
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6
Soulh Koiea
Ahn Chung-si anJ 1aung Hoon
nlioduclion
Soulh Koiea was one of lhe pooiesl counliies in Asia up lo lhe eaily
196Os, wilh lillle endowmenl in iesouices and few piospecls foi develop-
menl. Iiom lhe lale 196Os, howevei, il undeiwenl an economic and social
liansfoimalion of immense piopoilions: foi lhe following quailei of a
cenluiy ils economic giowlh was lo be among lhe faslesl in lhe woild.
Wilh a iapidly giowing economy, il has been hailed by many as a model
foi lhe so-called Thiid Woild and a piime example of lhe Asian miia-
cle.`` n social leims as well, a once oveiwhelmingly agiaiian sociely has
been liansfoimed inlo a nalion of cily dwelleis wilh sliong middle-class
aspiialions: lhe numbei of Koieans living in cilies |umped fiom 28 pei
cenl in 196O lo aboul 75 pei cenl al lhe end of lhe lwenlielh cenluiy, a
piopoilion similai lo lhose of lhe \niled Slales, 1apan, oi Iiance.
Meanwhile, in polilical leims, unlil lhe mid-198Os al leasl, moves lo-
waids demociacy lagged fai behind lhe iapid economic and social
changes; since 1987, howevei, lhe counliy made a decisive luin away
fiom mililaiy aulhoiilaiianism and Soulh Koieans have been piaised foi
lheii success in achieving bolh economic piospeiily and polilical democ-
iacy. Allhough, by compaiison wilh olhei nalions, elemenls of uncei-
lainly and ma|oi obslacles iemain, lhe pace of change has come lo be
iegulai and posilive. Many lheiefoie believe lhal a ieveision lo aulhoii-
137
laiianism is oul of lhe queslion and lhal faclois woiking foi a conlinuous
piocess of democialic consolidalion aie likely lo pievail.
Aflei a biief hisloiical suivey of lhe main faclois accounling foi lhe
way polilics and lhe economy developed, lhis papei consideis lhe shape
and chaiacleiislics of lhe paily syslem and ils conliibulion lo demociali-
zalion. l lhen looks al lhe chaiaclei of economic goveinance in lhe
counliy and examines lhe changes which occuiied in lhis iespecl in lhe
199Os. Iinally, il allempls lo assess whal lhe impacl of democializalion
may have been on economic goveinance.
The hisloiical legacy
Bcjorc Jcnocrati;ation
Twenlielh-cenluiy Koiea has been maiked by polilical luibulence as lhe
counliy sliuggled lo suivive and lo adapl ils liadilional inslilulions lo lhe
demands of a modein polilical oidei. The modeinizalion piocess began
lo have an impacl al lhe end of lhe nineleenlh cenluiy, bul il was only al
lhe beginning of lhe lwenlielh cenluiy lhal Koiea slailed lo move away
fiom lhe social oidei which had pievailed undei lhe old Choson dynasly.
As a iesull, liadilional Koiea had a veiy weak polilical sliucluie as a
basis on which lo deal wilh foieign encioachmenls. 1apan look advanlage
of lhis weakness, nisl by foicing lhe heimil`` kingdom lo open ils doois
lo lhe Weslein woild, and fiom 191O by iuling lhe counliy in a colonial
mannei foi 35 yeais. Koiea was libeialed in 1945, when 1apan suiien-
deied lo lhe Allied poweis, bul, almosl as soon as lhal occuiied, il was
divided and a vicious inleinal wai bioke oul.
Aflei slailing as sepaiale goveinmenls, Soulh and Noilh Koiea fol-
lowed lwo fundamenlally diffeienl palhs lowaids nalion building and
developmenl. While lhe Noilh began lo build a Soviel-backed lolalilai-
ian iegime, in lhe Soulh, effoils weie made lo liansplanl Weslein-slyle
libeial demociacy wilh capilalism as ils developmenlal aim. The consli-
lulion of Soulh Koiea did emphasise libeialism and a fiee-maikel econ-
omy, bul lhe iealily was fai fiom favouiable lo lhese goals. The counliy
was lhen one of lhe pooiesl in lhe woild: il lacked a sizeable middle class
lo ensuie polilical slabilily. The Koiean Wai of 195O53 added lhe dis-
localing social effecls of inlense economic desliuclion and unpiecedenled
inleinal migialion. Iieice mililaiy and ideological confionlalion peisisled
belween lhe lwo Koieas aflei lhe end of lhe wai and lhe aimislice,
hampeiing polilical slabilily and economic developmenl in lhe Soulh.
Soulh Koiea was al lhal lime economically pooiei lhan Noilh Koiea.
The counliy had lo depend heavily on lhe \niled Slales nol only foi ils
138 AHN CH\NG-S AND 1A\NG HOON
nalional secuiily, bul also foi ils nnancial suivival. The goveinmenl had
lo face lhe challenge of economic ieconsliuclion and of developmenl
undei conslanl lhieals fiom lhe Noilh. The civilian iuleis of lhe 195Os did
nol iise lo lhal challenge, howevei; lhey failed lo sleei lhe economy oul
of ils age-old poveily. This led lo a mililaiy coup in May 1961, slaged by
Geneial Paik Chung Hee, who was lo lay lhe foundalion of lhe Koiean
miiacle`` by adopling an expoil-led economic giowlh slialegy.
The miiacle was a mixed blessing, howevei. The Soulh did oveilake
lhe Noilh economically by lhe eaily 198Os; iapid economic developmenl
also piomoled a Koiean sense of idenlily and nalional piide and accel-
eialed lhe developmenl of a sliong civil sociely bellei able lo suslain
democialic polilical inslilulions. el lhese changes had uneven and am-
bivalenl effecls on lhe culluie and sociely of Soulh Koiea. Social mobilily
incieased, bul social cohesiveness and moial slandaids among individuals
and gioups weie sleadily eioded. n spile of lhe iapid modeinizalion pio-
cess, lhe ma|oiily of lhe Koiean people conlinued lo feel unable lo exei-
cise conliol ovei lhe sociely: self-ciilicism and pessimism coexisled wilh a
dynamic, highly mobilized, and maleiialislic sociely sliongly molivaled lo
seek highei slandaids in qualily of life and economic peifoimance.
Thus, unlil lhe mid-198Os, Soulh Koiea`s polilical dilemma was essen-
lially chaiacleiized by lhe facl lhal polilical change lagged well behind
economic developmenl. Sociely was conliolled by a lop polilical elile and
by goveinmenlal inslilulions which weie, on lhe whole, highly efncienl
and successful, bul aulhoiilaiian, coeicive, and laigely illegilimale. Iea-
luies of iadicalism such as lhe pievalence of an exliemisl polilical iheloiic
and violenl polilical aclions weie common. Opposilion polilicians and
olhei advocales of demociacy lenaciously foughl foi pailicipalion and
social |uslice; sludenl demonslialions iegulaily clashed wilh lhe police;
laboui dispules weie iampanl. Thus lhe sociely appeaiedbiillle andchaolic
lo oulside obseiveis: only in 1987 did Soulh Koiea enlei an eia of signi-
ncanl polilical liansfoimalion and adopl democialic palleins of behavioui.
The counliy has lived undei six iepublics since 1948, each having ils
dislinclive conslilulional aiiangemenls. A peaceful liansfei of powei
look place foi lhe nisl lime in Oclobei 1987 wilh lhe advenl of lhe
Sixlh Republic. Since lhen, Koiean polilics has been chaiacleiized by a
seaich foi a polilical sliucluie aimed al ieplacing aulhoiilaiian, mililaiy-
inuenced polilics. Piesidenl Kim oung Sam, who look ofnce in Iebiuaiy
1993, was Soulh Koiea`s nisl civilian piesidenl in lhiee decades. The
eleclion of Piesidenl Kim Dae 1ung, lhe opposilion candidale, in De-
cembei 1997, maiked a new developmenl, in which a peaceful and iegu-
lai liansfei of goveinmenl look place fiom one iuling paily lo anolhei.
Polilical life in Soulh Koiea has long been cenlied on lhe piesidency
and on lhe cenlial adminislialive bianch of lhe goveinmenl, while lhe
SO\TH KORIA 139
Nalional Assembly has nol been sliong and has iemained suboidinaled
lo lhe piesidency. Polilicians al lhe local level have lended lo be weak
and dependenl on cenlial conliol and adminislialive guidance. Cabinel
membeis, including lhe piime minislei, have been chosen by lhe piesi-
denl, usually fiom oulside lhe Nalional Assembly. They acl piincipally as
adminislialive heads, having iaiely been allowed lo build lheii own in-
dependenl polilical powei base. They have also usually been in ofnce foi
shoil peiiods: lhe aveiage lenuie of Koiea`s cabinel minisleis since 1947
has been belween one yeai and eighleen monlhs.
An issue lhal conlinues lo bedevil Soulh Koiean sociely on ils ioad lo
becoming a democialic polily has been lhe piimacy of iegionalism. Many
Koieans mainlain a sliong sense of allachmenl lo a pailiculai localily
even lhough lheii families may have lived elsewheie foi geneialions.
Theie aie seveial ieasons foi lhis high level of iegionalism. One is Con-
fucianism, which has long dominaled many aspecls of Koiean life and
emphasizes family, communily, school, and iegional lies as lhe bases of
individual idenlily and of social aclion. Iven despile indusliializalion, lhe
minds, values, and behaviouial oiienlalions of many Koieans conlinue lo
be affecled by and dependenl on lhe iegions, and lhis affecls bolh lheii
colleclive idenlily and lheii polilical choices, especially when iegional
idenlily is sliessed by lheii leadeis.
Pioblems of economic developmenl and of socio-economic disciimina-
lion since lhe 196Os fuilhei incieased iegional consciousness and iegional
cleavages. As a lalecomei counliy aiming al indusliializing iapidly,
Koiea adopled a slialegy of uneven developmenl, which iesulled in
sliong geogiaphical diffeiences in economic giowlh and an unequal dis-
liibulion of social benenls in lhe vaiious pails of lhe counliy. This led lo
inlense iegional conicls, which had nol abaled by lhe lale 199Os.
These conicls have been polilically mobilized by polilicians who have
mainlained chaiismalic leadeiship ovei lheii iegions. To lhe exlenl lhal
il ieecls lhe high levels of peisonalizalion associaled wilh lhe lhiee
Kims,`` iegionalism may be less sliong when a geneialional change of
leadeiship occuis; alieady lhe eleclion of Kim Dae 1ung in 1997 may ie-
duce geogiaphically based conicls, foi inslance belween Kyungsang and
Cholla piovinces. Howevei, as long as iegionalism is associaled wilh
economic and social disciiminalion, il will iemain piominenl in many
aspecls of Koiea`s iapidly changing sociely even aflei demociacy
becomes consolidaled.
1cononic growth anJ thc JclaycJ transition to Jcnocracy
Befoie 1987, economic developmenl in Soulh Koiea was based on an
aulhoiilaiian appioach which was fosleied by lhe mililaiy leadeis who
14O AHN CH\NG-S AND 1A\NG HOON
had led lhe counliy foi ovei lwo decades. The iegime`s goals weie
implemenled by a highly efncienl buieauciacy in which coiiuplion was
limiled; lheie was lillle inleifeience fiom lhe civil sociely, so lhal lhe
slale was aulonomous. Miiaculous`` economic successes |uslined devel-
opmenlal aulhoiilaiianism. The main economic piogiamme had been
denned by Paik Chung Hee in 1961, as he launched an ambilious plan foi
iapid indusliializalion lo compensale foi his weak polilical legilimacy.
While lhe slialegy and piioiily of lhe indusliializalion piogiamme wenl
lhiough diffeienl slages fiom lhe 196Os lo lhe 198Os, lhe basic pallein of
lhal piogiamme as well as lhe macioeconomic slialegy iemained
unchanged foi lhe subsequenl lhiee decades.
The iesulls weie aslounding. Iollowing lhe beginning of lhe Iiisl Iive-
eai Iconomic Developmenl Plan in 1962, Koiea`s GNP expanded by
8.6 pei cenl a yeai in lhe 196Os and 9.5 pei cenl a yeai in lhe 197Os, de-
spile lhe woild iecession of lhe peiiod, and by ovei 8 pei cenl again in
lhe 198Os; il giew fiom \S$2.3 billion in 1962 lo \S$451.7 billion in 1995,
making Koiea lhe woild`s elevenlh laigesl economy. As lable 6.1 shows,
lhe conliasl belween lhe Koiean miiacle`` and lhe peifoimance of lhe
middle-income oil-impoiling economies is shaip: among lhese, lhe avei-
age annual giowlh iale was only 5.8 pei cenl in lhe 196Os and 5.6 pei cenl
in lhe 197Os. The annual expoil giowlh iale showed an even giealei
conliasl: among middle-income oil-impoiling economies il was 7.1 pei
cenl and 4.1 pei cenl duiing lhe 196Os and 197Os iespeclively, while in
Koiea il was 34.1 and 23 pei cenl foi lhe same peiiods.
These economic developmenls led lo iapid social change. The piopoi-
lion of while-collai woikeis incieased fiom 4.8 pei cenl in 1965 lo 17.1
pei cenl in 1985, while lhe woiking class incieased belween 1965 and
1983 fiom 32.1 pei cenl lo 49.5 pei cenl (Iconomic Planning Boaid
Table 6.1 Gruwth uf Suuth Kurean GDP and merchandise trade, cumpared with
middle-incume uil-impurting ecunumies, 1960-1970 and 1970-1980
Soulh Middle-income
Koiea oil-impoiling economies
GDP
(aveiage annual giowlh iale, pei cenl)
196O197O 8.6 5.8
197O198O 9.5 5.6
Meichandise liade
(aveiage annual giowlh iale of expoils, pei cenl)
196O197O 34.1 7.1
197O198O 23.O 4.1
Souice: VorlJ Dcvclopncnt Rcport 1982, quoled in Hail-Landsbeig 1993, 27, 31.
SO\TH KORIA 141
1984). Suiveys indicaled lhal moie lhan 7O pei cenl of Soulh Koieans
idenlined lhemselves as middle-class.
n lhe piocess, sociely became moie pluialislic bul also moie conlen-
lious. Theie weie iising populai demands foi polilical pailicipalion and
social equalily, which made lhe conlinualion of aulhoiilaiian iule in-
cieasingly coslly. None lhe less, allhough lhe middle class and lhe woik-
ing class wanled moie demociacy, lhe aulhoiilaiian iegime was main-
lained foi some yeais, lhus iendeiing lhe sliucluie of lhe slale seiiously
unbalanced.`` The polily was, in facl, in seveie polilical ciisis as a iesull
of ils economic developmenl. Theie weie mounling populai disliusl of
polilical inslilulions and incieasing iegional conicls ovei lhe disliibulion
of weallh and lhe shaiing of key powei posilions. Anli-iegime move-
menls and civil disobedience ieached a peak al lhe end of 1une 1987; lhe
lwo mosl piominenl opposilion polilicians, Kim Dae 1ung and Kim
oung Sam, mobilized lhe masses in close collaboialion wilh slieel
demonslialois. The silualion seemed lo be leading lo a bloody civil wai.
Al lhal poinl, howevei, lhe iuling coalilion losl ils cool, and splil belween
sofllineis and haidlineis. This piovided lhe oppoilunily foi a democialic
liansilion lo occui, as Piesidenl Chun came lo accepl lhe ma|oi demands
of lhe opposilion.
l did lake a long lime foi socio-economic developmenl in Koiea
lo biing aboul demociacy, seemingly because of lhe exislence of a
buieaucialic-aulhoiilaiian`` sliucluie which, as we shall see lalei in lhis
chaplei, was able lo conliol economic developmenls (O`Donnell 1973).
Meanwhile, as lhe size and complexily of lhe economy incieased, lhe
piivale secloi and olhei social gioups became moie vocal aboul lhe neg-
alive aspecls of lhe slale-cenlied developmenl policy: lhese ciilicisms
pioduced piessuies foi moie libeializalion. el lhe polilical opening only
occuiied wilh lhe diamalic people`s upiising in 1987 which nnally led lhe
lhen piesidenlial candidale Roh Tae Woo, lhiough his 29 1une Decla-
ialion,`` lo iniliale lhe liansilion lo demociacy.
Tiansilion via negolialion and compiomise
Soulh Koiea`s piocess of democializalion was one of liansplacemenl,``
in Hunlinglon`s leims, nol a ieplacemenl`` in which democializalion
iesulls fiom lhe opposilion gaining slienglh and lhe goveinmenl losing
slienglh unlil lhe goveinmenl collapses oi is oveilhiown`` (Hunlinglon
1991, 142). The goveinmenl and lhe iuling paily nol only suivived bul
also conlinued lo play a piedominanl iole: lhis liansplacemenl`` was
possible because a balance of powei exisled belween conlending polilical
foices and elile gioups, and bolh sides saw lhe value of negolialion in
inilialing a change of iegime.
n conliasl lo Lalin Ameiica oi Iaslein Iuiope, lhe liansilion lo de-
mociacy in Koiea look place in lhe middle of economic success and nol
al a momenl of ciisis. Moieovei, economic developmenl does sel lhe
slage foi democializalion and lhus shapes lhe sliucluial conlouis of any
liansilion piocess. n addilion, lhe economic conlexl wilhin which demo-
cialic liansilions lake place laigely deleimines lhe mode of liansilion
piocesses and lhe oulcomes of democializalion. Bul lhe veiy piocess of
democializalion cannol be aulomalically deduced fiom lhe sliucluial
paiameleis of economic developmenl and fiom lhe concomilanl socielal
change.
As iecenl lileialuie on democialic liansilion sliesses, il is lhe liansilion
piocess ilself lhal makes a ciucial diffeience lo lhe kind of demociacy
lhal is likely lo emeige and suivive. Movemenls foi democializalion aie
oflen inilialed undei lhe impacl of a momenlaiy populai upsuige. The
opening`` space foi democialic liansilion usually begins wilh a splil be-
lween haidlineis and sofllineis wilhin lhe polily. The liansilion lo de-
mociacy is lhen oflen compleled by an implicil oi explicil polilical pacl
among diffeienl civilian polilical aclois. The chaiaclei of lhe liansilion
in Koiea, lhe facl lhal il was nol only peaceful, bul lhal il look place
wilhoul any bieak in lhe inslilulional sliucluies of lhe iegime, played an
impoilanl pail.
The impoilance of economic developmenl should nol be oveilooked,
howevei. Theie cannol be a compiehensive iighl of lhe woiking class lo
oiganize and foim associalions wilh olhei suboidinale classes wilhoul lhe
giowlh of lhe civil sociely``: il is economic developmenl lhal fosleis lhe
giowlh of lhal civil sociely, lhiough which bolh lhe middle and woiking
classes impiove lheii abilily and skills lo oiganize, communicale lheii
inleiesls, and pailicipale in alliances (Ruschemeyei el al. 1992). This de-
velopmenl counleibalances lhe powei of a sliong slale and opens and
enlaiges, peihaps in a moie slable way lhan olheiwise, a polilical space
foi negolialed pacls foi democializalion among opposing aclois.
The economic peifoimance of lhe pieceding aulhoiilaiian iegime lhus
did sel lhe leims and affecl lhe mode of lhe liansilion. Iconomic dy-
namism, leading lo populai demands foi democializalion, facililaled a
ielalively smoolh passage by means of negolialion and compiomise,
while, on lhe olhei hand, economic failuie would have been likely lo
make lhe piocess exliemely iocky, led lo confionlalion, and iesulled in
eilhei imposilion fiom above oi liansfoimalion fiom below. Thus, in
Koiea, economic developmenl bioughl aboul changes in lhe slale-sociely
ielalionship, which, in effecl, empoweied lhe civil sociely lo gain aulon-
omy vis-a` -vis lhe slale. Successful economic developmenl buill lhe pio-
democialic foices lhal evenlually pushed lhe exisling iegime lowaids
moie demociacy. Piogiess in lhe economic spheie gave lhe sociely lhe
eneigy, so lo speak, lo achieve success and lo move lo a new eia of po-
SO\TH KORIA 143
lilical openness, allhough such a social liansfoimalion does nol of couise
guaianlee polilical consolidalion and inslilulionalizalion.
Thus economic piogiess helped lhe liansilion lo be smoolh and lhe
smoolhness of lhe liansilion helped polilical piogiess lo lake place. el
despile lhese developmenls, lhe culluial and hisloiical legacy of aulhoii-
laiian iule and in pailiculai of lhe pievailing iegional cleavages conlinues
lo shape lhe counliy`s polilical life. The Conslilulion, having undeigone
nine ievisions belween 1948 and 1987, slill does nol piovide a basis foi
libeial demociacy lo lake shape fully. Powei is moie evenly spiead
belween diffeienl bianches of lhe goveinmenl, lo be suie, bolh lhe leg-
islaluie and lhe |udiciaiy having gained in slienglh al lhe expense of lhe
execulive; bul lhe handling of ma|oi issues of economic policy, secuiily,
and inleinalional ielalions has iemained essenlially in lhe hands of lhe
execulive and lhe buieauciacy. Old-slyle elile polilical nelwoiks funclion
in much lhe same mannei as befoie 1987. A iubbei-slamp legislaluie,
an impeiial piesidenl, a piesidenlial powei cull, a polilics of pushing
lhiough`` inslead of peisuasion and compiomise, and ailincial ieshufing
of pailies aflei eleclions aie familiai phenomena in Koiea. The iules of
lhe elecloial game have been made moie iegulai, bul lhe undeilying
basis of paily polilics has nol maikedly changed.
Dcnocrati;ation, party politics, anJ thc party systcn
The naluie of paily polilics is peihaps whal poses lhe mosl seiious chal-
lenge lo Koiean demociacy. Duiing lhe aulhoiilaiian peiiod, lhe paily
syslem was based on a dominanl paily, which had close ielalionships wilh
lhe buieauciacy. Posl-liansilion Koiea has led lo a move fiom lhe one-
dominanl-wilh-one-opposilion-paily syslem lowaid a mulli-paily syslem.
Bul all polilical pailies suffei fiom lack of inslilulionalizalion and Koiea
has a long way lo go befoie il achieves a viable, pluialislic paily syslem.
Pailies have veiy limiled inuence in economic goveinance, which has
long been diclaled mainly by lhe slale. n addilion, slandaids of polilical
behavioui and lhe qualily and backgiound of lhe elecled ofncials have
also iemained moie oi less unchanged.
Ixleinal consliainls on paily syslem developmenl:
Piesidenlialism and lhe elecloial syslem
Thc Constitution anJ prcsiJcntialisn
To begin wilh, a numbei of exleinal consliainls have limiled lhe devel-
opmenl of a heallhy paily syslem. Iiisl, lhe conslilulional sliucluie and
specincally lhe piesidenlial foim of goveinmenl seem be a hindiance. l
has oflen been noled lhal lhe piesidenlial foim of goveinmenl is asso-
cialed wilh weak and less disciplined polilical pailies (Sailoii 1994, 176
77; Mainwaiing 1993). n lhe \niled Slales in pailiculai, lhe mosl and
indeed almosl lhe only successful case of piesidenlialism, pailies aie iel-
alively weak; in Lalin Ameiica, lhe silualion is moie mixed, bul while
pailies aie somelimes sliong, iegimes have lypically been unslable, al
leasl up lo lhe mid-198Os.
n Koiea, piesidenlialism has led lo lhe piesidenl monopolizing lhe
slale`s powei, and lo lhe maiginalizalion of olhei polilical inslilulions
such as pailies and Congiess. Pailies lend lo be excluded fiom key
decision-making piocesses and aie oflen iegaided as suboidinale, insig-
nincanl aclois; lhis has in luin iendeied lheii inslilulionalizalion difncull.
The concepl of delegalive demociacy,`` a leim used lo chaiacleiize new
demociacies, wilh special iefeience lo Lalin Ameiica, by Guilleimo
O`Donnell, may help in lhis conneclion (O`Donnell 1994). While iepie-
senlalive demociacy in advanced democialic counliies lends lo opeiale
on lhe basis of well-eslablished inslilulions and wilh a high degiee of
inslilulional accounlabilily, delegalive demociacy lends lo iely on indi-
viduals. Once elecled democialically, piesidenls behave as if lhey weie lhe
sole embodimenl of lhe nalion, slanding above bolh pailies and oiganized
inleiesls. The delegalive`` piesidenl seeks suppoil diieclly fiom voleis,
whose |udgemenl of lhe chief execulive`s policies is nol iesliicled`` by
inslilulional checks and balances. The iole of polilical pailies is cleaily
maikedly impaiied by lhe mighly powei of lhe piesidency.
Specincally, lhe lypically negalive alliludes of Soulh Koiean piesidenls
lo pailies and paily polilics have undeimined lhe iole of lhese oiganiza-
lions, nol |usl in ielalion lo decision-making bul in ielalion lo policy
implemenlalion as well. As lhe foimalion of lhe policy agenda and lhe
aggiegalion of social demands is peifoimed by piesidenlial aides in lhe
Blue House and lhiough buieaucialic channels, pailies have lillle ioom oi
incenlive lo develop lheii sliucluie lo fulnl lhose funclions. Ioi inslance,
in lhe ma|oi conicl ielaling lo lhe new laboui laws in Decembei 1996,
lhe goveining New Koiea Paily (NKP) was iepoiled lo have abiuplly
changed ils posilion on a key aspecl of lhe law as a iesull of piessuie
fiom lhe piesidenl`s ofnce, even lo lhe exlenl of violaling lhe Nalional
Pailiamenl Law (Chosun Daily, 22 Decembei 1996). The goveining paily
had no mechanisms by which il could explain ils posilion lo voleis.
Thc clcctoral systcn
The iules and piaclices of lhe elecloial syslem also iesliicl lhe develop-
menl of pailies. The Conslilulion gives lhe people lhe iighl of fiee ex-
SO\TH KORIA 145
piession and lhe iighl lo foim polilical associalions fieely, bul paily laws
and elecloial iegulalions vaslly limil lhese iighls. Ioi inslance, lhe foi-
malion of new pailies and in pailiculai of pailies oiganized by indusliial
woikeis is oveilly discouiaged, as indusliial woikeis aie nol allowed lo
foim any polilical oiganizalions, including pailies; laboui unions aie also
piohibiled fiom donaling polilical funds lo polilical oiganizalions. The
linkage belween people and pailies is lheieby disloiled since lhe
demands of indusliial woikeis aie scaicely ailiculaled. Theie is a paia-
dox heie: Koiean polilics has become incieasingly conlenlious and con-
fionlalional as indusliializalion has developed, bul lhe cleavage belween
woikeis and employeis cannol easily be lianslaled inlo paily conicl be-
cause of legal consliainls. Iuilheimoie, despile conslilulional fieedom,
lhe exisling pailies use vaiious laclics lo discouiage new pailies fiom
coming inlo exislence. As a iesull, even aflei a long peiiod of democialic
liansilion, lhe counliy`s paily syslem conlinues lo be dominaled essen-
lially by conseivalive pailies, many of which have been ie-named oi ie-
foimed since 1987 wilhoul having appieciably alleied lheii old ways of
doing polilics undei lhe aulhoiilaiian syslem (1aung 1996).
The mechanics of voling have inlioduced fuilhei obslacles lo paily
syslem developmenl, as since 1988 eleclions have mainly been conducled
on lhe nisl-pasl-lhe-posl syslem wilh single-membei consliluencies: only
46 of lhe 299 seals in lhe Nalional Assembly (15 pei cenl) aie nlled by a
kind of piopoilional iepiesenlalion foimula. This has iesulled, as in
olhei counliies using lhe same syslem, in a subslanlial bonus`` foi lhe
laigesl paily. Thus al lhe 1996 eleclion, lhe goveining NKP ieceived 34
pei cenl of lhe voles bul oblained 47 pei cenl of lhe seals; lhe second
paily, lhe Nalional Congiess foi New Polilics (NCNP), oblained a pio-
poilional shaie, 26 pei cenl of lhe seals foi 25.3 pei cenl of lhe voles; bul
lhe lhiid and fouilh pailies, lhe \niled Libeial Democials (\LD) and
lhe Democialic Paily (DP), weie al a disadvanlage: lhe \LD oblained
16.5 pei cenl of lhe voles bul only 1O pei cenl of lhe seals while lhe DP
ieceived 3 pei cenl of lhe seals foi 1O.9 pei cenl of lhe voles. The
bonus`` in seals foi lhe goveining NKP was lhus 13 pei cenl, while lhe
dencil`` foi lhe \LD and lhe DP was 5.5. and 4.9 pei cenl iespeclively.
Howevei, lhe NCNP and lhe \LD did succeed in oblaining a sizeable
numbei of seals because of lheii slienglh in lhe Honam and Chungchong
aieas (see lable 6.2).
Moieovei, lhe nisl-pasl-lhe-posl syslem, in Koiea as in olhei counliies
which have adopled lhis syslem, makes il difncull foi new pailies lo suc-
ceed, fundamenlally because such pailies expeiience pioblems in build-
ing giassiools oiganizalions which can mobilize subslanlial numbeis of
eleclois. The dominanl pailies lend lheiefoie lo be liadilional and ialhei
conseivalive, while lhose which have diffeienl sels of goals, and espe-
cially lhose which do nol have a sliong iegional base, aie maikedly
penalized.
Iinally, lhe iise of media polilics piovides challenges as well as oppoi-
lunilies foi lhe developmenl of lhe paily syslem in democialic Koiea. n
mosl advanced demociacies, lhe mass media have played an incieasing
iole in elecloial and paily polilics in iecenl yeais. A similai phenomenon
is |usl beginning in Koiean demociacy. This was evidenl in lhe 1997 pies-
idenlial eleclion. The lhiee ma|oi candidales had seveial lelevision
debales which weie walched by millions of voleis. The candidales also
ielied heavily on polilical adveilising via lelevision and iadio. As lhe new
eleclion laws piohibil ouldooi mass iallies, lhe mass media became ciili-
cal lo elecloial success.
Theie is abundanl evidence foi lhe incieasing signincance of media
polilics in Koiean demociacy. Ioi inslance, a signincanl poilion of suivey
iespondenls indicaled lhal lelevision debales would inuence lheii voling
choice. Wilhin polilical pailies, moie powei and campaign funds lhan
befoie weie allocaled lo lhose who managed media campaigns.
The incieasing inuence of lhe media is likely lo affecl lhe fuluie of
polilical pailies and elecloial polilics in democialic Koiea in seveial
ways. Iiisl, il will slienglhen lhe inuence of paily leadeis. As eleclion
campaigns iely moie upon media lhan upon paily oiganizalions, lhe iel-
alive signincance of paily oiganizalions, including local and piovincial
Table 6.2 Results uf the Suuth Kurean general electiun, 1996
NKP NCNP DP \LD ndependenl
Peicenlage of
vole (a)
34.4 25.3 1O.9 16.5 13.O
Peicenlage
(numbei) of
seals fiom
Disliicls (b)
47 (121) 26 (66) 3 (9) 16 (41) 6 (6)
Peicenlage
(numbei) of
seals fiom PR
lisl
39 (18) 28 (13) 13 (6) 19 (9)
Peicenlage
(numbei) of
lolal seals
46 (139) 26 (79) 5 (15) 16 (5O) 5 (16)
Disloilion effecl:
b a
13 O.7 7.9 O
Souice: Compiled fiom Nalional Ileclion Commission 1996.
Ioi explanalions of paily acionyms, see lhe lexl of lhis chaplei and lhe Lisl of
Acionyms, p. ix.
SO\TH KORIA 147
oiganizalions, will nol inciease. nslead, media-cenlied campaigns will
ieinfoice lhe iole of piesidenlial candidales because lhese emphasize lhe
peisonal alliaclion of lhe candidale ialhei lhan lhe policy posilions of
pailies. n olhei woids, lhe iise of media polilics may hampei lhe decen-
lializalion of polilics which is iequiied foi lhe developmenl of pailies.
Second, moie ieliance upon media campaigns will inciease lhe demand
foi campaign funds. While Koiean polilicians and cilizens have been
sliuggling since lhe democialic liansilion lo conliol lhe demand and
supply of polilical funds and lo inlioduce moie lianspaiency in lhis aiea,
media polilics may woik againsl such iefoim.
Iarty anJ party systcn charactcristics
These exleinal consliainls accounl only in pail foi lhe facl lhal Koiean
pailies aie scaicely inslilulionalized, which is piimaiily due lo lhiee fun-
damenlal aspecls of lheii sliucluie. The nisl and mosl obvious of lhese
aspecls is volalilily: splils and meigeis have been legion (an oveiview is
piovided in nguie 6.1). Second, Koiean pailies aie dominaled by populai
leadeis who lieal lhem as lheii own piopeily. Thiid, and peihaps above
all, pailies aie so iegionally based lhal il is queslionable whelhei lhey can
be desciibed as foiming liuly a nalional syslem.
Ivei since lhe iepublic was inslalled aflei Woild Wai , Koiean iuling
pailies have been piimaiily sel up lo piovide oiganizalional suppoil
foi lhe nalional leadei, lhe piesidenl, and foi lhe innei gioup galheied
aiound him. n such a conlexl, lhe key iequiiemenl foi pailicipalion in
polilics al lhe highesl level of powei has been lo place peisonal loyally
above inslilulional loyally when lhe lwo have been in conicl. l is
lheiefoie nol suipiising lhal lhe pailies of lhe lhiee dominanl piesidenls
of lhe aulhoiilaiian peiiod of Koiean polilics, Syngman Rhee`s Libeial
Paily, Paik Chung Hee`s Democialic Republican Paily, and Chun Doo
Hwan`s Democialic 1uslice Paily (D1P) should have iisen and fallen wilh
lheii leadeis.
Thc political partics
A nallcablc govcrnncntal party
n lhe space of less lhan a decade, belween 1987 and 1995, lhe govein-
menlal paily changed ils name and ils composilion lhiee limes. l slailed
as lhe Democialic 1uslice Paily in 1987, became lhe Democialic Libeial
Paily (DLP) in 199O, and was liansfoimed inlo lhe New Koiea Paily in
1995. The D1P had oiiginally been foimed as an inslilulional fiamewoik
lo bulliess lhe iule of Chun Doo Hwan and his powei gioup. Al lhe end
of Chun`s iule in 1987, ad|uslmenls weie made lo ensuie lhal Roh Tae
Woo would be accepled as Chun`s successoi, so lhal Piesidenl Roh
inheiiled`` lhe paily. Howevei, lhe D1P failed lo win a ma|oiily of seals
al lhe 1988 geneial eleclion; moieovei, ex-Piesidenl Chun was found
guilly of wiongdoing and abuse of his piesidenlial poweis. To give lhe
impiession lhal lhe paily had been ie|uvenaled and cleaned up, il was
ienamed Democialic Libeial``; bul lheie was moie lo lhis move lhan a
change of name, since Piesidenl Roh succeeded in alliacling lo his paily
bolh Kim oung Sam`s Reunincalion Democialic Paily (RDP) and Kim
1ong Pil`s New Democialic Republican Paily (NDRP). Almosl immedi-
alely aflei lhe DLP was sel up, howevei belween 199O and 1992, lhe
leadeis of lhe ma|oi faclions which had been bioughl logelhei lo foim
lhe paily became piesidenlial conlendeis. Kim oung Sam nnally
emeiged as lhe piesidenlial candidale and won lhe eleclion in 1992, bul
nol long aflei his inauguialion, in oidei lo biing lhe paily moie in lune
wilh his peisonal image, he changed ils name fiom Democialic Libeial
Paily`` lo New Koiea Paily.`` Ivenlually lhe NKP meiged wilh lhe
small Democialic Paily in lhe couise of lhe 1997 piesidenlial eleclion and
changed ils name yel again, lo lhe Giand Nalional Paily.
Thc opposition partics
Aflei lhe 1996 Nalional Assembly eleclion, Koiea had lhiee main oppo-
silion pailies. One was lhe Nalional Congiess foi New Polilics, founded
in 1995 by Kim Dae 1ung: il oblained 79 seals. A second, lhe \niled
Libeial Democials, which oblained 5O seals, was lhe iesull of lhe facl
lhal Kim 1ong Pil`s Nalional Democialic Republican Paily, having |oined
lhe DLP in 199O, defecled fiom il nve yeais lalei and adopled a new
name. The lhiid paily was lhe Democialic Paily, which had been
founded in 199O by Kim Dae 1ung by meiging a numbei of small pailies,
including whal was lefl of lhe PPD, and had succeeded in gaining 77 seals
al lhe 1993 eleclion, bul only oblained 15 seals in 1996 aflei ils leadei
defecled fiom il and sel up lhe NCNP.
Theie is lillle lo dislinguish lhese pailies fiom each olhei in leims of
ideology; as a mallei of facl, lheii iole as opposilion pailies has nol been
veiy signincanl eilhei. Typically, Soulh Koiean opposilion pailies pailici-
pale maiginally in lhe polilical piocess, lheii main iole being lo accom-
modale evei-shifling coalilions of peisonalily-based faclions. Allegiance
lo faclion leadeis is moie impoilanl lhan is allegiance lo lhe paily as an
inslilulion: inslilulional loyally is weak. Consequenlly, lhe sliucluie of
opposilion pailies, like lhal of lhe iuling paily, lends lo be aulhoiilaiian,
malleis being sellled in a highly cenlialized mannei in Seoul, while giass-
iools oiganisalions play lillle pail in decision-making. The opposilion
pailies have seldom allempled lo enlisl syslemalically lhe suppoil of
laboui unions, consumeis, enviionmenlal bodies, oi olhei secloial pies-
suie gioups.
SO\TH KORIA 149
Splits anJ ncrgcrs, rcgionalisn, anJ thc pcrsonali;ation oj lcaJcrship
The lhiee chaiacleiislics of Koiean pailies, volalilily, peisonalizalion,
and iegionalizalion, aie inliinsically linked. Regionalism slems fiom bul
also ieinfoices peionalized leadeiship, while lhe idiosynciasies of leadeis
accounl foi ma|oi splils and meigeis. Thus iegional idenlily is sliongei
lhan olhei afnlialions, whelhei paily membeiship, ieligion, oi social
class; il accounls in laige pail foi lhe oulcomes of bolh nalional and local
eleclions. l is also a ciucial elemenl in lhe deleiminalion of ma|oi policy
issues: polilicians appeal lo eleclois on a iegional basis ialhei lhan on lhe
basis of nalional piogiammes, goals, and visions. So long as peison-
alizalion and iegionalism ieinfoice each olhei, a slable nalional paily
syslem can haidly be expecled lo emeige.
The pioblem of paily inslilulionalizalion
Accoiding lo Hunlinglon, lhe level of inslilulionalizalion of polilical
oiganizalions can be measuied by lheii adaplabilily, complexily, aulon-
omy, and coheience (Hunlinglon 1968, 1222). Adaplabilily`` iefeis lo
lhe capabilily of a paily lo ad|usl successfully lo changes in ils enviion-
menl: evidence foi lhis fealuie can lypically be based on lhe age of an
oiganizalion. Complexily`` means bolh lhe mulliplicalion of hieiaichical
and funclional subunils and lhe diffeienlialion of lhese. Aulonomy``
involves lhe exlenl lo which polilical oiganizalions exisl independenlly of
1987 1988 1992 1996 1997
Ileclion Ileclion Ileclion Ileclion Ileclion
D1P - - - - - - - - - - - - - - - - - -
W
b
b
b
b
a
b
b
b
b
Y
NPP
(1997)
RDP - - - - - - - - - - - - - - - - - DLP - - - - - - - - - - - - - - - - - - - - - NKP - - - - - - - - - - - - GNP
(1an. 199O) (1996) (1997)
NDRP- - - - - - - - - - - - - - - - \LD - - - - - - - - - - - - - - - - - - -
(1995)
PPD - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - DP - - - - - - - - - - - - - DP - - - - - - - - - - - - -
(1996)
NCNP - - - - - - - - - - - - - - - - - -
(1996)
Hangyoie - - - - - - - - X
Peoples - - - - - - - - - - - - X
RNP (1992) - - X
Iiguie 6.1 The evulutiun uf the Suuth Kurean party system after demucratizatiun,
1987-1997 (Souice: compiled fiom Chosun Daily. X`` indicales dissolulion of a
paily; foi explanalions of paily acionyms, see lhe lexl of lhis chaplei and lhe
Lisl of Acionyms, p. ix)
olhei social gioupings. Coheience`` ielales lo lhe exlenl lo which lhe
paily is uniled in leims of lhe funclions of lhe oiganizalion and of lhe
pioceduies foi iesolving dispules wilhin il.
n developed Weslein demociacies, pailies lend lo scoie ielalively
highly in leims of lhe foui chaiacleiislics: in pailiculai, lheii oiganizalion
and ideology iemain slable foi lenglhy peiiods, while being able lo adapl
lo changing enviionmenls. n Koiea, on lhe conliaiy, pailies have
scaicely become inslilulionalized duiing lhe 198Os and 199Os. They have
all been unslable, as nguie 6.1 shows: eveiy signincanl paily has expeii-
enced a meigei, has splil, oi has disappeaied. Thus, as we saw, lhe D1P
meiged wilh lhe RDP and lhe NDRP in 1anuaiy 199O, bul lhe DLP ex-
peiienced a splil aflei only six yeais, lhe dominanl faclion of lhe DLP
having puiged Kim 1ong Pil`s faclion lo avoid an inlense powei sliuggle
wilhin lhe paily. Opposilion pailies undeiwenl similai meigeis, splil, oi
disappeaied. None of lhe foui ma|oi pailies pailicipaling in lhe 1987
founding eleclion aflei lhe democialic liansilion mainlained ils idenlily
foi moie lhan six yeais. Koiea`s paily syslem is lhus cleaily unable lo
adapl lo changing enviionmenls.
Noi aie Koiean pailies complex oiganizalions. They may appeai lo
have subunils, bul lhese exisl only on papei: nalional, piovincial, and
local levels play a veiy limiled pail in decisions on campaign slialegy and
fund-iaising. These decisions aie laken by lop-level paily leadeis and
lheii immediale enlouiages. Thus, in spile of democializalion, Koiean
polilical pailies suffei fiom lhe same kind of volalilily as lhal which
chaiacleiizes many pailies in aulhoiilaiian iegimes: lhe pailies have ex-
peiienced delayed developmenl, which slems laigely fiom lhe facl lhal
lhey aie kepl in lulelage by populai leadeis whose bases aie essenlially
iegional.
Thc prinacy oj rcgionalisn ovcr othcr social clcavagcs
To become consolidaled, pailies need deep social iools and have lo be
inleinally uniled (Randall 1995; Ivans and Whileneld 1993). These lwo
elemenls aie ielaled in lhal when pailies have a social base, lhey aie
likely lo have numeious, disciplined, and loyal suppoileis. Hence lhe
impoilance given by Lipsel and Rokkan lo lhe social base of pailies, a
fealuie lhal has come lo be viewed as ciilical bolh in lhe Wesl and in
lhose non-Weslein counliies, such as Koiea, which became democialic in
lhe lale lwenlielh cenluiy (Lipsel and Rokkan 1967, 67).
As was noled eailiei, neaily all Koiean pailies have one, and only one,
social base, iegionalism. This is lhe one social base, howevei, which is
leasl likely lo lead lo a slable paily syslem. The facl lhal iegionalism
piedominales makes il naluially ialhei easy foi iegionally based polili-
cians lo build a sliong peisonalized suppoil; lhis in luin pievenls lhe
SO\TH KORIA 151
pailies fiom developing lively inleinal sliucluies and fiom becoming as a
iesull disciplined and slable. Whal emeiges, on lhe conliaiy, is volalile
bodies plagued by faclionalism. Koiean pailies display lhese chaiaclei-
islics: consequenlly, lheii inslilulionalizalion has been delayed and lhey
have known many splils and meigeis.
Moieovei, paiadoxically peihaps, lhe moie libeial polilical enviion-
menl which emeiged aflei 1987 enabled ceilain fealuies of iegionalism lo
pievail even moie. Given lhal all lhe ma|oi pailies have a coie iegional
base; lhal lhey diaw suppoil heavily fiom lheii iegions; and lhal lhey
weie sel up by oi aie maikedly dependenl on iegionally sliong peisonal
leadeis, diffeiences among lhe iegions have come lo be a key elemenl in
lhe populai appeal of lhese leadeis. Al lhe same lime, voleis appeai lo
iewaid lhe leadeis foi lheii emphasis on seclional geogiaphical plal-
foims. As a iesull, elecloial suppoil in all ma|oi pailies has incieasingly
been dependenl on lhe iegional facloi, ialhei lhan on social class oi
ieligion, foi inslance: iegionalism is lhe key mobilizing elemenl on which
polilicians base lheii appeal and lo which lhe voleis iespond. Thus Kim
Dae 1ung has been sliong in lhe Cholla piovinces and aieas in Seoul
wheie many people migialed fiom lhese piovinces; lhe people of lhe
Chungchong piovinces piimaiily backed Kim 1ong Pil; Kim oung Sam`s
main powei base has been Pusan and Soulh Kyungsang Piovince; and
lhe disunily of opposilion polilicians along iegional lines belween lhe
Kyungsang and Cholla piovinces enabled Roh Tae Woo lo win lhe pies-
idency in 1987. A similai pallein exisled in lhe 1988 Nalional Assembly
eleclion, as can be seen fiom lable 6.3.
nleieslingly, lhe slienglh of lhis iegional facloi has nol decieased wilh
lhe piogiess of democializalion: lhe iegional concenlialion of lhe vole
conlinues lo be iemaikable. Thus lhe D1P oblained 66.8 pei cenl of lhe
voles in Roh Tae Woo`s home piovince of Kyungbuk; and lhe RDP,
whose candidale was oiiginally fiom Kyungnam Piovince, oblained 52.8
pei cenl of lhe vole in lhe iegion in lhe 1987 eleclion. The concenlialion
is even moie maiked in lhe case of lhe Paily foi Peace and Demociacy
(PPD), as il diew 86.2 pei cenl of lhe vole in lwo Honam piovinces
wheie ils candidale, Kim Dae 1ung, was boin. The inlensily of iegional
voling even incieased al lhe 1992 piesidenlial eleclion: Kim oung Sam
oblained 52.8 pei cenl of lhe vole in his home iegion in 1987, bul in 1992
he oblained 72.1 pei cenl; in lhe Honam iegion, Kim Dae 1ung oblained
9O.9 pei cenl of lhe voles. The dominance of lhe iegional cleavage was
equally maiked al lhe Nalional Assembly eleclion of 1992 and lhe elec-
lion of 1996 showed almosl no change al all in lhis iespecl.
Regionalism and voling alignmenls have also been inlimalely linked in
local eleclions. n lhe 1une 1991 eleclion which ie-eslablished piovincial
assemblies aflei a 3O-yeai suspension, Kim Dae 1ung`s lhen New Demo-
cialic Paily gained 83 pei cenl of lhe seals in Kwang|u, 92 pei cenl in
Soulh Cholla, and 98 pei cenl in Noilh Cholla; bul il did nol win a single
seal in lhe lwo meliopolilan communilies of Pusan and Taegu oi in lhe
nve piovinces of Kangwon, Noilh Kyungsang, Chae|u, and Noilh and
Soulh Chungchong (Ahn and Back 1995). Local eleclions weie held
again in 1une 1995 foi lhe municipal and piovincial assemblies and foi
heads of local goveinmenls: lhe Cholla piovinces weie won by Kim Dae
1ung`s Democialic Paily, lhe Chungchong piovinces weie laken by Kim
1ong Pil`s \niled Libeial Democialic Paily, and Seoul was divided be-
cause of ils mixed iegional composilion.
Wilh iegionalism being lhe social base foi lhe pailies, nalional inslilu-
lionalizalion has nol even begun lo occui. Leadeis can use lheii iegional
suppoil in whalevei way lhey wish: when polilical leadeis foim oi dissolve
coalilions as a iesull of changed ciicumslances, lheii pailies meige oi splil.
When a populai leadei launches a new paily foi ieasons besl known lo
himself, his iegion swiflly changes ils suppoil lowaid lhe new paily.
This pallein bolh leads lo and is ieinfoiced by lhe weak inleinal
sliucluie of pailies. Paily oiganizalions aie dominaled by lhe lop leadeis;
lhese aie lypically wholly iesponsible foi managing lhe affaiis and n-
nances of lhe paily, as well as foi elaboialing polilical laclics, nominaling
candidales foi eleclions, and iunning elecloial campaigns. So long as ie-
gional cleavages iemain lhe social basis foi elecloial mobilizalion, and so
long as peisonalized leadeiship wilh a monolilhic iegional idenlincalion
dominales lhe paily syslem, lheie will be lillle paily inslilulionalizalion.
The inleinal condilions foi a slable paily syslem can lheiefoie be said lo
be absenl in Soulh Koiea al lhe end of lhe lwenlielh cenluiy.
Democializalion and economic peifoimance
Whelhei demociacy helps oi hindeis economic peifoimance has become
a piominenl issue in newly democializing counliies: as a mallei of facl,
lhe evidence on lhis queslion is laigely inconclusive and conliadicloiy.
Some conlend lhal lhe newly inlioduced democialic iegimes of Asia and
Lalin Ameiica have affecled lhe economy negalively; olheis claim lhal
demociacies have achieved a bellei and moie efncienl economic peifoi-
mance lhan aulhoiilaiian slales. (Sagong 1993; Cheng 1995; Maiavall
1994; Pei 1994; Geddes 1994).
1cononic pcrjornancc anJ thc burcaucratic statc
The success of lhe Soulh Koiean economy has owed a gieal deal lo lhe
sliong slale,`` wilh ils abilily lo foimulale piopei policies`` and lo
SO\TH KORIA 153
1
5
4
Table 6.3 Suuth Kurean presidential electiun results by regiun, 1987-1997
(pei cenl)
SeouljKyunggi Chungchong Kangwon Honam Kyungbuk Kyungnam Nalional lolal
19871
D1P (Roh Tae Woo) 33.7 32.2 57.9 9.6 66.8 35.9 36.6
RDP (Kim oung Sam) 28.2 19.5 25.5 1.2 26.1 52.8 28.O
PPD (Kim Dae 1ung) 28.O 11.6 8.6 86.2 2.4 6.8 27.O
NDRP (Kim 1ong Pil) 8.1 33.7 5.3 O.5 2.3 2.6 8.1
19921
DLP (Kim oung Sam) 36.O 36.2 4O.8 4.2 61.6 72.1 42.O
DP (Kim Dae 1ung) 34.8 27.3 15.2 9O.9 8.7 1O.8 33.8
NRP (1eong 1u oung) 19.8 23.8 33.5 2.3 17.O 8.8 16.3
Olheis 9.4 12.7 1O.5 2.6 12.7 8.3 7.9
19972
Shaie of voles by candidale
Region Piovincesjmeliopolilan cilies Lee Hoi Chang Kim Dae 1ung Rhee n 1e Tuinoul iale
Chungchong Tae|on 29.2 45.O 24.1 78.6
Noilh Chungchong 3O.8 37.4 29.4 79.3
Soulh Chungchong 23.5 48.3 26.1 77.O
Cholla Kwang|u 1.7 97.3 O.7 89.9
Noilh Cholla 4.5 92.3 2.1 85.5
Soulh Cholla 3.2 94.6 1.4 87.3
1
5
5
Noilh Kyungsang Taegu 72.7 12.5 13.1 78.9
Noilh Kyungsang 61.9 13.7 21.8 79.2
Soulh Kyungsang Pusan 53.3 15.3 29.8 78.9
\lsan 51.4 15.4 26.7 81.1
Soulh Kyungsang 55.1 11.O 31.3 8O.3
Olheis Seoul 4O.9 44.9 12.8 8O.5
Kyunggi 35.5 39.3 23.6 8O.6
nchon 36.4 38.5 23.O 8O.O
Kangwon 43.2 23.8 3O.9 78.5
Che|u 36.6 4O.6 2O.5 77.1
Tolal 38.7 4O.3 19.2 8O.7
Souice: Nalional Ileclion Managemenl Commission 1987, 1992, 1997.
1 Ioi explanalions of paily acionyms, see lhe lexl of lhis chaplei and lhe Lisl of Acionyms, p. ix.
2 The piesenlalion of dala foi 1997 ieecls lhe changes made by lhe Nalional Ileclion Managemenl Commission in lhe oiga-
nizalion of eleclion dala foi 1997 as againsl pievious eleclions.
channel bolh public and piivale iesouices effeclively foi dynamic indus-
liial giowlh. The slale oveisaw laboui ielalions and lhe ow of human,
capilal, and naluial iesouices; il could mobilize inveslmenl funds lhiough
foiced savings via laxes and inalion, foieign boiiowing, and nnancial
inleimedialion, and lhen channel lhese funds seleclively lo a numbei of
pio|ecls. The slale ciealed public enleipiises and manipulaled piovisions
of loans and incenlives lo lhe piivale secloi as well. n biief, il played a
dominanl iole in almosl all aspecls of economic life in Soulh Koiea
(1ones and Sagong 198O; Deyo 1987; Amsden 1989; Choi 1989; Woo
1991; Haggaid and Moon 1993; Ahn 1994). el lhe veiy success of lhe
sliong slale planled lhe seeds of ils undoing. As lhe economy giew in
size and complexily, lhe effecliveness of slale inleivenlion decieased.
ncieased indusliializalion and incieased maikel dependency led lo fui-
lhei inleifeience in bolh economy and sociely lo a poinl wheie lhis
inleifeience became impossibly coslly and counlei-pioduclive.
The piocess of indusliializalion enhances lhe powei and inuence of
sociely and of civic oiganizalions ielalive lo lhal of lhe slale and public
oiganizalions, while limiling lhe slale`s abilily lo inuence sociely and
lhus eioding ils fieedom of inleivenlion. The slale has lheiefoie lo ad|usl
ils melhods and ils mannei of acling on sociely. This occuiied in Koiea
when economic giowlh and indusliializalion ciealed lhe social and polil-
ical piecondilions foi demociacy. Wilh deepening indusliializalion, pio-
democialic foices weie slienglhened and acquiied incieasing polilical
inuence, allhough lhis did nol guaianlee lheii success.
As has been aigued foi Lalin Ameiica, and as has indeed occuiied in
lhe newly indusliializing counliies of Iasl and Soulheasl Asia, aulhoii-
laiianism appeais lo be necessaiy oi even inevilable foi a capilalisl
developing economy lo biing aboul lhe changes in ils pioduclion sliuc-
luie which aie necessaiy foi ils indusliial deepening. Sludies of Iasl
Asian newly indusliializing counliies (NCs) also lend lo aigue lhal lhe
sofl`` aulhoiilaiianism of lhe capilalisl developmenlal slales`` has a
ceilain advanlage ovei puiely socialisl oi capilalisl policies in pioviding
efnciency in economic iesouice mobilizalion, especially duiing lhe eaily
slages of indusliializalion. n effecl, lhese lheoiies end up saying lhal
Koiean sociely needed (oi condoned) lack of demociacy in oidei lo
achieve iapid economic developmenl (Amsden 1989). Peihaps, howevei,
Koiea`s iapid economic developmenl was made possible nol only be-
cause of lhe aulhoiilaiian sliong slale,`` bul also because of olhei
faclois; likewise, Koiea`s non-democialic pasl is due moie lo specinc
faclois in Koiean polilics lhan lo lhe uige foi economic developmenl,
such as ils unique slialegic posilion in lhe capilalisl woild syslem as well
as lhe absence of a counleivailing elile based on an inslilulionalized paily
syslem.
Thc cconony Juring thc transition pcrioJ
To examine lhe Koiean case moie closely, lel us begin by consideiing lhe
macioeconomic peifoimance of Koiea belween 1987 and 1995. As lable
6.4 shows, lhal peifoimance has been mixed duiing lhe liansilion peiiod.
Theie was an economic downluin duiing lhe eaily peiiod undei Roh Tae
Woo; lhe economy lhen appeaied lo iecovei undei Kim oung Sam,
albeil wilh weaknesses in some seclois.
Piioi lo lhe democialic liansilion, lhe peifoimance of lhe Koiean
economy was good: in 1987, foi inslance, lhe lasl yeai of lhe Chun Doo
Hwan iegime, lhe economy giew by an impiessive 12.3 pei cenl; lhe
cuiienl accounl balance was \S$9.9 billion in suiplus; inalion was 3 pei
cenl and unemploymenl 3.1 pei cenl. n lhe eaily democialic peiiod, on
lhe olhei hand, lhe economy began lo slow down. The giowlh in GNP
fell fiom 12.3 pei cenl in 1987 lo 6.9 pei cenl in 1989 and lo 5.O pei cenl
in 1992; lhe cuiienl accounl plummeled lo \S$5.1 billion in 1989 and was
in dencil bolh in 1991 (\S$8.7 billion) and in 1992 (\S$4.5 billion);
inalion iose lo 5.7 pei cenl in 1989 and lo 9.3 pei cenl in 1991. Thus,
by seveial indicalois, lhe Koiean economy seemed lo have been paying
a piice foi lhe liansilion.
Howevei, lhal economy began lo ievive wilh lhe Kim oung Sam
goveinmenl. The GNP giew by 5.8 pei cenl in 1993, by 8.2 pei cenl in
1994, and by 8.7 pei cenl in 1995. nalion was ieduced lo 4.8 pei cenl in
1993 and 4.5 pei cenl in 1995, while unemploymenl was kepl al 2.8 pei
cenl in 1993 and 2.O pei cenl in 1995. The balance of paymenls conlinued
lo deleiioiale, howevei, excepl in 1993 when lheie was a small suiplus of
\S$38O million; lhe dencil ieluined in 1994, when il was \S$4.6 billion; il
incieased lo \S$8.8 billion in 1995 and lo \S$2O.1 billion in 1996. By lale
1997, when lhe economy suffeied a seiious nnancial ciisis, il seemed lhal
lhe oslensibly sound peifoimance of lhe economy duiing lhe Kim oung-
Sam goveinmenl may have been in pail due lo lhese vasl dencils.
On lhe basis of lhese nguies il is lheiefoie nol peimissible lo pass a
cleai |udgemenl on lhe impacl of democializalion on economic peifoi-
mance. When lhe economy began lo show signs of iecoveiy in lhe eaily
yeais of Kim oung Sam`s piesidency, some fell lhal lhe Koiean econ-
omy mighl have been paying lhe piice of lhe democialic liansilion
(Cheng 1995; Ahn 1996) Theie weie indeed a numbei of posilive, if nol
iosy, signs; as a mallei of facl, Koiea`s economy had lhe highesl giowlh
iales among lhe new demociacies even duiing lhe mosl difncull peiiod of
liansilion undei Piesidenl Roh Tae Woo (198792). By 1995, pei capila
income exceeded \S$1O,OOO; in Decembei 1991, Soulh Koiea became a
membei of lhe LO and in lhe couise of lhe democializalion piocess,
bolh laboui and managemenl had slailed lo oveicome lheii conicls: lhe
SO\TH KORIA 157
1
5
8
Table 6.4 Suuth Kurea's ecunumic perfurmance, 1987-1995
1987 1988 1989 199O 1991 1992 1993 1994 1995
Giowlh iale of GNP1 12.3 12.O 6.9 9.6 9.1 5.O 5.8 8.2 8.7
GNP2 133 179 22O 251 292 3O5 33O 376 451
GNP pei capila3 3,218 4,295 5,21O 5,883 6,757 7,OO7 7,513 8,483 1O,O76
Cuiienl accounl4 9.9 14.2 5.1 2.2 8.7 4.5 O.38 4.5 8.8
Consumei piices5 3.O 7.1 5.7 8.6 9.3 6.2 4.8 6.2 4.5
\nemploymenl iale 3.1 2.5 2.6 2.4 2.3 2.4 2.8 2.4 2.O
Gioss savings6 37.3 39.3 36.2 35.9 36.1 34.9 35.2 35.4 36.2
Gioss domeslic inveslmenl7 3O.O 31.1 33.8 37.1 39.1 36.8 35.2 36.2 37.5
Souice: Compiled fiom Nalional Slalislics Ofnce, Major Statistics oj Korcan 1conony (Seoul, 1996), quoled fiom Moon and Kim
1996, 15.
1 Annual pei cenl change al 199O conslanl piices.
2 n cuiienl \S$ billions.
3 n cuiienl \S$.
4 n \S$ billions, BOP basis.
5 Annual pei cenl change al 199O conslanl piices.
6 Peicenlage of GNP.
7 Peicenlage of GNP.
numbei of dispules was signincanlly ieduced fiom ils 1993 level; nnally,
lhe counliy |oined lhe OICD al lhe end of 1996.
Howevei, lhe piospecls foi suslained giowlh and foi economic malu-
iily came lo be fuilhei in queslion as lhe economy was hil by anolhei
downluin in 1996 and by lhe explosive evenls of 1997. The giowlh iale of
lhe GDP was ieduced lo 6.4 pei cenl in 1996; lhe cuiienl accounl dencil
swelled. The Hanbo Sleel scandal led lo massive economic luibulence in
eaily 1997, only lo be followed by a seiies of bankiuplcies of scoies of
ianking business nims including a few leading chaebols. By lale 1997, as a
iesull of mounling exleinal debls, Soulh Koiea was close lo nalional in-
solvency, and had lo iely on lhe nnancial suppoil of lhe nleinalional
Monelaiy Iund.
Given lhese ups and downs, lheie is appaienlly no cleai associalion
belween demociacy and economic peifoimance in Koiea. The concepl of
polilical demociacy is loo bioad lo be closely ielaled in a geneial mannei
lo economic peifoimance. l mighl lheiefoie be bellei lo look foi a moie
limiled concepl lhal will enable us exploie lhe associalion belween lhe
lwo vaiiables.
We noled eailiei lhal while democializalion has pioceeded speedily
and successfully, lhe inslilulionalizalion of lhe paily syslem has been de-
ncienl: il may lheiefoie be lhal economic mismanagemenl has been
caused by lhe gap belween lhe democializalion of lhe polily and lhe
weakness of lhe paily syslem. n counliies wheie pluialislic pailies com-
pele on lhe basis of policy plalfoims, economic goveinance is moie likely
lo become lianspaienl, democialic, and peifoimance-oiienled. As Mai-
avall aigues, lo achieve successful economic iefoim, democialic gov-
einmenls need lo lislen, lo negoliale, and lo peisuade`` (Maiavall 1994,
23). Moieovei, a democialic iegime can moie easily gain lhe populai
liusl iequiied foi long-leim planning and foi economic iefoims. The le-
gilimacy of democialic iegimes also piovides leadeis wilh sliong polilical
mandales enabling lhem lo launch effeclive economic iefoims. Thus a
case can be made foi lhe view lhal when a new demociacy has a slable
and inslilulionalized paily syslem, il can also be economically efncienl as
well as less vulneiable lo economic ciises.
Thc changing Korcan strong statc
The changing iole and capacily of lhe slale in economic goveinance may
be a fuilhei inleivening vaiiable linking demociacy and economic pei-
foimance. n lhe couise of lhe democializalion piocess, lhe Koiean slale,
which had been lhe dominanl acloi in economic decision-making, undei-
wenl signincanl changes. Democialic liansilion caused a modeiale de-
cline, lhough nol a seiious undeimining, of a numbei of elemenls of lhe
SO\TH KORIA 159
sliong developmenlal slale: il is no longei fully insulaled and aulono-
mous since piivale business and lhe civil secloi in geneial have gained
slienglh. This has had an effecl on lhe consislency and coheience of lhe
buieauciacy in lhe elaboialion and implemenlalion of economic policy-
making, as well as on lhe adaplabilily of lhe slale lo changing exleinal
polilical and economic enviionmenls.
Iiisl, as a iesull of libeializalion and democializalion, lhe aulonomy of
lhe slale began lo be eioded. n a posl-aulhoiilaiian silualion, business
and laboui had giealei polilical fieedom lo make lheii own voices and
demands fell; social ciilicism and polilical piolesl againsl slale domi-
nance gained slienglh. Ioi example, when business oiganizalions, whose
inuence had giown subslanlially in lhe couise of lhe piocess of eco-
nomic libeializalion, pushed lhe goveinmenl lo inlioduce new laws lo
allow exibilily in lhe laboui maikel in Decembei 1996, unions and
woikeis began lo piolesl vehemenlly, wilh lhe effecl lhal lhe laws had lo
be poslponed. As eleclions became moie democialic and moie iegulaily
held, and as lhe polilical legilimacy and suivival of lhe goveinmenl came
lo iesl incieasingly on elecloial suppoil, lhe aulonomy and insulaiily of
lhe slale declined even fuilhei. The polilical almospheie made il impos-
sible foi lhe slale lo slop wage incieases, foi inslance; as a iesull, nominal
wage iales subslanlially exceeded incieases in laboui pioduclivily. This
in luin had ma|oi consequences foi Soulh Koiea`s compelilive edge in
lhe woild maikel.
Second, lhe weakening of lhe sliong slale also bioughl aboul inefn-
ciency and inconsislency in lhe goveinmenl`s economic policy. Bolh lhe
Roh Tae Woo and lhe Kim oung Sam goveinmenls peifoimed eiialic
lwisls in economic managemenl. The Roh goveinmenl, on ils inauguia-
lion, allempled lo inlioduce new economic iefoim piogiammes which
included a ieduclion of lhe concenlialion of lhe economic powei of lhe
chaebols and amendmenls lo laboui laws: because of lhe conliadicloiy
chaiaclei of lhese policies, lhe package of iefoims led lo an economic
iecession. To offsel lhis iecession, Roh`s goveinmenl abiuplly ieluined
lo expansionaiy, pio-business policies which fuilhei incieased inalion
(Moon and Kim 1996, 1O). Subsequenlly, when ieal eslale and slock
maikel speculalion became wild, lhe goveinmenl swilched back lo an al-
leinalive sel of policies in oidei lo diminish lhe effecl of lhis speculalion.
Kim oung Sam`s goveinmenl was also chaiacleiized by abiupl and
fiequenl changes of diieclion belween iefoim policies and conseiva-
live policies. On lhe inauguialion of lhe piesidenl, lhe goveinmenl
announced ambilious plans lo allei nnancial liansaclions and lo cam-
paign againsl coiiuplion. Allegedly in oidei lo enhance economic |uslice,
in 1993 Piesidenl Kim banned lhe use of false and boiiowed names in all
nnancial liansaclions, lhe main ob|eclive being lo block lhe ow of illegal
oi unelhical polilical donalions lhal smacked of coiiuplion. n addilion,
lhe goveinmenl announced lhal all ieal-eslale lilles had lo be iegisleied
undei lhe ieal name of lhe ownei (Ahn 1996, 253). These measuies had
uninlended iesulls, howevei: lhey led, foi inslance, lo shaip incieases in
consumplion, and in impoils of luxuiy goods. Confionled wilh lhese
negalive consequences as well as wilh mounling difncullies in lhe woild
maikel, lhe goveinmenl ieluined lo conseivalive policies: in 1994, in-
slead of emphasizing iefoim, lhe goveinmenl began lo sliess lhe need lo
iecovei inleinalional compeliliveness wilh lhe calchphiase of scgychwa
oi globalizalion.``
l was in such a conlexl lhal lhe goveinmenl allempled lo enfoice, in
Decembei 1996, a new law piimaiily aimed al allowing exibilily in lhe
laboui maikel and al pioviding businesses wilh moie favouiable con-
dilions in which lo compele in woild maikels. The law was senl piema-
luiely lo lhe Nalional Assembly, howevei, wilhoul enough effoils having
been made lo consull wilh opposilion pailies and laboui oiganizalions.
Despile veiy sliong opposilion, lhe goveinmenl and lhe iuling paily
nonelheless endeavouied lo see lo il lhal lhe law was passed, wilh only
lhe membeis of lhe iuling paily secielly galheiing and voling wilhoul
debale. This led bolh lo polilical luimoil and lo economic chaos. Iieice
piolesls came nol only fiom laboui oiganizalions, bul fiom many seclois
of lhe new middle class (1cononist, 18 1anuaiy 1997, 27). Rapid changes
in economic policy lhus plagued lhe goveinmenls of democializing Koiea.
Iiialic and fiequenl lwisls in diieclion have huil lhe ciedibilily of lhe
goveinmenl, and lhis may well in luin have had seveie consequences foi
oveiall economic peifoimance.
Iinally, democializalion lends lo cause a decline in lhe slale`s abilily lo
adapl in a limely mannei lo lhe exleinal economic enviionmenl. The
Koiean economy had pieviously ad|usled successfully lo changes in lhe
woild maikel wilh limely, effeclive, and consislenl economic measuies.
n lhe conlexl of lhe lale 199Os, lhe buieauciacy became moie vulneiable
lo lhe inleiesls of business gioups and lo lhe piessuie exeicised by olhei
piivale oi civic oiganizalions, lhis being anolhei aspecl of lhe ieduclion
of lhe insulaiily of lhe slale. The iesull has been a weakening of lhe
buieauciacy`s powei of policy co-oidinalion and geneially of ils powei lo
adapl lo lhe changing woild economy.
Since 1996, lhe Koiean economy has begun lo suffei fiom a numbei of
faclois in woild maikels. l was pailiculaily affecled by lhe decline of lhe
1apanese yen and by high wages: expoils of key ilems such as semicon-
duclois shaiply diopped. To meel lhese challenges, lhe economy needed
quick policy changes, bul wilh lhe decline of lhe sliong developmenlal
slale, lhe goveinmenl and economic buieaucials weie no longei able lo
undeilake such changes: lhe Koiean economy was no longei being efn-
SO\TH KORIA 161
cienlly goveined by a developmenlal slale iun by lough buieaucials.
Moieovei, as pail of Koiea`s accession lo lhe OICD in 1996, nnancial
conliols by lhe cenlial aulhoiilies on lhe banking syslem had been alle-
nualed and even in pail eliminaled. Olhei key playeis in lhe Koiean
economy nolably business and laboui weie maikedly moie poweiful
lhan in lhe pasl. A new ielalionship among lhese playeis and belween
lhem and lhe slale had lheiefoie lo be eslablished: unlil lhis occuis, lhe
Koiean economy is likely lo conlinue lo ucluale in accoidance wilh lhe
condilions diclaled by exleinal aclois and by lhe global enviionmenl in
geneial.
Conclusion
As Soulh Koiea enleis lhe lwenly-nisl cenluiy, il is confionled wilh lhe
lwin needs of having lo consolidale ils demociacy and ievilalize ils
economy. The democializalion piocess of 198796 helped lhe counliy
lo move, seemingly iiieveisibly, fiom an aulhoiilaiian lo a democialic
polily. Since lhis move has laken place, lhe nalion has been commilled
simullaneously lo polilical and economic iesliucluiing. n lhe Schumpe-
leiian sense of lhe leim al leasl, Soulh Koiea has become a demociacy: il
has a democialic conslilulion which allows foi fieedom of polilical ex-
piession and fieedom of associalion; il has a fiee piess, seveial pailies,
iegulai eleclions, and open compelilion foi powei among ma|oi polilical
foices; above all, since 1987, changes of goveinmenl have been peaceful
and iegulai.
el lhe legacy of aulhoiilaiian elile iule, iegional cleavages, and lhe
lack of inslilulionalizalion of polilical pailies has blocked Koiea`s palh
lowaids a maluie demociacy. As we saw, pailies have made less piogiess
lhan olhei inslilulions. Paily oiganizalions aie nol liue medialing agenls
belween social demands and lhe goveinmenl. They aie nol slable oi
duiable, all ma|oi pailies having undeigone meigeis and splils since
1987. Theii aulonomy as oiganizalions has been undeimined by lhe
dominance of peisonal paily leadeis enlienched in iigidly ciicumsciibed
iegional sliongholds. The piopei iole of lhe pailies as pailies has been
usuiped by lhese leadeis inslead of being peifoimed in accoidance wilh
sellled pioceduies. Piesidenlial polilics has also pievenled pailies fiom
being key aclois, while lhe nisl-pasl-lhe-posl elecloial syslem lends lo
favoui laige exisling pailies and makes il difncull foi new social foices lo
nnd a place in polilical life: all signincanl pailies have been ciilicized foi
being in effecl conseivalive pailies, and lhus foi fuilhei disloiling lhe
links belween paily and sociely (1aung 1996).
As a new kind of piesidency emeiges undei foimei opposilion leadei
Kim Dae 1ung, Soulh Koiea`s demociacy faces a numbei of polilical
challenges. Iiisl, goveinmenl peifoimance and policy effecliveness need
lo be impioved in oidei lo meel cilizens` expeclalions. Second, iefoim
diives and democializalion piogiammes have lo be bellei co-oidinaled
in oidei lo impiove lhe qualily of life of lhe people al laige. Thiid, lhe
values, goals, and noims of demociacy need lo be nimly iooled in lhe
culluial oiienlalion and lhe behavioui palleins of lhe populalion. Iouilh,
lhe fuluie of Soulh Koiean demociacy laigely depends on whelhei il
develops a social and economic base enabling il lo achieve a peaceful
unincalion of lhe lwo Koieas and lhus lo give lhe Noilh Koiean people
lhe oppoilunily lo live undei democialic iule (Ahn 1997).
Iconomically, Soulh Koiea faces lhe lask of moving successfully fiom
being an expoilei laigely of cheap manufacluies lo being able lo succeed
againsl moie aggiessive and sophislicaled compelilois in lhe global mai-
kel of high-lechnology and knowledge-inlensive indusliies. Slale-cenlied
economic goveinance conlinues in some iespecls. ndeed, pail of lhe
MI package enlails iesloiing lhe slale`s supeivision in some nelds, such
as nnancial supeivision; moieovei, lhe Iconomic Planning Boaid, which
had been weakened and subsumed in lhe Iinance Depailmenl in 1994
95, is lo be iesuiiecled as an Ofnce of Managemenl and lhe Budgel; fui-
lheimoie, lhe slale`s piominenl iole in R & D and new pioducl devel-
opmenl as well as in encouiaging small and medium-sized enleipiises and
expoils is lo iemain. Theie may be moie emphasis on collaboialion lhan
on hieiaichy and diieclion, bul lhe slale`s iole has nol been abandoned.
Howevei, in olhei aspecls, slale goveinance is subslanlially ieduced.
As was shown by lhe haish iesislance of laboui oiganizalions and lhe
sliikes and polilical luimoil which followed lhe aboilive allempl by lhe
goveinmenl lo enacl lhe new laboui law in lale 1996, lheie aie seiious
doubls aboul lhe powei of lhe slale lo be able lo iepiess laboui: in oidei
lo cieale a exible laboui maikel oi lo lowei wage cosls, lhe goveinmenl
needs lheiefoie lo lislen, co-opeiale, negoliale, and peisuade. The lime
has passed when slale buieaucials could deal wilh woikeis by using
heavy-handed melhods.
Meanwhile, on lhe inleinalional plane, lhe counliy is moving away
fiom being a clienl of lhe \niled Slales lo becoming an independenl,
middle-ianking acloi funclioning as a key playei in lhe iegion`s and even
in lhe woild`s polilical and economic oidei. Iiom a nalion divided by
ideology and billei wai, il has sel ilself lhe goal lo achieve nalional ie-
unincalion lhiough ieconcilialion and peaceful piocesses.
By lhe lime Kim Dae 1ung was elecled piesidenl in 1997, Koiean so-
ciely had come lo lhe painful iealizalion lhal lhe nalional economy had
ieached a ciucial |uncluie. n lhe pasl, low laboui cosls had fuelled dy-
namic giowlh lhiough expoil-led expansion. Al lhe end of lhe lwenlielh
SO\TH KORIA 163
cenluiy, on lhe olhei hand, indusliies need lo be upgiaded lo achieve
high-lech pioduclion if lheii inleinalional compeliliveness is lo be main-
lained. Ixcessive wage incieases, high capilal cosls, and exaggeialed
buieaucialic ied lape, nol lo menlion inslilulionalized coiiuplion, have
weakened lhe inleinalional compeliliveness of lhe economy; piospecls
aie even woise as exleinal economic ciicumslances deleiioiale. Mean-
while, mounling demands have also been made lo cul down lhe powei of
lhe chaebols, lhe mainly family-iun conglomeiales which seived Soulh
Koiea well as engines of giowlh in lhe 197Os and 198Os, bul which have
since lhen losl lheii compelilive edge in oveiseas expoil maikels.
Al lhe lime of his eleclion, Piesidenl Kim piomised lo ieinvigoiale lhe
economy by liimming goveinmenl and ieducing lhe ied lape which slies
efnciency. He also commilled himself lo sliiking a balance belween
laboui and managemenl and lo inlioducing measuies lo suppoil small
and medium-sized enleipiises. His adminislialion also had lo ieshape lhe
heavily indebled nnancial inslilulions in oidei lo enable lhem lo confoim
lo lhe iequiiemenls of lhe MI iescue package, while giving banks and
nnancial inslilulions giealei aulonomy. The choices which Piesidenl Kim
Dae 1ung had lo make weie veiy haid: lhey iequiied consideiable skill lo
enable him lo implemenl lhe necessaiy polilical and economic agenda,
while mainlaining coheience in economic and social policies.
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Socicty in Contcnporary Korca, Coinell \niveisily Piess, lhaca, N..
Hail-Landsbeig, Mailin (1993), Thc Rush to Dcvclopncnt. 1cononic Changc anJ
Iolitical Strugglc in South Korca, Monlhly Review Piess, New oik.
Hunlinglon, Samuel P. (1968), Iolitical OrJcr in Changing Socictics, ale \ni-
veisily Piess, New Haven, Conn.
(1991), Thc ThirJ Vavc. Dcnocrati;ation in thc 1atc Twcnticth Ccntury,
\niveisily of Oklahoma Piess, Noiman.
m, Hyug Baeg (1996), Koiean Democialic Consolidalion in Compaialive Pei-
speclive,`` papei piesenled al an inleinalional confeience on Democialic Con-
solidalion in Soulh Koiea, Koiea \niveisily, Seoul, 192O 1une.
1aung, Hoon (1996), Democialic Tiansilion and The Imeiging Paily Syslem in
Soulh Koiea: The Rise of A Conseivalives-Dominanl Paily Syslem,`` unpub-
lished manusciipl.
1ones, Leioy and Sakong, l (198O), Covcrnncnt, Busincss, anJ 1ntrcprcncurship
in 1cononic Dcvclopncnt. Thc Korcan Casc, Haivaid \niveisily Piess,
Cambiidge, Mass.
Koo, Hagen (1993), The Slale, Min|ung, and lhe Woiking Class in Soulh Koiea,``
in Hagen Koo (ed.), Statc anJ Socicty in Contcnporary Korca, Coinell \ni-
veisily Piess, lhaca, N..
Lipsel, Seymoui, and Rokkan, Slein (1967), Iarty Systcns anJ Votcr Alignncnt,
Iiee Piess, New oik.
Mainwaiing, Scoll (1993), Piesidenlialism, Mullipailism, and Demociacy: The
Difncull Combinalion,`` Conparativc Iolitical StuJics 26, 198228.
Maiavall, 1ose Maiia (1994), The Mylh of lhe Aulhoiilaiian Advanlage,`` 1our-
nal oj Dcnocracy 5(4), pp. 1731.
SO\TH KORIA 165
Moon, Chung-n, and Kim, Song-min (1996), Demociacy and Iconomic Peifoi-
mance in Soulh Koiea,`` papei piesenled al an inleinalional confeience on
Consolidaling Demociacy in Soulh Koiea, Koiea \niveisily, Seoul, 192O
1une.
Mooie, Baiiinglon, 1i. (1966), Social Origins oj Dictatorship anJ Dcnocracy,
Beacon Piess, Boslon.
Nalional Ileclion Managemenl Commission (1987, 1992, 1997), Thc IrcsiJcntial
1lcction Data, Seoul.
(1996), Thc 1996 Ccncral 1lcction, Seoul.
O`Donnell, Guilleimo (1973), MoJcrni;ation anJ Burcaucratic Authoritarianisn,
nslilule of nleinalional Sludies, Beikeley, Calif.
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Pei, Minxin (1994), The Puzzle of Iasl Asian Ixceplionalism,`` 1ournal oj Dc-
nocracy 5(4), pp. 9O1O3.
Pizewoisky, Adam (1992), Dcnocracy anJ thc Markct. Iolitical anJ 1cononic
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Randall, \icky (1995), Pailies and Democialisalion in lhe Thiid Woild,`` papei
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Mancheslei \niveisily, \.K., 1314 1anuaiy.
Ruschemeyei, Dieliich, Slephens, Ivelyn H., and Slephens, 1ohn D. (1992),
Capitalist Dcvclopncnt anJ Dcnocracy, \niveisily of Chicago Piess, Chicago.
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7
The Philippines
Rcnato S. Vclasco
n ousling a diclaloiship in 1986, lhe Philippines was an impoilanl pail of
lhe democialic wave lhal swepl lhe woild in lhe 197Os and 198Os. Duiing
lhese decades many aulhoiilaiian iegimes in Asia, Iaslein Iuiope, Lalin
Ameiica, and Afiica fell fiom powei, and moie libeial and democialic
polilical syslems look lheii place. Aflei yeais of diclaloiial iule, lhese
polilies expeiienced lhe ieluin of civilian iule, fiee eleclions, and polili-
cal pailies, a democialic awakening which iesulled in much oplimism and
even euphoiia. Iiancis Iukuyama desciibed lhis hisloiical phase as lhe
end of hisloiy.`` He aigued lhal lhe evenlful liiumph of demociacy ovei
aulhoiilaiianism signals lhe univeisalizalion of Weslein libeial democ-
iacy as lhe nnal foim of human goveinmenl.1
Olhei analysls, howevei, adopled a moie caulious allilude lowaid lhe
iesloialion of democialic iegimes. Relaling il lo pasl polilical liends,
Samuel Hunlinglon desciibed lhe iecenl episode as lhiid-wave democ-
ializalion.`` On lhe basis of lhis concepl, he pul foiwaid lwo aigumenls:
nisl, lhis democialic awakening is simply a conlinualion of lwo pievious
movemenls (lhe nisl wave in 18281926 and lhe second wave in 1943
62); second, each of lhe lwo eailiei waves was followed by a ieluin lo
non-democialic iegimes (lhe nisl ieveisal in 192242, lhe second in
195875). The implicalion is lhal lhe cuiienl lhiid wave of democializa-
lion will also lead lo a ieveisal.2
Tiansilions lo demociacy do nol necessaiily lead lo democialic con-
solidalion oi deepening: lheie aie indeed seiious lhieals lo new and old
167
demociacies. One of lhese lhieals is economic slowdown oi slagnalion
which hampeis lhe capacily of lhe slale lo delivei seivices and lo inlio-
duce iefoims while undeimining public conndence in democialic polilics.
The downfall of seveial aulhoiilaiian iegimes has been alliibuled lo bad
economic mismanagemenl. The legilimacy of newly iesloied demociacies
is lheiefoie lied lo lheii abilily lo iesloie and suslain economic giowlh.
Anolhei lhieal comes fiom messianic and egoislic leadeis who pei-
peluale a peisonalily-based leadeiship, lhus impaiiing lhe developmenl
of democialic pioceduies, sliucluies, and inslilulions. Moieovei, social
dislocalion leads lo alienalion and bieeds anli-iegime violence. Iinally,
lhe mililaiy has yel lo accepl fully oi ad|usl lo ils diminished iole in posl-
aulhoiilaiian polilics.
Thus lhe queslion is whelhei lhe iesloied demociacies of lhe 198Os and
199Os have a bellei chance al consolidalion and suivival inlo lhe fuluie
lhan lheii piedecessois had 3O oi 5O yeais ago. This in luin depends
laigely on lhe naluie of lhe polilical pailies wilhin lhe demociacies.
While sliong pailies may nol be necessaiy lo eslablish democialic
iegimes, lhey aie necessaiy foi lhe long-leim consolidalion of lhese
iegimes. As Diamond and Linz noled:
an impoilanl elemenl in lhe inslilulional iesilience of demociacy has been lhe
slienglh of lhe paily syslem and lhe high degiee of inslilulionalizalion and pop-
ulai loyally achieved by lhe ma|oi pailies. All of oui cases call allenlion lo lhe
inslilulional slienglh oi weakness of pailies as a deleiminanl of success oi failuie
wilh demociacy, and each of lhem giapples wilh lhe pioblem of inslilulionaliza-
lion in leims lhal inevilably iecall Samuel Hunlinglon`s classic foimula: cohei-
ence, complexily, aulonomy and adaplabilily.3
Polilical pailies aie lhe pioducls as well as lhe ciealois of demociacy.
Theii aclivilies piomole lhe foimalion of an oiganized opposilion which
is essenlial foi demociacy. Thiough lheii opeialion, lhe people become
involved and educaled polilically. Modein demociacy is unlhinkable
wilhoul pailies.
Pailies also conliibule lo economic giowlh, which in luin enhances lhe
duiabilily of democialic iegimes. The mosl developed economies aie also
lhose wilh lhe longesl hisloiy of and mosl inslilulionalized paily syslems.
Polilical and paily leadeiships which sleeied economic developmenl in
Weslein Iuiope, Ameiica, and 1apan bioughl aboul lhe afuence of
lhese counliies. Pailies and polilicians, logelhei wilh lhe buieauciacy,
eslablished lhe appiopiiale legal and policy infiasliucluie lhal made
suslained and iapid giowlh possible.
How fai do lhese chaiacleiislics apply lo Philippine polilical pailies?
Do lhey piomole democializalion as well as economic giowlh? Whal aie
168 RINATO S. \ILASCO
lheii basic oiganizalional fealuies? Whal is lhe impacl of lhe conslilu-
lional sliucluie and lhe elecloial syslem on lheii naluie, oiienlalion, and
opeialions? How do lhey ielale lo lhe buieauciacy in economic policy-
making? To whal exlenl does lhe buieauciacy denne economic policies
and oulcomes, and whal aie lhe modes of co-opeialion and conicl be-
lween lhe pailies and lhe buieauciacy? Whal aie lhe oulcomes of lhis co-
opeialion in leims of policies and giowlh?
To addiess lhese queslions, lhis chaplei nisl discusses lhe hisloiical
conlexl of paily polilics and of economic policy-making and demociali-
zalion. l lhen examines lhe conslilulional sel-up, elecloial syslem, and
mass media, and looks al lheii impacl on lhe polilical pailies. The pio-
giammes and plalfoims of lhe pailies aie analysed in lhe conlexl of lhe
selling up of a giowlh coalilion`` and ils impacl on democializalion and
economic goveinance. Iinally, lhe papei suiveys lhe backgiound, capa-
bilily and iole of lhe buieauciacy in economic policy-making, and lhe
modes of co-opeialion and lension belween pailies and buieaucials as
well as lhe oulcomes of economic policy-making iesulling fiom inlei-
aclions belween polilicians and buieaucials.
Hisloiical backgiound
A middle-income counliy wilh a populalion of 7O million, lhe Philippines
has one of lhe longesl iecoids of democialic goveinance in Asia. l has
been exlensively exposed lo libeialism. l was Asia`s oldesl iepublic
(1898); il is lhe only Chiislian counliy in Asia; il was a woiking democ-
iacy belween 1946 and 1972; and, aflei a diclaloiial inleilude belween
1972 and 1986, lhe diclaloiship was ousled by a non-violenl people
powei`` ievoll in 1986.
Duiing a long iesislance againsl 3OO yeais of Spanish colonialism, lhe
counliy was sliongly inuenced by lhe libeilaiian ideals of lhe Iiench
and Ameiican ievolulions. Al lhe heighl of lhe ievoll in 1898, Iilipino
ievolulionaiies diafled a iepublican conslilulion based on civil libeilies, a
iepiesenlalive assembly, and lhe sepaialion of chuich and slale. The
Philippine-Ameiican Wai of 189919O2 ended lhal iepublic, which was
ieplaced by Ameiican occupalion up lo 1946 when independence was
declaied.
Iost-war Jcnocratic politics, 19461972
Posl-wai polilics was based on a sepaialion of poweis syslem wilh checks
and balances on lhe \.S. model. The Ameiican-inspiied 1935 Conslilu-
lion had piovided foi univeisal suffiage. ls piovisions foi civil iighls and
THI PHLPPNIS 169
seculai iepiesenlalive demociacy complemenled lhe libeial concepls of
lhe 1898 Conslilulion.
Belween 1946 and 1972 polilical life was based on lwo pailies, lhe
Nalionalisla Paily (NP) and lhe Libeial Paily (LP). Minoi pailies occa-
sionally challenged lhis lwo-paily dominance bul lhey weie hampeied by
lhe buill-in slienglh (hisloiical, nnancial, and even legal) of lhe lwo main
pailies. Ileclions weie populai among Iilipinos. The elile consensus was
lheieby slienglhened, iesulling in polilical syslem slabilily and piedicl-
abilily. Allhough lheie was fiaud and violence, mosl polilical leadeis and
cilizens pul lheii failh in lhe democialic piocess. The Philippines is lhus
one of lhe few Asian counliies in which lhe luinovei of leadeiship has
lended lo be peaceful. Belween 1946 and 1972, lheie weie lhiee liansfeis
of powei fiom lhe elecled goveinmenl of one paily lo lhe elecled gov-
einmenl of anolhei.
Martial law politics, 19721986
This iecoid of democialic polilics was bioken in 1972 when Piesidenl
Ieidinand Maicos declaied mailial law. He exploiled lhe dissalisfaclion
which had emeiged as a iesull of lhe oligaichical chaiaclei of lhe lead-
eiship of lhe lwo pailies and used mailial law lo exlend his leim. Con-
slilulional piovisions on civil libeilies weie suspended, Congiess was
abolished, and opposilion leadeis and ciilics weie aiiesled and impiis-
oned. Relying on lhe mililaiy, Maicos piomulgaled a new Conslilulion
and eslablished a iegime which he desciibed as one of conslilulional
aulhoiilaiianism.`` A single-paily syslem was eslablished, based on lhe
Kilusang Bagong Lipunan (KBL New Sociely Movemenl) wilh bar-
angays oi neighboihood gioups as giassiools oiganizalions. The hegem-
ony of lhe KBL was unchallenged foi ovei a decade.
The iegime piomised slabilily and giowlh on lhe basis of devel-
opmenlalism: lhese piomises pioved emply. The exleinal shocks of lhe
oil and debl ciises in lhe 197Os and 198Os exposed lhe inleinal weak-
nesses of lhe iegime: pioleclionism, monopolies, and debl-poweied
giowlh. As a mallei of facl, lhe huge foieign debl buiden combined wilh
capilal ighl and lhe fall in expoil ievenues led lo negalive giowlh in lhe
eaily 198Os. Polilically, lhe aulhoiilaiian powei sliucluie and lhe lack of
a iegulai succession mechanism alienaled many gioups and caused anxi-
ely among inveslois. The iapid giowlh of a Muslim-based iebellion and
of a Communisl-led New People`s Aimy (NPA), and lhe assassinalion of
lhe noled opposilion leadei Senaloi Benigno Ninoy`` Aquino caused
widespiead alaim, including wilhin lhe \.S. goveinmenl which had
exlended economic and mililaiy assislance lo lhe iegime because of ils
slialegic inleiesls in lhe counliy. Theie came lo be a sliong uniled op-
17O RINATO S. \ILASCO
posilion againsl lhe iegime which included lhe Calholic Chuich, business
gioups, and disgiunlled mililaiy leadeis. n Iebiuaiy 1986, lhe people
powei`` ievoll deposed Maicos, and Coiazon Aquino, lhe widow of lhe
slain senaloi, became piesidenl.
Thc rcstoration oj Jcnocratic politics, 1986prcscnt
The fall of Maicos bioughl aboul lhe iesloialion of iepiesenlalive insli-
lulions and pioceduies in lhe posl-1986 polilical syslem. A new conslilu-
lion, ialined by ovei lhiee-quaileis (78 pei cenl) of lhe voleis in 1987, laid
down lhe democialic fiamewoik. Congiess was ie-eslablished. Despile ils
dominance, lhe Calholic Chuich nevei decided elecloial oulcomes: lhus
foimei Defense Secielaiy Iidel Ramos, a Pioleslanl, was elecled piesi-
denl in 1992. n May 1998, \ice-Piesidenl 1oseph Isliada was also
elecled piesidenl despile lhe sliong opposilion of lhe Calholic Chuich.
The media aie iegaided as among lhe fieesl in Asia. Human iighls and
civil libeilies aie enshiined in lhe Conslilulion, and inleiesl gioups
advocaling vaiious policies abound. Ovei 15,OOO people`s oiganizalions
(POs) and non-goveinmenl oiganizalions (NGOs) foim pail of an ex-
lensive civil sociely. An independenl Supieme Couil seives as lhe nnal
aibilei on poinls of law above lhe nelwoik of civil and ciiminal couils.
The posl-1986 democialic syslem especially since 1992 saw lhe
iesloialion of polilical slabilily and was concomilanl wilh a iemaikable
economic luinaiound which pul lhe counliy back inlo lhe giowlh iace
alongside olhei Soulheasl Asian nalions. Peace lalks wilh mililaiy and
Muslim iebel gioups look place as a iesull of which lhese gioups came lo
be inlegialed inlo iegulai polilical life; lalks wilh lhe Communisls pioved
moie difncull, bul lhey piogiessed despile a numbei of suspensions.
Islablished monopolies and cailels in lhe lelecommunicalions, bank-
ing, shipping, coconul, and olhei slialegic indusliies weie dismanlled. To
libeializalion and piivalizalion measuies weie added moves lowaids de-
cenlializalion, as a iesull of lhe enaclmenl of a Local Goveinmenl Code
in 1991. This led lo giealei piivale and local inilialives, which in luin
iesulled in moie inveslmenls. Iconomic dynamism as ieecled in lhe
giowlh in GNP, lhe expansion of expoils, lhe inciease of foieign ex-
change ieseives, and a faiily low iale of inalion, made some begin lo see
lhe Philippines as an emeiging ligei`` economy.
The conslilulional sliucluie and elecloial syslem
The sliucluie of lhe slale and elecloial syslem aie denned in lhe 1987
Conslilulion and lhe Omnibus Ileclion Code (OIC). The 1987 Consli-
THI PHLPPNIS 171
lulion iesloied lhe pie-1972 piesidenlial syslem bul ieplaced lhe lwo-
paily syslem by a fiee and open paily syslem`` which encouiaged lhe
selling up of a mulli-paily syslem and led lo lhe emeigence of a numbei
of pailies in posl-1986 eleclions. The inlioduclion of a paily lisl syslem
foi lhe eleclion of some iepiesenlalives in Congiess fuilhei iesulled lo
lhe slienglhening of lhe mulli-paily syslem.4
The fiameis of lhe 1987 Conslilulion piefeiied a mulli-paily syslem as
lhey wished lo avoid lhe ieluin of lhe oligaichical lendencies of lhe pie-
1972 lwo-paily syslem undei which elecloial conlesls lended lo be con-
nned lo a few weallhy polilical families. This pievenled lhe emeigence of
ieally democialic polilics. \ndei a mulli-paily syslem, il was believed,
eleclive posilions would be open lo a laige numbei of polilical gioups.
Accoiding lo lhe Conslilulion, lhe lhiee bianches of goveinmenl, ex-
eculive, legislaluie, and |udiciaiy, aie equal, as in lhe \niled Slales.
Piesidenls aie populaily elecled foi a nxed single leim of six yeais. They
have consideiable powei: lhis enables lhem lo alliacl laige numbeis of
iepiesenlalives and lo be suppoiled by a ma|oiily in Congiess, even if
lhis was nol lhe case befoie lhe eleclion. The pie-1972 adage, lhal il is lhe
Iilipino piesidenl who cieales his paily and nol lhe paily which cieales
lhe piesidenl, is slill applicable loday.5
Congiess is bicameial. The 24 membeis of lhe Senale aie elecled na-
lionally foi a maximum of lwo conseculive leims of six yeais each. 2OO of
lhe 25O membeis of lhe House of Repiesenlalives aie elecled by legisla-
live disliicls, based on populalion size excepl foi some veiy small ones,
foi a maximum of lhiee conseculive leims of lhiee yeais each. The nisl-
pasl-lhe-posl syslem applies in lhese cases; bul lhe olhei 5O membeis of
lhe House aie elecled fiom paily lisls on a piopoilional basis. Ioi lhese
seals, lhe lisls aie closed and eleclion depends on lhe candidale`s place-
menl on lhe paily slale. The limilalion on lenuie is piesciibed by lhe
Conslilulion lo discouiage lhe ievival of pie-1972 polilical dynaslies and
piomole a moie equal access lo iepiesenlalives of olhei pailies.
Ileclions aie iegulaled by lhe 1987 Conslilulion and lhe OIC; amend-
menls lo lhis code weie incoipoialed in elecloial iefoim laws following
lhe 1987 and 1992 eleclions. The piovisions of lhe Conslilulion in lhis
iespecl aie lhal lheie shall be no lileiacy, piopeily, oi olhei disciimina-
loiy qualincalions iesliicling lhe iighl lo vole.
The lask of enfoicing eleclion laws iesls wilh lhe Commission on Ilec-
lion (COMILIC). Membeis of lhis body aie appoinled by lhe piesidenl
wilh lhe consenl of Congiess. l exeicises exclusive |uiisdiclion ovei lhe
qualincalions of candidales, lhe acciedilalion of pailies and cilizens`
eleclion gioups, and canvassing. l sels lhe dales of opening of campaigns
(6O days foi lhe piesidenl, and 45 days foi House membeis and local
ofncials); ensuies lhal candidales aie piovided fiee, equal, and publicly
nnanced media exposuie; iegulales campaign expenses (a maximum of
P1O.OO (oi \S$.25) pei volei); and acls againsl leiioiism, volei haiass-
menl, and eleclioneeiing by goveinmenl ofncials and employees.
While lheie aie laws lo induce faiiness and counlei lhe so-called
lhiee Gs`` (guns, goons, and gold) which used lo chaiacleiize Philippine
eleclions, enfoicemenl iemains pooi. Compliance oi non-compliance
wilh lhe iules has been laigely dependenl on COMILIC. Theie weie
pioblems al bolh lhe 1987 and 1992 eleclions bul lhese weie oveilooked
because of lhe aulhoiily of lhe COMILIC leadeiship. Iiaud al lhe 1995
eleclions and iepealed adminislialive lapses subsequenlly have eioded
lhal aulhoiily, and COMILIC has been ciilicized as inefncienl and
subseivienl lo lhe powei wieldeis.6
Some fealuies of lhe elecloial syslem affecl lhe inlegiily of lhe demo-
cialic piocess and lhe giowlh of pailies. One of lhese is lhe liadilional
and cumbeisome melhod of having lo wiile lhe names of piefeiied can-
didales on lhe ballol; anolhei is lhe facl lhal lhe counl is done manually.
This leads lo delays and lo fiaud. Theie would be savings if lhe syslem
weie modeinized, since lhe whole pioceduie would lake place moie
quickly. nslead of having lo exlend ovei lhiee lo nve days, lhe whole
piocess of counling would lake only a day oi lwo al lhe maximum.
Anolhei difncully slems fiom lhe facl lhal nalional and local eleclions
aie held simullaneously. This conslilules a subslanlial advanlage foi
voleis, allhough lhey may also nnd evalualing and wiiling lhe names of
aboul 2O oi moie candidales buidensome. The syslem is ceilainly disad-
vanlageous foi COMILIC, since lhis body has lo supeivise lhe eleclion
of ovei 4O,OOO public ofncials in 77 piovinces, 68 cilies, and 1,55O munic-
ipalilies. Moieovei, pailies aie adveisely affecled, as simullaneous elec-
lions weaken paily links belween nalional and local candidales. Befoie
1972, when local and nalional eleclions look place al diffeienl limes, local
leadeis could devole lheii full eneigy lo suppoiling candidales foi na-
lional ofnce and vice veisa: lhis lhey cannol do any longei, as lhey have
lo nghl lheii own elecloial ballles duiing lhe same peiiod.
A fuilhei pioblem is consliluled by lhe limiled amounl of slale nnan-
cial suppoil given lo pailies and candidales duiing eleclions. Polilical
adveilising is banned and lhis piovides incumbenls, media peisonalilies,
and well-known candidales a maiked advanlage; slale subsidies would
also slienglhen pailies as lhey would lessen lhe dependence of lhese
pailies on weallhy individuals.
The eliminalion of paily iepiesenlalives in lhe Boaid of Ileclion
Canvasseis (BOC) has also weakened paily slienglh. Befoie 1972, when
paily iepiesenlalives weie BOC membeis, pailies could exeicise moie
inuence since lhey could piolecl lhe voles of lheii paily belleis and
supeivise lhe faiiness of lhe elecloial piocess: since 1987, on lhe olhei
THI PHLPPNIS 173
hand, many candidales feel lhey do nol need lhe suppoil of a paily lo
make suie lhal lhe counl is done honeslly: cilizens and chuich-based
elecloial walch gioups such as lhe Nalional Movemenl foi Iiee Ileclions
(NAMIRIL) and lhe People`s Pasloial Council foi Responsible \oling
(PPCR\) have piomoled populai pailicipalion, bul lhe iole of pailies
has diminished in lhe piocess.
Peihaps lhe mosl impoilanl fealuie of lhe syslem, howevei, is lhe facl
lhal lhe nisl-pasl-lhe-posl syslem is in foice foi lhe eleclion of lhe piesi-
denl and vice-piesidenl. This means lhal a candidale may be elecled wilh
a small minoiily only, if lheie is, as has been lhe case since 1987, a laige
numbei of ielalively sliong candidales. Thus Iidel Ramos was elecled
wilh only 24 pei cenl of lhe voles in 1992, and in lhe 1998 eleclions,
1oseph Isliada was elecled wilh 38 pei cenl of lhe voles. Nol suipiis-
ingly, lheie have been iepealed calls foi lhe ieluin of lhe lwo-paily syslem.
The mass media in Philippine polilics
The media play an impoilanl iole in lhe democializalion of Philippine
polilics. They have iendeied policy-making moie lianspaienl by piovid-
ing ways and means foi lhe public lo know moie aboul goveinmenlal
aclivilies and policies. Iieed fiom polilical conliol since lhe ouslei of lhe
diclaloiship, lhe mass media weie ievilalized and came lo shape public
opinion and lhus become an impoilanl locus of powei. They aie a
mechanism foi populai feedback as well as an effeclive insliumenl foi
building consensus on nalional policies. The sliong inuence of lhe Phil-
ippine media is disceinible in lheii evei widening ieach and vaiiely. Theii
aclive iole in lhe ciealion of a moie demanding and disciiminaling public
has come lo be documenled.7
Twenly-foui daily newspapeis (9 bioadsheels and 14 labloids) aie
published in lhe Nalional Capilal Region. Oulside Manila, lheie aie al
leasl one local and one piovincial papei in each of lhe 12 iegional cenlies
of lhe counliy. Radio and lelevision have a widei and laigei ieach. l
was eslimaled in 1993 lhal 82 pei cenl of households owned a iadio sel,
54 pei cenl owned a lelevision sel, and close lo one million weie cable
T\ subsciibeis.
The media have become as a iesull an effeclive vehicle foi infoimalion
and inleiesl ailiculalion. They have lended lo ieplace pailies and polili-
cians as links belween goveinmenl and people. Iew appioach pailies oi
polilicians foi lheii daily conceins; mosl go lo populai media peison-
alilies oi public affaiis piogiammes such as lhe populai Hoy Cising'
(Hey! Wake \p!``). T\ and iadio public affaiis piogiammes gel inslanl
allenlion and piovide quick solulions lo peisonal pioblems. Radio and
T\ announceis have come lo acquiie an auia of omnipolence: even on
cases of limiled impoilance, lhey oflen awake a Cabinel membei, legis-
laloi, oi public ofncial al nve o`clock in lhe moining and expecl nol only
lo be spoken lo bul also lo be lhanked.8
As in lhe \niled Slales, lhe media exeicise a sliong inuence on public
policy: lhis was manifesled in lhe case of Iloi Conlemplacion, a Iilipino
household woikei in Singapoie chaiged wilh muidei and senlenced lo
dealh by lhe Singapoiean aulhoiilies. The coveiage of lhe case was such
lhal lhe Ramos goveinmenl had lo make sliong effoils lo save lhe ovei-
seas woikei. Bowing lo public oulciy, il iecalled lhe Iilipino ambassadoi
lo expiess ils displeasuie wilh Singapoie`s iefusal lo slay lhe execulion of
Conlemplacion. The Ioieign Affaiis Secielaiy, Robeilo Romulo, and lhe
Laboi Secielaiy, Nieves Confessoi, weie foiced lo iesign as lhe media
had claimed lhal lhey had been negligenl in piolecling Iilipino oveiseas
woikeis.
Media oi public ielalions expeils have in effecl laken ovei many of lhe
funclions of paily oiganizeis. n Congiess, public ielalions leams in lhe
ofnces of seveial senalois and iepiesenlalives aie oflen piovided wilh
moie peisonnel and iesouices lhan olhei seclions oi depailmenls. Ilec-
live ofncials, especially lhose aspiiing lo highei posilions, considei lhe
media as lhe faslesl and mosl effeclive mechanism lo communicale wilh
lheii consliluenls and lo display lheii images lo lhe elecloiale.9
Nol suipiisingly, pailies endeavoi lo ieciuil media peisonalilies in
oidei lo cash in on lheii buill-in populaiily and exploil lhe peisonalily-
oiienled culluie of Iilipino voleis. Some of lhese celebiilies have indeed
oblained impoilanl nalional and local posilions: al lhe 1992 eleclions, foi
inslance, lhe second highesl posilion in goveinmenl, lhe vice-piesidency,
was won by a foimei movie acloi, 1oseph Isliada, while lwo olhei media
peisonalilies lopped lhe senaloiial iace, lhe populai comedian \icenle
Sollo, and lhe movie slai Ramon Revilla. This feal was iepealed in lhe
1998 eleclions wilh lhe eleclion of 1oseph Isliada lo lhe piesidency and
lhe vicloiies of media peisonalilies Loien Legaida and Rene Cayelano in
lhe senaloiial iace.
The ma|oi polilical pailies
Theie aie lhiee main pailies in lhe Philippines: Lakas ng TaoNalional
\nion of Chiislian Democials (Lakas-N\CD, usually known simply as
Lakas); Laban ng Makabayang Masang Pilipino (LAMMP Sliuggle of
lhe Nalionalisl Iilipino Masses); and lhe Libeial Paily (LP).
Two of lhese, Lakas and lhe LAMMP, weie eslablished only in 1992
and 1997 iespeclively: hence lheii low level of inslilulionalizalion (see
THI PHLPPNIS 175
lable 7.1)10 Theii mass membeiship is low and lheii oiganizalional sliuc-
luie limiled. As befoie 1972, lhe pailies aie loose coalilions of piovincial
and iegional polilical clans and families mainly pul logelhei lo conlesl
eleclions. They aie pailies of nolables whose main suppoil is diawn fiom
lhe polilically aclive elile, and hence lhey aie highly decenlialized.
nliapaily demociacy is weak oi non-exislenl. Rank-and-nle membeis
aie seldom consulled oi involved in policy-making: lhe mosl impoilanl
policies aie foimulaled by a nalional execulive commillee oi nalional
diiecloiale composed of a few paily leadeis and peisonalilies. Allhough
lheii highesl policy-making body is deemed lo be lhe nalional paily con-
giess, lhe iole of lhal body is laigely ceiemonial: il consisls in ieafniming
lhe decisions of lhe nalional execulive commillee oi diiecloiale.
Being dependenl on and conliolled by bosses, lhe pailies lend lo be
sel up mainly lo seive lhe ambilions of a few people, and in pailiculai of
piesidenlial candidales. These leadeis conliol paily posilions and acliv-
ilies, bolh as foundeis, in lhe case of lwo of lhe lhiee pailies, and as
ma|oi ieciuileis and nnancieis. Hence lhe view lhal in lhe Philippines
lheie aie no ieal pailies, only polilicians: foi lhe pailies aie piimaiily
insliumenls foi mulual aid foi lhe capluie, ielenlion, and exploilalion of
public ofnces.11
The social base of lhe pailies is naluially deleimined by lhe geo-
giaphical oi elhnic oiigin of lhe lop leadeis. This suppoil oflen slems
fiom lhe facl lhal a piominenl polilician`s family has dispensed favouis
locally nnancial oi in kind. This obviously occuis moslly in iemole and
pooi iuial aieas wheie lhe lack of alleinalives ieinfoices lhe iole of
bosses, palions, and oveiloids.
The lhiee pailies aie essenlially conceined wilh vole-maximizing, and
lheii plalfoims lheiefoie have a calch-all chaiaclei. They claim lo sub-
sciibe lo libeial demociacy and seldom ailiculale class, secloi, oi geo-
giaphically specinc inleiesls. As vehicles foi seekeis of eleclive ofnces,
lhey espouse populai piinciples lo please as many voleis as possible and
anlagonize lhe leasl numbei, oi if possible none al all. Linkages wilh
oiganized ieligious and ideological gioups aie oflen liansienl, laclical,
and oppoilunislic.
Theie is lheiefoie lillle piogiammalic diveisily and polilical diffeien-
lialion among lhe main pailies. To an exlenl, lhis is due lo lhe facl lhal
lhe paily eliles iecognize lhal lhe newly iesloied iepiesenlalive inslilu-
lions aie fiagile and need nuiluiing befoie being sub|ecled lo ma|oi
conicls ovei policy posilions. Thiee polilical evenls played a key pail in
lhe developmenl of such a low-conicl appioach: lhe 1986 people
powei`` ievoll which ie|ecled aulhoiilaiianism and iesloied demociacy;
lhe 1987 ialincalion of lhe new Conslilulion which laid down lhe libeial
foundalions of posl-1986 demociacy; and lhe 1987 and 1992 eleclions
1
7
7
Table 7.1 Basic indicaturs uf party institutiunalizatiun in the Philippines
Adaplabilily Complexily Aulonomy
Paily1
Age
(yeais)
Leadeis`
geneialion
Peisonalily
oiienlalion Oiganizalion
Powei of
bosses Paily lype deology
Lakas-N\CD 6 pie-1972 sliong chapleis sliong calch-all libeial
LDP 1O posl-1986 sliong nalional sliong calch-all libeial
NPC 6 pie-1972 sliong nalional sliong calch-all libeial
LP 51 pie-1972 sliong nalional sliong calch-all libeial
Souice: Renalo S. \elasco, Democializalion, Giowlh and lhe nslilulionalizalion of Iilipino Polilical Pailies,`` papei piesenled
al lhe Philippine Polilical Science Associalion Nalional Confeience, uezon Cily, 8 May 1997.
which ieafnimed public suppoil foi polilical foices espousing lhe ideals
of lhe 1986 ievoll. Thus, lhe plalfoims of lhe main pailies poinl lo a
consensus on ma|oi issues, nolably wilh iespecl lo lhe piomolion of de-
mociacy and economic giowlh, lhe supeiioiily of libeializalion ovei pio-
leclionism, and lhe leading iole of lhe piivale secloi in lhe economy.
1akas
Lakas came lo be lhe laigesl paily aflei lhe eleclion of Iidel Ramos lo
lhe piesidency in 1992. (Ioi lhe compaialive slienglhs of lhe main pai-
lies, see lable 7.2.) l was eslablished in 1992 by a handful of foimei
Laban ng Demokialikong Pilipino (LDP Sliuggle of Democialic Iili-
pinos) membeis lo be Ramos`s vehicle foi lhe piesidenlial eleclion, as
Ramos was lhen pailyless, having iesigned fiom lhe LDP when lhal paily
did nol nominale him foi piesidenl.
n accoidance wilh lhe adage aboul lhe piesidenl ciealing pailies and
nol vice veisa, Lakas was quickly liansfoimed fiom a minoi paily lo lhe
ma|oiily paily as many followeis of defealed piesidenlial candidales lefl
lheii pailies lo |oin Lakas. Thus, ils small membeiship in Congiess and
local aulhoiilies befoie 1992 incieased diamalically, nisl aflei Ramos`s
vicloiy al lhe 1992 eleclion, and again aflei a Lakas-led elecloial sweep
al lhe 1995 midleim eleclions. Aflei foui yeais of lhe Ramos piesidency,
Lakas came lo conliol lhe ma|oiily of seals in lhe House and held mosl
piovincial goveinoiships and cily mayoiallies.
The polilical base of Lakas is in lwo laige and slialegic piovinces which
aie lhe sliongholds of ils lop leadeis. One is Pangasinan, lhe home piov-
ince of Ramos and foimei speakei of lhe House 1ose De \enencia. This
is one of lhe 1O biggesl piovinces, wilh ovei a million voleis oi ovei half
lhe elecloiale of Noilheasl Luzon. Cebu is lhe olhei powei base, being
lhe slionghold of Imilio Osmena, Ramos`s defealed vice-piesidenlial
iunning male: il is anolhei laige piovince wilh moie lhan a million voleis
in lhe soulhein iegion of Iaslein \isayas, which has pioduced lwo of
lhe pasl len piesidenls of lhe counliy. The piovince is consideied lo be
second only lo Melio Manila, lhe Nalional Capilal Region, in leims of
economic and polilical slienglh.
Lakas has sliong links wilh big business because ils leadeis weie in
powei undei Ramos and because of ils pio-business policies. Apail fiom
fiequenl business confeiences and |oinl goveinmenl-business woikshops
which biing Lakas and business leadeis logelhei, lhese close links aie
undeiscoied by lhe facl lhal many leadeis of big business gioups weie
also lop Lakas campaigneis and nnancieis duiing lhe 1992 piesidenlial
eleclions: among lhese aie Pelei Gaiiucho of lhe Managemenl Associa-
lion of lhe Philippines, Robeilo Romulo and Robeilo Del Rosaiio, 1i., of
1
7
9
Table 7.2 Party afhliatiuns uf members uf Cungress and guvernurs in the Philippines, 1992, 1995, and 19971
1992 1995 1997
Senale House Goveinoi Senale House Goveinoi Senale House Goveinoi
Lakas-N\CD 2 8 22 2 118 56 4 134 58
LDP 3 13O 26 19 32 7 9 21 6
NPC O 1O 16 2 26 8 2 2O 7
LP 1O 3O 5 1 12 3 2 1O 3
KBL 4 3 3 2 3 1
PRP O O O O O O 1 O O
NP 1 6 O O 2 O O 1 O
Olheisjndependenl 9 22 2 13 3 5 16 2
Souices: Commission on Ileclions 1992, 1995; Congrcsswatch Rcport, Makali Business Club, Decembei 1996; Lakas, LDP, NPC,
and LP iosleis of membeis, 1995; ToJay, Manila Tincs, Ihilippinc Daily Inquircr, 21 and 31 May 1995; Ihilippinc Daily Inquircr,
4 Apiil 1997.
lhe Makali Business Club, and 1ose Concepcion of lhe Iedeialion of
Iilipino ndusliies.
Thc 1aban ng Makabayang Masang Iilipino
The LAMMP is a coalilion of lwo ma|oi and one minoi opposilion pailies,
namely lhe Laban ng Demokialikong Pilipino, lhe Nalionalisl People`s
Coalilion (NPC), and lhe Pailido ng Masang Pilipino (PMP Paily of lhe
Iilipino Masses). l was sel up in Oclobei 1997 lo consolidale lhe oppo-
silion and inciease ils elecloial chances againsl Lakas. The LAMMP is led
by Senaloi Idgaido Angaia, foimei head of lhe LDP, and lhe secielaiy-
geneial is Senaloi Oilando Meicado, foimei piesidenl of lhe PMP.12
The vicloiy of ils piesidenlial candidale, 1oseph Isliada, in lhe May
1998 eleclions has made lhe LAMMP lhe new iuling coalilion, wilh many
membeis of Lakas-N\CD and olhei pailies defecling lo ils camp. Theie
weie lalks and piepaialions wilh a view lo liansfoiming lhe coalilion inlo
a foimal meigei lo be called Labian ng Masang Pilipino (LAMP
Sliuggle of lhe Iilipino Masses) wilh Angaia, Isliada`s defealed iunning
male, as piesidenl and Isliada himself as chaiiman.13
Thc 1aban ng Dcnokratikong
Befoie lhe LAMP meigei, lhe LDP was lhe laigesl opposilion paily. l
was lhe iuling paily duiing lhe Aquino adminislialion, having been sel
up in 1988 by piominenl anli-Maicos polilicians led by lhe lhen Senale
Piesidenl Neplali Gonzales, House Speakei Ramon Milia, and Con-
giessman 1ose Co|uangco, puipoiledly lo oiganize legislalive and polili-
cal suppoil foi lhe Aquino adminislialion. Despile iepealed effoils lo
ieciuil hei inlo lhe paily, Aquino iefused lo |oin. This pioved lo be a
ma|oi facloi in lhe decline of lhe paily, especially when Aquino endoised
lhe candidacy of Ramos and diveiled lhe adminislialion`s iesouices and
buieaucialic machineiy lo Lakas. The LDP losl much of ils polilical
ciedibilily soon afleiwaids when ils piesidenlial candidale, Speakei
Milia, losl lhe 1992 eleclion and many LDP membeis iesigned lo |oin lhe
piesidenl`s paily.
The oiganizalional pioblems of Laban weie made woise by faclional-
ism. The sliife was belween lhe so-called pio-coalilion`` (pios``), headed
by Senaloi Gonzales, who wanled lo conlinue lhe alliance wilh Lakas,
and lhe anli-coalilion`` (anlis``), led by Senaloi Angaia, who wanled lo
bieak away fiom lhe coalilion and nghl Lakas.
This division was lhe iesull of a complele \-luin as lhe Gonzales-led
pios had al nisl opposed lhe coalilion wilh Lakas while lhe Angaia-led
anlis weie lhe ones who engineeied il. Ivenlually, innghling wilhin lhe
LDP ieached such piopoilions lhal il losl lhe Senale piesidency in 1996.
Despile an LDP ma|oiily in lhe Senale, lhe NPC piesidenl, Senaloi
Iineslo Maceda, defealed Gonzales as Angaia, lhe LDP piesidenl, allied
wilh him and olhei Lakas senalois.
The paily was fuilhei demoialized by a silualion in which ils own
piesidenl had conliibuled lo lhe defeal of an LDP Senale piesidenl by a
non-LDP leadei. Nol long afleiwaids, many of lhe paily`s noled and
longlime leadeis iesigned fiom il, among lhem Senalois Gonzales,
Albeilo Romulo, Gloiia Macapagal-Aiioyo, and Oilando Meicado,
House Depuly Speakei and Laban Secielaiy-Geneial Heinando Peiez,
and Laban`s founding secielaiy-geneial, Rep. 1ose Co|uangco, 1i. n
Oclobei 1997, lhe Angaia-led LDP faclion allied wilh lhe NPC and PMP
lo foim lhe LAMMP.
Thc Nationalist Icoplcs Coalition
The NPC was lhe second biggesl opposilion paily befoie ils coalilion
wilh LDP and PMP. l was akin lo Lakas in having been foimed in 1992
piimaiily lo suppoil lhe piesidenlial campaign of ils candidale, Iduaido
Co|uangco, 1i., a weallhy Maicos ciony and cousin of Piesidenl Aquino.
Con|uangco losl lhe piesidency bul lhe paily won some seals in lhe Sen-
ale, lhe House of Repiesenlalives, and local goveinmenls. ls slienglh
was fuilhei ieduced aflei lhe Lakas-led coalilion vicloiy in lhe 1995 mid-
leim eleclions.
Co|uangco iesigned lhe leadeiship which wenl lo Senaloi Iineslo
Maceda, and Maceda`s shiewd manoeuvies pioved successful in building
up lhe NPC`s iole in paily polilics despile ils weak base. He won lhe
Senale piesidency by aligning wilh lhe Angaia faclion and lhe PMP, lhe
minuscule paily of lhen \ice Piesidenl 1oseph Isliada. He consolidaled
lhe alliance by foiming il inlo LAMMP, bul iesigned fiom LAMMP
when Angaia was chosen ovei him as Isliada`s vice-piesidenlial iunning
male in lhe May 1998 eleclions. He lhen ian foi mayoi of Manila and
losl; and on 11 1une 1998 lhe NPC dissolved ilself as a paily. ls membeis
aie expecled lo |oin LAMP which is sel lo ieplace Lakas as lhe iuling
paily.
The geogiaphic sliongholds of LAMMP aie idenlical wilh lhe zones of
inuence of ils lop leadeis. Ixcepl foi Negios, lhe home piovince of lhe
NPC`s foundei, Co|uangco, lhe LAMMP bases aie moslly in medium-
sized and small piovinces wilh small voling slienglh and lillle economic
powei. Whal seems lo be lhe compensaling facloi is lhe facl lhal lhese
piovincial bases aie scalleied in slialegic pails of lhe counliy. These
include lhe locano piovinces (Maceda), Auioia in Soulhein Tagalog
(Angaia), as well as lhe bailiwicks of close allies of Angaia such as Bohol
THI PHLPPNIS 181
in Iaslein \isayas (Senaloi Iineslo Heiieia), Camaiines Sui in Soulh-
ein Luzon (Goveinoi Luis \illafueile), Albay in Soulhein Luzon (Rep.
Idcel Lagman), and Agusan in Mindanao (Goveinoi Demociilo Plaza).
The LAMMP is said lo have links wilh business gioups, nolably lhe
coipoiale clienls of Angaia`s law nim, known as lhe ACCRA Law Ofnce.
Anolhei base of suppoil is piovided by lhe Iilipino Chinese who sup-
poiled \ice-Piesidenl Isliada`s anli-kidnapping campaigns when he
chaiied lhe Piesidenlial Anli-Ciime Commission. The suppoil given by
lhese business gioups lo LAMMP has been indiiecl due lo lhe coalilion`s
opposilionisl slance and lhe facl lhal lhe business communily lends lo
benenl fiom lhe economic policies of lhe Lakas-led adminislialion.
LAMMP also ieceives suppoil fiom lhe Tiade \nion Council of lhe
Philippines, an inuenlial fedeialion of oiganized laboui, whose secie-
laiy-geneial is Senaloi Heiieia.
Thc 1ibcral Iarty
The lhiid main paily is lhe Libeial Paily, lhe only iemaining pie-1972
paily. Duiing lhe Aquino adminislialion, lhis paily conliolled lhe Senale
and exeicised inuence in lhe House. Like lhe LDP, il suffeied a ma|oi
selback in lhe piesidenlial and congiessional eleclions in 1992. On lhe
whole, lhe paily has lended lo hold lefl-of-cenlei views and il has
been ciediled wilh being iesponsible foi lhe ie|eclion of lhe Philippines-
Ameiica Co-opeialion Tiealy which led lo lhe wilhdiawal of lhe \.S.
mililaiy bases in lhe counliy.
Allhough il has only a few membeis in lhe Senale and lhe House, lhey
hold impoilanl leadeiship posilions in Congiess, such as chaiiman of lhe
Senale Commillee on Ways and Means, House senioi depuly speakei,
and House assislanl ma|oiily ooi leadei. As a coalilion pailnei of
Lakas, lhe LP has been given moie posilions and access lo goveinmenl
iesouices by lhe iuling paily.
The sliongholds of lhe LP aie also in medium-sized and small piov-
inces. These include Samai (Rep. Raul Daza), Maiikina (Rep. Romeo
Candazo), Balanes (Rep. Iloiencio Abad), Capiz (Rep. Manuel Roxas
), and Balaan (Rep. Ielicilo Payumo). The paily has no diiecl suppoil
fiom oi close links wilh big business allhough some of ils leadeis, nolably
Roxas and Daza, aie known lo have exlensive business inleiesls. l is also
linked lo a numbei of cause-oiienled gioups.
Iarty policics, iJcologics, platjorns, anJ vicws
All lhiee main pailies subsciibe lo lhe fundamenlal libeial piinciples of
fiee enleipiise, limiled goveinmenl, and civil iighls and libeilies. This
coiiesponds lo lhe consensus of posl-1986 polilical eliles on basic policy
issues. Theie is bioad acceplance of peaceful and democialic means of
acquiiing and iemaining in powei. On a few policy nuances, lheie aie
diffeiing opinions, bul eleclions aie iegaided as being lhe main way lo
iesolve lhese diffeiences. Iuilheimoie, lheie is a de faclo consensus on
ma|oi economic issues and in pailiculai on lhe impoilance of economic
giowlh, which is viewed as lhe key lo lhe solulion of many socio-
economic pioblems, as well as on lhe leading iole of lhe piivale secloi in
lhe economy, and on lhe facl lhal globalizalion of lhe economy has lo be
accepled.
Lakas desciibes ilself as naka-Diyos (pio-God), nakabayan (pio-
counliy oi nalionalisl), nakatao (pio-people) and naka-kalikasan
(Gieen,`` oi pioenviionmenl). l pledges ilself lo woik foi a sliong and
slable iepublic, lhe enhancemenl of iepiesenlalive goveinmenl, people
empoweimenl, eslablishmenl of a maikel economy, pioleclion of lhe
enviionmenl, and piogiessive developmenl of lhe iule of law. Aflei
winning lhe piesidency in 1992, Lakas iallied aiound Piesidenl Iidel
Ramos`s vision of Philippines 2OOO.`` This goal has lwo basic ob|eclives:
lo make lhe counliy`s economy globally compelilive by lhe yeai 2OOO
lhiough libeializalion, piivalizalion, and deiegulalion; and lo piomole
people empoweimenl.
The LAMMP has adopled lhe I1AM1S piogiam, which slands foi
Iood secuiily and enviionmenlal pioleclion, 1ivelihood and |obs, Anli
giafl and coiiuplion, Mass lianspoilalion and liafnc managemenl, 1du-
calion and heallh iefoim, and Safely and public oidei. These aie lhe
same aieas in which Lakas as lhe goveinmenl paily can boasl of
achievemenls.
Piioi lo ils dissolulion and absoiplion inlo lhe LAMMP, lhe LDP, in
bolh ils 1988 and 1995 plalfoims, soughl lo piomole lhe iule of law,
nalional polilical slabilily, self-ielianl economy, and impiovemenl of lhe
slandaid of living of lhe people.`` l pledges ilself lo woik foi lhe de-
velopmenl of a nalional philosophy and lhe giowlh of a socially piogies-
sive cilizeniy.``
n lhe same vein, lhe olhei componenl of lhe LAMMP, lhe NPC, pai-
allels LDP`s call foi a nalional philosophy lo iekindle Iilipino paliio-
lism and self-esleem.`` l also ieileiales ils commilmenl lo lhe goals of
iecognizing piivale inilialives and individual fieedom, pioleclion of
piivale piopeily, deiegulalion, and adheience lo lhe iule of law.``
The LP has lhe mosl delailed piogiam. \nlike ils counleipails which
simply piesenl geneial slalemenls, lhe LP has developed posilions on
specinc issues such as opposilion lo nucleai weapons, lhe ieduclion of lhe
foieign debl, and genuine land iefoim. Despile lhese diffeiences, how-
evei, lhe LP`s basic slandpoinls on lhe iule of law, iespecl foi piopeily
THI PHLPPNIS 183
iighls and limiled slale inleivenlion`` aie similai lo lhose of lhe olhei
main pailies. n ils 1995 ievised paily piogiam, il ieileialed ils suppoil
foi a fiee-maikel economy and downplayed nalionalisl pioleclionism.
The main pailies lend lo suppoil similai slandpoinls foi a numbei of
ieasons. Iiisl, lhe social backgiound of posl-1986 paily leadeis diffeis
fiom lhal of lhe pie-1972 leadeis. The lallei consliluled a naiiow elile,
which was closely associaled wilh lhe landed oligaichy whose ienl-
seeking inleiesls weie anchoied on slale palionage and inleivenlion.
Wilh a bioadei economic base and diveise caieei backgiounds, lhe posl-
1986 paily eliles aie moie disposed lowaids fiee enleipiise and limiled
goveinmenl.
Second, lhe new elile has in common lhe facl lhal ils membeis all ex-
peiienced lhe Maicos diclaloiship and weie allies duiing lhe 1986 peo-
ple powei`` ievolulion. They aie moie awaie, if nol convinced, of lhe
viilues of democialic polilics because of lhe negalive consequences of
aulhoiilaiianism and olhei modes of polilical exliemism. Theii suppoil foi
libeializalion slems fiomlheii awaieness of lhe aws and cosls of economic
pioleclionism befoie 1972 and ils moie paiasilic foim of ciony capilalism
duiing lhe Maicos iegime. They favoi eleclions and olhei peaceful and
democialic modes of change aflei having wilnessed iepealed public ie|ec-
lion of mililaiy coups and olhei violenl means lo sellle conicls.
Iinally, lhe piofessional and maleiial inleiesls of paily eliles have
giown duiing lhe posl-1986 democialic iegime. f lhe slalus quo has been
geneially good foi lheii caieeis, why change il?
Theie aie diawbacks iesulling fiom lhe similaiily of slandpoinls and
plalfoims, howevei. Iiisl, only mainslieam policy posilions and inleiesls
aie accommodaled. Alleinalive piogiams, especially lhose fiom maiginal
gioups, aie seldom ailiculaled. Second, paily loyally and ideology have
lillle weighl. Iiialic peisonal slyles and ambilions ialhei lhan nimei
policy posilions become lhe diiving foice of mosl pailies. This explains
lhe fiequenl changes of paily by leading polilicians, a piaclice lhal is iaie
in moie developed demociacies. Pie-1972 polilical bulleiies`` who
weie lhoughl lo have ceased lo exisl in lhe new polilics`` of lhe posl-
1986 polilical eia have made a comeback. Lakas chaiiman and foimei
piesidenl Ramos was an LDP leadei befoie he sel up Lakas; likewise,
LAMMP chaiiman and piesidenl 1oseph Isliada was an LP leadei piioi
lo his LAMMP afnlialion.
Iarty policics anJ ccononic govcrnancc
Despile lhese diawbacks, lhe facl lhal pailies have bioadly similai views
has a posilive impacl in lhe liansilional phase of iedemocializalion when
decisive policy-making is ciilical. Nolably, il has spaied lhe edgling
iepiesenlalive bodies fiom lhe debililaling impacl of elile fiagmenla-
lion`` and demoscleiosis``14 which iesulls fiom excessive policy dispules
and leads lo giidlock and inslilulional combal among lhe bianches of
goveinmenl. Policy consensus, even if shoil-lived, has allowed lhe ma|oi
pailies lo foigo shoil-leim inleiesls and woik logelhei foi sliucluial
iefoims lo nim up lhe foundalions of democialic polilics.
The inilial building blocks of lhis giowlh consensus`` weie laid down
immedialely aflei 1986. The LDP, lhen in powei, dismanlled lhe Maico-
sian sliucluies of cionyism and polilical cenlializalion and enacled a
numbei of libeializalion and decenlializalion measuies. Allhough lhe
paily losl lhe piesidenlial eleclions in 1992, il ielained a ma|oiily in lhe
Senale. nslead of adopling lhe liadilional iole of an opposilion paily as
a nscalizei`` (an Inglish woid used in Iilipino slang lo mean walch-
dog``), il diafled a common iefoim agenda wilh lhe Lakas-led execulive
bianch. A numbei of legislalive-execulive economic summils weie sub-
sequenlly held; lhese weie lalei expanded inlo People`s Summils`` in
which piivale-secloi and civil sociely gioups weie aclively involved.
The co-opeialion belween Congiess and lhe piesidenl was inslilulion-
alized lhiough lhe eslablishmenl of lhe Legislalive-Ixeculive Develop-
menl Advisoiy Council (LIDAC). This body, in which lhe piesidenl,
membeis of lhe Cabinel, and leadeis of Congiess including lhose fiom
lhe opposilion, meel weekly, deleimines piioiily social and economic
measuies and facililales policy-making. l exposes lhe piesidenl lo views
olhei lhan lhose ailiculaled in Cabinel meelings. Leadeis of Congiess
aie also given moie oppoilunilies lo sludy adminislialion measuies and
lo make cleai lo lhe execulive lheii poinls of agieemenl and disagiee-
menl. Since LIDAC meels weekly, bolh moniloiing and follow-up of
pievious commilmenls aie possible. Moieovei, lhe impacl of LIDAC
has been slienglhened by lhe allenlion lo delail and lhe miciomanage-
menl slyle of Piesidenl Ramos, which iesulls in lhe fasl-liacking of such
impoilanl bul conlenlious issues as lhe safely nels againsl lhe effecls of
lhe GATT Law, lhe expanded value-added lax, lhe nnancial iesliuclui-
ing of lhe Cenlial Bank, lhe Ixpoil Developmenl Acl, lhe anli-dumping
law, and compiehensive lax iefoim. Obviously salisned by LIDAC`s valu-
able iole in policy-making, an LP leadei and LIDAC membei desciibed
il as lhe mosl efncacious vehicle in unlangling giidlock and iesolving
conicls belween lhe Ixeculive and Legislalive bianches.``15
The collaboialion belween piesidenl and Congiess ieached ils peak
wilh lhe foimal selling up of a coalilion belween Lakas and lhe LDP
pailies in 1995. Ioi lhe nisl lime in Philippine hisloiy, an alliance was
foimed on lhe basis of giowlh-oiienled iefoims and nol meiely foi piac-
THI PHLPPNIS 185
lical elecloial ob|eclives. This giowlh coalilion`` oullined in ils Com-
pacl foi Change`` lhe common beliefs of lhe pailies and lhe ma|oi
iefoims lhey would undeilake. The coalilion agieemenl undeiscoied lhe
need foi co-opeialion, nol needless pailisan sliife; lhe need foi unily,
nol discoid.`` l idenlined lhe main elemenls of lhe common legislalive
piogiam of Lakas and lhe LDP, which included: lax and nscal iefoim;
slieamlining lhe buieauciacy; lhe dismanlling of monopolies and cailels;
lhe piomolion of compeliliveness and expoils; lhe modeinizalion of ag-
iiculluie; and incieased public inveslmenls foi social iefoim.
Lakas also foiged a sepaiale coalilion wilh lhe LP and wilh a small
paily, lhe Philippine Democialic Paily (PDP), wilh a common legislalive
agenda. n Apiil 1995, lhe Lakas-LDPjLakas-LP jLakas-PDP coalilion
nelded a common slale in lhe senaloiial eleclions. Some desciibed il as
ieecling maluiily of Philippine polilics`` and lhe biilh of coalilion
polilics,`` allhough olheis dubbed il a cleai suiiendei oi co-oplalion of
lhe opposilion`` (Ihilippinc Daily Inquircr, 13 Iebiuaiy 1995). The com-
peling peisonal ambilions of Piesidenl Ramos and Senaloi Angaia slood
in lhe way of lhe Lakas-LDP coalilion and il bioke up in Novembei
1996.
The Lakas-led coalilion made il possible lo avoid deadlock and paial-
ysis in policy-making. l was able lo deal wilh lhe queslion of lhe ienl-
iei`` economy and lo adopl a moie open appioach, and lo lay oul a moie
open and level playing neld, in many slialegic seclois. These legislalive-
execulive measuies include: deiegulalion of foieign exchange lians-
aclions; lhe libeializalion of access lo lhe Philippines foi foieign banks;
lhe exlension of land lease lenuie by foieigneis lo 75 yeais; lhe dis-
manlling of monopolies and cailels in lelecommunicalions, land, sea, and
aii lianspoil as well as in lhe coconul and sugai indusliies; lhe piivaliza-
lion of laige slale-owned enleipiises such as Philippine Aiilines, lhe Philip-
pine Nalional Bank, and lhe Meliopolilan Waleiwoiks and Seweiage
Syslem; lhe enliy of moie inveslmenls lhiough lhe iemoval of foily-yeai-
old laiiff baiiieis; lhe expansion of giowlh cenlies lhiough lhe ciealion
of special economic zones acioss lhe counliy; incenlives foi piivale-secloi
involvemenl in powei, infiasliucluie, and olhei capilal-inlensive pio|ecls
lhiough lhe Build-Opeiale-Tiansfei law; making lhe Cenlial Bank inde-
pendenl of lhe goveinmenl; lhe acceplance of libeializalion as lhe oveiall
fiamewoik of giowlh lhiough lhe eaily ialincalion of lhe GATT; lhe
impiovemenl of lhe lax base and lax colleclion lhiough lhe expanded
value-added lax and lhe compiehensive lax iefoim law; and lhe piomo-
lion of expoil-oiienled enleipiises as a iesull of lhe Ixpoil Developmenl
Acl.
The macioeconomic iefoims iesponsible foi lhe counliy`s economic
luinaiound have appaienlly helped lo foslei a good public image of lhe
ma|oi pailies. Despile lhe facl lhal lheii inslilulionalized fealuies aie
weak and much ciilicized, and lhal lhey have sliong peisonalislic len-
dencies, lhe main pailies, and especially lhose which foimed pail of lhe
giowlh coalilion (Lakas, lhe LDP, lhe LP, and lhe PDP) have been
assessed maikedly moie posilively lhan mosl of lheii ciilics had anlici-
paled (see lable 7.3)
As was poinled oul eailiei, lhe posl-1986 slale eliles, especially since
1992, have had a diffeienl social backgiound fiom and lheiefoie weakei
lies wilh lhe old oligaichy and lhe landed families. This ielalive aulon-
omy fiom dominanl classes, as well as fiom dominaled social gioups,
incieased lhe slale`s capacily lo play a slialegic iole in foiming lhe
giowlh coalilion and in leading lhe membeis of lhal coalilion lo undei-
lake piofound sliucluial iefoims.16
The liadilional landed eliles, as well as lhe laboui unions, depended on
pioleclionism and slale palionage foi lheii piivileges: lhey lheiefoie
lended lo block effoils designed lo libeialize lhe economy. Ioi decades
lhey fiuslialed indusliializalion and giowlh policies. This was alleied by
lhe 1986 ievolulion as new polilical foices came lo lhe foie; wilh lhe 1992
piesidenlial eleclions, lhese foices became dominanl and old eliles weie
maiginalized. The abilily of lhe polilical syslem lo liansfoim, oi al leasl
expand, lhe social base of ils eliles, among olhei faclois, has led lo a
posilive public evalualion of lhe counliy`s democialic polily. As lable 7.4
shows, salisfaclion ialings of Iilipinos vis-a` -vis lheii polilical syslem have
been high highei, indeed, lhan lhose of lhe cilizens of such developed
demociacies as Belgium, laly, Iiance, and lhe \niled Kingdom.
Al lhe iool of lhe elecloial defeal of lhe old oligaichy weie impoilanl
changes in lhe economic sliucluie which in luin led lo lhe eiosion of lhe
oligaichy`s inuence. The liadilional expoil ciops which used lo suslain
ils hegemony became less signincanl as lhe economic shaie of new seclois
like gaimenls, eleclionics, and lhe seivice indusliies expanded. The shaie
of expoil ciops in lolal expoils diopped fiom 54 pei cenl in 198O lo 23
pei cenl in 1988, while duiing lhe same peiiod, lhe shaie of new seclois
iose fiom 46 pei cenl lo 77 pei cenl. Belween 198O and 1995, lhe demo-
giaphic pionle and class composilion of lhe counliy weie also maikedly
alleied: lhe uiban populalion iose fiom 36 lo 48 pei cenl of lhe popula-
lion, while lhe iuial populalion diopped fiom 74 pei cenl lo 52 pei cenl.
Theie has also been a signincanl expansion of oveiseas Iilipino woikeis
(OIWs), of lhe uiban lowei middle class and seivice woikeis.17 Mean-
while, an incieasing numbei of Iilipinos ieceive secondaiy and leiliaiy
educalion.
Globalizalion and infoimalion lechnology, which have made possible
inslanl movemenl of capilal and a 24-houi slock maikel, have led lo
giowlh in many seclois and inlegialed lhese seclois lo lhe global econ-
THI PHLPPNIS 187
1
8
8
Table 7.3 Net trust ratings uf Filipinu pulitical parties, 1uly 1991-1une 19971
(peicenlage diffeience belween lhose saying lhal lhey liusl and lhose saying lhal lhey disliusl each paily)
1uly 1991 Apiil 1992 Augusl 1994 Decembei 1994 1une 1995 1une 1997 Aveiage
Lakas 23 23 23 2O 38 25.4
LDP 1 11 1O 13 5 29 11.5
PDP 5 28 16.5
PMP 5 3 6 11 O 24 6.5
LP 7 2 3 7 2O 5.8
NPC 1 4 3 2 19 1.8
KAMP 19 9.O
NP 3 2 2 17 4.O
PRP 5 16 1 1 2 17 4.8
KBL 1O 4 16 3.3
PNB 2 2.O
Souice: Social Vcathcr Stations, 1une 1997.
omy and lhe inleinalional communicalions nelwoik. Moie lhan foui
million OIWs, foimei OIWs, and lheii families have gained bellei
incomes; lhey have also acquiied insighls inlo olhei models of giowlh
and goveinance and lhis has made lhem less dependenl on local palions
and moie asseilive of lheii iighls.
Pailies, lhe buieauciacy, and economic goveinance
The hisloiy of lhe shoil-lived yel pioduclive Lakas-led coalilion demon-
sliales lhe posilive iole played by pailies in economic policy-making.
Allhough pailies aie nol lhe oiiginalois of economic iefoims noi ils key
implemenleis, lhe Lakas coalilion`s giowlh-enhancing measuies would
nol have been possible wilhoul paily polilics.
\nlike Piesidenl Aquino who did nol |oin any polilical paily, hei suc-
cessoi played a leading iole as Lakas paily chaiiman. He is geneially
iegaided as having liansfoimed il fiom a small and insignincanl oigani-
zalion inlo a sliong suppoil foi lhe adminislialion.
Thiough Lakas, Ramos gained conliol of lhe House of Repiesenlalives
and won lhe co-opeialion of lhe LDP-conliolled Senale, befoie making his
polilical coalilion wilh LDP. This unpiecedenled collaboialion belween
lhe execulive and legislalive bianches of goveinmenl facililaled decision-
making. Budgels weie passed wilhoul much delay and impoilanl gov-
einmenl pio|ecls weie implemenled wilhoul encounleiing, as in lhe pasl,
lhe obsliuclion of noisy legislalois. The kind of elile fiagmenlalion and
Table 7.4 Satisfactiun with demucracy: The Philippines cumpared with Eurupean
cuuntries, 1993
\eiyjfaiily salisned Nol veiyjnol al all
salisned
Belgium 49 46
Denmaik 81 18
Iiance 41 56
Gieece 34 65
laly 12 88
Luxembouig 72 24
Nelheilands 68 3O
Philippines 58 42
Poilugal 54 43
Spain 41 55
\K 49 46
Souice: Social Vcathcr Stations, 1993; 1urobaronctcr, 1993, pp. 14.
THI PHLPPNIS 189
bickeiing which chaiacleiized lhe Aquino adminislialion was ieplaced by
effeclive paily and coalilion polilics undei Piesidenl Ramos.18
Befoie lhe Lakas-LDP coalilion, execulive-legislalive ielalions weie
confionlalional. Iconomic buieaucials fiom lhe Depailmenl of Iinance,
Cenlial Bank, Depailmenl of Tiade and ndusliy, and Nalional Ico-
nomic Developmenl Aulhoiily oflen saw lhemselves confionled wilh
hoslile legislalois who openly challenged and undeimined lheii policies,
in pailiculai wilh iespecl lo debl managemenl, as undei populisl pies-
suie, Congiess iepealedly allempled lo limil lhe seivice of lhe debl and
amend lhe law on aulomalic appiopiialion foi debl seivice. The conlenls
and pioceduies of negolialions wilh lhe nleinalional Monelaiy Iund
and wilh ciedilois weie sciulinized and economic manageis weie sub-
|ecled lo iepealed giilling and even lo iidicule in public heaiings.
Budgels of uncoopeialive Cabinel membeis weie also ieviewed lhoi-
oughly and lhose who iemained iecalcilianl had lheii appiopiialions cul
down in oidei lo make lhem moie amenable lowaids Congiess: lhis
occuiied foi inslance wilh lhe budgel of lhe Iconomic nlelligence Bu-
ieau of Gen. 1ose Almonle which was ieduced lo P1.OO ($.O3) duiing lhe
Aquino adminislialion. Moieovei, lhe connimalions of seveial piesiden-
lial appoinlees such Cenlial Bank Goveinoi 1ose Ieinandez, Iinance
Secielaiy Robeilo Del Rosaiio, Tiade Secielaiy Rizalino Navaiio,
Tianspoilalion Secielaiy Pablo Gaicia, Ioieign Affaiis \ndei-Secielaiy
Rodolfo Seveiino, Touiism Secielaiy Pedio Pilapil, and Heallh Secielaiy
Hilaiion Ramiio weie eilhei held in abeyance oi ie|ecled.
The buieaucials weie nol always on lhe defensive. Given lheii lechni-
cal expeilise, longei lenuie, and access lo moie iesouices and dala, lhey
weie nol exaclly helpless, noi meiely lhe innocenl viclims of lhe inlian-
sigence of Congiess. While Congiess seemed oflen lo have won lhe ballle
in lhe media, lhe buieaucials lended lo oblain mosl of whal lhey wanled
in lhe end: lhey made Congiess pass many of lheii economic iefoim
measuies inlo law, lhus luining lhem inlo binding and slable policies. To
lhis exlenl, lhe oiiginalois and implemenleis of lhe posl-1986 economic
iefoims weie lhe buieaucials, nol lhe pailies oi polilicians.
ndeed, buieaucials have oflen iegaided legislalois as shoil-sighled,
inlelleclually weak, and paiochial. When asked in Congiess why he only
senl a summaiy and nol all lhe documenls ielaling lo debl negolialions,
lhe lhen Cenlial Bank Goveinoi 1ose Ieinandez said lhe documenls
weie |usl loo complicaled lo be undeislood by lhe lawmakeis. n his
memoiis, foimei Iducalion Secielaiy sidio Caiino ciled his fiuslialion
wilh legislalois whom he claimed lo be obsessed wilh lheii paiochial and
pelly inleiesls and indiffeienl lo bioad nalional goals. Duiing a public
heaiing of lhe Senale Commillee on Defense, Aimed Ioices Chief of
Slaff Ainulfo Acedeia iefused lo slop lalking aflei he had been asked lo.
When asked lhe ieason foi his denance, he said: do nol yield lo a
Pepsodenl salesman`` obviously iefeiiing lo lhe commillee chaiiman,
Senaloi Oilando Meicado, a foimei media peisonalily who had advei-
lised loolhpasle pioducls.
Thus buieaucials usually wilhhold dala and infoimalion, especially on
economic and nnance malleis, because lhey considei lhem lo be loo
lechnical and complicaled foi lhe lawmakeis: cases of iiielevanl ques-
lions and demands foi unielaled documenls by legislalois somelimes
|uslify lhis chaige. Buieaucials also use lhe expeclalion of foieign loans
oi lhe MI seal of housekeeping as a leveiage lo compel Congiess lo pass
lhe economic measuies lhey piopose.19 Congiess is oflen foiced lo ap-
piove lhe economic pioposals of lhe adminislialion as lhese aie usually
lied lo lhe ielease of lhe much-needed loans oi of iequiied lax ievenues.
Congiess may have lhe powei of lhe puise, bul lhis powei is useless if lhe
puise is emply.20
Buieaucials also undeimine lhe implemenlalion of policies passed by
Congiess, if lhey considei lhese lo be conliaiy lo lhe piioiilies of lhe
adminislialion. This has been lhe case wilh lhe way lhe Depailmenl of
Budgel Managemenl (DBM) ieleases funds foi pio|ecls, especially lhose
which have a poik-baiiel chaiaclei, such as lhe Counliywide Develop-
menl Iund (CDI). Lakas membeis, especially lhose close lo Piesidenl
Ramos oi DBM ofncials, oflen see lheii CDI pio|ecls ieleased eaily
while lhose in lhe opposilion pailies like NPC and Laban ieceive lheii
appiopiialions lale. Bul lhe eaily ielease of funds by lhe buieauciacy
does nol only lake place in oidei lo placale ceilain polilicians: il is also
used lo induce Congiess lo pass lhe pel bills of lhe adminislialion.
Iinally, buieaucials liy lo appease oi conliol Congiess by means of
moniloiing and co-oplion. The Piesidenlial Legislalive Liaison Ofnce
iegulaily scans legislalive aclivilies. The PLLO is composed of Legisla-
live Liaison Ofnceis fiom vaiious line depailmenls who aie assigned lo
moniloi, co-oidinale, and assisl lheii iespeclive counleipails on lhe
slanding commillees of Congiess. n lhis way, lhe buieauciacy is iegu-
laily appiised of lhe aclivilies of Congiess and can exeil inuence on lhe
policies inilialed by legislalois.
The powei of lhe buieauciacy is fuilhei boosled by lhe co-oplion of
polilicians. Leading membeis of Congiess fiom vaiious pailies aie
appoinled lo lhe Cabinel: lhus, Piesidenl Aquino appoinled lo hei Cab-
inel Senaloi Raul Manglapus as foieign affaiis secielaiy and Reps. Oscai
Oibos and Iloiencio Abad as execulive secielaiy and agiaiian iefoim
secielaiy, iespeclively. The same lechnique was adopled by Piesidenl
Ramos who appoinled lo lhe execulive bianch Senaloi Teonslo Guin-
THI PHLPPNIS 191
gona as |uslice secielaiy, and Reps. Salvadoi Iscudeio as agiiculluie
secielaiy, Robeil Baibeis as local goveinmenl secielaiy, and Idilbeilo
Amanle as execulive secielaiy.
A bloatcJ anJ politici;cJ burcaucracy
A lug of wai belween lawmakeis and buieaucials chaiacleiizes economic
policy-making and goveinance. Allhough lhe iighls and dulies of civil
seivanls aie denned by lhe Conslilulion, lheii independence and piofes-
sionalism aie undeimined by lhe piessuies of elecloial polilics. Two
inslilulional aiiangemenls aie pailiculaily iesponsible foi lhe suboidina-
lion of buieauciacy lo polilical inuence and foi ils peimeabilily lo
vesled inleiesls.
The nisl iesulls fiom lhe piesidenlial powei lo appoinl nol only cabi-
nel membeis bul many high-ianking and middle-level ofncials in vaiious
depailmenls and agencies. Senioi caieei ofncials aie bypassed, and
iequiiemenls foi enliy inlo lhe civil seivice (such as possession of a col-
lege degiee oi passing lhe civil seivice examinalions) aie waived lo
iewaid wilh impoilanl goveinmenl posilions lhose who helped in lhe
eleclion campaign. Apail fiom unnecessaiily incieasing lhe size of lhe
buieauciacy, lhis piesidenlial discielion (which has ils paiallels among
among Cabinel membeis and elecled local goveinmenl iepiesenlalives)
iesulls al a minimum in a subslanlial loss in adminislialive efnciency as
lhese appoinlees ad|usl lo lheii new |obs. The facl lhal some lhem aie
lalei ieassigned oi dismissed fiom ofnce fuilhei slows down goveinmenl
opeialions. The pioblem is oflen woisened by lhe sliong lendency of
piesidenls lo cieale new ofnces foi lheii pel pio|ecls: lhis iesulls in a
coiiesponding expansion of lhe buieauciacy, lhe loss of powei by func-
lional agencies, and oveiall incoheience in policy diieclion. Some unnn-
ished yel ciilical piogiams aie also leiminaled oi ieplaced by diffeienl
pio|ecls when a new adminislialion aiiives. This lendency lo launch
piesidenlial schemes explains lhe seiies of much-vaunled bul laigely
unnnished ieoiganizalion plans launched by Iilipino piesidenls since
1946, wilh lhe nolable exceplion of Piesidenls Diosdado Macapagal and
Iidel Ramos.21
Second, lhe democialic syslem of checks and balances belween lhe
execulive and legislaluie is oflen used lo haiass buieaucials. n lhe con-
lexl of an inslilulional sel-up which obliges eveiy depailmenl and agency
lo piesenl and defend ils annual appiopiialions befoie Congiess, a cul-
luie of quid pio quo polilics has emeiged. Buieaucials oflen give in lo
iequesls of legislalois and include lhem in lhe agency`s piogiammes lo
ensuie lhe passage of lheii budgel. This impedes syslemalic planning and
leads lo inefncienl iesouice allocalion. Scaice slale iesouices aie wasled
oi misused and lhis silualion has led lo seveial cases of coiiuplion in
poik-baiiel funds.22
A jcw gooJ burcaucrats
The nnance and economic agencies, specincally lhe Cenlial Bank, lhe
Depailmenl of Iinance, lhe Depailmenl of Tiade and ndusliy, and lhe
Nalional Iconomic Developmenl Aulhoiily, appeai lo be exceplions in
lhe olheiwise lhe bloaled, expensive, and inefncienl buieauciacy. These
agencies aie leasl affecled by elecloial polilics and mainlain a ciilical
coie of compelenl ofncials who aie sliongly inclined lowaids expoil-
oiienled giowlh and economic libeializalion. Theii fiee-maikel oiienla-
lion and iappoil wilh business gioups and ciedilois have piovided a good
foundalion foi incieased slale capacily and foi a iemaikable economic
dynamism since lhe lale 198Os.
These nnancial and economic civil seivanls nisl gained piominence
duiing lhe Maicos iegime. Known as lhe lechnocials,`` lhey consliluled
lhe mosl pioduclive of lhe so-called lhiee pillais of lhe iegime,`` lhe
olhei lwo being lhe mililaiy and lhe cionies of lhe piesidenl. They weie
ieciuiled by Maicos in oidei lo in|ecl efnciency and add pieslige lo his
iegime. Theii apolilical and coipoialisl backgiound and dislike of lhe
policy paialysis and iiialionalilies of pie-1972 democialic polilics made
lhem alliaclive lo Maicos.
Wilh giaduale degiees fiom noled Ameiican schools and as foimei
bankeis, piofessional manageis, academics, oi consullanls of lhe Woild
Bank, lhe MI, and mullinalional companies, lhese lechnocials weie
ciilical of pioleclionism and adheied lo fiee-maikel piinciples as lhe besl
foimula foi economic giowlh. They had exlensive liaining and expeii-
ence in ieseaich and weie quile adepl in managemenl and economic
planning. They weie familiai wilh lhe language of global liade and in-
leinalional nnance and lhey also knew lhe key playeis. These chaiaclei-
islics and ciedenlials iendeied lhem useful lo lhe iegime, especially in
secuiing much-needed foieign loans. Theii lechnical expeilise combined
wilh lhe suppoil lhey en|oyed fiom foieign ciedilois helped lhem lo be
somewhal insulaled fiom polilical piessuies. They bioughl giealei ialio-
nalily lo goveinmenl and impioved lhe slale`s adminislialive appaialus
by inlioducing sophislicaled modein managemenl lechniques, nolably
developmenl planning and slalislical analysis foi effeclive policy and pio-
giamme moniloiing and evalualion. The Woild Bank ilself iecognized
lhe compelence of lhese civil seivanls when il desciibed lhe Philippines
as a model of economic developmenl and made il one of ils laigesl aid
iecipienls.23 The combinalion of lhis geneious exleinal assislance and
buieaucialic compelence iesulled in impiessive giowlh iales in lhe sev-
THI PHLPPNIS 193
enlies, bul lhese successes weie undeimined by cionyism and evenlually
complelely nullined as a iesull of coiiuplion and plundei. Many analysls
believe lhal had Maicos iesliained his gieed and piovided lhe civilian
lechnocials wilh moie poweis and moie aulonomy, lhe counliy could
have counled as an NC by lhe mid-198Os.24
The 1986 ievolulion did nol ieduce lhe inuence of economic and
nnance buieaucials, who weie mainlained in lheii posls, excepl foi a few
high-pionle Maicos appoinlees. Theii expeilise made lhem difncull lo
ieplace, unlike lhose in olhei agencies. Peihaps moie impoilanlly in a
silualion in which lhe goveinmenl was shoil of cash, lhese buieaucials
had links wilh foieign and local ciedilois. This played an obvious pail in
lhe decision of Piesidenl Aquino lo ieappoinl Cenlial Bank Goveinoi
1ose Ieinandez, a lop Maicos appoinlee, despile sliong opposilion fiom
hei close adviseis. The heads of economic agencies weie ieplaced by
Aquino`s appoinlees bul lhe undei-secielaiies, buieau diieclois, and di-
vision chiefs weie ielained. Ioimei lop Maicos lechnocials like expiime
minislei and nnance minislei Cesai \iiala weie bioughl back lhiough
lhe back dooi as consullanls of lhe economic and nnancial agencies.25
The posl-1986 lop economic buieaucials aie an example of new wine
in old bollles. Theii polilics and leadeiship slyles may be al vaiiance fiom
lhose of lheii piedecessois bul lhey haidly diffei in economic oullook
and oiienlalion. They all shaie lhe common belief in lhe giowlh paia-
digm of libeializalion, piivalizalion, and deiegulalion, a chaiacleiislic
which accounls foi lhe basic similaiilies belween lhe economic policies of
lhe Aquino and Ramos adminislialions. This also explains why Iinance
Secielaiy 1aime Ongpin sliongly inleiceded foi lhe ieappoinlmenl of
Ieinandez lo lhe Cenlial Bank, wheie he was Ongpin`s close collaboia-
loi in lhe debl negolialions and economic policy-making. Allhough wilh
weakei academic and piofessional ciedenlials lhan lhose of Maicos
lechnocials, lhe posl-1986 civil seivanls also belong lo an old boys nel-
woik of piofessional manageis, academics, and consullanls wilh links lo
lhe MI, lhe Woild Bank, and mullinalional coipoialions.26
1cononic policy-naking anJ ccononic growth
When lhe giowlh coalilion was pul in place, lhe economic lechnocials
weie piolecled againsl polilical piessuies and weie bellei able lhan be-
foie lo foimulale and implemenl maikel-oiienled iefoims. These libei-
alizalion measuies opened up lhe economy, led lo giealei inveslmenls,
and bioughl back lhe counliy on lhe giowlh palh lhal chaiacleiized Iasl
and Soulheasl Asia al lhe lime. The gains iesulling fiom posl-1986 eco-
nomic policy-making aie shown in lable 7.5.
Ixcepl foi 1992, lhe giowlh iale hoveied belween 4 and 7 pei cenl
duiing 198696. This giowlh iale is iendeied even moie signincanl be-
cause il was expoil- and inveslmenl-led and was accompanied by a single-
digil inalion iale, incieased employmenl, and a ieduclion of poveily
incidence. The only negalive indicaloi was lhe balance of liade which
showed a dencil incieasing fiom \S$1.O8 billion in 1988 lo \S$11.4
billion in 1996. Howevei, a laige pail of lhe impoil bill was due lo capilal
expendiluies such as machineiy, iaw maleiials, chemicals, and powei
planls. These could be expecled lo iesull in highei efnciency and giealei
pioduclivily. Meanwhile, expoils also giew fiom \S$8.2 billion in 199O lo
\S$13.5 billion in 1994 and \S$2O.5 billion in 1996. ndeed, lhe Philip-
pines had lhe highesl giowlh iale of expoils among lhe Asian counliies
belween 1993 and 1996. Duiing lhis peiiod, lhe counliy`s expoils
exceeded lhose of such Asian expoil leadeis as Taiwan, Soulh Koiea,
and Thailand. f il suslains lhis giowlh iale in expoils, lhe liade gap
could be wiped oul by lhe yeai 2OOO.
The expoil peifoimance is in pail lhe iesull of impioved invesloi con-
ndence, as is shown by lhe facl lhal inveslmenl sleadily incieased fiom
\S$15.83 billion in 199O lo \S$2O.3 billion in 1996. Theie is also a good
balance belween poilfolio and foieign diiecl inveslmenl inows: lhis
minimizes lhe polenlial foi a sudden economic downluin if an abiupl
ow ieveisal occuis. The shaie of nel poilfolio inveslmenls declined fiom
Table 7.5 Macruecunumic indicaturs at the end uf the Marcus regime and during
the Aquinu and Ramus administratiuns, 1985-1996
1985 1986 1988 199O 1992 1994 1996
GNP giowlh
iale1
6.96 3.64 7.21 4.78 1.55 5.3 6.9
GDP giowlh
iale1
7.31 3.42 6.75 3.O4 .34 4.4 5.7
Balance of
paymenls2
.8O 1.2O .59 .93 1.49 1.8O 3.92
Balance of liade2 .5O .2O 1.O8 4.O2 4.69 7.85 11.4
Ixpoils2 4.6 4.8O 7.1O 8.2 9.8 13.5 2O.5
mpoils2 5.1 5.OO 8.1O 12.2 14.5 21.3 31.9
nveslmenl2 .32 1O.O6 14.69 15.83 7.83 8.63 2O.3
nalion iale1 23.4 O.4 8.9 14.2 8.9 9.O 8.4
\nemploymenl
iale1
17 14.O 9.6 8.4 9.8 9.5 9.2
Poveily
incidence1
44.2 n.a. 4O.2 n.a. 37.O 35.5 n.a.
Souice: Nalional Iconomic Developmenl Aulhoiily 1cononic InJicators, 1anu-
aiy 1998; Cenlial Bank of lhe Philippines, Statistical Bullctin, Oclobei 1997.
1 Iiguies aie peicenlages.
2 \S$ billion.
THI PHLPPNIS 195
53 pei cenl in 1995 lo 45 pei cenl in 1996, an indicalion lhal an incieasing
amounl of inveslmenls is being channelled inlo longei-leim, moie pio-
duclive pio|ecls.
Thc currcncy crisis anJ thc ''tigcr cub cconony
n lhe conlexl of lhe 1997 nnancial luimoil in Iasl and Soulheasl Asia,
lhe Philippines seem lo be in a bellei posilion lhan olhei counliies of lhe
iegion which succumbed lo lhe ciisis. Some indicalois suggesl, indeed,
lhal lhe economic peifoimance of lhe counliy is on nimei foundalions
lhan in lhe pasl. Iiisl, pievious giowlh iecoids weie mainly induced by
exleinal faclois such as \.S. quolas, a boom in expoil ciops in lhe 195Os
and 196Os, and low-inleiesl foieign loans in lhe 197Os: lhey did nol iesull
fiom subslanlial changes in lhe Philippine polilical economy. On lhe
olhei hand, lhe giowlh of lhe 199Os was pieceded by bold iefoims and
sliucluial ad|uslmenls. These have iesulled in moie compelilion and in
giealei efnciency in lhe libeialized seclois and iendeied lhe economy
moie iesilienl.
These iefoims aie also moie slable lhan pievious measuies. They be-
came law in a democialic conlexl and en|oyed lhe suppoil of a bioad
coalilion of polilical and social foices. This combined wilh lhe benenls
which lhey pioduced lo iendei lhem nimly giounded. They will iemain in
foice as il would be difncull and unpopulai foi any polilical paily oi
gioup lo ievise oi abolish lhem in lhe neai fuluie.
The suslainable chaiaclei of Philippine economic dynamism is
enhanced by ils bioad geogiaphical base: all iegions, including pooi and
iemole ones, have expeiienced ieal giowlh in gioss iegional domeslic
pioducl. Region 1 which includes lhe Coidilleia Aulonomous Region in
Noilheaslein Luzon, and Region 5 oi lhe Bicol iegion in Soulhein
Luzon, had giowlh iales of ovei 7 pei cenl and 2.9 pei cenl iespeclively
belween 1993 and 1995.27 Pieviously, economic expansion look place in
Melio Manila only: posl-1986 giowlh led lo lhe emeigence of iobusl
giowlh in lhe special economic zones in Subic in Zambales and Claik in
Pampanga, and in indusliial and manufacluiing paiks in Cavile-Laguna-
Balangas-uezon in lhe Luzon mainland, Cebu and loilo giowlh cenlies
in lhe \isayas, and in lhe Cagayan de Oio, Geneial Sanlos, and Davao
giowlh aieas in Mindanao.
These achievemenls have piovided good pioleclion againsl lhe iegional
cuiiency ciisis of lhe lale 199Os. The luimoil did cause an economic
slowdown, bul lhe Philippines is expecled lo come oul of il ielalively
well. Iiisl, lhe counliy expeiienced a seiies of boom-and-busl cycles in
lhe 197Os and 198Os and lhis expeiience is valuable. As lhe foimei sick
man of Asia,`` il leained lo be modesl; ils public also leained lo discovei
bolh lhe shoil-leim cosls and lhe long-leim benenls of nscal discipline
and ausleiily measuies. Being a lalecomei can also be an advanlage. l is
possible lo leain fiom bolh lhe negalive and lhe posilive expeiiences of
eaily slaileis. This is lhe case, foi inslance, wilh lhe ceilings imposed by
lhe Cenlial Bank on bank loans in ieal eslale and piopeily developmenl,
as well as wilh ils close moniloiing of exposuies in cai loans and ciedil
caids: lhese measuies have been effeclive in checking bankiuplcies fiom
piopeily glul and bad loans.
nveslois and analysls have noled lhe slienglhs of lhe Philippine
economy. While il has lhe smallesl foieign ieseives among lhe ASIAN
counliies, il has had lhe leasl cuiiency depiecialion. Nol only has il nol
asked foi a nnancial iescue package fiom lhe MI and lhe Woild Bank,
bul il has compleled an exil agieemenl wilh lhe MI. Ixpoils have
incieased and lhe depiecialion of lhe Philippine peso is expecled lo make
lhe counliy`s expoils cheapei and moie compelililive. The Woild Bank
hailed lhe counliy`s ad|uslmenl measuies while Ciedil Lyonnais Secu-
iilies Asia, one of woild`s laigesl biokeis, said: The Philippines is ahead
of lhe game. By no means is il going lo suffei as badly as Thailand and
ndonesia.``28
Iinally, lhe counliy`s macioeconomic fundamenlals aie supplemenled
wilh good polilical fundamenlals. The counliy`s democialic polilics pio-
moles giowlh by pioviding faiiness and piediclabilily in lhe syslem
lhiough lhe iule of law, lianspaiency in decision-making, and olhei
democialic piinciples and pioceduies. n lwo impoilanl iespecls, de-
mociacy, foi all ils ofl-ciled aws, is supeiioi lo aulhoiilaiianism in
allaining giowlh and slabilily: nisl, demociacy has buill-in feedback
mechanisms in lhe foim of compelilive eleclions and fieedom of expies-
sion foi self-iegeneialion and iefoim; and second, demociacy iequiies
public consenl and consensus in goveinance, which aie ciilical foi long-
leim slabilily and bellei policy foimulalion and implemenlalion.
Conclusion
A numbei of poinls can be made aboul lhe ielalionship belween polili-
cal pailies and lhe buieauciacy wilh iespecl lo economic giowlh in lhe
Philippines.
Iiisl, lhe polilical pailies in lhe Philippines do nol play a leading iole
in economic policy-making. Theii low level of inslilulionalizalion iesliicls
lheii abilily lo be agenls of policy aggiegalion and social mobilizalion.
They aie essenlially pailies of nolables whose main suppoil is diawn
fiom lhe polilical eliles. Mosl of lhem weie sel up piimaiily lo seive lhe
piesidenlial ambilions of lheii foundeis, who in luin diiecl and conliol
mosl of lheii policies and aclivilies. Theii social bases aie limiled lo lhe
THI PHLPPNIS 197
elhnic gioupings and polilical bailiwicks of paily foundeis and bosses.
The iuling paily has exlensive linkages wilh big business; olhei pailies
have closei lies wilh laboui fedeialions and civil sociely oiganizalions. To
be suie, lhese weak oiganizalional fealuies aie due in pail lo lhe facl lhal
lhe pailies aie new; bul lhey aie also due lo lhe consliainls of lhe elec-
loial syslem. n addilion, lhe peisonalislic leadeiship of lhe pailies and
lhe iival foice of lhe mass media eiode lheii abilily lo play a pail in in-
leiesl ailiculalion and aggiegalion and lo be a link belween lhe govein-
menl and lhe cilizeniy.
Second, lhe similaiily of paily piogiammes, foi inslance on libeializa-
lion, lhe maikel economy, and demociacy, iesulls fiom lhe facl lhal lhe
social backgiound of lheii leadeis is similai and lhal lhese leadeis have
all expeiienced lhe dangeis iesulling fiom pioleclionism, cionyism, and
aulhoiilaiianism. Allhough ciilicized as leading lo an issueless`` and
peisonalislic polilics, lhis similaiily in policy views has pioved valuable in
lhe conlexl of lhe slill fiagile foundalions of giowlh and democializalion.
The basic policy consensus haslened lhe selling up of a giowlh coalilion
among lhe main pailies which in luin impioved policy-making, and suc-
ceeded in iesolving seveial conicls belween lhe legislalive and execu-
live bianches. Sliucluial iefoims weie undeilaken by lhe alliance, which
iesulled in a ieduclion of lhe ienliei economy, as well as in giealei com-
pelilion and piomolion of giowlh in many seclois and in many pails of
lhe counliy. Thiough lhe coalilion, lhe pailies despile lheii low degiee
of inslilulionalizalion peifoim a diiecl and posilive iole in giowlh pio-
molion: lhus lhey have fulnlled al leasl some of lhe funclions which aie
lheiis in a democialic conlexl.
A seiies of faclois iendeied lhe giowlh coalilion possible. The posl-
1986 leadeiship had weakei lies wilh lhe liadilional oligaichy, especially
since 1992: lhus il could en|oy ielalive aulonomy fiom bolh lhe dominanl
and lhe dominaled social gioups. The polilical leadeiship could counl on
an economic adminislialive appaialus able lo inciease lhe slale`s capacily
foi sliucluial iefoims. Meanwhile, changes in lhe polilical economy weie
eioding lhe powei base of lhe old landed eliles: lhe impoilance of expoil
ciops declined while lhal of manufacluiing and seivice indusliies maik-
edly incieased. Globalizalion and infoimalion lechnology induced giowlh
in many seclois and inlegialed lhese seclois inlo lhe woild economy and
communicalions nelwoik. The iuial populalion declined and lhe numbei
of cily dwelleis expanded: lhis meanl a laigei middle class wilh bellei
incomes, a highei level of educalion, and moie access lo infoimalion.
Being moie polilically sophislicaled, lhe new middle class is dissalisned
wilh lhe old syslem of goveining and has given ils suppoil lo alleinalives
lo oligaichical polilics.
Thiid, lhe inslilulional conlexl musl be impioved lo slienglhen pailies
and paily polilics. Ilecloial iefoims such as lhe modeinizalion of lhe
elecloial piocess, iesloialion of paily iepiesenlalion in lhe boaid of
canvasseis, and uncoupling of nalional and local eleclions aie among lhe
measuies which can slienglhen pailies and lhe paily syslem. Above all,
peihaps, as in developed demociacies, lhe public nnancing of pailies
should be inlioduced: il would iendei lhem moie piofessional and ieduce
lheii dependence on palions and nnancieis. Resouice dependency has
been lhe ma|oi ieason foi lhe mainlenance of a slale of affaiis in which
lhe piesidenls cieale lhe paily when il should be lhe olhei way aiound.
Iouilh, much of lhe buieauciacy is bloaled and inefncienl, lhis being
laigely lhe consequence of elecloial polilics. The iapid luinovei of lop
and middle-level buieaucials caused by peiiodic changes of adminislia-
lion leads lo a loss in woik momenlum, pooi inslilulional memoiy, and
policy incoheience. Howevei, lhe nnance and economics seclions of lhe
buieauciacy conslilule nolable exceplions; lhey have a coie of compelenl
caieei ofncials wilh a sliong oiienlalion lowaids libeializalion and maikel
iefoim. Many aie giaduales of leading Ameiican univeisilies and had
exlensive liaining in adminislialion duiing lhe Maicos iegime. They
belong lo a small nelwoik of highly paid piofessional manageis, noled
academics, and foimei consullanls of lhe MI, lhe Woild Bank, and
mullinalional coipoialions. The lechnical naluie of lhe expeilise of lhese
civil seivanls helps lhem lo avoid being affecled by elecloial polilics.
Nolwilhslanding lhe iegime change in 1986, lhey ielained lheii foolhold
in lhe buieauciacy. Only a few high-pionle Maicos appoinlees have been
ieplaced. Theii main chaiacleiislic is lo believe sliongly in lhe giowlh
paiadigm of economic libeialion, piivalizalion, and decenlializalion.
Shielded fiom polilics lhanks lo lhe giowlh coalilion, lhe economic and
nnancial buieaucials have been able lo design and bellei implemenl
long-delayed maikel-oiienled iefoims. Admilledly, economic policies
and oulcomes, especially in a democialic polily such as lhe Philippines,
aie fai fiom being wholly deleimined by lhe aclions of a small numbei of
decision makeis, howevei compelenl lhey may be. Bul lhis compelence
counls in combinalion wilh lhe inleinalional conlacls of lhese decision
makeis: in lhe economic neld al leasl, lhey play a laigei pail lhan pailies
and polilicians.
Bolh giowlh and democializalion will in all piobabilily conlinue. Pai-
lies have begun lo show an abilily lo oveicome lheii paiochial inleiesls
and lo hainess lheii effoils in oidei lo slienglhen lhe fiagile foundalions
of lhe newly iesloied demociacy. Admilledly, lhe difncullies iesulling
fiom lhe 1997 nnancial and cuiiency ciisis have lended lo bieak lhe pol-
icy consensus among lhe main pailies; bul lhis may have a posilive effecl.
THI PHLPPNIS 199
As lhe opposilion pailies aie likely lo adopl ciilical posilions, policy dif-
feienlialion will inciease and a moie issue-oiienled lype of polilics may
emeige, giving iise lo a widei iange of alleinalives. Meanwhile, on lhe
economic fionl, lhe giowlh which lhe counliy en|oyed in lhe 199Os has
been heallhiei. l has been based on sliucluial iefoims which have
incieased compelilion and impioved efnciency in many seclois: lhe ex-
pansion has also laken place bioadly acioss lhe counliy.
n lhe Philippines, economics and polilics have gone hand in hand in
lhe 199Os. Demociacy has piomoled giowlh and has pioved supeiioi lo
aulhoiilaiianism. Allhough lhe counliy has had lo liavel a iocky ioad, il
has so fai suimounled all difncullies. The gieal challenge is lo suslain
bolh polilical vibiancy and giowlh momenlum. Theie aie encouiaging
signs lhal lhe Philippines can meel lhis challenge successfully.
Noles
1. Iiancis Iukuyama, The Ind of Hisloiy,`` Thc National Intcrcst Winlei 19899O; 18:
pp. 1235.
2. Samuel P. Hunlinglon, Thc ThirJ Vavc. Dcnocrati;ation in thc 1atc Twcnticth Ccntury
(Noiman: \niveisily of Oklahoma Piess, 1991).
3. Laiiy Diamond, 1ohn Linz, and Seymoui M. Lipsel (eds.), Dcnocracy in Dcvcloping
Countrics. 1atin Ancrica, \ol. \ (Bouldei, Colo.: Lynne Riennei, 1989), pp. 2O21.
4. 1987 Philippine Conslilulion, Ail. X, Sec. C.
5. Ioi a hisloiical accounl of lhe poweis and iole of lhe Iilipino piesidenls in goveinmenl
and polilics, see Alex B. Biillanles and Bienvenida M. Amailes-lago, 18981992. Thc
Ihilippinc IrcsiJcncy (uezon Cily: CPA, \niveisily of lhe Philippines, 1994). The
ciilical iole played by \.S. piesidenls in lhe iise and fall of ma|oi Ameiican pailies is
discussed in Mailin P. Wallenbeig, Thc Dcclinc oj Ancrican Iolitical Iartics, 19521994
(Cambiidge, Mass.: Haivaid \niveisily Piess, 1996) esp. pp. 73124.
6. Ihilippinc Daily Inquircr, 11 Oclobei 1997.
7. Dennis Aiioyo and Geiaido Sandoval, Do The Mass Media Really Affecl Public
Opinion?`` Social Vcathcr Bullctin May 1993, pp. 34. See also Media in lhe Piesenl
Ciisis,`` Kasarinlan Iiisl uailei 199O; 7: pp. 9O99.
8. Randy David, Media Iducalion Challenges in lhe 199Os,`` in McJia 1xpo 91 (Manila:
Melio Times, 1991), p. 13.
9. The aulhoi, as foimei chief of slaff of House Assislanl Ma|oiily Leadei Manuel Roxas
and consullanl lo Senale Piesidenl Idgaido Angaia and Senaloi Gloiia Macapagal-
Aiioyo, has peisonally seen lhe cloul wielded by public ielalions leams in many ofnces
of legislalois in bolh houses of Congiess.
1O. A high degiee of inslilulionalizalion achieved by ma|oi pailies is consideied lo be
an impoilanl elemenl in lhe inslilulional iesilience of demociacy. Samuel Hunlinglon
devised a foimula which idenlines coheience, complexily, aulonomy, and adaplabilily as
indicalois of paily inslilulionalizalion. See Samuel P. Hunlinglon, Iolitical OrJcr in
Changing Socictics (New Haven, Conn.: ale \niveisily Piess, 1968), pp. 1O32.
11. Cail H. Lande, 1caJcrs, Iactions anJ Iartics (New Haven, Conn.: ale \niveisily
Piess, 1965), p. 69.
2OO RINATO S. \ILASCO
12. Manuel I. Almaiio, Biilh of A New Opposilion Paily,`` Ihilippinc Craphic, 3
Novembei 1997, pp. 1215.
13. ToJay, 18 1une 1998.
14. Ioi cases of elile fiagmenlalion duiing lhe Aquino adminislialion, see Rigobeilo
Tiglao, Dilemmas of Iconomic Policy-Making in a People Powei Slale,` `` in David
Timbeiman (ed.), Thc Iolitics oj 1cononic Rcjorn in Southcast Asia (Makali: Asian
nslilule of Managemenl, 1992), pp. 91116. Ioi a ielaled accounl, see 1onalhan Rauch,
Dcnosclcrosis. Thc Silcnt Killcr oj Ancrican Covcrnncnt (New oik: Times Books,
1994).
15. Ielicilo C. Payumo, eai Ind Review and Piospecls: A \iew fiom Congiess,`` Ka-
sarinlan, Iouilh uailei 1994; 1O(3): p. 26.
16. P. Ivans, Piedaloiy, Developmenlal and Olhei Appaialuses: A Compaialive Polilical
Iconomy Peispeclive on lhe Thiid Woild Slale,`` Sociological Iorun 1989; 4(4): pp.
55962, and 1ose T. Almonle, The Polilics of Developmenl in lhe Philippines,``
Kasarinlan Iouilh uailei 1993 and Iiisl uailei, 1994; 9(23): pp. 1O717.
17. Iiguies ciled in Iilologo Panle and Iilinda Medalla, Ihilippinc InJustrial Scctor. Ioli-
cics, Irograns anJ Icrjornanccs, (Makali Cily: PDS, 1uly 199O), p. 17, and VorlJ
Bank Dcvclopncnt Rcport, 1993, pp. 37884.
18. Tiglao, Dilemmas of Iconomic Policy-Making,`` pp. 91116. See also Chailes Lindsey,
The Polilical Iconomy of nleinalional Iconomic Policy Refoim in lhe Philippines,``
in Andiew 1. Macnlyie and Kanishka 1ayasuiiya (eds.), Thc Dynanics oj 1cononic
Iolicy Rcjorn in Southcast Asia anJ thc Southwcst Iacic (Singapoie: Oxfoid \nivei-
sily Piess, 1992), pp. 7493.
19. Ioieign loans weie nisl used lo inlioducejcompel iadical iefoims in liade and monelaiy
agencies by economic buieaucials duiing lhe Maicos iegime. See Robin Bioad, Uncqual
Alliancc, 19791986. thc VorlJ Bank, thc Intcrnational Monctary IunJ, anJ thc Ihilip-
pincs (uezon Cily: Aleneo Piess, 1988), pp. 12838.
2O. Renalo S. \elasco, A Debl Peieslioika foi lhe Philippines,`` Iorcign Rclations 1ournal
Decembei 199O; 4(4): pp. 153.
21. Biillanles and lago, Thc Ihilippinc IrcsiJcncy, pp. 9O95.
22. The poik-baiiel funds aie of lwo lypes. Iiisl, lheie is lhe Counliywide Developmenl
Iund, which is a nxed amounl of P18 million foi each senaloi and P14 million foi eveiy
House membei. A legislaloi can use his oi hei fund foi any kind of pio|ecl fiom schol-
aiships and lhe consliuclion of baskelball couils lo lhe building of public maikels. The
second lype is lhe Congiessional nilialive Allocalion, which is inseiled by a legislaloi in
a pailiculai depailmenl as lhe implemenling agency of a pel pio|ecl. Depending on his
oi hei leadeiship posilion in Congiess, ielalionship wilh buieaucials, and geneial cie-
alivily, lhe allocalion of a legislaloi can iange fiom P5OO,OOO lo P2 billion. Ioi scandals
in lhe CDI involving House membeis see Ihilippinc Daily Inquircr, 1215 Seplembei
1996.
23. bid.
24. The ma|oi ieasons foi lhe failuie of lhe Philippines lo become an NC aie discussed in
Manuel Monles, Oveicoming Phillippine \ndeidevelopmenl,`` ThirJ VorlJ Quartcrly
1uly 1989; 2(3): pp. 1O719, and Renalo S. \elasco, Lessons fiom lhe NCs foi lhe
Philippines,`` Contcnporary Southcast Asia Seplembei 199O; 12(2): 1345O.
25. Ledevina Caiino, Buieauciacy foi A Demociacy: The Sliuggle of lhe Philippine
Polilical Leadeiship and lhe Civil Seivice in lhe Posl-Maicos Peiiod,`` Ihilippinc
1ournal oj Iublic AJninistration 1uly 1989; 33(3): pp. 1218. See also Olivia Caoili,
Thc Ihilippinc Congrcss. 1xccutivc-1cgislativc Rclations anJ thc Rcstoration oj Dcnoc-
racy (Cenlei foi nlegialive and Developmenl Sludies, \niveisily of lhe Philippines,
1993).
THI PHLPPNIS 2O1
26. These posl-1986 economic buieaucials include: foimei Woild Bank senioi ofncei and
Developmenl Bank of lhe Philippines piesidenl Robeilo Ocampo, Depailmenl of Ii-
nance secielaiy; lawyei and long-lime Cenlial Bank depuly goveinoi Gabiiel Singson;
foimei piofessional managei and businessman Cesai Baulisla, Depailmenl of Tiade
and ndusliy secielaiy; \niveisily of lhe Philippines economics piofessoi and Haivaid
Ph.D. Cielilo Habilo, Nalional Iconomic Developmenl Aulhoiily diiecloi-geneial. See
Aiichiio shii el al, National Dcvclopncnt Iolicics anJ thc Busincss Scctor in thc Ihilip-
pincs (Tokyo: nslilule of Developing Iconomies, 1988), esp. pp. 2O658.
27. Highlighls of Tiends in Gioss Regional Domeslic Pioducl, 19931995,`` Rcgional
Dcvclopncnt Digcst 1uly 1996; 1(3), pp. 13.
28. ToJay, 7 Novembei 1997 and 3 Apiil 1998.
2O2 RINATO S. \ILASCO
8
Thailand
Dan King
nlioduclion
Thailand has been blamed foi slailing off lhe melldown of Asian maikels
and cuiiencies in mid-1997, an assessmenl which may be pailly liue since
lhe 2 1uly 1997 devalualion of lhe bahl began a chain ieaclion lhioughoul
lhe iegion. The cenlial bank, lhe Bank of Thailand, has since come undei
inlense sciuliny and heavy ciilicism foi having depleled ils foieign
ieseives and lenl |usl ovei Bl 1 liillion lo ailing banks and nnance com-
panies, moie lhan lhe enliie nalional budgel foi nscal yeai 1997.
el only a yeai oi lwo pieviously, lhe geneial view of Thailand`s bu-
ieauciacy iesponsible foi economic policymaking was quile diffeienl:
Thailand was said lo benenl fiom expeiienced lechnocials al lhe key
minisliies and agencies, including lhe Bank of Thailand, and lhese lech-
nocials weie ciediled wilh keeping Thailand`s own veision of lhe Asian
economic miiacle on liack. ndeed, meddling on lhe pail of elecled poli-
licians was lhe dangei lhal had lo be guaided againsl, as, olheiwise, lhe
polilicians and lheii poik-baiiel polilics mighl affecl adveisely lhe coun-
liy`s iale of economic giowlh which was so admiied aiound lhe woild.
Mosl membeis of lhe polilical elile would have agieed lhal il was bellei
lo lel lhe lechnocials do lheii woik unencumbeied by polilical consid-
eialions. l is sufncienl lo iemembei lhal in 1996 lhe Woild Bank
declaied Thailand lhe lop giowlh counliy in lhe woild foi lhe decade of
198594, ahead of China oi Soulh Koiea.
2O3
Whal happened? Iiom a piime example of semi-sliong goveinmenl
led economics lo inleinalional paiiah, Thailand`s fall by lhe end of 1997
was as meleoiic as ils pievious climb inlo lhe ianks of lhe neai-NCS.
Meanwhile, as Thailand`s economy fell, lhe counliy`s puisuil of polilical
demociacy acceleialed wilh peaceful liansilions of powei by elecloial
means in 1995 and 1996, as well as wilh lhe discussion and adoplion of
lhe Conslilulion in Seplembei 1997. Thus, in lale 1997, having lo face
bolh a new conslilulion and lhe MI`s aid package iequiiemenls, Thai-
land`s polilical leadeis and lechnocials weie confionled wilh a new sel of
iules foi bolh economy and polilics.
Polilical and economic developmenl
Aflei a biief hisloiical suivey, lhis essay will focus nisl on lhe naluie of
democializalion in Thailand and in pailiculai on lhe chaiaclei of lhe
pailies. l will lhen examine economic goveinance and lhe ielalionship
belween lhe pailies and lhe paily syslem and lhe buieauciacy. l will n-
nally considei lhe piospecls foi lhe fuluie of lhe ielalionship belween
pailies and buieauciacy and belween democializalion and economic de-
velopmenl.
Since lhe fall of lhe absolule monaichy in 1932, Thailand`s puisuil
of polilical demociacy has been al besl uneven. Piioi lo Woild Wai ,
neilhei lhe Conslilulion noi Pailiamenl succeeded in iesolving lhe com-
pelilion belween lhe mililaiy and lhe buieauciacy: lo seize powei, polil-
ical leadeis declaied new iules of lhe polilical game and penalized
opponenls. Iiom 1945 lo 1973, lheie weie only a few shoil peiiods of
democialic iefoim inleispeised among long-lasling mililaiy-led govein-
menls which suppiessed polilical pailicipalion and manipulaled elecloial
piocesses.
A ciucial change occuiied belween Oclobei 1973 and Oclobei 1976,
howevei, when democialic and anlidemocialic foices engaged in foiceful
compelilion (Moiell and Chai-Anan 1981). Aflei sludenl demonslialions
had been ciushed by a massive show of foice on 14 Oclobei 1973, young
King Bhumiphol Adulyade| dismissed lhe piime minislei, who ed lhe
counliy logelhei wilh olhei goveinmenl leadeis. Whal followed was a
peiiod duiing which lhe sludenl movemenl ouiished, public discussion
of polilical and social libeializalion expanded, and lhe Communisl Paily
developed iapidly. n 1975, aflei lhe mililaiy faclions had iegiouped and
obseived lhe dominoes of \ielnam, Laos, and Cambodia fall, iighl-wing
elemenls and sludenls clashed moie fiequenlly and wilh giealei acii-
mony. A coup look place in Oclobei 1976, which was chaiacleiised by
massive violence and acls of loiluie againsl sludenls al lhe hands of iighl-
2O4 DAN KNG
wing gioups and of lhe secuiily foices: lhese evenls iemain a slain on
Thailand`s colleclive conscience.
A new conslilulion was pioclaimed in 1978 by lhe mililaiy-led govein-
menl wilh lhe aim of inlioducing a limiled foim of demociacy. Ileclions
weie held in 1979, pailies which had suivived lhe 197Os ie-emeiged,
and pailiamenlaiy demociacy was ie-inlioduced (Giiling 1981). \ndei
lhe lulelage of Piime Minislei Geneial Piem Tinasulanond, foimei aimy
commandei-in-chief, Thai demociacy, howevei limiled, became moie
slable: il was nol inleiiupled by coups dè lal. Piem piesided ovei seveial
successive cabinels and lhiee pailiamenlaiy eleclions (1983, 1986, and
1988), and alliacled lhe iespecl of lhe eliles, lhe piess, and lhe Royal
Iamily. Being liied of lhe manoeuviings of Cabinel polilics, howevei,
Piem announced his ieliiemenl aflei lhe 1988 eleclions: he had been
eighl yeais in powei, wilhoul having led a polilical paily oi compeled foi
eleclion. He was succeeded by Chalichai Choonhawan, head of lhe lhen
laigesl paily in Pailiamenl, who buill a coalilion goveinmenl and lhus
became Thailand`s nisl elecled piime minislei in 12 yeais.
Meanwhile, since lhe 195Os Thailand`s leadeis had focused on indus-
liializalion, wilh a good iecoid of oveiall success. Ixcepl in lhe afleimalh
of lhe oil ciises of lhe 197Os and lhe iecession of lhe eaily 198Os, Thai-
land`s economy giew iapidly. The giowlh iales foi agiiculluie aveiaged
4.4 pei cenl foi lhe peiiod 197O8O, and 3.8 pei cenl foi lhe peiiod 198O
93. Manufacluiing giowlh iales weie mosl impiessive, ieaching 9.7 pei
cenl in lhe 197Os and 11.O pei cenl belween 198O and 1993. The piopoi-
lion of Thais living in poveily fell fiom 57 pei cenl in 1962 lo |usl 13.7 pei
cenl in 1992, allhough lhe populalion iose duiing lhe same peiiod fiom
29 million lo 57.3 million (Woild Bank 1996). Duiing Chalichai`s admin-
islialion giowlh iose lo new iecoids and was iegaided as suslainable:
lhe NISDB`s Nalional Iive eai Plan foi 19972OO1 was based on lhe
assumplion of 8 pei cenl giowlh pei annum.
Howevei, undei Chalichai allegalions of coiiuplion againsl membeis
of lhe Cabinel became widespiead; as in lhe 195Os, 196Os, oi 197Os, co-
alilion pailneis ballled amongsl lhemselves foi payoffs and powei, while
disaffecled mililaiy faclions demanded changes in lhe Cabinel. This
evenlually led lo a coup which loppled lhe Chalichai goveinmenl in
Iebiuaiy 1991. This lype of inslabilily deiived fiom lhe weakness of Thai
polilical pailies is key lo a well-accepled view of Thai polilics: lhe vi-
cious cycle`` oullined by Chai-Anan Samudavani|a (1982).
Peiiods of Thai demociacy, Chai-Anan has aigued, have been shoil-
lived because of lhe failuie of elecled goveinmenls and lhe polilical
inslilulions lhal suppoiled lhem. n each cycle, a new conslilulion was
wiillen, polilical pailies weie legalized, open debale was allowed, elec-
lions weie held, and a cabinel was foimed. Aflei a shoil lime, lhal cabi-
THALAND 2O5
nel was widely iegaided as coiiupl and unable lo manage lhe affaiis of
lhe nalion; lhe mililaiy evenlually inleivened lo end lhe democialic ex-
peiimenl in lhe inleiesls of polilical slabilily. \sually, polilical pailies
weie banned and civil libeilies iesliicled in lhe ielienchmenl lhal fol-
lowed. n lhis view of Thai polilics, lhe pailies lhemselves sowed lhe
seeds of lheii own desliuclion because of lheii inheienl weaknesses
(Chai-Anan 1982, 15).
Belween Iebiuaiy 1991 and Seplembei 1992, lhe coup leadeis, headed
by Geneial Suchinda Kiapiayoon, soughl lo biing back old-slyle polilics.
The 1978 Conslilulion was ieplaced by a moie aulhoiilaiian one; pio-
molions in lhe mililaiy and lhe police weie manipulaled lo ensuie sup-
poil foi lhe coup leadeis and lheii followeis; a new polilical paily was
ciealed which was expiessly designed lo bulliess Geneial Suchinda in lhe
piime minisleiial ofnce. Meanwhile, foimei Cabinel membeis had lheii
assels fiozen unlil lhey could piove lhemselves innocenl of lhe chaige of
having become unusually weallhy. These moves weie challenged, how-
evei, as pio-demociacy gioups became aclive in opposing lhe ievised
Conslilulion and mobilized lhe public againsl lhe ieluin lo a managed
foim of demociacy led by a geneial luined piime minislei. Aflei lhe
Maich 1992 eleclions and Suchinda`s subsequenl appoinlmenl lo lhe
posl of piime minislei, a coalilion composed of polilical pailies, pio-
demociacy aclivisl gioups, and sludenls slailed lo demonsliale againsl
lhe piime minislei. These demonslialions weie |oined by middle-class
cilizens, woikeis, and manageis who foimed whal came lo be known as
lhe mobile phone mobs.``
The movemenl againsl lhe piime minislei ieached ils peak on 172O
May 1992 when goveinmenl foices sliuck and a bloody ciackdown
ensued. The iepiession was halled by lhe king on May 2O: Suchinda was
foiced lo iesign, lhe |ailed demonslialion leadeis weie ieleased, and new
eleclions weie scheduled foi Seplembei 1992. The alignmenl al lhal
eleclion was belween lhose pailies which had and lhose which had nol
suppoiled lhe Suchinda goveinmenl, lwo camps which lhe piess dubbed
devils`` and angels`` (King 1992, Suiin 1992). The angels won a slim
ma|oiily and foimed a coalilion goveinmenl which lasled fiom Seplem-
bei 1992 lo 1uly 1995 undei lhe leadeiship of Chuan Leekphai.
Chuan was ieplaced in 1uly 1995 by opposilion leadei Banhain Silapa-
aicha, who iemained piime minislei foi |usl a yeai and foui monlhs up lo
lhe Novembei 1996 eleclion. Al lhal eleclion, Banhain was ieplaced by
ieliied Geneial Chavalil ongchaiyulh, who in luin iesigned in Novem-
bei 1997, having losl lhe suppoil of his coalilion; Chuan Leekphai be-
come once moie head of lhe goveinmenl. Thus elecloial demociacy had
pievailed in Thailand lhioughoul lhe 198Os and 199Os, excepl foi one
yeai in 199192; in geneial, goveinmenlal ciises had been lhe iesull of
2O6 DAN KNG
elecloial upsels oi had been handled in a conslilulional mannei by means
of ieshufes.
The economic downluin of 1996 and lhe ciisis of 1997
While Thailand`s demociacy was becoming inslilulionalized, lhe econ-
omy was sliding giadually inlo iecession. When lhe Banhain goveinmenl
came lo ofnce, Thailand`s economy was alieady expeiiencing a slow-
down: giowlh was 8.6 pei cenl in 1995, bul 6.4 pei cenl in 1996, and lhen
luined inlo iecession in 1997. Ixpoils in 1996 expeiienced negalive
giowlh of O.2 pei cenl as Thailand`s fundamenlal compeliliveness in
woild maikels was coming inlo queslion. Banhain`s goveinmenl was com-
posed of moslly businessmen luined polilicians and lacked iools in lhe
polilically inuenlial capilal. Chaiacleiized by lhe piess as a colleclion
of gieedy counliy bumpkins, lhe Banhain goveinmenl ignoied lhe eco-
nomic waining signs and did lillle lo slop Thailand`s economic decline.
Geneial Chavalil and his New Aspiialion Paily edged oul lhe Chuan-
led Democial Paily in lhe Novembei 1996 eleclion. Having foimed a
goveinmenl, he inslalled a new leam of economic policy makeis, bul
despile iepealed wainings fiom lhe MI, Thailand`s new leadeis did lillle
lo guaid againsl lhe giowing mounlain of bad debl piling up in lhe
nnancial syslem. nslead, lhey sluck slubboinly lo lhe managed foieign
exchange syslem which effeclively pegged lhe bahl lo lhe \.S. dollai.
When lhal peg was bioken, lhe bahl weakened shaiply and Thailand`s
economy, which had appeaied so sliong, iapidly fell inlo iecession. Iaced
wilh ma|oi ciilicisms ovei Thailand`s economic woes as well as allega-
lions of coiiuplion againsl seveial Cabinel minisleis, Chavalil had lo face
a no-conndence molion in Novembei 1997. n exchange foi coalilion
suppoil in lhe no-conndence vole, Chavalil iesigned immedialely aflei-
waid so lhal olheis could foim lhe nexl goveinmenl.
As Chavalil lefl ofnce wilhoul dissolving lhe House and oiganizing new
eleclions, bolh lhe exisling goveinmenl coalilion and lhe opposilion
pailies weie able lo engage in a polilical fiee-foi-all in lheii allempls lo
foim a new coalilion. Ioi seveial days in Novembei 1997 il was nol cleai
which gioup of pailies would foim lhe nexl goveinmenl. Two sepaiale
coalilions even held news confeiences wilhin houis of each olhei lo de-
claie lhal a new goveinmenl ma|oiily would be foimed. The Social Aclion
Paily and lhe Piachakoin Thai Paily weie inilially claimed lo suppoil
bolh camps.
Ivenlually, lhe Social Aclion Paily sided wilh lhe Democial-led coali-
lion, and in a ialhei bizaiie lwisl, mosl of lhe Piachakoin Thai Paily
MPs, nol including lheii paily leadei, pledged lheii suppoil lo lhe coali-
THALAND 2O7
lion. Chuan Leekphai became piime minislei foi lhe second lime on 8
Novembei 1997. Allhough inilially lhe slienglh of lhis coalilion govein-
menl was queslionable, a liansilion has occuiied successfully and lhe
piime minislei even began speaking of scheduling lhe nexl eleclions foi
as lale as 2OOO oi 2OO1.
Thai democializalion and paily syslem developmenl
Againsl lhe backdiop of a hisloiic economic downluin, queslions have
naluially been iaised aboul lhe Thai goveinmenl`s abilily lo handle lhe
ciisis. Such queslions would have pieviously been pul lo lhe buieaucials
as, lhen, pailies and pailiamenl would nol have been consideied ielevanl.
By lhe lale 199Os, howevei, lhe funclioning of Thai demociacy had
impioved: lheie had nol been a coup since 1991, even if lhe inleiplay
belween pailies, coalilion pailneis, and even piime minisleis and lheii
goveinmenls had nol been smoolh. The queslion of whelhei Thailand`s
polilical elile could make lhe necessaiy ad|uslmenls lo lhe new iealily
had lheiefoie become meaningful.
el, howevei posilively Thai demociacy can be iegaided, lhe pailies
slill have lo be desciibed as weak in view of lheii limiled oiganizalional
sliucluies, lheii disunily, and lheii lack of cleai ideologies (Chai-Anan
1989; Nehei 1987; Somsakdi 1987; Suchil 199O). The Thai polilical syslem
had been modeled on Weslminslei, al leasl since lhe 1978 Conslilulion
ie-inlioduced a pailiamenlaiy syslem wilh a fully elecled House of Rep-
iesenlalives and an appoinled Senale. Pailiamenlaiy eleclions weie lo be
held al leasl eveiy foui yeais, allhough lhe piime minislei could dissolve
lhe House al any lime. The elecloial syslem was based on piovinces, each
of which was in luin divided inlo single-membei, lwo-membei, oi lhiee-
membei consliluencies. As lhe populalion of lhe piovinces giew, con-
sliluencies weie given moie seals andjoi moie consliluencies weie cie-
aled. The numbei of seals in lhe House lhus incieased fiom 3O1 in lhe
1979 eleclion lo 357 in 1988 and 395 in 1996. Allhough lhe Conslilulion
was ievised in 1991 and again in 1992, lhe elecloial fiamewoik iemained
bioadly lhe same, wheieas lhe 1997 Conslilulion was lo inlioduce ma|oi
changes.
Pailies aie iegulaled by lhe Polilical Paily Law of 1981 which is cui-
ienlly being modined lo comply wilh lhe piovisions of lhe 1997 Con-
slilulion. \nlil lhe changes fully lake place, lhe cuiienl law iequiies
pailies lo iegislei wilh lhe nleiioi Minisliy, lo submil copies of lheii
iegulalions and a lisl of lheii leadeiship, and lo seek minisliy appioval lo
iegislei new bianches. The aim had been lo cieale mass-based pailies by
iequiiing lhal each paily musl have al leasl 5,OOO membeis dispeised
2O8 DAN KNG
lhioughoul lhe nalion. n addilion, lo be eligible lo compele in eleclions,
pailies had lo submil a numbei of candidales equal lo half of lhe avail-
able House seals.
The legal iequiiemenls and consliainls iegaiding paily iegislialion
and elecloial compelilion conslilule signincanl baiiieis lo new paily foi-
malion. Thai pailies have been foiced inlo a quasi-mass-based paily
oiganizalional sliucluie, al leasl foimally, and lhis has cuilailed lhe mul-
liplicalion of pailies. Howevei, despile lhe legal iequiiemenls, few
pailies have aclually succeeded in eslablishing (oi even allempled lo
eslablish) mass oiganizalions which would possess a complex oiganiza-
lional sliucluie, a nelwoik of paily bianches, and a signincanl numbei
of membeis. Allhough lhe Palang Dhaima Paily allempled lo build up
a mass-based paily, il failed; only lhe Democial Paily (lhe oldesl con-
linuous Thai paily) can make a ciedible claim lo a nelwoik of paily
bianches.
The weakness of Thai pailies slems laigely fiom lhe chaiaclei of lhe
ielalionship belween lhese pailies and lheii candidales. Candidales musl
belong lo a paily (since 1983), bul lhe pailies musl nominale a sufncienl
numbei of candidales in each eleclion oi iisk couil-oideied dissolulion.
Since voleis do nol punish candidales who swilch pailies, and lheie aie
many pailies, candidales who aie expecled lo iun sliong campaigns aie in
high demand and, as a iesull, if lhey leave a paily, anolhei will ieadily
accepl lhem. By sliong campaigns`` mean ones in which candidales
eained a numbei of voles equal lo oi giealei lhan 5O pei cenl of lhe vole
lolal of lhe winning candidale, oi, on aveiage, appioximalely 2O pei cenl
of lhe lolal neld of candidales (King 1996).
The media play a ma|oi iole in Thai eleclions. They lypically lake a
hoise-iace appioach lo iepoiling, focusing on whichevei polenlial piime
minislei appeais lo be on lop. Television and lhe piess aie fiee; lhe piess
in pailiculai fiequenlly iepoils allegalions of vole buying and olhei lypes
of eleclion law violalions as well as lhe moie inleiesling oi enleilaining
campaign lechniques. Newspapeis oflen announce lheii suppoil foi a
polenlial piime minislei lale in lhe eleclion conlesl. As pailies have been
allowed lo adveilise on lelevision since 1995 only, eleclion expendiluie
has lypically been devoled lo adveilising via posleis and banneis, ienling
eels of pickup liucks lo enable candidales lo loui consliluencies, and
lo diiecl conlacls wilh nelwoiks of vole buyeis. \ole buying is wilhoul
aigumenl foi many candidales lhe laigesl single expense.
Thai pailies have also been iegaided as weak because lhey lack sub-
slanlive policy slands, lel alone an ideology. Theie aie no cleai lefl-wing
oi iighl-wing pailies, wilh lhe exceplion of lhe illegal Communisl Paily;
laboui, Gieen, oi ioyalisl pailies have yel lo suiface. l has been aigued
lhal lhe basis of paily foimalion in Thailand is consliluled by lhe polilical
THALAND 2O9
2
1
O
Table 8.1 hi prlimentry eletion sttistisD IWUWIWWT
1979 1983 1986 1988 Maich 1992 Seplembei 1992 1995 1996
Pailies conlesling 361 16 16 16 15 12 12 13
Pailies winning seals 15 112 15 15 11 11 11 11
Candidales 1,626 1,876 3,813 3,6O6 2,851 2,417 2,372 2,31O
Seals 3O1 324 347 357 36O 36O 391 393
Bangkok volei luinoul3 19.O 32.5 37.3 38.O 42.6 47.4 49.8 49.O
Oveiall volei luinoul3 43.9 5O.8 61.4 63.6 59.2 62.O 61.6 62.O
Souice: Manool 1986, 1998; Ileclion Repoils, Depailmenl of Local Adminislialion, nleiioi Minisliy 1992a, 1992b, 1995, 1996.
1 Pailies weie nol foimally allowed lo exisl unlil aflei lhe piomulgalion of lhe Polilical Paily Acl in 1981, bul pailies did exisl
infoimally. n addilion lo gioups lhal called lhemselves pailies,`` lheie weie 28 olhei gioups lhal submilled candidales.
2 Aflei lhe eleclions of 1983, independenls weie nol allowed lo hold seals in pailiamenl, so lhal all independenls weie foiced lo
|oin pailies. The nguie of pailies lhal won seals does nol include pailies lhal gained seals only aflei lhe geneial eleclions due lo
paily swilching.
3 Iiguies aie peicenlages.
ambilions of individuals oi of faclions. ndeed, whelhei in lhe 195Os oi
lhe 198Os, paily policy conlenl has been essenlially local in chaiaclei:
each candidale oi MP is piimaiily conceined wilh such paiochial con-
ceins as a new village school, a new ioad, oi donalions lo lhe local lemple
(Kanok 1987; Phillips 1958). Accoiding lo Kiamol, even in lhe polilically
chaiged almospheie of lhe 197376 peiiod, lheie was a lack of cleai
ideological diieclion and commilmenl on lhe pail of mosl noncommunisl
eliles`` (Kiamol 1982, 34). As all non-Communisl pailies pledged lheii
suppoil lo lhe democialic pailiamenlaiy syslem and lo lhe lioika of ofn-
cial Thai polilical values Nalion, King, and Religion lheie weie no
cleai dislinclions among pailies: non-communisl paily membeis could
swilch pailies wilhoul feeling lhal lhey |hadj abandoned oi devialed fiom
lheii ideology`` (Kiamol 1982, 34). Since Thai pailies weie focused on
elecloial vicloiies, paily policy was ielegaled lo lhe moie conciele offeis
of favouis lhal voleis appiecialed. As Suchil aigues:
Pailies` policies and peifoimances weie nol a deleiminanl of voling behavioi,
pailiculaily in lhe piovinces. Thus, in lheii eleclion campaigns, a numbei of
piominenl polilicians concenlialed on lheii individual policies, achievemenls, and
palions, and iaiely emphasized lhe paily`s peifoimance. They had lo sel up lheii
own eleclion campaigns and campaign oiganizalions, nnancing and ieciuiling
lheii own campaign slaff. . . . lheii eleclion success depended on lheii own effoils
ialhei lhan |lhose ofj lhe paily. (Suchil 199O, 261)
The ma|oi Thai pailies and lheii link wilh sociely
Theie have been nve ma|oi pailies in Thailand in lhe 198Os and 199Os.
These aie lhe Democial Paily, lhe New Aspiialions Paily (NAP), lhe
Chail Thai oi Thai Nalion Paily (CTP), lhe Social Aclion Paily (SAP),
and lhe Chail Pallana oi Nalional Developmenl Paily (CPP). Theie aie
also a numbei of small pailies.
Thc Dcnocrat Iarty
Allhough il was only Thailand`s second laigesl paily al lhe lime, lhe
Democial Paily led lhe coalilion goveinmenl foimed by Chuan Leekphai
al lhe end of 1997. l is Thailand`s oldesl paily, ils iools daling back lo
1945. Wilh solid bases of suppoil in lhe soulhein iegion and in Bangkok,
il is piobably lhe paily besl aligned wilh lhe capilal`s elile public opinion.
Known somewhal deiisively as a paily of piofessois,`` ils leadeiship
includes a numbei of Ph.D.`s and iespecled bankeis and diplomals, as
well as lawyeis and foimei academics. The paily also has a iuial wing
THALAND 211
consisling of MPs who have oflen been accused of vole buying and vaii-
ous olhei lypes of coiiuplion. Wilh ovei 15O iegisleied bianches and
ovei 3OO,OOO membeis in 1996, lhe Democials may be Thailand`s mosl
exlensively oiganized paily, bul lillle syslemalic effoil has been made lo
ieciuil oi iegislei new paily membeis (McCaigo 1997). Allhough lhe n-
nancial maikels and business leadeis have piaised lhe paily`s appioach
lo solving Thailand`s economic woes, queslions have been iaised aboul
lhe fuluie of lhe paily aflei lhe nexl few yeais of painful economic policy
choices lhal ceilainly musl be made.
Thc Ncw Aspiration Iarty
The NAP, led by Geneial Chavalil, was foimed in 199192 aflei Chavalil
ieliied fiom aclive mililaiy seivice in lhe aimy`s highesl posilions. Cha-
valil`s new paily was being oiganized |usl as lhe 1991 coup occuiied; il
was inilially lhoughl lo benenl fiom lhe coup since many mililaiy leadeis
had been close lo Chavalil. Chavalil did oppose lhe lakeovei, howevei,
and lhe coup leadeis weie inslead suppoiled by lhe Samakhilham Paily,
which was foimed wilh lheii help. Chavalil conlinued lo develop lhe
NAP in opposilion. Iiom a coie of ex-mililaiy and academic paily
foundeis, Chavalil`s paily giew in slienglh lo win 72 seals in lhe Maich
1992 eleclion. n lhe Seplembei 1992 campaign, in spile of being dubbed
an angelic paily,`` lhe NAP shiank lo 51 MPs bul was able lo |oin lhe
goveinmenl coalilion. The paily evenlually defecled lo lhe opposilion
ovei a dispule conceining decenlializalion policy, and giew in lhe 1995
and 1996 eleclions lo 125 MPs, lhus being able lo foim lhe coie of lhe
posl1996 eleclion goveinmenl and in pailiculai lo give Chavalil lhe
oppoilunily lo fulnll his long-held dieam of becoming piime minislei.
Chavalil`s adminislialion suivived one yeai only; il fell foui monlhs
aflei lhe devalualion of lhe bahl in 1uly 1997, having been widely ciili-
cized foi fool diagging wilh iespecl lo lhe implemenlalion of impoilanl
economic iefoims and ineplilude in iesponding lo lhe economic ciisis.
Allhough many business leadeis suppoiled Chavalil while Bangkok
voleis did nol, neilhei lhe NAP, noi indeed any olhei Thai paily, can easily
be linked lo pailiculai social gioups oi social cleavages. On a iegional
basis, lhe NAP has included a soulhein and a noilheaslein wing. n 1996,
lhe paily won 22 seals in lhe cenlial iegion and 2O in lhe noilh, bul had
ils giealesl success in lhe noilheasl wilh 78 seals.
Thc Chart Thai Iarty
The CTP is led by a quinlessenlial iuial businessman luined polilician,
Banhain Silapa-aicha. Banhain`s conglomeiale of business inleiesls in
212 DAN KNG
consliuclion and indusliial chemicals piovided sufncienl funds foi him lo
bankioll seveial CTP campaigns as ils secielaiy-geneial and evenlually
as ils leadei. Ioimed in lhe mid-197Os by a gioup of ieliied mililaiy ofn-
ceis luined businessmen, lhe CTP has uclualed fiom 1O8 MPs in 1983 lo
77 in 1992. l has seived in mosl coalilion goveinmenls lhioughoul lhe
198Os and 199Os even lhough il was dubbed a devil paily`` due ils
pailicipalion in lhe Suchinda goveinmenl. l is somelimes iefeiied lo as a
businessman`s paily, bul lhe expiession is moie appiopiiale foi lhe pai-
ly`s foundeis and subsequenl leadeis lhan foi ils suppoileis. The CTP has
usually gaineied suppoil fiom al leasl lwo oi lhiee ma|oi iegions, nol
including Bangkok; il is sliongesl in lhe cenlial iegion. Aflei Banhain`s
shoil-lived goveinmenl in 199596, lhe CTP shiank lo 39 MPs in lhe 1996
eleclions.
Thc Social Action Iarty
The SAP was also oiganized in lhe mid-197Os. l ceased lo be a laige
paily in lhe mid-198Os, lypically winning 2O3O seals in a bioad cioss-
seclion of geogiaphic iegions, moslly in iuial consliluencies. The paily`s
main campaign plank has been ils suppoil foi lhe agiiculluial secloi and
iuial developmenl, admilledly a policy appioach shaied by many olhei
pailies.
Thc Chart Iattana Iarty
The CPP was foimed in lhe wake of lhe May 1992 violence and lhe ies-
ignalion of Piime Minislei Suchinda. The coie of lhal goveinmenl was
lhe Samakhilham Paily which had, piioi lo lhe Maich 1992 eleclion,
pioclaimed ils suppoil foi Suchinda. Defeclois fiom lhal paily, along
wilh foimei CTP paily leadei Chalichai Choonhawan, foimed lhe CPP.
The CPP has giown lo a mid-size paily by winning 52 seals in lhe 1996
pailiamenlaiy eleclions. ls main slienglh has been in lhe noilh and
noilheasl, allhough il has won seals in olhei iegions as well. When
Chalichai was al lhe helm, lhe paily`s key eleclion appioach was suppoil
foi an evenlual Chalichai bid foi lhe posl of piime minislei on lhe
giounds of his expeilise in economic policy and his skills in inleinalional
diplomacy. Aflei |oining lhe Chavalil goveinmenl in 1996, Chalichai
accepled only a minoi economic advisoiy iole and lhe CPP`s Cabinel
membeis did nol dislinguish lhemselves in economic policy-making oi in
diplomacy. Wilh Chalichai`s dealh in May 1998, lhe paily leadeiship has
been passed lo his son-in-law Koin Dabaiansi and a youngei geneialion
of leadeis.
l is difncull lo say whelhei lhe CPP oi olhei Thai pailies iepiesenl
THALAND 213
specinc business inleiesls in lelecommunicalions, consliuclion, oi nnance,
foi inslance, oi pailiculai social gioups such as manual woikeis, laboui
movemenl leadeis, oi faimeis. Iven lhe CPP, despile ils claims lo ex-
peilise in managing economic policy, did nol diffei subslanlially fiom
olhei Thai pailies in lhe policies which ils leadeis pioposed duiing lhe
eleclion campaigns of 1995 oi 1996. el allhough lhe links aie nol obvi-
ous, some conneclion does exisl belween Thai pailies and lheii suppoil-
eis. Whal is moie in queslion is whelhei lhese linkages aie long-lasling,
exclusive, oi even signincanl in leims of elecloial success.
Any linkages which exisl aie cleaily nol exclusive, howevei. Ma|oi
business gioups aie known lo make conliibulions lo a vaiiely of leading
pailies and lo develop iecipiocal ielalionships lhal oullasl pailiculai
goveinmenls oi coalilions. l is difncull, if nol impossible, lo idenlify a
faimeis` paily since all pailies expiess suppoil foi, and cuiiy favoi wilh,
lhe 6O pei cenl of lhe populalion engaged in agiiculluie. Noi is lheie a
cleai conseivalive, elile-cenleied paily since neaily eveiy paily is con-
seivalive in leims of polilical ideology and suppoil of exisling inslilulions
and modes of polilical inleiaclion. Noi can a laboui paily oi a Gieen
paily be easily idenlined. This does nol mean lhal Thai pailies have no
linkages wilh sociely, bul lhal lhe linkages aie oveilapping, condilional,
peihaps based moie diieclly on piomises of elecloial suppoil, and piob-
ably oiganized and managed as much by candidales as by paily leadeis.
The spiead of demociacy and lhe developmenl of lhe paily
syslem
n lhe couise of lhe second half of lhe lwenlielh cenluiy, lheie has been
giealei suppoil in Thailand foi democialic ideals and a giealei undei-
slanding of lhe complexilies lhal iesull fiom allempls lo govein in ac-
coidance wilh democialic piecepls lhan al any olhei lime in Thai polili-
cal hisloiy. Suiveys indicale lhal suppoil foi democialic ideals is ialhei
widespiead and sliong, as againsl eailiei nndings lhal found lhal few
Thais undeislood lhe concepl oi even lhe Thai-language woid foi de-
mociacy (LoGeifo 1995; Wilson 1962). Suppoil foi pailies is lypically
lempeied by suspicion. Iew would aigue lhal demociacy could funclion
wilhoul pailies oi lhal pailies aie unnecessaiy, bul lheii hisloiy of fiac-
liousness and of elecloial spending violalions has iesulled in pailies
having a bad iepulalion. The aclions of lhe 1991 coup leadeis indicale
lhal lhey undeislood lhe need foi pailies: pailies weie nol banned, and a
paily was sel up as a polilical vehicle foi posl-coup consolidalion. Bul
lheii aclions also cleaily indicale a common allilude among polilical
214 DAN KNG
eliles, accoiding lo which pailies can be easily manipulaled, and easily
eslablished oi dissolved depending on agieemenl oi discoid among
poweiful polilicians. The ielalively ease wilh which Thai pailies can be
eslablished and lhe fiaclious naluie of Thai polilicians has fuilhei con-
liibuled lo a ioll-ovei effecl in which each occuiience of pailiamenlaiy
eleclions sees al leasl one oi lwo pailies dissolve and one oi lwo new
pailies emeige.
Anolhei widely accepled poinl is lhal lhe piime minislei should be lhe
head of lhe laigesl paily based on ils numbei of MPs in lhe House. This
was nol lhe case in lhe 198Os when Piem was lhe peiennial favoiile foi
piime minislei despile lhe facl lhal he nevei held a paily posl oi slood
foi eleclion. The idea of eleclions as compelilions belween possible piime
minisleis and lhe link belween suppoil foi a paily`s candidales and sup-
poil foi ils paily leadei as piime minislei aie emphasized in eleclion
campaigns. l is widely undeislood lhal one musl lead a big paily lo
become piime minislei and lheiefoie lhal pailies suppoil lheii candi-
dales al eleclion lime even if lhey do nol enliiely conliol oi nnance lhose
candidales.
The Seplembei 1997 Conslilulion: New iules foi lhe
polilical game
The new Conslilulion was appioved by Pailiamenl in lale Seplembei
1997 and came inlo foice immedialely aflei il was agieed lo by king and
published in lhe ioyal gazelle al lhe beginning of Oclobei 1997. The iules
of lhe polilical game became in many ways signincanlly diffeienl: lheie
aie incieased guaianlees of individual iighls, an elecled Senale, a new
Ileclion Commission lo supeivise eleclions, sepaialion of lhe elecled
Pailiamenl and lhe Cabinel (MPs oi senalois aie no longei allowed lo
simullaneously hold a Cabinel posl and a seal in Pailiamenl), a new
elecloial syslem based on a combinalion of single-membei disliicls and a
paily-lisl syslem, and new iequiiemenls foi candidales.
IncrcascJ guarantccs jor inJiviJual rights
The conslilulional guaianlees aie incieased foi such individual iighls as
lhe fieedom of speech and lhe fieedom lo associale while a new Human
Righls Commission is being sel up. These piovisions may ovei lime in-
ciease polilical pailicipalion, bul lhe 1997 Conslilulion also inlioduces
compulsoiy voling. A iighl lo iecall MPs is also given lo cilizens foi lhe
nisl lime, by means of a pelilion which, if signed by 5O,OOO eleclois, can
THALAND 215
iniliale lhe pioceduie. Meanwhile, pelilion signeis can iniliale a iecall
molion againsl an elecled MP. Inliiely new seclions in lhe Conslilulion
covei lhe dulies of cilizens and lhe dulies of lhe slale lowaid cilizens.
Among lhe moie posilive iighls, lhe Conslilulion guaianlees lwelve
yeais of basic educalion. Since 1995, successive goveinmenls have made
such a pledge bul lhe iealily lagged fai behind and mosl educalois fell
lhal lhe syslem of slale schools had difncully in pioviding even nine yeais
of basic educalion. The piopoilion of lhe Thai woik foice having
ieceived secondaiy educalion has iemained slalic al 33 pei cenl foi some
yeais (Woild Bank 1996).
An clcctcJ Scnatc
The new Conslilulion has also eslablished an elecled Senale lo ieplace
lhe appoinled chambei which was in pail modelled on lhe Biilish House
of Loids and included mililaiy ofnceis on aclive duly, lop-level buieau-
cials, leading businessmen, univeisily piofessois, and laboui leadeis. n
conliasl, lhe new Senale has 2OO membeis elecled foi six yeais fiom
single-membei disliicls based on lhe counliy`s 76 piovinces. Senalois can
no longei seive concuiienlly as mililaiy ofnceis oi as any olhei lype of
civil seivanl. The poweis of lhe Senale iemain bioadly lhe same: lhal
body can ie|ecl oi delay oidinaiy legislalion and considei measuies
designed lo implemenl lhe piovisions of lhe new Conslilulion, bul no
longei has lhe iighl lo vole on no-conndence molions.
A ncw 1lcction Connission
The Depailmenl of Local Adminislialion in lhe Minisliy of lhe nleiioi
liadilionally adminisleied nalional and local eleclions. \ndei lhe piovi-
sions of lhe 1997 Conslilulion, lhis iole passes lo an Ileclion Commis-
sion. The lenglh of lhe campaign iemains nxed al 45 days. The govein-
menl is iequiied by lhe Conslilulion lo ensuie lhal elecloial conlesls aie
foughl faiily by aiianging foi fiee iadio and lelevision lime foi lhe pai-
lies, publicizing lhe eleclion, aiianging appiopiiale access lo localions foi
candidales lo campaign, and enabling lhe Ileclion Commission lo caiiy
oul ils dulies. The commission also becomes lhe ofncial iegisliai of lhe
pailies.
\oling becomes compulsoiy and lhe penally foi nol voling could in-
clude lhe loss of lhe iighl lo vole in subsequenl eleclions. A numbei of
conciele piovisions aie also specined in lhe Conslilulion: ballols musl be
counled al one localion in each elecloial disliicl and no longei al each
polling slalion; voleis aie allowed lo casl a none of lhe above`` vole,
lheieby fulnlling lheii obligalion lo vole bul being nonelheless able lo
216 DAN KNG
ie|ecl lhe available candidales. This oppoilunily was alieady given fiom
lhe Maich 1992 eleclion onwaids, and 2 pei cenl of voles weie casl in lhis
way in lhe 1995 and 1996 eleclions.
The new ballol-counling aiiangemenls aie designed lo ieduce vole
buying which is consideied lo conslilule lhe bulk of campaign spending
and is eslimaled in lhe billions of bahl. Counling lhe ballols al each
polling slalion (lheie weie ovei 62,OOO polling slalions used in lhe lasl
eleclion, oi appioximalely one polling slalion foi eveiy 25O voles casl)
allowed candidales lo check whelhei lheii nelwoik of canvasseis down lo
lhe sub-village level had been effeclive. By iemoving lhe oppoilunily lo
do such checking, lhe conslilulion diafleis hoped lo make vole buying
less alliaclive: il will be moie difncull lo check nol only lhal voles boughl
weie aclually casl, bul also which canvasseis weie effeclive and which
mighl have simply kepl lhe money foi lhemselves. Olhei anlivole buy-
ing measuies include lhe use of laigei single-membei disliicls which will
make il moie expensive foi candidales lo pay off a ma|oiily of voleis.
Iven moie signincanl lhan lhese measuies is lhe piovision foi lhe
sepaialion of Pailiamenl and lhe Cabinel. \ndei lhe new Conslilulion,
MPs oi senalois musl give up lheii seals on accepling a Cabinel posl. l
has been fiequenlly aigued lhal since holding a Cabinel ofnce is a highly
piized oppoilunily foi coiiuplion, a signincanl numbei of polilicians iun
foi eleclion lo Pailiamenl in lhe hope of being offeied a Cabinel posl. As
lhe benenls lo be ieaped by a Cabinel minislei aie limiled only by
imaginalion and skill, il appeais highly ialional lo invesl in a House seal
by buying voles in oidei lo secuie a ieluin on one`s inveslmenl lhiough
coiiupl aclivily. n oidei lo avoid a cascade of by-eleclions, il is assumed
lhal lhe pailies will selecl Cabinel membeis fiom among paily-lisl MPs
and nol fiom lhose elecled in single-membei disliicls.
Ncw rcquircncnts jor parliancntary canJiJatcs
Some new iequiiemenls foi candidales and MPs ielale lo lhe fuluie of
Thai polilical pailies. Ioimeily, MPs expelled by lheii paily aulomali-
cally losl lheii seal and a by-eleclion was held; undei lhe new Conslilu-
lion, such MPs have been given lhe iighl lo ielain lheii seals if lhey
|oin anolhei polilical paily wilhin 3O days. This piovision may lend lo
weaken paily discipline. Ioi example, in 1993 an MP fiom lhe Social
Aclion Paily was expelled foi fiequenlly ciilicizing lhe coalilion govein-
menl lo which his paily belonged and iefusing lo heed lhe paily`s oidei
lo cease making commenls lo lhe piess. Allhough lhis membei was
ieelecled on lhe Chail Thai Paily lickel, lhe paily lo which he pieviously
belonged was al leasl able lo oblain a degiee of discipline fiom ils MPs.
Pailiamenlaiy candidales will also be iequiied lo have al leasl a bach-
THALAND 217
eloi`s degiee fiom an acciediled inslilulion of highei educalion. This
piovision spaiked consideiable discussion since college allendance is slill
ielalively iaie in Thailand. n piaclice, lhe piopoilion of MPs holding al
leasl a bacheloi`s degiee has incieased fiom 52 pei cenl in 1979 lo 73 pei
cenl in 1996.
Ncw rcquircncnts jor political partics
Iven befoie a new polilical paily law is enacled, lwo changes have been
inlioduced by lhe new Conslilulion. Iiisl, a paily can be eslablished by
as few as 15 peisons inslead of 5,OOO as pieviously; second, pailies which
nominale candidales foi pailiamenl bul fail lo win seals aie no longei
aulomalically disbanded. These piovisions could lead lo a piolifeialion of
pailies and in pailiculai lo moie small pailies compeling in pailiamen-
laiy eleclions.
n conliasl, lhe new piovisions ielaling lo single-membei disliicls and
lhe exislence of paily-lisl voling wilh a 5 pei cenl lhieshold clause should
ieduce lhe numbei of pailies elecled in lhe House. Oveiall, lheiefoie, lhe
new Conslilulion is likely lo have a seiies of ialhei conliadicloiy effecls
on pailies and on elecloial piaclices.
Iconomic policy managemenl and lhe paily syslem
The economy is holly debaled duiing elecloial campaigns in Thailand,
yel pailies do nol diffei appieciably in leims of lhe bioad economic policy
lines which lhey suppoil. Discussions on lhe sub|ecl aie nol ideological,
bul conciele and delailed. All pailies agiee aboul a geneially capilalisl
appioach lo economic developmenl wilh a measuie of goveinmenl in-
leivenlion on lhe 1apanese model. They do disagiee ovei whal piioiily lo
give infiasliucluie pio|ecls, foi inslance whelhei subways oi oveihead
iails aie piefeiable, oi whelhei foui-lane oi six-lane iegional lianspoila-
lion links aie necessaiy. Theie have been debales as lo whelhei lhe gov-
einmenl`s iubbei piice suppoil policy was as successful as had been
claimed, oi whelhei lhe piice of iubbei incieased simply in iesponse lo
woild maikel foices, bul no paily aigues lhal lhe iubbei suppoil pio-
giam should be phased oul. nslead of debaling ovei ideology, pailies
lake luins lo iespond lo local needs and piesenl diffeienl shopping lisls
of infiasliucluie pio|ecls, inveslmenl incenlives, oi indusliial libeializa-
lion measuies. Thailand`s decline inlo economic ciisis has focused polilical
debale moie diieclly on economic policy and economic policy-making.
Successive goveinmenls have liied lo poiliay Thailand`s economic difn-
218 DAN KNG
cullies as an occasion foi nalional unily since lhe cuiiency and capilal
maikels usually ieacl negalively lo polilical debale aboul lhe MI-led
\S$17.2 billion economic iescue package.
A few yeais befoie lhe 1997 ciisis occuiied, MPs had alieady slailed lo
seive in key economic posls. Pieviously, nnance oi commeice minisleis
mighl be selecled fiom among iespecled non-pailiamenlaiians and weie
oflen non-pailisan. Subsequenlly, MPs giadually came lo hold posilions
such as lhose of economic minisleis and depuly minisleis so long as lheii
expeiience and backgiound seemed adequale in lhe eyes of lhe business
communily.
\ndei lhe mililaiy-led goveinmenls of lhe lale 197Os and eaily 198Os,
pailies appeaied ieady lo leave lhe adminislialion of lhe economy lo
expeils and lo populai piime minisleis such as Piem. Aflei lhe oil ciisis
of 197879, Piem`s goveinmenl insliluled ausleiily measuies, bioughl
inalion undei conliol, and devalued lhe bahl in 1984. Bolh lhese aus-
leiily measuies and lhe cuiiency iealignmenl aie usually iegaided as
having given Thailand a solid macioeconomic base by lhe lime Chalichai
became piime minislei in 1988 and lhe Thai economy giew al ils mosl
iapid annual iales. l was lhen commonly poinled oul lhal Piem had
ielied heavily on lechnocials and lhal lhey had been able lo adminislei
nalional affaiis quile aulonomously. Thailand was lhus called by some a
piemociacy`` (Likhil 1988; Nehei 1988; os 1989).
As in many olhei counliies, Thailand`s cenlial bank, lhe Bank of
Thailand, is foimally independenl allhough lhe nnance minislei has lhe
powei lo name lhe bank`s goveinoi. A long-slanding liadilion has placed
lhe Bank of Thailand, lhe Minisliy of Iinance, lhe Buieau of lhe Budgel,
and goveinmenl economic and planning commillees above polilical inlei-
feience. Pailiamenl has hisloiically had few poweis and fewei iesouices
lo inuence lhe delails of lhe goveinmenl`s budgel oi lo challenge eco-
nomic policy-making. Thailand`s Weslminslei-lype pailiamenlaiy syslem
iesulled in Cabinel goveinmenl, and lheiefoie, no goveinmenl would
puiposely endow Pailiamenl wilh poweis lhal mighl subsequenlly be
used lo challenge oi defeal lhe goveinmenl.
Beyond lhe cuiienl sliucluial chaiacleiislics which bolslei lhe iole of
buieaucials in economic policy-making, lhe hisloiy of lhe Thai buieauc-
iacy`s inuence and powei can be liaced back lo lhe foimalion of lhe
Thai slale and lo lhe appaialus developed undei King Mongkul and King
Chulalongkoin fiom lhe mid-18OOs. The slale buieauciacy has been con-
sideied lhe choice caieei liack foi pieslige-conscious eliles who pie-
feiied honoiinc posilions lo bellei-paid oppoilunilies in piivale business.
n lhe Thai language, civil seivanls aie known as khaa ratchakarn oi
seivanls lo lhe monaichy.`` \nlil lhe fall of lhe absolule monaichy in
THALAND 219
1932, slale business was consideied lo be lhe king`s business, and an auia
of honoi and pieslige has iemained.
Cabinel minisleis as polilical appoinlees have giadually soughl lo con-
liol, oi al leasl inuence, lhe slale buieauciacy. el, unlil lhe mid-197Os,
mosl Cabinel membeis weie selecled eilhei fiom lhe buieauciacy oi
fiom lhe mililaiy. The mililaiy-led and mililaiy-dominaled goveinmenls
fiom 1932 lo lhe mid-197Os weie sliongly associaled wilh lhe buieauciacy
(Riggs 1996). The Piem cabinels fiom 198O88 included signincanl iep-
iesenlalion fiom lhe buieaucialic and mililaiy eliles, nol lhe leasl of
which was Piem himself. The Chalichai goveinmenl (198891) conslilules
peihaps lhe mosl signincanl allempl by elecled polilicians lo conliol lhe
affaiis of lhe slale (Robeilson 1996).
n leims of embeddedness`` as denned by Ivans (1992), oi lhe ca-
pacily of lhe slale lo peneliale sociely, Thailand does indeed exhibil lhe
chaiacleiislics iequiied al lhe basic level. The slale is able lo cieale lhe
condilions necessaiy foi a maikel economy: law and oidei pievail, an
infiasliucluie is piovided, lhe adminislialion is compelenl. Coiiuplion
does exisl, as does clienlelism, bul nol lo lhe exlenl of unduly undei-
mining economic aclivily.
Ivans (1992) idenlines al leasl lhiee elemenls in whal he leims ela-
boialed embeddedness``: lhe foiums available foi inleiaclion belween
lhe slale and business; lhe souices of inuence available lo lhe slale; and
lhe capacily of business lo pailicipale in lhese exchanges. The nisl ciile-
iion iefeis lo lhe inslilulional aiiangemenls lhiough which inleiaclion
belween goveinmenl and business lakes place. n Thailand since lhe mid-
198Os, business gioups have been incieasingly oiganized inlo business
associalions, and lhese associalions aie incieasingly funclioning wilh ef-
fecliveness in negolialing wilh lhe slale (Anek 1988). The second ele-
menl iefeis lo lhe iesouices available lo lhe slale lo inuence behavioui
in lhese exchanges. The Thai slale has lhe laxalion and legal iegulaloiy
poweis needed lo foice compliance lo some degiee by means of laws
fiequenlly designed lo diiecl economic aclivily. Thus lhe Bank of Thai-
land began in 1995 lo discouiage lending lo lhe piopeily secloi, nisl by
classifying lhal secloi as unpioduclive`` and subsequenlly by iequiiing
highei levels of piovisioning againsl iisk assels. Thiough lhe slale`s
Boaid of nveslmenl which doles oul ovei half of lhe piivileges al ils
disposal lo domeslic inveslois, and ils Ixim Bank, among olhei inslilu-
lions, lhe slale can aiiange capilal lo be made available, allocale funds,
oi gianl subsidies. Howevei, lhe Thai slale does lack lhe lhiid elemenl
which Ivans associales wilh elaboialed embeddedness, namely sophisli-
caled souices of infoimalion (aside fiom infoimalion on slale conliacls
oi concessions) and a bioad aiiay of delibeialive councils.
22O DAN KNG
Powei ows belween lhe buieauciacy and lhe pailies
The following examples illusliale lhe changes lhal have occuiied in lhe
Thai buieauciacy, in ils slalus and iepulalion, and in ils effecliveness and
ielalive insulalion in adminisleiing economic affaiis in Thailand. Iiisl,
Di. Amnuay \iiavan, who can be consideied a quinlessenlial Thai lech-
nocial, seived mosl of his piofessional life in a vaiiely of posilions in bolh
goveinmenl and piivale-secloi banking. He became nnance minislei in
lhe nisl Chuan adminislialion (199295) undei lhe New Aspiialions
Paily`s quola of Cabinel seals. Despile high maiks fiom lhe business
communily foi his expeiience and expeilise, Amnuay came undei pies-
suie fiom NAP MPs who piefeiied lo see elecled MPs nll lhe paily`s
quola of Cabinel posls. Amnuay was foiced lo abandon his pieviously
valued neulialily and |oin lhe polilical fiay by iesigning fiom lhe Cabinel
and selling up his own polilical paily, lhe Nam Thai (Thai Leadeiship)
Paily.
The Nam Thai Paily self-consciously poiliayed ilself as a paily of
lechnocials who could, because of lheii supeiioi liaining and expeiience,
seive in public ofnce foi lhe common good of lhe nalion. Howevei, al-
lhough a numbei of iespecled buieaucials and academics |oined
Amnuay`s paily, in oidei lo giow quickly, lhe paily was faced wilh lhe
same dilemma olhei Thai pailies face, namely lo accepl iuial polilicians
who could delivei House seals oi lo be liue lo ils founding piinciples and
only endoise candidales who mel lhe paily`s high slandaids. \nfoilu-
nalely foi Amnuay, lhe Nam Thai Paily won only 18 seals, half of lhem
iuial, while il failed lo win a single seal in Bangkok. Amnuay`s view lhal
voleis would suppoil highly educaled and expeiienced lechnocials was
dashed by elecloial compelilion iealilies, namely lhe lack of giassiools
suppoil nelwoiks, as well as lhe shoilness of lime lo piepaie foi lhe nexl
eleclion. Amnuay |oined lhe Cabinel bul lalei abandoned his paily lo
|oin lhe NAP. He was ieelecled in 1996 and led Gen. Chavalil`s economic
Dieam Team.`` Howevei, Thailand`s economic slowdown and lhe polil-
ical ambilions of coalilion pailneis iesulled in Piime Minislei Chavalil
oveiiuling an impoilanl economic policy line advocaled by Amnuay who
subsequenlly decided lo iesign.
The Chuan goveinmenl`s (1997 ) nnance minislei, Di. Taiiin Nim-
manhaeminda, and ils commeice minislei, Di. Supachai Panichpakdi,
have similai backgiounds lo Amnuay. Bolh belonged lo lhe lop levels of
managemenl in Thailand`s banking syslem befoie accepling cabinel posls
in lhe nisl Chuan goveinmenl (199295) as unelecled non-pailisan oul-
sideis wilh sliong lechnocial qualincalions. Bolh men subsequenlly
abandoned lheii non-pailisan slalus, |oined lhe Democial Paily, and won
THALAND 221
seals in Bangkok. They bolh lhus made lhe liansilion fiom unelecled,
neulial lechnocials lo elecled polilicians.
Aside fiom lhe liansfoimalion of lhe Thai buieauciacy fiom
lechnocial-led lo elecled polilicianled, peihaps lhe mosl impoilanl fac-
loi lhal has changed lhe powei ows belween lhe elecled polilicians and
lhe buieaucials has been lhe aclions of lhe Bank of Thailand ilself. As
lhe nalion`s cenlial bank, il is supposed lo opeiale independenlly fiom
lhe goveinmenl, adminislei lhe nalion`s monelaiy supply, and iegulale
lhe banking and nnance seclois. Befoie 1995, il was iegaided as lhe besl
example of Thailand`s lechnociacy woiking foi lhe good of lhe nalion,
bul lhe aclions of lhe bank in ielalion lo lhe Bangkok Bank of Com-
meice (BBC) denled lhis shining aimoi. The BBC`s nnancial heallh
began lo deleiioiale piioi lo 1995. Thiough venalily oi simple neglecl by
lhe Bank of Thailand, lhe BBC had lo be iescued lo slave off bankiuplcy.
n lhe invesligalion which ensued, BBC ofncials weie accused of gianling
loans wilhoul adequale collaleial, including lo inuenlial polilicians,
lending laige amounls lo lhe bank`s lop managemenl lhiough a maze of
holding companies, and falsifying documenls. n view of lhe Bl 75 billion
piice lag (lhen appioximalely \S$3 billion) lo clean up lhe BBC mess,
lhe iepulalion of lhe cenlial bank as a baslion of expeil lechnocials was
maikedly impaiied.
Iollowing on lhe heels of lhe BBC nasco, fiom lale 1996 lo Augusl
1997, lhe Bank of Thailand piovided Bl 43O billion in liquidily loans lo a
lolal of 58 nnance companies. This infoimalion was nol made public unlil
lhe MI package was almosl appioved in Augusl 1997. Geneially, a nim
would only boiiow fiom lhe cenlial bank if il was having liquidily piob-
lems lo lhe poinl of insolvency. Despile lhe facl lhal mosl of lhese nims
weie leeleiing on lhe biink of bankiuplcy, lhe bank conlinued lo exlend
ils loans lo lhem unlil il had lenl an aslonishing \$12.3 billion, equivalenl
lo neaily half of lhe goveinmenl`s nscal budgel. To complicale malleis,
lhe bank and lhe Minisliy of Iinance suspended opeialions al 16 nnance
companies in 1une 1997, and lhen al anolhei 42 nims in Augusl 1997.
Aflei allowing lhese nims lo submil iehabililalion plans, lhe bank even-
lually closed 56 of lhe 58 nims in Decembei 1997 and lalei wenl inlo lhe
piocess of liquidaling lheii assels. n Maich 1998, lhe bank admilled lo
having lenl ovei Bl 1 liillion lo banks and nnance companies since 1996.
n addilion lo lhe BBC nasco and lhe nnancial secloi iescue cosls, lhe
Bank of Thailand also came undei inlense ciilicism foi ils failed defense
of lhe bahl. Iiom lhe devalualion of lhe bahl in Novembei 1984 lo 1uly
1997, lhe bank adminisleied a de faclo nxed exchange syslem which
pegged lhe bahl lo a baskel of cuiiencies. Allhough lhe exacl specinca-
lion of lhe baskel was a closely guaided seciel, il was widely known lhal
lhe \.S. dollai, lhe yen, and lhe maik consliluled lhe coie elemenls, lhe
222 DAN KNG
\.S. Dollai accounling foi appioximalely 8O pei cenl of lhe oveiall
weighlings. As a iesull, lhe bahl oaled wilhin a veiy naiiow iange and il
came undei piessuie in lale 1996 as lhe cuiiency weakened fiom Bl 24.5j
\S$1.OO lo Bl 25.5j\S$1.OO.
Speculalive allacks againsl lhe Thai cuiiency heighlened in Iebiuaiy
and Maich 1997 as lhe bahl weakened lo above Bl 26j\S$1.OO. The
allacks inlensined in May and 1une 1997. n iesponse lo lhese allacks, lo
pieseive lhe value of lhe bahl, lhe Bank of Thailand spenl a lolal of
\S$23.8 billion in foiwaid cuiiency conliacls, oi neaily lhiee-quaileis of
ils enliie ieseives which al lhe end of May 1997 slood al \S$33.3 billion.
The news of lhese foiwaid conliacls was nol ieleased lo lhe public unlil
Augusl 1997 aflei lhe MI package had been signed and lhe bank was
piessed foi giealei lianspaiency. The allempl lo save lhe bahl was doubly
unsuccessful: nol only was lhe bahl oaled on 2 1uly 1997, bul since lhe
bank`s ieseives weie so depleled, no defense of lhe cuiiency could be
allempled, so lhal lhe bahl weakened lo Bl 45j\S$1.OO by lhe end of
1997.
Wilhin lhe couise of |usl lwo yeais, lhe Bank of Thailand and Minisliy
of Iinance came undei neaily conslanl allack ovei lhe BBC collapse and
iescue, lhe liquidily loans lo nnance companies, lhe messy closuie of 56
nnance companies, and lhe coslly and unsuccessful defense of lhe bahl.
Wilh six nnance minisleis and foui cenlial bank goveinois involved in
lhe piocess ovei |usl lhiee yeais, lhe iepulalion of Thai lechnocials has
been seiiously affecled.
Globalizalion and ils impacl on Thailand`s economy
Apail fiom domeslic economic and polilical evenls lhal ieshaped lhe
powei ielalionship belween Thailand`s elecled polilicians and ils bu-
ieauciacy, globalizalion of lhe Thai economy has pioduced new foices
and new challenges. The impacl of globalizalion can be liaced back lo lhe
goveinmenl`s decision in lhe mid-198Os lo adopl an expoil-led giowlh
slialegy. Allhough heighlened expoil aclivily bioughl wilh il moie iapid
economic giowlh, Thailand was also sub|ecl lo lhe uclualions of lhe in-
leinalional liade maikels as ils pioduclion base was foiced lo iespond lo
inleinalional maikel demand and lo foieign compelilion. \ndei lhe
WTO agieemenl of which Thailand is a membei, mosl of Thailand`s
piolecled indusliies have had lo be libeialized piogiessively. Given lhe
seveie economic pioblems expeiienced in 199697, and lhe widely held
expeclalion lhal lhe Thai economy will nol luin aiound unlil 19992OOO,
lhe exlenl of lhe commilmenl of Thai policy makeis lo lhe WTO libei-
alizalion plans is in queslion, as lhese plans weie agieed upon when
THALAND 223
lhe Thai economy was iobusl and ieady lo adapl lo inleinalional
compelilion.
One aspecl of globalizalion lhal has come undei sciuliny is lhal of in-
leinalional nnance and capilal ows. \ndei piessuie fiom lhe inlei-
nalional communily and leading woild poweis, Thailand began libeializ-
ing ils nnance secloi in 199394. Specincally, lhe foimalion of onshoiej
offshoie lending facililies incieased access lo inleinalional nnancial mai-
kels. Due lo high local inleiesl iales and incieased access lo inleinalional
funding souices fiom 1992 lo 1996, Thailand`s piivalely held exleinal
debl incieased diamalically, lo \S$73.7 billion by lhe end of 1996. Al-
lhough foieign capilal helped fuel 8 pei cenl economic giowlh in 1993
95, lhe buiden of lhis debl aflei lhe bahl devalualion has pioved ciushing
lo Thai coipoialions. As lhe bahl weakened by ovei 45 pei cenl againsl
lhe \.S. dollai al lhe end of 1997, Thai goveinmenl iepiesenlalives weie
senl lo ask 1apanese, Ameiican, and olhei inleinalional bankeis lo ioll
ovei shoil-leim debl which iepiesenls aboul lwo-lhiids of lhe lolal debl.
Iuilheimoie, along wilh inleinalional capilal comes incieased moniloi-
ing by inleinalional ialing agencies such as Moody`s nveslmenl Seivice,
Slandaid & Poois, and lhe 1apan Bond Raling Agency. Announcemenls
of ialings downgiades by Moody`s in pailiculai have on each occasion
iesulled in slumps in lhe Thai slock maikel and incieased funding cosls
foi lhose Thai coipoialions lhal could slill boiiow fiom abioad.
A nnal aspecl of globalizalion is lhe mullinalional aid package of
\S$17.2 billion oiganized by lhe MI and agieed lo in Augusl 1997.
Iiom lhal poinl onwaid, Thailand`s economic policy makeis became
bound by ceilain guidelines and goals and weie sub|ecled lo advice fiom
lhe MI, Woild Bank, and olhei mullilaleial and bilaleial oiganizalions
on eveiylhing fiom nnancial secloi iefoim lo capilal maikel developmenl
lo lhe piivalizalion of slale enleipiises. n some impoilanl ways, lhe MI
agieemenl lhal iescued Thailand naiiowed lhe paiameleis undei which
Thai policy makeis could opeiale and slill mainlain lhe conndence of
lhe inleinalional cuiiency and nnancial maikels. By accepling lhe mulli-
nalional aid package, Thailand`s buieaucials effeclively admilled lhal lhe
pioblems weie beyond lheii capacily. Allhough il is commonly lhe case
lhal olhei nalions lie lheii aid lo lhe MI`s suppoil foi Thailand, lhis
silualion also sends a signal lhal Thai polilical leadeis aie only lo be
liusled in so fai as lhey can be liusled by lhe MI.
These developmenls have ieduced policy choices foi buieaucials and
elecled polilical leadeis. Thus goveinmenl spending has come undei
close sciuliny. Spendlhiifl pio|ecls and even some deals lhal could have
been kepl undei wiaps have come undei giealei public sciuliny. The
speclie of losing MI conndence is loo gieal lo iisk foi a |uicy conliacl
foi one`s polilical allies. Opposing sides can now use lhe loss of MI
224 DAN KNG
conndence as a polenl weapon in lheii polilical ballles, allhough on lhe
olhei hand, opposing sides also ciilicize each olhei foi giving in loo
ieadily oi loo slavishly lo MI demands.
While Thai polilicians have always been sensilive lo inleinalional sen-
limenl and lo lhe ieaclions of lhe inleinalional capilal maikels lo local
polilical manoeuviing, lhis sensilivily has incieased diamalically since
Augusl 1997. The opposilion mighl have pieviously ciilicized lhe gov-
einmenl ovei economic policy, bul when lhe Thai economy kepl giowing
al 8 pei cenl oi moie pei yeai, lhe ciilicisms did nol caiiy much weighl.
Since 1997, a goveinmenl mislake, oi lhe use by lhe opposilion of ob-
sliuclionisl laclics, can iesull in a quick and shaip weakening of lhe bahl
and in luin lead lo highei inalion, highei inleiesl iales, and heaviei
coipoiale debl buidens.
The ballle al piesenl is ovei lhe assessmenl of blame. Thioughoul 1997
and inlo lhe beginning of 1998, Thai buieaucials, especially lhose al lhe
cenlial bank, weie quoled fiequenlly in lhe local piess offeiing lheii
explanalions foi lhe Thai economic ciisis: lhe effecls of a iegional eco-
nomic downluin, inleifeience by elecled polilicians in economic policy-
making, and lhe excesses of Thai piivale coipoialions. The elecled polili-
cians have similaily soughl lo lay lhe blame al lhe feel of lhe buieaucials.
n lhe widely disliibuled nndings of lhe iepoil of lhe Nukul Commillee
which was eslablished lo invesligale lhe woikings of lhe Bank of Thai-
land, lhe cenlial bank`s ofnceis and pioceduies weie haishly ciilicized.
Conclusion: Paily developmenl, democializalion, and
economic goveinance in Thailand
Thailand has a cenluiy-long hisloiy of a sliong buieauciacy acling wilh a
wide measuie of aulonomy. n lhe 199Os, howevei, democialic piocesses
have become moie nimly enlienched. \ndei Thailand`s slyle of cabinel
goveinmenl, elecled minisleis (oi a few non-elecled minisleis selecled by
lhe polilical pailies) have diiecled lhe woikings of lhe buieauciacy lo lhe
same exlenl as in many olhei counliies: minisleis may sel oveiall policy
diieclions oi goals, and may exeicise some conliol ovei budgeling, bul
policy implemenlalion is moie pioblemalic. Disciplinaiy conliols aie
lypically limiled: minisleis may be allowed lo piomole oi ieassign lop
minisliy ofncials, bul may nol conliol lhe assignmenls of lowei-level ofn-
cials. One facloi which has inhibiled lhe developmenl of moie exlensive
conliol of lhe buieauciacy by elecled polilicians is lhe shoil life of mosl
Thai cabinels. As a iesull of fiequenl eleclions and cabinel ieshufes,
fiom 1979 lo 1998 no coalilion goveinmenl has suivived unchanged foi
ovei lwo yeais. Given lhal minisleis cannol build up nelwoiks of loyal
THALAND 225
and complianl allies among lhe peimanenl buieaucials wilhin a few
weeks oi monlhs, lhe shoil duialion of a minislei`s lenuie sliongly con-
sliains cabinel minisleis and pievenls pailies fiom exlending lheii con-
liol ovei lhe buieauciacy. Moieovei, coalilions have led lo a lype of
cabinel sliucluie in which no single paily exclusively conliols a pailiculai
minisliy: minisleis of one paily lypically woik wilh depuly minisleis
selecled fiom among lhe coalilion`s olhei pailies.
\ndei lhe 1997 Conslilulion, lhe sepaialion of lhe Cabinel fiom Pai-
liamenl could divoice lhe goveinmenl fiom lhe demands of local polilics.
As cabinel membeis aie diawn fiom lhe House and aie elecled fiom
small consliluencies, lhey oflen iepiesenl conceins specinc lo lheii con-
sliluencies oi lo lhe iegions in which lheii pailies aie sliong elecloially.
\ndei lhe new iules, cabinel minisleis aie likely lo be selecled fiom each
coalilion pailnei`s paily-lisl candidales, lhese being in luin selecled fiom
a single nalional consliluency. Minisleis will lheiefoie lend lo ieecl
paily policies ialhei lhan local conceins.
The 199697 economic downluin in Thailand is pailially a ieeclion of
similai pioblems in lhe Soulheasl Asian iegion, yel lheie is sufncienl ev-
idence lo conclude lhal Thailand`s buieaucials ignoied impoilanl wain-
ing signs, made pooi |udgemenls, and leveiaged lhe nalion`s inleinalional
ieseives lo a piecaiious posilion. The \S$17.2 billion aid package
gianled by lhe MI is a cleai signal lhal lhe economy was mismanaged
and lhal signincanl changes should be implemenled. As a iesull of a se-
iies of eiiois and mishaps, Thai buieaucials losl giound lo lhe polilical
pailies and lo elecled leadeis. Howevei, Thailand`s pailies have hisloii-
cally been weak, and only in lhe mid-199Os has lhe paily syslem been
slienglhened and lhe legilimacy of eleclions as lhe piopei mechanism foi
goveinmenl change been impioved. Weak pailies wilh lillle signincanl
piogiammalic conlenl may nol be able lo lake full advanlage of lhis his-
loiic oppoilunily. Allhough lhe new Conslilulion piovides ceilain checks
on lhe poweiful buieauciacy, many of lhese guaianlees and mechanisms
aie designed foi cilizens, and nol pailies, lo exeicise.
The end of lhe lwenlielh cenluiy is a highly diamalic and signincanl
peiiod bolh foi Thai economic policy-making due lo lhe pan-Asian eco-
nomic ciisis, and also foi Thai polilical developmenl based on lhe
iequiiemenls of lhe new Conslilulion. While Thailand`s economy con-
liacls in a signincanl iecession of an eslimaled negalive 4 lo 5 pei cenl in
1998 accoiding lo goveinmenl eslimales, unemploymenl is expecled lo
iise signincanlly as domeslic businesses cul back on laboui cosls and foi-
eign inveslois slow pio|ecls. ncome levels aie expecled lo iemain al oi
fall as business aflei business implemenls salaiy culs and lhe bahl weak-
ens againsl inleinalional cuiiencies.
Thailand`s expeiience wilh moie slable goveinmenl and lhe inslilu-
226 DAN KNG
lionalizalion and legilimizalion of pailiamenlaiy and elecloial polilics
coincided wilh sliong economic giowlh fiom 198O lo 1996. When Thai-
land`s economy began lo slow in 1996, lheie weie calls foi polilical
change and many commenlalois bemoaned lhe lack of lechnical skills on
lhe pail of lhe Banhain goveinmenl (199596). Banhain`s shoil-lived
adminislialion gave way lo Chavalil`s adminislialion which included
moie qualined minisleis wilh lechnocialic backgiounds. Howevei, as lhe
economy slowed even fuilhei and lhe bahl was oaled on lhe inleina-
lional cuiiency maikel, lheie weie calls foi Chavalil lo slep aside foi one
of lhe iespecled and non-pailisan expiime minisleis Piem (198O88) oi
Anand (199192). Anolhei oplion iaised was lhe idea of a nalional
goveinmenl`` in which lhe goveinmenl coalilion would secuie an ovei-
whelming ma|oiily in lhe House lo piovide addilional slabilily.
Allhough debaled in public foiums and in lhe piess, bolh ideas weie
ie|ecled by polilical leadeis. The foimalion of lhe Chuan goveinmenl
in Novembei 1997 lo ieplace lhe oulgoing Chavalil goveinmenl was
applauded by lhe maikels due lo lhe inclusion of seveial iespecled lech-
nocials luined polilicians. Whal is slill uncleai is whal will happen when
lhe economy ieally bolloms oul in lhe monlhs oi yeais ahead and Thais
aie faced wilh slieel demonslialions, in pail as a iesull of lhe inabilily of
lhe goveinmenl lo solve lhe economic pioblems, given lhal lhese piob-
lems mighl be beyond whal a single counliy`s goveinmenl can accom-
plish. l could veiy well be lhe case lhal lhe ieal lesl of demociacy and
economic goveinance is |usl beginning.
RIIIRINCIS
Anek Laolhamalas (1988), Business and Polilics in Thailand: New Palleins of
nuence,`` Asian Survcy 27(4), pp. 4517O.
Chai-Anan Samudavani|a (1982), Thc Thai Young Turks, nslilule of Soulheasl
Asian Sludies, Singapoie.
(1989), Thailand: A Slable Semi-Demociacy,`` in Laiiy Diamond, 1uan 1.
Linz, and Seymoui Mailin Lipsel (eds.), Dcnocracy in Dcvcloping Countrics,
vol. 3, Asia, Lynne Riennei, Bouldei, Coloiado.
Dahl, Robeil (1971), Iolyarchy. Iarticipation anJ Opposition, ale \niveisily
(1989), Dcnocracy anJ Its Critics, ale \niveisily Piess, NewHaven, Conn.
Diamond, Laiiy, Linz 1uan, and Lipsel Seymoui Mailin (1989), pieface lo Laiiy
Diamond, 1uan Linz, and Seymoui Mailin Lipsel (eds.), Dcnocracy in Dcvcl-
oping Countrics, vol. 3, Asia, Lynne Riennei, Bouldei, Colo.
Ileclion Division, Depailmenl of Local Adminislialion, nleiioi Minisliy
(1992a), Rcport on thc 1lcction to thc Housc oj Rcprcscntativcs (in Thai), 22
Maich 1992.
THALAND 227
(1992b), Rcport on thc 1lcction to thc Housc oj Rcprcscntativcs (in Thai),
13 Seplembei 1992.
(1995), Rcport on thc 1lcction to thc Housc oj Rcprcscntativcs (in Thai), 2
1uly 1995.
(1996), Rcport on thc 1lcction to thc Housc oj Rcprcscntativcs (in Thai), 17
Novembei 1996.
Ivans, Pelei (1992), The Slale as Pioblem and Solulion,`` in Slephan Haggaid
and Robeil Kaufman (eds.), Thc Iolitics oj 1cononic AJjustncnt, Piincelon
\niveisily Piess, Piincelon, N.1.
Giiling, 1ohn L. S. (1981), ThailanJ. Socicty anJ Iolitics, Coinell \niveisily
Piess, lhaca, N..
Kanok Wongliangan (1987), Kannuang nai ratsapha |Polilics in lhe Pailiamenlj,
Chulalongkoin \niveisily Piess, Bangkok.
King, Daniel I. (1992), The Thai Pailiamenlaiy Ileclions of 1992: Reluin lo
Demociacy in an Alypical eai,`` Asian Survcy 32(12), pp. 11O923.
(1996), New Polilical Pailies in Thailand: A Case Sludy of lhe Palang
Dhaima Paily and lhe New Aspiialion Paily,`` Ph.D. diss., \niveisily of Wis-
consin al Madison.
King, Daniel I. and LoGeifo, 1im. (1996), Thailand: Towaid Democialic Sla-
bilily.`` 1ournal oj Dcnocracy 7(1), pp. 1O217.
Kiamol Tongdhamachail (1982), TowarJ a Thcory oj Iolitical Iartics in Thai
Icrspcctivc, nslilule of Soulheasl Asian Sludies, Singapoie.
Likhil Dhiiavegin (1988), Demi-demociacy and lhe Maikel Iconomy: The Case
of Thailand,`` Southcast Asian 1ournal oj Social Scicncc 16(1), pp. 125.
McCaigo, Duncan (1997), Thailand`s Polilical Pailies: Real, Aulhenlic and
Aclual,`` in Kevin Hewison (ed.), Iolitical Changc in ThailanJ. Dcnocracy anJ
Iarticipation, Roulledge, New oik.
Manool Walhanakomen (1986), Khonuun phucnthan phakkannuang nai pach-
uban lc kanluaktang |Baseline dala on piesenl Thai polilical pailies and lhe
197986 eleclionsj, Social Science Associalion of Thailand, Bangkok.
(1988), Khonuun phucnthan phakkannuang nai pachuban lc phakkan-
nuang kab kanluaktang pii 2531 |Baseline dala on piesenl Thai polilical pailies
and polilical pailies in lhe 1988 eleclionj, Social Science Associalion of Thai-
land, Bangkok.
Moiell, David and Chai-Anan Samudavani|a (1981), Iolitical Conict in Thai-
lanJ. Rcjorn, Rcaction, Rcvolution, Oelgeschlagei, Gunn & Hain, Cambiidge,
Mass.
Nehei, Claik D. (1987), Iolitics in Southcast Asia, Schenkman Books, Rocheslei,
\l.
(1988), Thailand in 1987: Semi-Successful Semi-Demociacy,`` Asian
Survcy 28(2), pp. 1922O1.
Phillips, Heibeil P. (1958), The Ileclion Rilual in a Thai \illage,`` 1ournal oj
Social Issucs 14(4), pp. 365O.
Riggs, Iied (1996), ThailanJ. Thc MoJcrni;ation oj a Burcaucratic Iolity, Iasl-
Wesl Cenlei Piess, Honolulu.
Robeilson, Philips S., 1i. (1996), The Rise of lhe Ruial Nelwoik Polilician,``
Asian Survcy 36(9), pp. 92441.
228 DAN KNG
Somsakdi Xulo (ed.) (1987), Covcrnncnt anJ Iolitics oj ThailanJ, Oxfoid \ni-
veisily Piess, Singapoie.
Suchil Bunbongkain (199O), The Role of Ma|oi Polilical Ioices in lhe Thai Po-
lilical Piocess,`` in Claik D. Nehei and Wiwal Mungkandi (eds.), U.S.ThailanJ
Rclations in a Ncw Intcrnational 1ra, nslilule of Iasl Asian Sludies, \niveisily
of Califoinia, Beikeley.
Suiin Maisiikiod (1992), ThailanJs Two Ccncral 1lcctions in 1992. Dcnocracy
SustaincJ, nslilule of Soulheasl Asian Sludies, Singapoie.
Wilson, David A. (1962), Iolitics in ThailanJ, Coinell \niveisily Piess, lhaca,
N..
os Sanlasombal (1989), The Ind of Piemociacy in Thailand,`` Southcast Asian
Ajjairs, 1989, pp. 31735.
THALAND 229
9
Malaysia
1JnunJ Tcrcncc Conc; anJ 1ono Kwanc SunJaran
Malaysia was eslablished as an independenl, fedeial slale in 1957. Iiom
lhe lale eighleenlh cenluiy unlil lhis lallei dale, Malaya had been a
Biilish colonial possession. The ma|oi social legacy of colonial iule was
lhe ciealion of a mulli-elhnic sociely. Chinese and ndians weie bolh
encouiaged lo immigiale lo woik in lin mining and iubbei planlalions,
lhe indusliies lhal weie lhe lwin pillais of lhe colonial economy. Malay
involvemenl in lhe emeiging capilalisl economy was nol encouiaged.
Malay economic exclusion and numeiical piedominance weie lhus eslab-
lished as lhe giounding chaiacleiislic of lhe new slale of Malaysia.
This chaplei ieviews lhe foimal conlexl and developmenl of polilics
and lhe impacl of lhe polilical syslem on lhe economy. Iiisl, iequiie-
menls and ciicumslances suiiounding lhe elecloial syslem aie ieviewed.
Second, lhe sliucluie, oiganizalion, and membeiship base of Malaysia`s
ma|oi pailies aie summaiized. The lhiid seclion exploies economic gov-
einance and lhe chaplei concludes wilh a ieview of lhe polilical oullook.
Ileclions and lhe elecloial syslem
1lcctoral anJ voting rulcs
Pailiamenlaiy and slale eleclions aie held iegulaily. These aie iun on
a nisl-pasl-lhe-posl basis in single-membei consliluencies. Theie is no
23O
public elecloial funding. \oling is nol compulsoiy, and all Malaysians
above lhe age of 21 aie eligible lo vole.
Since lhe nisl fedeial eleclion in 1955, pailiamenlaiy eleclions have
been conducled as conslilulionally iequiied. The conducl of eleclions is
iegulaled by vaiious acls and lhe Conslilulion piovides foi an indepen-
denl Ileclion Commission, whose membeis aie appoinled by lhe king.
Ilecloial pailicipalion by eligible cilizens has been consislenlly high. n
lhe fedeial eleclions held belween 1959 and 199O, volei luinoul ianged
belween 7O.O and 78.9 pei cenl, while lhe luinoul in slale eleclions duiing
lhe same peiiod ianged belween 71.7 and 78.9 pei cenl (NSTP Reseaich
and nfoimalion Seivices 1994).
Ileclions aie compelilive in lhal a numbei of pailies compele in lhe
elecloial piocess any paily iegisleied wilh lhe Regisliai of Socielies is
eligible lo conlesl an eleclion. By sub|ecling lhe choice of goveinmenl lo
lhe elecloial piocess al iegulai inleivals undei such condilions, lhe gov-
eining Baiisan Nasional (BN Nalional Iionl) coalilion has been able lo
legilimize ils iighl lo iule, especially since lhe BN has been voled oul of
ofnce on a few occasions in slale-level eleclions.
1lcctoral Jivisions
Allhough lhe Ileclion Commission is iesponsible foi ieviewing lhe divi-
sion of pailiamenlaiy and slale consliluencies, lhe elecloiales in lhese
consliluencies have always been dispiopoilionalely smallei in piedom-
inanlly Bumipuleia iuial aieas compaied lo lhe mainly Chinese-ma|oiily
uiban consliluencies; such elecloial boundaiies favoui lhe goveining co-
alilion, lhe BN, pailiculaily ils laigesl membei, lhe \niled Malay Na-
lional Oiganisalion (\MNO), whose main suppoil is fiom iuial Malays.
This has been a key facloi behind lhe BN`s consislenl vicloiies in fedeial-
level eleclions (Ciouch 1996b).
n lhe 196Os, Bumipuleia-ma|oiily consliluencies consliluled 57 pei
cenl of all pailiamenlaiy seals; by lhe 198Os, lhis had iisen lo 65 pei cenl.
The oveiiepiesenlalion of Sabah and Saiawak Bumipuleias has also
enhanced Bumipuleia dominance in Pailiamenl. n 199O, allhough only
16.5 pei cenl of lhe populalion iesided in Sabah and Saiawak, lhe 48
consliluencies in lhese lwo slales consliluled 27 pei cenl of lhe seals in
Pailiamenl; Bumipuleias in lhe Boineo slales, pailiculaily Saiawak, have
lended lo suppoil lhe BN.
This has meanl lhal any paily in lhe peninsula which could command
lhe suppoil of mosl Bumipuleias would be able lo conliol lhe fedeial
goveinmenl, and if il collaboialed wilh Bumipuleia pailies of some in-
uence in Sabah and Saiawak, il would be able lo command a comfoil-
able ma|oiily in Pailiamenl (Ciouch 1996b).
MALASA 231
By 1994, \MNO had secuied a sliong base in Sabah in Muslim Bumi-
puleia-ma|oiily consliluencies (lhal is, lhose wilh a ma|oiily of Malays
and olhei indigenous peoples), while ils ielalionship wilh lhe Paili Pesaka
Bumipuleia Beisalu (PBB \niled Bumipuleia Paily), Saiawak`s long-
slanding iuling paily, was pailiculaily sliong. Such geiiymandeiing has
meanl lhal even if lhe opposilion gaineied sliong elecloial suppoil
in leims of lhe lolal numbei of voles casl, lhe numbei of seals il would
secuie in Pailiamenl would be much less. n lhe 199O geneial eleclion,
allhough lhe opposilion oblained 48 pei cenl of lhe lolal voles casl, il
secuied only 29 pei cenl of lhe 18O pailiamenlaiy seals. n lhe 1995 polls,
lhe opposilion secuied 35 pei cenl of lhe vole, bul only 15 pei cenl of
pailiamenlaiians.
McJia
\MNO has a ma|oiily slake in \lusan Melayu Bhd which publishes lhe
inuenlial Malay newspapeis, Utusan Malaysia, Mingguan Malaysia, and
Utusan Mclayu. Businessmen closely associaled wilh \MNO depuly
piesidenl Anwai biahim have conliolling inleiesl in T\3 and The New
Sliails Times Piess Bhd, which publishes lhe Inglish newspapeis, lhe
Ncw Straits Tincs and Busincss Tincs, and lhe Malay newspapei, Bcrita
Harian. An inveslmenl aim of lhe Malaysian Chinese Associales (MCA),
Huaien Holdings Sdn Bhd, has a conliolling inleiesl in Slai Publicalions
Bhd, which publishes lhe populai Inglish labloid, Thc Star, while Thc
Sun, anolhei Inglish labloid, is conliolled by \incenl Tan Chee ioun,
who has sliong lies wilh lhe \MNO elile. Mosl of lhe Tamil piess is
conliolled by leadeis of lhe Malaysian ndian Congiess (MC), while
some leading Chinese newspapeis, including lhe Nanyang Siang Iau,
aie conliolled by lhe Hong Leong Gioup, which has business lies wilh
\MNO-linked companies. Sin Chcw 1it Ioh, lhe counliy`s besl-selling
Chinese newspapei, is conliolled by a Saiawak-based lycoon who was
also a BN senaloi (Gomez 1994).
Given lhe owneiship of lhe mainslieam media, il is nol suipiising lhal
opposilion membeis have iepealedly complained lhal lhey aie unable
lo gel lheii manifeslos publicized duiing campaign peiiods, while lheii
slalemenls aie usually laken oul of conlexl when caiiied by lhe piess.
The opposilion has also claimed on numeious occasions lhal piess
iepoils of lheii aclivilies have been blalanlly false. Ma|oi newspapeis
aie, howevei, used lo caiiying full-page usually coloied adveilise-
menls of lhe BN`s manifeslos and accomplishmenls, while lhe views of
goveinmenl leadeis aie given wide and favouiable coveiage (Sankaian
and Hamdan 1988; Khong 1991; Gomez 1996a).
232 IDM\ND TIRINCI GOMIZ AND 1OMO KWAMI S\NDARAM
Canpaigns
The mannei in which campaigns aie conducled heavily favouis lhe BN.
The ma|oi inuencing faclois have been commonly leimed lhe 3Ms``
money, media, and machineiy. Theie have been complainls aboul lhe
BN`s excessive use of funds, abuse of ils conliol of Malaysia`s leading
newspapeis as well as lelevision and iadio nelwoiks, and misuse of gov-
einmenl machineiy (Chandia 1982; Sakaian and Hamdan 1988; Khong
1991; Gomez 1996a).
Olhei faclois which benenl lhe paily in powei include lhe shoilness of
lhe eleclion campaigns, a ban on open iallies, and lhe applicalion of slale
funds. The Ileclion Commission decides lhe lenglh of lhe campaign pe-
iiod and ensuies lhal il is kepl veiy shoil noimally |usl ovei a week
oslensibly in lhe inleiesls of mainlaining elhnic haimony. Open iallies
have been banned since lhe 1978 geneial eleclion. el, BN leadeis bla-
lanlly campaign al huge iallies while oslensibly ofncialing al goveinmenl
funclions. Iinally, lhiough lheii conliol of fedeial funds, BN leadeis
oflen piomise new developmenl pio|ecls, lhiealen nnancial culs, oi dis-
liibule slale laigesse |usl befoie and duiing lhe campaign peiiod.
Compaied lo lhe opposilion pailies, lhe BN`s campaign machineiy,
especially lhal of \MNO, is efncienlly and effeclively iun duiing elec-
lions. The effecliveness of lhe BN`s machineiy is pailly alliibulable lo ils
easy access lo funds. Since public iallies aie banned, dooi-lo-dooi can-
vassing is lhe mosl common foim of campaigning, which iequiies much
manpowei; mosl BN campaign woikeis aie well iemuneialed, while lhe
opposilion ielies heavily on unpaid volunlaiy help. Since lhe numbei of
campaign posleis and vehicles used duiing lhe campaign peiiod is nol
specincally limiled by law, lhis lends lo benenl pailies wilh giealei access
lo funds, invaiiably lhe BN pailies.
The mosl common allegalion made duiing eleclions is lhal funds aie
used lo buy consliluency suppoil. Befoie lhe 199O poll, lhe BN was
iepoiledly piepaied lo spend an aveiage of RM 1 million in each
pailiamenlaiy consliluency (Iar 1astcrn 1cononic Rcvicw, 5 1uly 199O).
\ole buying was slill iampanl duiing lhe 1995 geneial eleclion. Theie weie
numeious allegalions by lhe opposilion lhal voles weie secuied lhiough lhe
disliibulion of funds and gifls in Kelanlan, Teiengganu, and Kedah, and in
some uiban consliluencies in Peiak and Kuala Lumpui. n Kelanlan, lhe
opposilion alleged lhal lheie weie candidales who spenl almosl RM 5 mil-
lion lo secuie suppoil, wilh voleis paid belween RM5OO and RM1,OOO each
(Gomez 1996a). Allhough all candidales aie iequiied lo nle lhe lolal funds
used duiing lhe campaign wilh lhe Ileclion Commission following lhe
eleclion, lhey aie nol iequiied lo divulge lhe souices of lheii funds.
MALASA 233
Given \MNO`s vaslly supeiioi membeiship base and exlensive paily
machineiy, duiing eleclions mosl BN pailies depend on \MNO lo iun an
effeclive campaign lo secuie elecloial suppoil. The MCA, MC, and lhe
Geiakan Rakyal Malaysia (Geiakan Malaysian People`s Movemenl)
lend lo peifoim unsalisfacloiily in nonBumipuleia-ma|oiily conslilu-
encies, lhus incieasing lheii ieliance on \MNO lo muslei Bumipuleia
voles.
n lhe 1986 and 199O geneial eleclions, even lhe leadeis of lhe MCA,
Geiakan, and MC acknowledged lhal lheii elecloial vicloiy was due pii-
maiily lo lhe Malay suppoil lhal \MNO had managed lo secuie foi lhem.
Moieovei, lhe MCA and Geiakan`s inuence in lhe easl coasl of lhe
peninsula is nol exlensive while lheii inuence in Sabah (and Saiawak) is
negligible despile effoils lo eslablish a base in lhe slale.
1lcction outconcs
All lhe len fedeial-level eleclions lhal have been held since 1955 have
been won by lhe \MNO-led Alliance oi BN coalilions. On all occasions,
excepl in 1969, a lwo-lhiids ma|oiily was secuied in Pailiamenl (lable 9.1).
Polilical pailies in Malaysia
Thc ruling coalition
Launched in 1973, lhe BN was a ie-oiganizalion of lhe Alliance following
lhe lallei`s diie peifoimance in lhe 1969 geneial eleclion. Al lhis lime,
mosl opposilion pailies including lhe main Malay opposilion paily, Paili
slam SeMalaysia (PAS Pan-Malaysian slamic Paily), lhe People`s Pio-
giessive Paily (PPP), and lhe Geiakan weie bioughl inlo lhe BN. This
followed lhe iacial sliife of May 1969.
The BN`s enlaiged syslem of consocialionalism was an effeclive means
lo consolidale elecloial suppoil on lhe basis of bolh elhnicily and class.
The ob|eclives of lhe \MNO, MCA, and MC aie based on elhnic ideol-
ogies. This has enabled lhese pailies lo iepiesenl lheii leadeis as elhnic
palions (Biown 1994, 2O657). By lhe l99Os, \MNO`s main baslions of
suppoil weie slill lhe peninsula`s iuial Malays and Sabah`s iuial Muslim
Bumipuleias (lhe paily does nol have a piesence in Saiawak). The MCA
helps lhe BN maishal Chinese business and middle-class suppoil, while
lhe MC has been moie successful in mobilizing bioadei ndian suppoil.
The nominally mulliiacial, bul laigely Chinese Geiakan has been able lo
complemenl lhe MCA in alliacling Chinese suppoil, especially fiom lhe
middle classes.
2
3
5
Table 9.1 Malaysian Federal Parliament electiun results, 1955-19951
1955 1959 1964 1969 1974 1978 1982 1986 199O 1995
Alliance 51 74 89 74
BN2 135 13O 132 148 127 162
PAS3 1 13 9 12 5 5 1 7 7
DAP 13 9 16 9 24 2O 9
Socialisl Iionl 8 2
PPP4 4 2
P. Negaia 1
P. Malaya 1
\DP 1
PAP 1
Geiakan4 8
\SNO 13
SCA 3
SNAP4 9 9
S\PP4 5
Pesaka
Semangal 8 6
Pekemas 1
PBS 14 8
ndependenl 3 1 2 8 4 4
TOTAL 52 1O4 1O4 144 154 154 154 177 18O 192
Souice: Ncw Straits Tincs, 23 Apiil 1995.
2 The Alliance was enlaiged and ienamed lhe BN fiom 1973.
3 PAS was pail of lhe BN foi lhe 1974 geneial eleclion.
4 These pailies |oined lhe BN aflei lhe 1969 eleclion excepl foi SNAP which |oined aflei lhe 1974 eleclion.
\MNO`s BN inilialive has meanl lhal lhe Chinese suppoil en|oyed by
lhe Geiakan has diminished lhe MCA`s inuence, while lhe incoipoia-
lion of lhe PAS, whose inuence was piimaiily in lhe piedominanlly
Malay slales in lhe noilh of lhe peninsula, enhanced Malay elecloial
suppoil. \MNO`s iefusal lo allow PAS lo inciease lhe numbei of seals il
won in 1969 in lhe subsequenl geneial eleclion of 1974 fuilhei slienglh-
ened \MNO hegemony in lhe coalilion, lhough PAS evenlually ieluined
lo lhe opposilion in 1978. n 1996, lhe consliluenl numbei of pailies in
lhe BN slood al 14.
Allhough lhe BN is lhe goveining coalilion, il cannol be consliued as
an aclively funclioning paily. Iven lhe BN`s Supieme Council meelings,
compiising leadeis of all componenl pailies, aie held infiequenlly, usually
befoie a fedeial oi slale eleclion. Discussions on policy malleis belween
membeis of lhe BN aie kepl lo lhe minimum, while ma|oi decisions aie
made by a selecl gioup of leadeis, mainly fiom \MNO, befoie being
passed down foi endoisemenl, usually al cabinel level. This has been
connimed by leadeis of BN pailies: accoiding lo Koh Tsu Koon of lhe
Geiakan, lhe basic pioblem is lhal lheie is nol enough consullalion
among lhe Baiisan pailies`` (Malaysian Busincss, 1 Decembei 1987).
Michael eoh fiom lhe MCA has slaled, Lel us ievive lhe BN Supieme
Council, make il a moie ciedible, liuly consullalive body. Now il is only
ievived eveiy lime lheie is a geneial eleclion, lo discuss lhe allocalion of
seals`` (Malaysian Busincss, 1 Decembei 1987). This suggesls lhal lhe
iole of lhe BN`s Supieme Council as lhe main goveining body is meiely
peifuncloiy allhough il is piesenled as lhe medium lhiough which con-
sullalions aie held lo mainlain elhnic coexislence.
Since lhe leadeis of mosl of lhe main BN pailies aie iepiesenled in lhe
Cabinel, lhis foium is piomoled as lhe main avenue lhiough which inlei-
elhnic consullalions aie iegulaily held and diffeiing viewpoinls expiessed.
n view of \MNO`s hegemony in lhe execulive and lhe facl lhal lhe
choice of Cabinel minisleis is lhe sole pieiogalive of lhe piime minislei,
and given lhe heavy ieliance of mosl componenl pailies on \MNO lo
secuie lheii vicloiies in eleclions, inleipaily consullalions aie nol con-
ducled on an equal fooling.
UMNO
\MNO`s hegemony is alliibulable lo ils size, ils nalional piesence, and
ils exliemely efncienl paily machineiy. \MNO has appioximalely 2.765
million membeis, spiead oul among 17,355 bianches in all pailiamenlaiy
consliluencies in lhe peninsula and Sabah (Ncw Straits Tincs, 6 Seplem-
bei 1997; lable 9.2). \MNO`s paily sliucluie is oiganized hieiaichically,
wilh lhe bianches foiming lhe base, followed by lhe divisions, lhe Slale
Liaison Commillees and lhe Supieme Council. n \MNO`s syslem of
eleclion, delegales aie chosen fiom bianches lo allend divisional meel-
ings wheie nominalions aie made foi Supieme Council posls. Delegales
lo \MNO`s geneial assembly aie chosen fiom among delegales allending
lhe divisional meelings.
\ndei lhe paily`s conslilulion, nominees foi lhe posls of \MNO piesi-
denl and depuly piesidenl aie awaided len bonus voles foi each divi-
sional nominalion lhey ieceive; lhese bonus voles aie added lo lhe num-
bei of voles lhal lhe candidales ieceive duiing lhe eleclion al lhe geneial
assembly. The piovision foi lhe bonus voles was designed lo consolidale
lhe posilion of lhe lop lwo leadeis in lhe paily since lhe chaiimen of lhe
Slale Liaison Commillee aie usually lhe Mcntri Bcsar (chief minisleis) of
lhe iespeclive slales, who aie appoinled by lhe paily piesidenl in his ca-
pacily as piime minislei. The paily`s nalional headquaileis, a spiawling
edince in lhe heail of Kuala Lumpui, seives as lhe cenlie wheie lhe
paily`s opeialions aie moniloied; \MNO also has a slale headquaileis in
each ma|oi cily in lhe peninsula.
Iatronagc
Palionage polilics has long been lhe piimaiy means lhiough which a
sliong giass-iools base is ciealed in lhe paily. The disliibulion of eco-
nomic favouis also conliibuled lo giowing lies belween business and
polilics. The developmenl of lhis phenomenon, populaily iefeiied lo as
money polilics,`` has also involved disliibuling cash and gifls and offei-
ing expenses-paid liips lo membeis in ieluin foi voles (Gomez 199O,
1991a, 1994).
Table 9.2 LMNO membership breakduwn by state, 1997
Slale Tolal membeiship
1ohoie 388,828
Sabah 362,494
Selangoi 3O8,O15
Kelanlan 285,631
Peiak 252,O55
Kedah 229,336
Pahang 192,116
Teiengganu 169,4OO
Negeii Sembila 119,O45
Penang 114,765
Iedeial Teiiiloiy 1O3,169
Malacca 86,579
Peilis 43,174
Souice: Ncw Straits Tincs, 6 Seplembei 1997.
MALASA 237
Though lhe paily was dominaled mainly by iuial leacheis since
\MNO`s foimalion, businessmen began lo gain conliol of ils bianches
and divisions by lhe 198Os. n 1981, leacheis slill made up 41 pei cenl of
delegales lo \MNO`s annual Geneial Assembly; lhis diopped lo 32 pei
cenl in 1984, and declined fuilhei lo 19 pei cenl in 1987. By 1987, busi-
nessmen consliluled 25 pei cenl of delegales, while elecled iepiesenla-
lives made up 19 pei cenl. By 1995, almosl 2O pei cenl of \MNO`s
165 division chaiimen weie millionaiie businessmen-cum-polilicians
(Vawancara, Decembei 1995).
As businessmen enleied mainslieam polilics in lhe 198Os, money poli-
lics became iampanl in lhe conlesls foi posilions in \MNO`s Supieme
Council and in lhe eleclion of bianch and division leadeis. n lhe 1984
\MNO eleclions, lhe lolal money spenl lo secuie suppoil was allegedly
well in excess of RM 2O million (Milne 1986). Wilhin a decade, duiing lhe
1993 \MNO eleclion, lhe money spenl duiing lhe campaign had incieased
by moie lhan lenfold, lo an eslimaled RM 2OO3OO million. n 1985, one
polilician was willing lo spend as much as RM 6OO,OOO in his bid lo be-
come division chaiiman. n a bid foi a similai posl in 1995, one candidale
allegedly spenl RM 6 million (Gomez 1994).
Polilical palionage has become lhe key lo weallh. This is cleai fiom lhe
business inleiesls of Piime Minislei Mahalhii Mohamad`s sons, and fiom
lhose of suppoileis of his \MNO iival Anwai biahim, as well as fiom
widespiead owneiship of coipoiale slock by business piole ge s of foimei
Iinance Minislei Daim Zainuddin, cuiienlly Goveinmenl Iconomic
Advisoi and \MNO lieasuiei. Ioi example, Daim piole ge s include:
Ta|udin Ramli, a diiecloi of Malaysian Aiiline Syslem, Malaysian Heli-
coplei Seivices, and lwo olhei companies; Wan Azmi W. Hamzah, a diiec-
loi of R 1 Reynolds Land and Geneial; Halim Saad, diiecloi of six com-
panies; and Samsudin Abu Hassan, diiecloi of lwo companies. Business
piole ge s of Mahalii include his sons, Miizan, Mokhzani and Mukhiiz,
who have each been nominaled lo foui boaids and Mohd Nooi usoh, a
diiecloi of lhiee companies including T\3. Iinally, al leasl nine have
benenled fiom Anwai`s palionage including Mohd Saiil usoh, shak
smail, Ahmad Zahid Hamidi, biahim Ahd, and Kamaiuddin 1affai.
Anwai associales weie all benenciaiies of lhe lakeovei of lhe New Sliails
Times Gioup and T\3.
1987 jactional crisis
Peisislenl faclionalism wilhin \MNO is closely lied lo lhe paily`s
hegemonic posilion and ils conliol of slale iesouices. n 1987, an \MNO
faclion, led by lhe lhen liade and indusliy minislei, Razaleigh Hamzah,
alleged lhal Mahalhii had foimed a kilchen cabinel which had cen-
lialized decision-making poweis, wilh mosl goveinmenl conliacls and
business oppoilunilies disliibuled lo membeis of lhis innei ciicle; lhese
allegalions |uslined his decision lo conlesl lhe paily piesidency. n lhe
eleclion, Mahalhii naiiowly clinched vicloiy, secuiing meiely 51 pei cenl
of lhe voles of lhe delegales lo lhe \MNO geneial assembly (Shamsul
1988). This pioved lo be a denning momenl in Malaysian polilics as il
piecipilaled a seiies of aulhoiilaiian measuies by Mahalhii as he moved
lo consolidale his posilion. Wilhin lhe nexl yeai, moie lhan 1OO govein-
menl ciilics weie delained undei lhe nleinal Secuiily Acl (SA), which
allows foi long-leim delenlion wilhoul liial; some newspapeis had lheii
licences ievoked; membeis of lhe |udiciaiy, including lhe loid piesidenl,
weie iemoved fiom ofnce lhiough queslionable means; and \MNO was
declaied an illegal paily in a iuse lo eslablish a new \MNO nimly undei
Mahalhii`s conliol (see CARPA 1988; Lee 1995).
\MNO`s illegal slalus slemmed fiom a High Couil iuling in Iebiuaiy
1988 on a suil nled by Razaleigh`s faclion challenging lhe iesulls of lhe
1987 \MNO eleclion on lhe giounds lhal delegales fiom 3O uniegisleied
bianches weie piesenl al lhe paily`s Geneial Assembly. The couil iuled
lhal lhe piesence of lhe uniegisleied bianches made \MNO an illegal
sociely undei lhe Socielies Acl. Mahalhii immedialely foimed a new
paily, \MNO Baiu (New \MNO), which piovided him wilh lhe oppoi-
lunily lo deny his ciilics membeiship in lhe new paily. Razaleigh and his
loyalisls foimed lhe Paili Melayu Semangal 46 (Semangal Spiiil of `46
Malay Paily) and ciossed ovei lo lhe opposilion.
1993 Jcputy prcsiJcntial clcction
The use of palionage lo develop a sliong coleiie of polilically aligned
businessmen and a laige giass-iools base, lhe abuse of money in paily
eleclions, and lhe giowing inuence of businessmen in polilics weie all
obvious duiing lhe 1993 \MNO eleclion, when Anwai biahim ousled
Ghafai Baba as depuly piesidenl. Anwai`s faclion, calling lhemselves
lhe \ision Team,`` capluied mosl key paily posls by aiguing lhal wilh
iapid economic developmenl and lhe giowlh of a Malay middle class,
\MNO ilself had lo change. They called on membeis lo embody lheii
modein vision; foi lhem, lhe eia of lhe New Malay`` had aiiived.
Though lheii conceplualizalion of lhe New Malay iemained nebulous,
il implied lhal lhe puisuil of weallh was a social viilue, enhancing lhe
alieady incieasingly maleiialislic oullook of \MNO membeis; gieed be-
came good. Howevei, lheie was giowing disconlenl wilhin \MNO ovei
lhe facl lhal lhe gains made by individual membeis fiom lheii polilical
afnlialions had been spiead veiy unevenly. Mahalhii was evenlually
foiced lo denounce lhis new culluie, calling il lhe culluie of gieed,``
MALASA 239
which was dividing lhe paily againsl ilself (Ncw Straits Tincs, 2O Oclobei
1994).
Aflei lhe 1993 \MNO eleclion, veiy pionounced pio- and anli-Anwai
faclions emeiged. While lhe pio-Anwai faclion mainly compiised a
youngei gioup of polilicians eagei lo displace senioi polilicians, lhe anli-
Anwai faclions weie geneially led by moie senioi polilicians waiy of
Anwai`s meleoiic iise in lhe paily. Anwai, who had only been ieciuiled
inlo \MNO in 1982, had been a piominenl ciilic of lhe BN and lhe long-
lime piesidenl of lhe nongoveinmenlal oiganizalion, Angkalan Belia slam
Malaysia (ABM Malaysian slamic oulh Movemenl).
Anwai`s supposed ieciuilmenl of old ABM colleagues inlo his \MNO
innei ciicle had led lo giowing anxielies, even fiom wilhin his own \i-
sion Team.`` ls iapid disinlegialion connimed widespiead speculalion
lhal ils basis was polilical. ls demise has led lo lhe emeigence in \MNO
of seveial oveilapping faclions.
Mahathir consoliJation
Allhough Mahalhii was nol challenged foi lhe piesidency duiing lhe
1993 \MNO eleclion, il was widely believed lhal Anwai was emeiging as
lhe mosl poweiful polilician in lhe counliy, sublly laying siege lo lhe
piime minislei. l was believed lhal Mahalhii, unlike Anwai, had nol
spenl enough lime cullivaling lhe giass iools, leaving a vacuum lhal had
been nlled by lhe eneigelic Anwai and his ambilious youngei men. Iiom
l993, howevei, Mahalhii moved decisively lo consolidale his piesidency.
Befoie lhe 1995 geneial eleclion, Mahalhii despalched some Anwai
allies in lhe Iedeial Cabinel lo lhe slale level, oi vice veisa, and senl
some of his own loyalisls lo conlesl slale consliluencies, which would
enable lhem lo be appoinled as Mcntri Bcsar lalei. A numbei of Anwai`s
associales weie sidelined including some fiom ABM who had hoped lo
be nelded inslead of olhei \MNO membeis. n lhe posl-eleclion Cabinel,
Anwai`s iivals weie piomoled lo senioi poilfolios while his allies weie
iesliicled lo uninuenlial minisliies oi lo lhe backbenches.
Mahalhii also bioughl aboul changes wilhin \MNO lo piolecl his po-
silion, even pioposing changes lo lhe paily conslilulion. Mahalhii pio-
posed lhal lhe bonus voles piovision be ieviewed and lhal a code of
elhics lo cuib money polilics be diawn up. This code was designed lo be
used againsl lhose who lhiealened Mahalhii`s posilion. Half a yeai befoie
lhe 1996 \MNO eleclion, a new iule was inlioduced, iequiiing candi-
dales wishing lo conlesl paily posls lo declaie lheii inlenlions well in
advance, lhus blocking a possible lale challenge. As lhe eleclions
appioached, even campaigning was banned. Mahalhii |uslined lhis as
lhe paily`s way of ensuiing faiiness lo all because lheie aie some can-
24O IDM\ND TIRINCI GOMIZ AND 1OMO KWAMI S\NDARAM
didales who can affoid lo campaign while olheis cannol. . . . Banning
campaigning is lo level oul lhe oppoilunily foi all`` (Iar 1astcrn 1co-
nonic Rcvicw, 25 Apiil 1996).
This seiies of aclions in \MNOand in lhe Cabinel ieinfoiced Mahalhii`s
polilical dominance, making il exliemely difncull foi anyone lo lopple
him fiom wilhin \MNO. The compelilion among faclions was foughl oul
al lowei paily echelons, in lhe conlesls foi lhe vice-piesidencies, foi
conliol of lhe youlh and women`s wings, and al divisional and bianch
levels. Though \MNO may be badly faclionalized, il appeais lo be held
logelhei by Mahalhii`s seemingly unassailable giip on lhe apex.
Duiing lhe 1996 \MNO eleclion, allhough iesulls of eleclions al
division and bianch levels suggesled lhal membeis aligned lo Anwai
had secuied giass-iools conliol, none of lhe lhiee diieclly elecled vice-
piesidenls weie seen as pailiculaily close lo Anwai. Howevei, lhe lead-
eiship of lhe \MNO youlh and women`s wings was secuied by lhose in
Anwai`s camp. The oveiall impiession lhal emeiged fiom lhe iesulls of
lhe eleclions was lhe evenly divided slienglhs wilhin lhe paily.
Othcr BN ncnbcrs
Allhough lhe MCA, MC, and Geiakan have ialhei similai oiganiza-
lional sliucluies, lheii iespeclive paily machineiies, allhough aclive, aie
much less effeclive lhan lhal of \MNO, due piimaiily lo lheii much
smallei membeiship base and nnancial powei. The MCA has appioxi-
malely 715,OOO membeis in 2,917 bianches, in all slales excepl Saiawak.
The MC has almosl 35O,OOO membeis in 2,5OO bianches in only lhe
peninsula. The Geiakan has aboul 25O,OOO membeis in 1,259 bianches
(Ncw Straits Tincs, 8 Apiil 1996, 1 Augusl 1996).
The leading Saiawak-based BN componenl paily, lhe PBB, is a Bumi-
puleia-based paily led by Abdul Taib Mahmud, Saiawak`s long-slanding
chief minislei and a foimei Iedeial Cabinel membei. PBB is lhe domi-
nanl paily in lhe Baiisan Tiga (Tiipailile Iionl), also compiising lwo
olhei Saiawak-based BN membeis lhe Chinese-based Saiawak \niled
People`s Paily (S\PP) and lhe ban-based Saiawak Nalional Paily
(SNAP). Though a BN membei, lhe Paili Bangsa Dayak Saiawak (PBDS
Saiawak Dayak People`s Paily), a Dayak-based bieakaway fiom lhe
SNAP, had lhe unique posilion of iemaining an opposilion paily al slale
level. The PBDS subsequenlly soughl and gained admission inlo lhe slale
iuling coalilion aflei faiing badly in lhe 1991 slale eleclions. None of
lhese pailies has any inuence oulside Saiawak.
n Sabah, lhe luinovei of pailies fiom lhe BN has been high. The foi-
mei BN componenl membeis which once led lhe Sabah slale goveinmenl
bul aie now in lhe opposilion include lhe \niled Sabah Nalional Oiga-
MALASA 241
nizalion (\SNO) (196376) and lhe Paili Beisalu Sabah (PBS \niled
Sabah Paily) (198594); lhe Beisalu Rakyal (Bei|aya\niled People),
which iuled Sabah fiom 1976 lo 1985, is neaily defuncl, lhough lechni-
cally slill a BN membei. Among lhe cuiienl Sabah-based BN membeis
aie lhe Dusun-based Angkalan Keadilan Rakyal (AKAR People`s
1uslice Movemenl) and lhe Chinese-based Libeial Democialic Paily
(LDP), bolh minoi pailies wilh lillle inuence. n 1994, seveial newly
foimed Sabahan pailies weie accepled inlo lhe BN lhe Chinese-based
Sabah Piogiessive Paily (SAPP) and lhe Kadazan-based Paili Beisalu
Rakyal Sabah (PBRS oi \niled Sabah People`s Paily) and lhe Paili
Demokialik Sabah (PDS Sabah Democialic Paily). All lhese pailies
aie led by foimei PBS leadeis, mosl of whom defecled in 1994 when il
became cleai lhal lhe PBS was losing conliol of lhe slale goveinmenl.
Thc opposition
The lwo main opposilion pailies aie lhe Democialic Aclion Paily (DAP)
and lhe PAS. Theie aie lwo smallei opposilion pailies, lhe PBS and lhe
Paili Rakyal Malaysia (PRM Malaysian People`s Paily).
Dcnocratic Action Iarty
The DAP was consliluled fiom lhe iump of Singapoie`s iuling People`s
Aclion Paily aflei lhe sepaialion of lhe iepublic in 1965. Ispousing lhe
PAP`s commilmenl lo lhe ciealion of a democialic, socialisl Malaysia, lhe
DAP asseils lhe piinciple of iacial equalily moie lhan social and eco-
nomic |uslice. The DAP sliesses lhe need foi a level playing neld foi all
elhnic communilies in polilics, business, and educalion. Nol unexpecl-
edly, lhe DAP does nol have much Malay suppoil. Iven lhough ils
membeiship is open lo all Malaysians and il has a mulliiacial leadeiship,
lhe DAP is seen as a Chinese`` paily, a view lhal is bulliessed by lhe
commonly held peiceplion lhal il piimaiily iaises Chinese conceins. By
consislenlly exposing coiiuplion in goveinmenl and piomoling lianspai-
ency and accounlabilily, lhe paily has managed lo gainei sizeable uiban,
non-Malay middle-class suppoil.
The DAP emphasizes lhe need foi giealei democializalion, aiguing lhal
lhe liue spiiil of demociacy in a mulli-elhnic sociely is expiessed lhiough
iacial equalily, mulual iespecl, and loleiance. A sliidenl and consislenl
ciilic of aulhoiilaiian iule, lhe DAP ob|ecls lo lhe BN conlenlion lhal
ma|oiily iule and iesliiclions on fieedom of lhe piess, assembly, and ex-
piession aie essenlial lo mainlain elhnic haimony and piomole economic
giowlh. On lhe conliaiy, lhe DAP claims lhal Malaysian hisloiy beais
ieliable wilness lo lhe facl lhal ma|oiily iule has conliibuled lo lhe denial
of basic human iighls and lhe ciealion of giealei social in|uslices; lhe
paily has also aigued lhal concenlialion of powei has conliibuled lo sig-
nincanl inequalily in lhe disliibulion of weallh (see Lim 1978).
Iarti Islan ScMalaysia (Ian-Malayan Islanic Iarty)
The slamic paily, PAS, a bieakaway \MNO faclion foimed in 1951, is
lhe main opposilion paily wilh lhe capacily lo undeimine \MNO`s in-
uence among iuial Malays. Iollowing a leadeiship change in 1982, lhe
PAS began adopling a moie slamic slance. Cuiienl leadeis aie piimaiily
slamic-educaled ulana (ieligious leacheis), and lhe paily`s inuence is
limiled lo lhe noilhein Malay heailland slales of Kelanlan, Teiengganu,
Kedah, and Peilis. The PAS nisl secuied a ma|oiily in lhe Kelanlan leg-
islaluie in 1959 and goveined lhe slale unlil 1978. PAS also gained con-
liol of Teiengganu aflei lhe 1959 geneial eleclion, bul ceded conliol
of lhe slale in 1961 following defeclions fiom lhe paily lo \MNO. Dui-
ing lhe 199O geneial eleclion, lhe PAS swepl back lo powei in Kelanlan
wilh lhe aid of lhe newly eslablished Malay paily, Semangal, led by lhe
Kelanlan piince, Razaleigh Hamzah, lhe foimei nnance minislei and a
long-slanding \MNO vice piesidenl. The PAS ielained conliol of
Kelanlan in lhe 1995 geneial eleclion, and oblained a maiginal inciease
in suppoil in Teiengganu and Kedah. Bul because of ils conlinued sliess
on ils desiie lo eslablish an slamic slale, ils inuence on lhe wesl coasl of
lhe peninsula, and in Saiawak and Sabah, is scanl even among Muslim
Bumipuleias, which iesliicls ils abilily lo achieve powei al lhe fedeial level.
Among opposilion pailies, lhe PAS has lhe laigesl membeiship base
wilh aboul 436,84O membeis in 3,377 bianches (Ncw Straits Tincs, 1une 1
1997). The PAS also has lhe mosl sliongly denned ideological posilion.
Commilled lo lhe foimalion of an slamic slale, il espouses policies and
ideas supposedly iooled in lhe ieligion. Adopling lhis slamic posluie,
lhe PAS has been offeiing Malaysians, and Muslims in pailiculai, a soci-
ely iefoimed lhiough legislalive changes based on ieligious lenels. Ioi
lhe PAS, lhe eslablishmenl of an slamic slale will biing aboul spiiilual
upliflmenl and lead lo lhe developmenl of a moie |usl, democialic,
moial, piincipled, and socially conscious sociely, devoid of iepiessive
legislalion and unheallhy aclivilies such as gambling. Democialic ideals,
lhe paily believes, aie only acceplable wilhin a seculai conlexl, since such
ideals would aulomalically be a fealuie of a syslem which is inheienlly
|usl wilhin an slamic lheocialic slale. el il has been obseived lhal lhe
PAS would piobably ie|ecl lhe concepls of ma|oiily iule and individual
choice, since lhe foimei allows foi lhe possibilily of moially wiong lenels
being implemenled, and lhe lallei involves lhe assumplion lhal individ-
uals aie all-knowing (see 1esudason 1996).
MALASA 243
Iarti Bcrsatu Sabah (UnitcJ Sabah Iarty)
The mulliiacial PBS was foimed in 1985 by dissidenls fiom Bei|aya, a BN
membei lhal lhen had conliol of lhe Sabah slale goveinmenl. The paily
was led by 1oseph Paiiin Kilingan, a Kadazan, and anolhei nolable PBS
leadei was ong Teck Lee, a Chinese, and al lhe lime lhe chief minislei
of Sabah; lhis helped lhe PBS secuie a sliong base among lhese lwo
communilies. The PBS came lo powei in 1986, aflei il naiiowly defealed
lhe Bei|aya. Againsl lhis backgiound, lhe PBS had an uneasy ielalion-
ship wilh olhei membei pailies of lhe BN, especially \MNO, belween
1986 and 199O.
Iarti Rakyat Malaysia (Malaysian Icoplcs Iarty)
The PRM has a small membeiship and limiled inuence. nauguialed
in 1955, and hoping lo deiive suppoil fiom iuial peasanls, il has, moie
iecenlly, made some inioads among lhe uiban woiking class. The PRM
secuied lwo pailiamenlaiy and lwo slale seals in lhe nisl geneial eleclion
il conlesled in 1959 undei lhe bannei of lhe Socialisl Iionl (SI). n lhe
following eleclion of 1964, lhe SI only secuied lwo fedeial pailiamenlaiy
and eighl slale seals. The PRM has nol been able lo win an elecloial
conlesl since il secuied one pailiamenlaiy seal and lhiee slale seals in lhe
1969 geneial eleclion (\asil 1971, 167). n lhe eleclions of 1982, 199O, and
1995, lhe PRM collaboialed wilh olhei opposilion pailies, including lhe
opposilion coalilion Gagasan Rakyal Malaysia, foimed in 199O, which
had ils iools in \MNO faclionalism. l failed lo secuie iepiesenlalion
eilhei in lhe Iedeial Pailiamenl oi in any of lhe Slale Assemblies.
Opposition coalitions sincc 1987
Whal appeaied lo be a polilically expedienl move by Mahalhii lo iid
\MNO of his opponenls led lo lhe emeigence of lhe mosl oiganized
opposilion lo lhe BN since lhe lallei`s foimalion. Wilh Semangal in lhe
opposilion, lwo coalilions emeiged undei ils leadeiship. The nisl was
based on an elecloial pacl wilh lhe DAP, lhe PRM, and lhe ndian-based
All Malaysian ndian People`s Iionl (PI), a bieakaway MC faclion.
The BN-like mulliiacial coalilion, Gagasan Rakyal (People`s Movemenl),
piimaiily conlesled pailiamenlaiy and slale seals on lhe wesl coasl of
lhe peninsula, wheie consliluenls weie fiom all elhnic communilies. n
addilion, on lhe easl coasl, wheie lhe consliluencies aie dominaled by
Malay Muslims, Semangal combined foices wilh PAS and lwo olhei
small slamic pailies lo foim Angkalan Peipaduan \mmah (AP\
Communily \nily Movemenl) (Khong 1991).
The chief ieason foi ciealing lwo sepaiale coalilions was lhe inabilily
of lhe slamic-based PAS and lhe DAP lo nnd common giound. The
DAP was opposed lo PAS`s inlenlion lo foim an slamic slale, while PAS
was nol willing lo ienounce lhis goal. When bolh coalilions weie foimed
|usl befoie lhe Oclobei 199O geneial eleclion, il was lhe nisl lime in lhe
hisloiy of Malaysian polilics lhal all opposilion pailies weie uniled and
led by an eslablished ex-\MNO Malay leadei, Razaleigh. Midway
lhiough lhe campaign, lhe PBS |oined lhe opposilion, giving lhe Gagasan
Rakyal conliol ovei Sabah even befoie il conlesled ils nisl eleclion.
The new opposilion coalilions pioved foimidable adveisaiies lo lhe
BN. The AP\ iesoundingly defealed lhe BN in Kelanlan, secuiing vic-
loiy in all lhe slale`s pailiamenlaiy and slale seals. The Gagasan Rakyal
naiiowly failed lo secuie conliol of lhe Penang slale goveinmenl. The
BN`s peifoimance in lhe olhei slales, howevei, was much bellei,
enabling il lo ielain ils lwo-lhiids ma|oiily in pailiamenl, albeil by a
meie seven seals. Bul il was indispulable lhal lhe BN`s vicloiy was due lo
ils effeclive use of funds, goveinmenl machineiy, and lhe leading news-
papeis as well as lelevision and iadio nelwoiks (Khong 1991).
Subsequenlly, fedeial funds lo lhe Kelanlan and Sabah slale govein-
menls weie ieduced. This led some PBS leadeis lo advocale closei lies
wilh lhe BN, oslensibly lo secuie moie fedeial funding, bul piobably also
foi peisonal ieasons. Aflei lhe PBS`s defeclion lo lhe opposilion, some
paily leadeis, including Kilingan`s biolhei, weie delained undei lhe SA.
Kilingan was chaiged and found guilly of abusing his poweis lo channel a
RM 1.4 million consliuclion conliacl lo family membeis; he was nned foi
lhe offence (Iar 1astcrn 1cononic Rcvicw, 27 1anuaiy 1994).
The PBS lefl lhe Gagasan Rakyal and allempled lo ieluin lo lhe BN;
ils applicalion was ie|ecled and lhe BN secuied conliol of lhe Sabah slale
goveinmenl following lhe 1994 slale eleclion lhiough queslionable
means, allhough lhe PBS had naiiowly secuied vicloiy (Gomez 1996b).
Despile lhe PBS`s ieduced elecloial suppoil in lhis eleclion and lhe de-
feclion of key leadeis lo lhe BN, lhe iesulls of lhe 1995 geneial eleclion
showed lhal lhe PBS slill commanded sizeable non-Muslim suppoil, es-
pecially among lhe Kadazans and Chinese (Gomez 1996a). This sequence
of evenls ievealed \MNO`s use of fedeial goveinmenl inuence lo
undeimine leadeis al slale level.
The wilhdiawal of lhe PBS fiom lhe Gagasan Rakyal signalled lhe
lallei`s decline despile lhe seiious elecloial lhieal lhal lhe Semangal-led
opposilion coalilions had posed lo lhe BN in 199O. Semangal was in-
cieasingly unable lo suslain co-opeialion among lhe opposilion pailies
due lo polilical diffeiences, while lhe DAP, Semangal, and PI weie
lhemselves encumbeied wilh inleinal pioblems. The lallei lwo weie
wiacked by defeclions lo lhe BN. n 1995, lhe DAP also exiled fiom lhe
Gagasan Rakyal, claiming lhal conlinued membeiship in lhe coalilion
MALASA 245
was being consliued by ils suppoileis as lacil suppoil foi lhe PAS`s idea
of an slamic slale. n lhe 1995 geneial eleclion, lhese opposilion pailies
compeled undei lheii own banneis (Gomez 1996a).
Meanwhile, Semangal sliuggled lo suslain suppoil among lhe elecloi-
ale, peifoiming fai less well in lhe 1995 polls lhan in lhe 199O geneial
eleclions. As Semangal`s pioblems wilh lhe PAS in lhe Kelanlan slale
goveinmenl mounled, Razaleigh ieluined lo \MNO in 1996. The ambi-
lious Razaleigh was piobably awaie lhal he would be unable lo make
fuilhei polilical piogiess, lel alone secuie lhe piemieiship, fiom oulside
\MNO by seeking lhe co-opeialion of opposilion pailies piofessing dis-
paiale ideologies. Semangal had difncully suslaining ils membeiship, as
many membeis, denied access lo slale ienls, defecled lo \MNO. Wilh
lhe deep iifls wilhin \MNO, by liansfeiiing Semangal`s supposed
2OO,OOO membeis lo lhe paily Razaleigh hoped lo slienglhen his own
chances of making a polilical comeback wilhin \MNO.
Since lhe smallei pailies in lhe AP\ weie dwaifed by PAS and since
lhe Gagasan Rakyal depended piimaiily on Razaleigh`s leadeiship lo be
seen as an effeclive alleinalive lo lhe BN, bolh opposilion coalilions aie
unlikely lo suslain lhemselves and will piobably disappeai wilh Semangal.
The founding of lhe mulliiacial Gagasan Rakyal was lhe iesull of ils
componenl membeis knowing lhal lhey would be unable lo bioaden lheii
suppoil independenlly. Thus, lhe leadeis of lhe DAP, piofessedly mulli-
iacial in oullook, found il impeialive lo woik wilh lhe Malay-based
Semangal and lhe ndian-based PI, whose heads weie foimei leadeis of
lhe BN, and wilh whom lhey diffeied gieally in leims of polilical oiien-
lalion. Allhough lhe Gagasan Rakyal faied ialhei well in lhe 199O gen-
eial eleclion, lhe dispaiale inleiesls of ils componenl pailies, especially
lheii leadeis, evenlually conliibuled lo ils collapse.
Iconomic goveinance
Iiom 1957 unlil 197O, lhe aveiage annual GDP giowlh iale in Peninsulai
Malaysia was 6.4 pei cenl, mainly due lo expoil eainings fiom lin and
iubbei (Khoi 1983). To enhance diveisincalion, oil palm and cocoa pio-
duclion weie encouiaged, while impoil-subsliluling indusliializalion
(S) was aclively piomoled. This alliacled much foieign capilal invesl-
menl, allhough mosl foieign companies pailicipaling in S meiely
eslablished subsidiaiies foi assembling, nnishing, and packaging goods
pioduced wilh impoiled maleiials. Iuilheimoie, since lhe maleiials and
lechnologies used weie geneially impoiled fiom paienl companies
abioad, lhey weie pooily linked lo lhe iesl of lhe nalional economy.
Though wage iales in lhese capilal-inlensive indusliies iose, lhe in-
dusliies lended lo geneiale ielalively lillle employmenl, lhus nol sig-
nincanlly ieducing unemploymenl. Moieovei, lhe size of lhe local maikel
was limiled by lhe level and disliibulion of income (1omo 199O, 12). By
lhe mid-196Os, many liansnalional coipoialions weie beginning lo ielo-
cale lheii moie laboi-inlensive pioduclion piocesses abioad, oflen in
Iasl Asia oi Lalin Ameiica, lo ieduce pioduclion cosls.
Wilh lhe Iiee Tiade Zone Acl of 1971, lhe goveinmenl also began lo
piomole expoil-oiienled indusliializalion (IO). New indusliial eslales
oi expoil piocessing zones known as fiee liade zones`` weie eslablished
lo encouiage inveslmenls fiom companies manufacluiing foi expoil.
Wilhin a decade, nims in lhese fiee liade zones came lo dominale
Malaysia`s manufacluied expoils.
Despile ielalively high economic giowlh and low inalion foi ovei a
decade aflei 1957, income inequalilies incieased and poveily iemained
widespiead. nleielhnic income diffeiences weie ieduced slighlly bul
inlia-elhnic diffeiences giew, especially among Malays. Goveinmenl
schemes lo foslei Malay capilalism had nol been successful despile pio-
visions foi Malay quolas in lhe awaid of business licences and acquisilion
slialegies lo expand Malay owneiship of coipoiale equily. Malay capilal
owneiship slood al a scanl 2.4 pei cenl in 197O. Mosl Malays weie slill
employed in lhe peasanl agiiculluie and public seclois.
n iesponse lo ciilicism, lhe goveinmenl exlended lhe woik of public
enleipiises. Theie weie only 22 such enleipiises in 196O and 1O9 by 197O.
Theie was giowing concein among lhe Chinese lhal lhese public enlei-
piises would encioach inlo lhe economic seclois lhey conliolled. This
exaceibaled populai disconlenl.
n lhe 1969 geneial eleclion, lhe Alliance goveinmenl iecoided ils
woisl-evei elecloial peifoimance. The Alliance was a consocialional
giouping of lhiee piincipals: lhe \niled Malay Nalional Oiganizalion
(\MNO), lhe Malaysian Chinese Associales (MCA), and lhe Malaysian
ndian Congiess (MC). The Alliance ielained conliol ovei Pailiamenl,
bul wilh a seveiely diminished ma|oiily. Communal lensions ian high as
lhe iesulls weie peiceived in some quaileis as ieecling a diminulion in
\MNO`s and hence, Malay polilical hegemony. This liiggeied off
iace iiols on 13 May 1969.
Malaysian political cconony, 19701990
The 1969 iiols weie pailly asciibed lo lhe inequilable disliibulion of
weallh belween Malays and Chinese. n consequence, in 197O, lhe gov-
einmenl inlioduced lhe New Iconomic Policy (NIP), an ambilious
lwenly-yeai social engineeiing plan lo achieve nalional unily`` by
MALASA 247
eiadicaling poveily iiiespeclive of iace`` and iesliucluiing sociely``
lo achieve inleielhnic economic paiily belween lhe Bumipuleias and
lhe non-Bumipuleias.
This was lo be allained by incieasing Bumipuleia coipoiale equily
owneiship lo 3O pei cenl and by ieducing lhe poveily level fiom ovei
5O pei cenl lo 15 pei cenl by 199O. Many measuies weie laken lo achieve
lhese goals: impioving access of lhe pooi lo liaining, capilal, and land;
changing educalion and employmenl palleins among Malays lhiough
scholaiships and elhnic quolas favoiing Malay enliy inlo leiliaiy inslilu-
lions; and iequiiing companies lo iesliucluie lheii coipoiale holdings lo
ensuie al leasl 3O pei cenl Bumipuleia owneiship. Tiusl agencies, like
lhe Peimodalan Nalional Bhd, oi PNB (Nalional Iquily Coipoialion),
weie incoipoialed lo accumulale weallh on behalf of lhe Bumipuleias.
The goveinmenl aigued lhal giealei inleielhnic economic paiily would
ensuie slabilily and economic giowlh, bul placaled non-Bumipuleia mis-
givings aboul lhe NIP by assuiing lhem lhal since iedisliibulion would
be undeilaken in a giowing economy, no communily would feel any
sense of depiivalion.
Public enleipiises, lhe new engine of giowlh, weie lo pailicipale much
moie in modein-secloi`` aclivilies such as nnance, commeice, and in-
dusliy, pieviously lhe exclusive domain of piivale enleipiise. These new
public enleipiises included goveinmenl-owned piivale oi public limiled
companies, like piopeily developei Peiemba Bhd and food piocessoi
Iood ndusliies of Malaysia Bhd, whose equily holdings weie eilhei fully
oi pailially held by lhe goveinmenl.
Belween 197O and 199O, lhe lolal numbei of enleipiises owned by
fedeial and slale aulhoiilies giew consideiably, fiom only 1O9 in 197O lo
1,O14 by 1985 (Rugayah 1995, 66). Belween 197O and 1983, public-secloi
employmenl incieased almosl fouifold, fiom 139,467 lo 521,818 (Mehmel
1986, 1O). The expansion of lhe public secloi was facililaled by a giadual
shifl lo dencil nnancing and lhe foiluilous availabilily of oil expoils off
lhe easl coasl of lhe peninsula fiom lhe mid-197Os.
nevilably, mosl public enleipiises lacked a compelilive, enliepieneu-
iial elhos, which impeded pionlabilily. They weie heavily dependenl
on goveinmenl funds and piefeienlial access lo business oppoilunilies,
while iemaining immune fiom nnancial discipline and compelilive maikel
foices. Losses oi low pionls and waslage of inveslmenl iesouices
incieased lhe goveinmenl`s nscal buiden and slowed economic giowlh.
Ioi inslance, in 1984 lhe Minisliy of Public Inleipiise could only iepoil
annual ieluins of 269 oul of a lolal of 9OO public enleipiises; lheii accu-
mulaled losses came lo RM 137.3 million (Supian 1988, 12O23).
While lhe goveinmenl was able lo absoib such cosls duiing lhe 197Os
when giowlh and ievenues weie high, lhis was no longei possible by lhe
mid-198Os when lhe economy slipped inlo iecession and ofncial ievenues
fell. Ialling oil piices belween 1982 and 1986, lhe collapse of lhe lin
maikel in 1985, as well as lhe declining piices of Malaysia`s olhei ma|oi
expoils iubbei, cocoa, and palm oil conliibuled lo lhe economy ieg-
isleiing an unpiecedenled negalive 1 pei cenl giowlh iale in 1985. Capi-
lal ighl incieased as piivale inveslmenl conlinued lo decline fiom lhe
mid-197Os, and unemploymenl iose sleadily when lhe goveinmenl could
no longei affoid lo iaise public spending aflei 1982.
Hcavy inJustriali;ation stratcgy
Anolhei facloi conliibuling lo lhe economic malaise in lhe mid-198Os
was lhe goveinmenl`s heavy indusliializalion slialegy, aclively piomoled
by Mahalhii. n an allempl lo diveisify lhe indusliial secloi and lo com-
pensale foi declining piivale inveslmenls wilh incieased public invesl-
menls, Mahalhii launched his (impoil-subsliluling) heavy indusliializa-
lion piogiam in lhe face of widespiead ciilicisms and piolesls, even fiom
wilhin his own Cabinel. \ndeislandably, lheie was much ieluclance on
lhe pail of piivale capilalisls lo make massive inveslmenls in heavy
indusliies given lhe huge capilal inveslmenls iequiied, lhe long geslalion
peiiods involved, lhe lack of ielevanl lechnological expeilise, and lhe
expecled heavy ieliance on goveinmenl pioleclion and subsidies; wilh
lhe NIP-inspiied piaclice of elhnic bypass,`` lhe goveinmenl seemed
ieluclanl lo involve lhe Chinese in lhese pio|ecls (1omo 1994).
Thus, lhe Heavy ndusliies Coipoialion of Malaysia (HCOM) was sel
up lo puisue lhe heavy indusliializalion piogiam by collaboialing wilh
foieign, mainly 1apanese, companies lo develop a vaiiely of indusliies,
ianging fiom sleel and cemenl pioduclion lo lhe manufacluie of a nalional
cai. To nnance lhese inilialives, lhe goveinmenl iesoiled lo massive
boiiowing fiom abioad, mainly fiom 1apan (see Malaysia 1986, 1989).
Belween 198O and 1987, accumulaled public-secloi foieign debl giew
fiom RM 4.9 billion lo RM 28.5 billion. ncluding loans fiom domeslic
agencies, lolal public-secloi boiiowing incieased fiom RM 26.5 billion in
198O lo RM 1OO.6 billion in 1986 (1omo 199O, 186). By 1987, public
enleipiises accounled foi moie lhan a lhiid of lhe public secloi`s oul-
slanding debl, and moie lhan 3O pei cenl of lolal debl seivicing (1omo
199O, 186).
The impacl of lhe iecession conliibuled lo a luinaiound in goveinmenl
policy. nuenced by neo-libeial Thalcheiism and Reaganomics, Maha-
lhii aclively soughl lo libeialize lhe economy, piomole piivalizalion,
augmenl suppoil foi lhe piivale secloi, and inciease inveslmenl incen-
lives, even going so fai as lo ielax some iequiiemenls of lhe NIP.
To encouiage foieign inveslmenl, lhe nveslmenls Piomolion Acl was
enacled, which piovided geneious lax holidays and pioneei slalus foi
MALASA 249
peiiods of belween nve lo len yeais foi inveslmenls in expoil-oiienled
manufacluiing and agiiculluie as well as louiism. To piomole domeslic
piivale inveslmenl, lhe goveinmenl amended legislalion on ils sliingenl
Bumipuleia inveslmenl and employee exemplion limils foi licensing of
manufacluiing enleipiises. Piivalizalion was supposed lo cuib inefnciency,
pooi managemenl, and weak nnancial discipline in lhe public secloi.
Ivenls abioad also helped lhe Malaysian economy. Aflei lhe second
Plaza Holel meeling in 1985, lhe \.S. dollai began lo depieciale heavily
againsl ma|oi woild cuiiencies, pailiculaily lhe 1apanese yen. As lhe
value of lhe cuiiencies of mosl Iasl Asian indusliializing economies iose,
iaising compaialive pioduclion cosls in lhe piocess, lhe Malaysian iinggil
declined, even againsl lhe \.S. dollai. This silualion, coupled wilh lhe
goveinmenl`s libeializalion effoils, iesulled in a iesuigence of expoil-
oiienled manufacluiing, laigely undei lhe auspices of foieign, especially
Iasl Asian, capilal, which ie-invigoialed lhe economy. Iiom 1986, lhe
iole and conliibulion of diiecl foieign inveslmenl (DI) lo gioss domes-
lic capilal foimalion incieased appieciably. Belween 1986 and 1989, DI
incieased almosl fouifold fiom RM 1.262 billion lo RM 4.518 billion, and
lhen soaied fuilhei lo RM 11.2OO billion in 1991 (Ghazali 1994, 4243).
Wilh giowlh iales of ovei 8 pei cenl since 1988, by lhe mid-199Os viilu-
ally full employmenl had been achieved, social mobilily had incieased,
and business oppoilunilies had expanded.
Wilh lhe incenlives piovided lo piomole IO, lhe aveiage annual
giowlh iale of manufacluiing oulpul exceeded 1O pei cenl belween 197O
and 199O. By 198O, manufacluiing had become a ma|oi nel foieign ex-
change eainei, ieducing dependence on piimaiy expoils. Manufaclui-
ing`s shaie of Malaysia`s GDP moie lhan doubled fiom 13 pei cenl in
197O lo 3O pei cenl in 1993 (lable 9.3).
As lhe NIP peiiod came lo an end, il appeaied lhal ils goals had been
achieved, aided by lhe giowlh of lhe economy al an aveiage of 6.9 pei
cenl pei annum belween 197O and 199O. By 199O, public-secloi assel ac-
cumulalion on behalf of Bumipuleias, goveinmenl iegulalion of business
oppoilunilies and inveslmenls, and piefeienlial policies foi Bumipuleia
Table 9.3 Malaysia's gruss dumestic pruduct by sectur, 1960-1993
(pei cenl)
196O 197O 198O 199O 1993
Agiiculluie 4O 31 23 19 16
Mining 6 6 1O 1O 8
Manufacluiing 9 13 2O 27 3O
Olhei 45 5O 47 44 46
Souice: Gomez and 1omo 1997, 2O.
businesses had all helped lo augmenl Bumipuleia equily in lhe coipoiale
secloi lo 19.3 pei cenl, a iemaikable inciease despile being consideiably
shoil of lhe NIP`s 3O pei cenl laigel. Of lhis 19.3 pei cenl, Bumipuleia
individuals held 14.2 pei cenl and goveinmenl liusl agencies lhe balance.
The Chinese shaie of lhe coipoiale secloi also iose, fiom 27.2 pei cenl in
197O lo 45.5 pei cenl in 199O (lable 9.4).
Poveily had also been cul down lo a iemaikable 17 pei cenl nalion-
wide, while lhe idenlincalion of iace wilh economic funclion had also
been laigely ieduced (lable 9.5). The incieasing numbei of Bumipuleias
in middle-class occupalions was pailiculaily conspicuous.
Table 9.4 Ownership uf share capital uf Malaysian limited cumpanies, 1970-
19951
(pei cenl)
197O 199O 1995
Bumipuleia 2.4 19.3 2O.6
ndividuals and nslilulions 1.6 14.2 18.6
Tiusl Agencies2 O.8 5.1 2.O
Non-Bumipuleia 28.3 46.8 43.4
Chinese 27.2 45.5 4O.9
ndians 1.1 1.O 1.5
Olheis O.3 1.O
Nominee Companies 6.O 8.5 8.3
Ioieigneis 63.4 25.4 27.7
Souices: Malaysia 1976, 1996.
1 Ixcludes shaies held by fedeial, slale, and local goveinmenls. Shaies aie
laken al pai value.
2 Refeis lo shaies held lhiough liusl agencies such as Peinas, PNB (Nalional
Iquily Coipoialion), and lhe SIDCs.
Table 9.5 Malaysian empluyment and uccupatiun by ethnic gruup, 1995
(pei cenl)
Bumipuleias Chinese ndians Olheis
Piofessional and lechnical 64.3 26.2 7.3 2.2
Teacheis and nuises 72.3 2O.5 6.6 O.6
Adminislialive and manageiial 36.1 54.7 5.1 4.1
Cleiical 57.2 34.4 7.7 O.7
Sales 36.2 51.9 6.5 5.4
Seivices 58.2 22.8 8.7 1O.3
Agiiculluie 63.1 12.9 7.5 16.5
Pioduclion 44.8 35.O 1O.3 9.9
Souice: Malaysia 1996. Scvcnth Malaysia Ilan, 19962000.
MALASA 251
n spile of lhe iapid changes of lhe lwo NIP decades, some fealuies of
lhe economy peisisled. Ioi inslance, allhough lhe NIP helped lo develop
a signincanl Malay middle class, Bumipuleias slill dominale peasanl ag-
iiculluie and incieased lheii dominalion of lhe public secloi. Poveily is
slill widespiead among Bumipuleias. Goveinmenl allempls lo iedisliib-
ule owneiship of coipoiale slock have been effeclive seveial sludies
aigue consideiable undeieslimalion of lhe aclual Bumipuleia shaie of
coipoiale weallh bul weallh concenlialion has incieased (see 1omo
199O; Gomez 199O, 1994; Gomez and 1omo, 1997). ncome inequalily and
weallh diffeiences among all communilies have also incieased. The Chi-
nese conlinue lo dominale wholesale and ielail liade, despile considei-
able inioads by Bumipuleias (Malaysian Busincss, 16 1anuaiy 1991).
ndians have failed lo achieve any signincanl inciease in lheii shaie of
coipoiale slock (lable 9.4).
Burcaucrats anJ think tanks
The buieauciacy`s inuence ovei lhe slale slienglhened appieciably
duiing lhe eaily 197Os, a developmenl lhal was desciibed by Isman (1972)
as lhe iise of an adminislialive slale.`` The exlenl of lhe buieauciacy`s
inuence ovei lhe slale has, howevei, been qualined (see Pulhucheaiy
1987; Zakaiia 1987). Pulhucheaiy (1987) noled lhal lo piesume lhal lhe
buieauciacy`s iole is so impoilanl as lo make Malaysia an adminislia-
live slale is lo foigel lhe slienglh of lhe iuling paily which has been in
powei foi lwenly yeais and is likely lo slay in powei foi some lime.``
Anolhei facloi undeimining lhe slienglh of lhe buieauciacy was fiag-
menlalion. Aulhoiily was disliibuled among compeling agencies like lhe
Malaysian ndusliial Developmenl Aulhoiily (MDA), lhe Slale Ico-
nomic Developmenl Coipoialions (SIDCs), Pelionas, lhe Minisliy
of Tiade and ndusliy, and lhe Iconomic Planning \nil in lhe Piime
Minislei`s Depailmenl. Allhough lheie weie oveilapping ob|eclives and
funclions wilhin lhese enleipiises, lheie was lillle co-oidinalion among
lhem.
The buieauciacy`s inuence was pailiculaily checked aflei Mahalhii`s
appoinlmenl as piime minislei in 1981. l was he who began lo cenlialize
goveinmenl decision-making in lhe Piime Minislei`s Depailmenl, push-
ing lhiough economic inilialives wilh lillle consullalion; by 1983, senioi
buieaucials weie iepoiledly conceined lhal sound, piaclical advice is
loo oflen discouiaged oi ignoied`` (Iar 1astcrn 1cononic Rcvicw, 16
1une 1983). The eslablishmenl of numeious policy-oiienled ieseaich
inslilulions oi lhink lanks`` in lhe 198Os was believed lo be molivaled by
Mahalhii`s desiie lo undeimine lhe buieauciacy`s dominance ovei
policy-making (Noda 1996, 4O8). The mosl piominenl inslilulions, lhe
nslilule of Slialegic and nleinalional Sludies (SS) and lhe Malay-
sian nslilule of Iconomic Reseaich (MIR), aie conspicuous foi lheii
advisoiy iole lo lhe goveinmenl. Led and slaffed by foieign-educaled
inlellecluals and foimei academics, lhe lhink lanks have emeiged as
alleinalive souices of lechnical and olhei compelencies.
SS, led since ils eslablishmenl in 1985 by Noidin Sopiee, a foimei
newspapei ediloi wilh a docloiale fiom lhe London School of Iconom-
ics, is iepuledly one of lhe laigesl lhink lanks in Soulheasl Asia wilh
aiound one hundied full-lime ieseaich and suppoil slaff. SS conliibules
lo policy on defence, secuiily, and foieign affaiis and is believed lo have
played a key iole in developing lhe goveinmenl`s posl-199O economic
plans, pailiculaily \ision 2O2O. MIR was eslablished in 1985 and has
been led by foimei academics. l piovides lhe goveinmenl wilh economic
analysis and planning, business suiveys, and economic policy pioposals
(Noda 1996, 41115).
\MNO`s incieasing hegemony ovei lhe slale also piogiessively
undeimined lhe buieaucials` dominance ovei policy implemenlalion, es-
pecially ils iedisliibulive aspecls. Ixeculive dominance was evidenced by
ils abilily lo bend lhe buieauciacy lo build veilical linkages wilh diveise
gioups among lhe Malay populalion. Peasanl, nsheimen, and business
associalions weie oflen oiganized diieclly by buieaucialic agencies and
became conduils foi developmenl funds and slale laigess lo piomole
\MNO inleiesls (see Shamsul 1986).
Given lhe incieasing polilical exploilalion of lhe slale foi vesled inlei-
esls, il was piobably inevilable lhal by lhe eaily 198Os public-secloi ex-
pansion undei lhe NIP was geneially deemed lo have led lo a bloaled
and inefncienl buieauciacy, exaceibaled by a scaicily of Bumipuleia
manageiial expeilise. \eiy lillle moniloiing, lel alone nnancial discipline,
was exeicised, especially when funds ieadily owed in befoie lhe nscal
and debl ciises of lhe mid-198Os.
Vision 2020
n 1991, lhe goveinmenl oullined ils long-leim goals foi Malaysia
lhiough ils \ision 2O2O slalemenl and lhe Nalional Developmenl Policy
(NDP); ils emphasis was foi Malaysia lo achieve fully developed coun-
liy`` slalus by lhe yeai 2O2O, piimaiily by acceleialing indusliializalion,
giowlh, and modeinizalion.
\ndeislandably, lheie has been some enlhusiasm, especially on lhe
pail of non-Bumipuleias, foi \ision 2O2O`s explicil commilmenl lo foig-
ing a Malaysian nalion which lianscends exisling elhnic idenlilies and
loyallies, and foi lhe slalemenl`s emphasis on lhe maikel ialhei lhan lhe
public secloi lo encouiage giowlh. Thus, while foieign inveslois conlinue
MALASA 253
lo be couiled, lhe goveinmenl has also slailed lo allow local Chinese
capilal moie ioom lo move. Chinese capilal has also been encouiaged by
vaiious olhei iefoims, foi example easiei access lo lisling on lhe slock
exchange and giealei ofncial encouiagemenl of small and medium
indusliies (SMs). Local nims, especially laige coipoialions, have been
encouiaged lo invesl oveiseas, wheie lhe scope foi Malaysian govein-
menl inuence is even less; lhis has been peiceived as a sign of good failh
lhal lhe goveinmenl is commilled lo ieducing inleivenlion.
Howevei, wheieas lhe NIP soughl nalional unily in leims of impioved
inleielhnic ielalions lo be iealized by achieving inleielhnic economic
paiily, \ision 2O2O`s developed counliy`` goal sliesses economic giowlh.
Olhei diffeiences aie moie suggeslive of lhe new appioach and piioiilies.
While lhe NIP envisaged piogiessive goveinmenl inleivenlion and a
iedisliibulive welfaie iole foi lhe slale, \ision 2O2O has soughl lo shifl
piimaiy iesponsibilily foi human welfaie back lo lhe family. Wilh culs in
public expendiluie, lhe cosls of social seivices like educalion and heallh
have been incieasingly liansfeiied lo consumeis in lhe foim of highei
univeisily fees, paymenls foi school amenilies, hospilal chaiges, and
medicine fees.
Polilical oullook
MiJJlc-class activisn
Despile giowing concenlialion of powei in lhe execulive aim of govein-
menl, lheie is lillle evidence of much lension belween lhe laige mulli-
elhnic middle class lhal has emeiged and lhe aulhoiilaiian slale, oi of
giowing demands foi polilical libeializalion among lhe Malay middle
class. Ralhei, as lhe 1995 geneial eleclion iesulls indicaled, lhe BN slill
en|oys a high degiee of populai suppoil, while much of lhe middle class
believes lhal lheie has been commendable economic peifoimance, as
well as success in ieducing poveily, iaising ieal incomes, and diminishing
weallh dispaiilies among elhnic communilies lhanks lo lhe exislence of a
sliong slale (see Gomez 1996a). Mahalhii piobably also invokes his
iegime`s success in piomoling economic giowlh lo |uslify his aulhoiilai-
ian slyle of goveinance; he has slaled lhal nobody caies aboul human
iighls so long as you can iegislei annual giowlh iales of 8.5 pei cenl``
(ThirJ VorlJ Rcsurgcncc, Augusl 1993).
Moieovei, lheie is slill only limiled inleielhnic co-opeialion among lhe
middle class due lo elhnic polaiizalion; lhis has inhibiled moie effeclive
middle-class mobilizalion. The bulk of lhe middle class seems quile
maleiialislic and unlikely lo face lhe avoidable iisks of seeking iefoims.
Theie is lillle evidence lhal lhe giowing access of young Malaysians lo
highei educalion has led lo a signincanl inciease in democialic values and
piaclices, as has been lhe case in olhei pails of Iasl and Soulheasl Asia.
This piocess is hampeied by lhe ialhei iepiessive \niveisily and \ni-
veisily Colleges Acl, which foibids sludenls fiom any foim of unap-
pioved (lhal is, non-goveinmenl) polilical pailicipalion.
The limiled iefoimisl oiienlalion of lhe middle class may also be due lo
lhe facl lhal lhe access of mosl Bumipuleias lo highei educalion has been
facililaled by slale scholaiships and elhnic quolas. Iuilheimoie, much of
lhe Bumipuleia middle class eilhei is slill employed by lhe slale oi slale-
owned enleipiises, oi views \MNO as a slepping slone lo upwaid social
mobilily; many slill conceive of \MNO and lhe slale as pioleclois of
lheii inleiesls, polilically and economically.
\ndoubledly, libeializalion policies, including piivalizalion, which
have enlailed diminishing lhe iole of lhe slale in lhe economy, and lhe
iecenl emphasis on piivale secloiled giowlh have been well ieceived by
lhe Chinese communily, pailiculaily ils uiban, middle class membeis.
Allhough goveinmenl palionage has peisisled wilh piivalizalion, inlei-
elhnic business co-opeialion has been enhanced belween lhose Chinese
capable of fulnlling conliacls and lhose Malays who can secuie lhem.
Iconomically, Mahalhii has iealized lhe ulilily of mobilizing Chinese
capilal foi his modeinizalion diive. Polilically, such developmenl of
inleielhnic economic co-opeialion has given him unpiecedenled elecloial
suppoil fiom non-Bumipuleias, pailiculaily uiban middle-class Chinese
(see Gomez 1996a).
n addilion, non-Bumipuleias have gained fiom, and hence been ap-
piecialive of, lhe culluial libeializalion measuies insliluled since lhe mid-
198Os, especially lhe piomolion of Inglish language use. Theie has also
been giealei loleiance foi non-Malay culluial expiession, especially
when polilically expedienl; Mahalhii, foi example, lifled long-slanding
iesliiclions on lhe lion dance, and libeialized liavel iesliiclions lo China
|usl befoie lhe 199O geneial eleclion. Since Malaysian Chinese have his-
loiically been as conceined wilh mainlaining lheii economic, educalional,
and culluial iighls as lheii polilical iighls (Lee 1987), lhe move by lhe
goveinmenl lowaid economic and culluial libeializalion, lhough unaccom-
panied by giealei polilical and civil libeilies, has been polilically expe-
dienl and alliaclive.
UMNO jactionalisn
The besl piospecls foi democialic consolidalion would seem lo lie in
giowing \MNO faclionalism. This has been slimulaled by giealei inlia-
elhnic pioblems among lhe Malays as evidenced in lhe \MNO splil,
MALASA 255
which led lo lhe foimalion of Semangal, as well as cuiienl developmenls.
Alieady, Bumipuleias piimaiily, bul nol exclusively, iuial Malays aie
assessing lhe BN goveinmenl`s peifoimance in leims of nol only eco-
nomic giowlh bul also ils capacily lo pievenl oi deal wilh social ills and
mainlain a moie decenl level of piobily and lianspaiency (see Gomez
1996a).
Some of lhe pioblems lhal have emeiged among Malays appeai lo
have lo do wilh Mahalhii`s vision of developmenl foi Malaysia. His em-
phasis on ciealing a Bumipuleia capilalisl elile and on indusliialized
modeinizalion is nol consislenl wilh lhe agiaiian populisl basis of
\MNO. The Malay peasanliy, long lhe backbone of \MNO, appeais
incieasingly alienaled fiom lhis vision (see Gomez 1996a). Mahalhii`s
depuly, Anwai, has liied lo pio|ecl a moie populisl vision wilh his
giealei allenlion lo such needs. Moieovei, allhough lheie was some
agieemenl among \MNO leadeis ovei Mahalhii`s piesciiplions lo help
ievive lhe economy in iecession, lheie now appeais lo be giowing con-
cein ovei lhe biases of lhe new policies. These diffeienl emphases of
lhese lwo leadeis aie a ieason foi peiceived diffeiences belween lhem
\MNO iemains deeply faclionalized. n lhese ciicumslances, and given
lhe concenlialion of powei in \MNO, if giealei polilical libeializalion is
lo emeige, il may depend piimaiily on machinalions wilhin lhe paily.
The impacl of such faclionalism on lhe fuluie of Malaysian polilics is
difncull lo gauge. l is possible lhal if faclionalism inlensines, anolhei
gioup may bieak away, which may lead lo lhe eslablishmenl of anolhei
bioad-based opposilion coalilion. Such an alleinalive may nol be alliac-
live given lhe expeiience of such bieakaway faclions in lhe opposilion, as
evidenced by lhe demise of Semangal. Olhei bieakaway \MNO faclions
including one led in 1951 by Onn 1aafai, \MNO`s nisl piesidenl have
similaily failed lo undeimine \MNO. On lhe olhei hand, since lhe
incieasing difncully of ieaching compiomises among faclions may exac-
eibale inslabilily in goveinmenl, Mahalhii may cenlialize even moie
powei in his own hands. The fiuslialions of Anwai `s suppoileis in such
ciicumslances may inciease, especially since Mahalhii conlinues lo show
no sign of ielinquishing powei. Howevei, much will depend on lheii
abilily lo peisuade Anwai lo lake on Mahalhii foi lhe \MNO piesidency
an unlikely scenaiio in lhe neai fuluie given how effeclively Mahalhii
checked lhe possibilily of such a challenge in 1995 and 1996.
Theie aie a numbei of ieasons why faclions wilhin \MNO may
emeige as key playeis insisling on moie lianspaiency and accounlabilily.
Iiisl, lhe emeigence of lhe new Malay middle and business classes wilh
slale palionage conlinues lo conliibule lo fiiclion ovei access lo ienl
oppoilunilies, which has led lo inlensined challenges foi senioi paily
posls. Some leadeis even use lhe aigumenl of lhe need foi giealei lians-
paiency lo |uslify lheii decisions lo conlesl paily posls. Duiing lhe 1996
\MNO eleclion, Sili Zahaiah Sulaiman successfully challenged lhe
paily`s women`s wing leadei; she claimed lhal hei decision lo do so
slemmed fiom hei belief lhal lhe movemenl needed a clean and liusl-
woilhy head. The incumbenl, Randah Aziz, had been embioiled in a
scandal in which she allegedly abused hei posilion as minislei of inlei-
nalional liade and indusliy lo channel lo hei son-in-law RM 1.5 million
woilh of shaies in a publicly lisled company ieseived foi lhe Bumipuleia
communily undei lhe goveinmenl`s Bumipuleia shaie allocalion scheme
(Asiawcck, 21 1uly 1996).
Second, lhe ambilions of lhose in lhe middle and business classes vying
lo climb lhe \MNO hieiaichy may compel lhem lo use lheii business
inuence, especially conliol ovei lhe media, lo expose vaiious lypes
of liansgiessions, bolh moial and legal, lo disciedil lheii opponenls.
Alieady, lheie have been numeious expose s in lhe mainslieam piess of
coiiuplion and conicls of inleiesl involving \MNO leadeis, pailiculaily
lhose nol aligned wilh Anwai. The scandal involving Randah is believed
lo have been highlighled by lhe Anwai-conliolled media. Randah ielali-
aled by alleging similai allocalions lo family membeis of equily ieseived
by lhe goveinmenl foi Bumipuleias, on lhe pail of Anwai, Mahalhii, and
olhei senioi \MNO leadeis and pio-Mahalhii nguies, including lhe foi-
mei head of lhe |udiciaiy. Randah`s expose ievealed how \MNO leadeis
have been channelling slale-conliolled ienls lo lhemselves.
This seiies of evenls suggesls lhal such \MNO faclionalism may in-
ciease demands in \MNO foi giealei change, changes in lhe leadeiship,
incieased polilical pailicipalion, and moie lianspaiency and accounl-
abilily. Some of lhose who feel maiginalized believe lhal lhey can opei-
ale bellei on a moie level playing neld. Thus, lhey may desiie lo allei
inlia-elhnic allocalion lo enhance lheii access lo slale ienls. n lhal case,
in lhe evenl of an economic downluin, which may gieally ieduce lhe ienls
lhal can be disliibuled, \MNO faclionalism may be difncull lo be conlain.
The Malaysian case indicales lhal lheie is no simple causal link
belween developmenl and demociacy. Diffeienl levels of economic
developmenl do nol necessaiily explain why demociacy has, oi has nol,
developed as in olhei pails of Iasl and Soulheasl Asia. Appaienlly, lhe
conlinued inslilulional viabilily of elhno-populism has been a ma|oi
impedimenl lo democializalion. Howevei, given \MNO`s hegemonic
posilion, polilical and business iivaliies among \MNO membeis may
give iise lo silualions lhal may enhance democializalion in Malaysia. The
goveinmenl may also have lo concede some polilical libeializalion in lhe
inleiesls of fuilhei economic giowlh and polilical slabilily.
MALASA 257
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(1996), Scvcnth Malaysia Ilan, 19962000, Goveinmenl Piinleis, Kuala
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Means, Goidon P. (1976), Malaysian Iolitics, Hoddei & Sloughlon, London.
Mehmel, Ozay (1986), Dcvclopncnt in Malaysia. Iovcrty, Vcalth anJ Trustccship,
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Milne, R. S. (1986), Malaysia Beyond lhe New Iconomic Policy,`` Asian Survcy
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Munio-Kua, Anne (1996), Authoritarian Iopulisn in Malaysia, Macmillan,
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Noda Makilo (1996), Reseaich nslilulions in Malaysia,`` in Tadashi amamolo
(ed.), 1ncrging Civil Socicty in thc Asia Iacic Connunity, iev. ed., nslilule
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NSTP Reseaich and nfoimalion Seivices (1994), 1lcctions in Malaysia. A
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1O
ndonesia
AnJrcw MacIntyrc
This volume is conceined wilh lhe conneclions belween lhe polilical
fiamewoiks of counliies and lheii economic welfaie, as measuied by
economic giowlh. n pailiculai, il seeks lo piobe lhe impacl of democia-
lizalion on economic peifoimance in a iange of Asian counliies wheie
economic giowlh iales have geneially been exliaoidinaiily high. Rales
of economic giowlh. The lask of lhis chaplei is lo focus on lhe case of
ndonesia. Iiom one angle, ndonesia`s inclusion is naluial: il is a veiy
impoilanl Asian counliy lhal has en|oyed aveiage annual economic
giowlh in excess of 7 pei cenl since 197O a iecoid exceeded by only a
veiy small numbei of olhei counliies (all in Asia). Iiom anolhei angle,
howevei, ndonesia`s inclusion is somewhal pioblemalic since il is neilhei
democialic noi, appaienlly, on lhe veige of becoming democialic. And
yel, will aigue, by adopling a sliongly inslilulional focus we can slill gain
useful puichase on lhe undeilying issues al slake heie fiom an examina-
lion of ndonesia.
Caieful analysis of lhe foimal and infoimal iules goveining elecloial
syslems, polilical pailies, lhe sliucluie of goveinmenl, and ullimalely, lhe
chaiaclei of lhe oveiall policy-making piocess is ielalively new in lhe
sludy of polilics foi mosl counliies in Asia. Wilh lhe conspicuous excep-
lion of lhe lileialuie on 1apan, lhese polilical inslilulions have lypically
been oveilooked in favoui of queslions such as lhe naluie of slale-sociely
ielalions, class analysis, civil-mililaiy ielalions, palion-clienl ielalions,
inlia-elile faclionalism, elhnic and ieligious polilics, and so on. The iea-
261
sons foi lhese eslablished pieoccupalions aie nol haid lo giasp. None-
lheless, lhe neld is iipe foi change and lhis essay iepiesenls an inilial slep
in lhal diieclion.
Oveiall, my conceins heie aie lo explain how lhe key elemenls of
ndonesia`s so-called New Oidei`` polilical fiamewoik nl logelhei, lo
examine lheii consequences foi economic giowlh, and lo considei some
of lhe implicalions of democializalion in ndonesia al some fuluie lime.
begin by focusing in pailiculai on polilical pailies and lhe elecloial
syslem, and lhen bioaden lhe empiiical scope in lhe second seclion lo
piovide a complele accounl of lhe oveiall policy-making aichilecluie by
dealing wilh channels foi inleiesl iepiesenlalion and lhe sliucluie of
goveinmenl. The lhiid seclion diaws upon vaiious sliands of lhe lheo-
ielical lileialuie on polilical and economic inslilulions lo ieecl upon lhe
polilical foundalions foi economic giowlh. The nnal seclion offeis some
a piioii ieeclions on lhe possible implicalions of democializalion foi
economic policy-making and economic peifoimance in ndonesia.
Polilical pailies and lhe elecloial syslem
ndonesia`s paily syslem is ieasonably well inslilulionalized in lhe gen-
eial sense lhal lheie is a sel of eslablished foimal and infoimal iules lhal
have been obseived on a iepealed basis foi a quailei of a cenluiy.
Moieovei, allhough piobably nol univeisally accepled in ndonesia, lhe
syslem is widely undeislood and is one which mosl aclois have come lo
expecl lo pievail foi lhe foieseeable fuluie (Mainwaiing and Scully 1995,
4). Howevei, lhough il is well inslilulionalized by lhe slandaids of paily
syslems elsewheie in lhe iegion, one could haidly desciibe lhe syslem as
democialic. Theie is a veiy sliong and syslemalic bias in lhe iules gov-
eining pailies and lhe elecloial piocess which laigely piedeleimines
lhe oulcome (D|iwandono & Legowo 1996; Kiisliadi 1997; Siagian 1997;
Sihbudi 1997). Six aspecls of lhe paily fiamewoik and elecloial syslem
iequiie pailiculai allenlion: enliy and exil conliols, public-secloi sup-
poil, conliols on paily policy plalfoims, iesliiclions on oiganizalional
and campaign aclivilies, unequal iesouicing and media access, and a
pailisan elecloial umpiie.
Peihaps lhe mosl fundamenlal conliol is lhal of enliy lo and exil fiom
lhe elecloial aiena. Piimaiily on lhe basis of ofncial slalule bul peiiodi-
cally wilh iecouise lo unofncial inducemenl and coeicion as well, lhe
goveinmenl is able lo deleimine whelhei a paily may conlesl an eleclion,
whelhei an individual may sland foi eleclion as lhe iepiesenlalive of a
paily, and which individuals may seive as leadeis of lhe pailies. Since lhe
eaily 197Os, only lhiee pailies have been peimilled by law: lhe slale
262 ANDRIW MACNTRI
polilical paily, Golkai, and lwo small non-goveinmenl pailies, lhe Pailai
Peisaluang Pembangunan (PPP \niled Developmenl Paily) and lhe
Pailai Demokiasi ndonesia (PD ndonesian Democialic Paily). l was
nol always lhus. n lhe 195Os, duiing lhe peiiod of pailiamenlaiy democ-
iacy, ndonesia had a highly uid mulli-paily syslem, wilh neaily lhiily
pailies being iepiesenled in lhe legislaluie. The numbei of pailies began
lo decline following lhe counliy`s swing lo incieasingly aulhoiilaiian
polilics when ils nisl piesidenl, Sukaino, inlioduced whal he leimed
Guided Demociacy`` and pioceeded lo oullaw seveial pailies opposed
lo his incieasingly diclaloiial slyle. This liend inlensined undei lhe nexl
piesidenl, (foimei Geneial) Suhailo, who came lo powei in 1966 in lhe
conlexl of widespiead polilical violence. Wilh lhe sliong suppoil of lhe
aimed foices, Suhailo puiged lhe oiganized Lefl fiom lhe polilical land-
scape, and sel aboul eslablishing a New Oidei`` in lhe lale 196Os and
eaily 197Os by building up lhe mililaiy-linked coipoialisl body, Golkai,
inlo a dominanl slale polilical paily and foicing lhe iemaining len pailies
lo meige inlo lwo fiaclious amalgams.1
Theie aie also foimal exil conliols on polilical pailies. The piesidenl is
legally empoweied lo dissolve any paily nol compalible wilh slale goals
(as denned by lhe piesidenl) oi any paily iepiesenling less lhan 25 pei
cenl of lhe populalion. Compaiable enliy and exil conliols apply lo
individuals wishing lo sland as candidales foi a paily al eleclion lime.
\ndei elecloial laws, all candidales aie sub|ecl lo an appioval piocess
adminisleied lhiough lhe Geneial Ileclion nslilule. This means lhal lhe
goveinmenl can ieadily pievenl sliong ciilics fiom enleiing lhe legisla-
luie, and can eliminale any incumbenl legislaloi al lhe following eleclion.2
nfoimally, lhe goveinmenl has been able lo exeicise enliy and exil
conliols on paily leadeiship posilions. Allhough lheie is oflen inleinal
compelilion foi paily leadeiship posls, lhe goveinmenl is able lo ensuie
lhiough a blend of sublle inducemenls and lhieals of blunlei coeicion
lhal only individuals who aie willing lo accede lo goveinmenl wishes
secuie lhese posls. The eiuplion of luimoil wilhin lhe PD duiing 1995
and 1996 ovei Megawali Sukainopulii`s bid foi lhe leadeiship iepie-
senled a sliiking pailial exceplion lo lhis pallein. Megawali, lhe daughlei
of foimei piesidenl Sukaino, en|oyed a subslanlial mass following bolh
inside and oulside lhe PD, and was viewed as a lhieal by lhe govein-
menl. When noimal suasion and coeicion laclics failed lo iemove hei
fiom lhe paily leadeiship, lhe goveinmenl engineeied a violenl inleinal
paily lakeovei by lhose seclions of lhe paily willing lo co-opeiale.
f enliy and exil conliols aie one basic means by which lhe goveinmenl
manages lhe paily syslem and lhe elecloial piocess, a second cenlies on
lhe sliong foimal and infoimal piessuies lhal aie bioughl lo beai on
public-secloi employees in lhe civil seivice, lhe slale enleipiise secloi,
NDONISA 263
and olhei public enlilies such as educalional and heallh inslilulions
lo suppoil Golkai (Silaen 1997). All civil seivanls aie aulomalically
membeis of Koips Pegawai Negeii Republik ndonesia (Koipii lhe
ndonesian Civil Seivanls Coips), a coipoialisl inslilulion lhal is linked
diieclly wilh Golkai. n lhe eaily 197Os, all civil seivanls weie fuilhei
iequiied lo sign a lellei commilling lheii monoloyally`` lo Golkai, wilh
lhose who declined being sub|ecl lo dismissal (Waid 1974, 34). Sub-
sequenlly, any civil seivanl seeking lo become an ofncial membei of a
polilical paily has been iequiied lo oblain wiillen peimission fiom his oi
hei supeivisoi (Sanloso 199O, 1O23). The piobabilily of being gianled
peimission lo |oin a paily olhei lhan Golkai is, of couise, veiy low. Moie
geneially, depailmenlal heads, and lhe heads of slale enleipiises and
olhei public-secloi inslilulions, come undei sliong infoimal piessuie lo
ially suppoil foi Golkai among lheii suboidinales al eleclion limes. As
one ofncial who seived as lhe head of a disliicl ofnce of lhe Minisliy of
Agiiculluie and, simullaneously, lhe head of lhe local Golkai chaplei,
candidly pul il in lhe lead-up lo lhe 1997 eleclion: Somelimes have
liouble lelling lhe diffeience belween my posilion as head of Golkai and
my |ob as head of lhe agiiculluie depailmenl`` (quoled in McBelh and
Cohen 1997, 25)
This ielales lo a lhiid impoilanl dimension of goveinmenl conliol of
lhe paily syslem and elecloial piocesses, namely legal iesliiclions on
elecloial campaign aclivilies. n addilion lo being sub|ecl lo piohibilions
on vaiious specinc campaign laclics, since 1971 polilical pailies have been
piohibiled fiom oiganizing al lhe village level in iuial aieas. This is of
gieal signincance because lhe bulk of lhe populalion slill lives in iuial
villages ialhei lhan lowns oi cilies. The iesliiclion has piovided a pow-
eiful advanlage lo Golkai since, even lhough il loo may nol sel up paily
bianches in villages, il is able lo iun de faclo campaigns al lhis level
because local ofncials such as lhe village head oi lhe local police ofncei oi
iepiesenlalive of lhe aimed foices aie all civil seivanls iesponsible lo lhe
nalional goveinmenl, and aie lhus almosl ceilain lo be Golkai membeis
and sub|ecl lo infoimal incenlives lo ially suppoil foi Golkai al eleclion
limes.
A fouilh conliol mechanism is lhe goveinmenl`s abilily lo heavily
shape oi consliain lhe policy plalfoims of lhe pailies. \ndei law, all
pailies (along wilh all social oiganizalions) musl foimally accepl lhe ofn-
cial slale ideology, Iancasila, as lheii sole ideological foundalion.3 This,
logelhei wilh conliols on paily peisonnel, seives lo limil lhe public posi-
lions laken by lhe lwo non-goveinmenl pailies lo lillle moie lhan mild
vaiialions on lhe lhemes of Golkai. Moieovei, even lhe public slance of
Golkai has lillle specinc policy conlenl, and consisls mainly of vague
invocalions of lhe impoilance of values such as developmenl`` and
264 ANDRIW MACNTRI
slabilily.`` The nel effecl of lhis is lhal lheie is lillle in lhe way of ieal
ideological oi policy diffeienlialion among lhe pailies; Golkai is loosely
associaled wilh aulhoiily and economic success, lhe PPP is linked wilh
segmenls of lhe slamic speclium and peihaps a vague ciilique of coi-
iuplion, and lhe PD has come lo be loosely idenlined wilh foimei pies-
idenl Sukaino and peihaps wilh a vague ciilique of aulhoiilaiianism and
inequalily (nolwilhslanding lhe facl Sukaino was himself aulhoiilaiian in
his nnal decade in ofnce). Consislenl wilh lhe implied nolion of some-
lhing appioaching ideological unanimily is lhe implied piinciple lhal lhe
non-goveinmenl pailies aie nol opposilion pailies,`` bul ialhei amal-
gams of legislalois iepiesenling diffeienl segmenls of sociely lhal woik in
pailneiship wilh lhe execulive bianch of goveinmenl.
A fuilhei impoilanl vaiiable is lhe syslemalically unequal iesouicing
and media access of lhe pailies. All polilical pailies ieceive public fund-
ing lo suppoil lheii opeialions. The non-goveinmenl pailies in pailiculai
depend heavily on lhis suppoil lo nnance lheii campaign iallies. The PPP
is able lo iaise modesl nnancial suppoil lhiough lhe mosque and olhei
slamic inslilulions fiom devoul membeis of lhe Muslim communily
(Liddle 1996, n. 16). Nol suipiisingly, businesses have lillle inleiesl in
giving money lo pailies lhal have no chance of winning eleclions, espe-
cially if lhey iun lhe iisk of angeiing lhe goveinmenl by doing so. Wheie
lhe PD and PPP sliuggle foi exlia iesouices, Golkai is suppoiled by
seciel off-budgel public monies and laige slush funds managed by shadowy
social oi chaiilable foundalions lhal collecl money fiom business gioups
wilh close lies lo lhe goveinmenl (Macnlyie foilhcoming-a). n addilion,
of couise, Golkai is able lo diaw upon lhe infiasliucluial iesouices of lhe
enliie slale, fiom nalional-level inslilulions down lhiough lhe piovincial,
disliicl, and local levels of adminislialion.
Paialleling lhe iesouicing imbalance is lhe diffeienlial access lo lhe
media among lhe polilical pailies. Television coveiage has become much
moie impoilanl in iecenl yeais, as iising living slandaids have lianslaled
inlo moie and moie households owning lelevision sels. l is eslimaled
lhal T\R, lhe slale-owned bioadcasling channel, now ieaches aiound 65
pei cenl of lhe populalion (Cohen 1997). Special lelevision piogiams
duiing eleclion campaigns aie dedicaled lo lhe lhiee pailies, giving equal
lime lo each. Bul lhese piogiams aie highly foimalislic, closely slage-
managed, and piobably of limiled campaign value. Moie signincanl is lhe
lolal coveiage given lo lhe pailies in olhei piogiams, pailiculaily news
piogiams. Accoiding lo one suivey conducled fiom Apiil lo 1une in 1995,
lhe slale lelevision channel, T\R, iepoiled on Golkai 98 limes duiing
ils news piogiams, on PPP 1O limes, and on PD |usl lwice. And allhough
lhe iecenlly launched piivale lelevision slalions aie giowing quickly,
lhese licenses weie awaided only lo lhose associaled wilh Golkai,
NDONISA 265
including some of lhe childien of Piesidenl Suhailo (Cohen 1997). Nol
suipiisingly, lhese piivale channels offei lillle in lhe way of alleinalive
news coveiage lo T\R.
A nnal facloi lo be highlighled conceins lhe slalus of lhe body foimally
iesponsible foi oveiseeing lhe eleclion piocess and counling lhe vole, lhe
Geneial Ileclion nslilule. Iai fiom being an independenl slaluloiy
agency, lhe inslilule funclions like any olhei bianch of lhe execulive
goveinmenl and is chaiied by lhe minislei foi inleinal affaiis, a Golkai
membei. The polenlial foi chealing in lhe counling of lhe vole is consid-
eiable, and following eveiy eleclion lheie aie complainls fiom lhe non-
goveinmenl pailies aboul iiiegulaiilies al some polling boolhs.4 None-
lheless, Liddle (1996, 45) is piobably coiiecl lo asseil lhal wilh a few
exceplions, lheie is lillle in lhe way of syslemalic chealing al lhe ballol
box oi in vole counling. The ieason foi suspecling lhis is, quile simply,
lhal lhe whole paily and elecloial syslem is alieady so heavily biased in
favoui of Golkai lhal lheie is lillle need foi ciude lasl-minule mass cheal-
ing. Neveilheless, lhe polenlial foi chealing is ieal. ionically, peihaps lhe
mosl glaiing illuslialion of lhis came in lhe 1997 eleclion, when lhe gov-
einmenl inleivened lo help boost lhe PD aflei il had been all bul wiped
oul in lhe polls following lhe goveinmenl`s ouslei of Megawali Sukaino-
pulii fiom lhe leadeiship of lhe paily which had caused many suppoil-
eis lo deseil. The pieliminaiy iesulls fiom lhe eleclion suggesled lhal lhe
PD would fall below lhe lhieshold of 11 seals necessaiy foi a paily lo
funclion in lhe pailiamenl. l was inilially suggesled lhal Golkai and lhe
PPP each give a seal lo lhe PD lo help il oul; bul lhe PPP iefused lo co-
opeiale. \nable lo nnd any olhei means lo exliicale ilself fiom lhe mas-
sive oveikill pioblem lhe goveinmenl had ciealed, lhe Geneial Ileclion
nslilule appaienlly found`` an addilional 6O,OOO voles, which seived lo
lifl lhe PD above lhe lhieshold (Reulei, 1akaila, 22 1une 1997).
To summaiize, lhe aigumenl lhus fai is lhal allhough ndonesia does
indeed have an inslilulionalized paily syslem and elecloial piocess in
which conlesls aie held eveiy nve yeais, in which lhiee polilical pailies
compele vigoiously foi volei suppoil, and in which lheie is ielalively
lillle gioss ballol iigging oi fiaudulenl counling, foi ieasons inheienl lo
lhe naluie of lhe syslem, il is a fai ciy fiom meaningful demociacy. The
paily syslem and elecloial piocess aie exlensively managed and lilled
veiy heavily in favoui of Golkai. As lable 1O.1 shows, Golkai has swepl
eveiy eleclion foi moie lhan lhiee decades by a comfoilably laige maigin
indeed, an embaiiassingly laige maigin in lhe mosl iecenl eleclion.
This is nol lo say lhal lhe elecloial piocess is ulleily devoid of meaning
oi polilical signincance. Aflei all, lhe goveinmenl would be unlikely lo go
lo such gieal lenglhs and cosls lo manage lhe piocess if il was unim-
poilanl. As Liddle (1996) puls il, eleclions in ndonesia aie a useful
266 ANDRIW MACNTRI
nclion`` which helps lo legilimale lhe iegime and piovide scope foi mass
pailicipalion, albeil heavily slage-managed. Moieovei, as will be aigued
below, in view of lhe inslilulional sliucluie of goveinmenl in ndonesia,
lhe elecloial piocess has lillle diiecl beaiing on conliol of lhe execulive
bianch of goveinmenl.
The policy-making fiamewoik: nleiesl iepiesenlalion and
goveinmenlal sliucluie
n democialic polilical syslems, pailies play a ciucial iole: lhey piovide lhe
inslilulional link belween voleis and lhe machineiy of goveinmenl. As
pail of lhe piocess of compeling foi volei suppoil, pailies aggiegale public
inleiesls and campaign on lhe basis of conlending packages of policy
pioposals. n ndonesia lheie is indeed compelilion belween pailies, and
voleis aie foi lhe mosl pail fiee lo casl lheii ballols as lhey please; lhe
diffeience is lhal lhe elecloial piocess has lillle effecl on goveinmenl
policies. This is a pallein lypical of many counliies in which eleclions
lake place wilhin a moie oi less aulhoiilaiian fiamewoik (Heimel 1978).
Thal lhe PPP oi lhe PD have lillle impacl on lhe policy-making pio-
cess should be evidenl fiom lhe pievious seclion; lhey have lillle inde-
pendenl polilical life oi policy agenda, alliacl lillle suppoil fiom eilhei
business oi laboui, and nevei alliacl moie lhan a modesl shaie of lhe
vole. Moie iemaikable is lhe facl lhal even Golkai is nol a ma|oi playei
in lhe policy piocess. Golkai is neilhei a signincanl geneialoi of ideas
oi policy piefeiences noi, moie fundamenlally, a locus of powei in lhe
Table 1O.1 Indunesian General Electiun Results, 1971-1997
(pei cenl)
GOLKAR PPP PD
Seals1 \oles Seals1 \oles Seals1 \oles
19712 66 59 27 26 8 9
19772 64 56 28 27 8 8
1982 6O 64 24 28 6 8
1987 75 73 15 16 1O 11
1992 7O 68 16 17 14 15
1997 76 75 21 22 3 3
Souice: Geneial Ileclion nslilule.
1 Refeis lo peicenlage of seals in lhe House of Repiesenlalives sel aside foi
elecled iepiesenlalives, excluding iepiesenlalives appoinled fiom lhe aimed
foices.
2 Peicenlages of voles do nol sum lo 1OO.
NDONISA 267
ndonesian polilical syslem. None of lhe mosl impoilanl playeis in ndo-
nesian polilics buill lheii caieeis inside Golkai; while lhey mighl occupy
posilions wilhin Golkai (foi inslance, Suhailo is lhe head of lhe paily`s
Boaid of Advisois) lheii powei deiives fiom olhei posls lhey occupy.
Golkai is lhe capslone of a vasl nelwoik of coipoialisl bodies lhan spans
lhe speclium of economic and social seclois (Reeve 1985; Macnlyie
1994b). Bul like lhe polilical pailies lhemselves, coipoialisl inleiesl
associalions in ndonesia opeiale wilhin a slale-dominaled fiamewoik.
The exlenl lo which lhe slale inleivenes in lhe opeialions of lhese inlei-
esl associalions vaiies, wilh lhe laboui movemenl being sub|ecl lo lighl
conliol. While en|oying moie opeialional aulonomy, lhe nalional Cham-
bei of Commeice and ndusliy (KADN) is nonelheless a lame oigani-
zalion which plays lillle iole as an advocale of business inleiesls in lhe
policy piocess. Allhough in some indusliies we have seen moie indepen-
denl and policy-oiienled business associalions emeige, foi lhe mosl pail
associalions acioss lhe business secloi aie polilically ineil. ndeed, in
geneial lhe myiiad coipoialisl inleiesl associalions opeiale piimaiily as
inslilulional mechanisms foi polilical conlainmenl ialhei lhan as inslilu-
lions foi aggiegaling secloial inleiesls and in|ecling lhese inleiesls inlo
lhe policy-making piocess (Macnlyie 1991, 1994c).
The poinl lo be emphasized heie is lhal bolh lhe paily syslem and
lhe associaled nelwoik of coipoialisl inleiesl associalions seive lo limil
demand-making upon lhe slale by socielal gioups. Pul diffeienlly, lhey
insulale lhe buieauciacy fiom colleclive aclion and bioadei mass polilical
piessuies. The nel effecl of lhese inslilulional baiiieis is lo concenliale
inuence ovei lhe policy piocess wilhin lhe sliucluies of lhe slale, and as
will be seen, wilhin lhe slale powei is fuilhei concenlialed in lhe uppei
iealms of lhe execulive bianch pailiculaily aiound lhe piesidency.
\ndei lhe leims of ndonesia`s Conslilulion and ils vaiious supple-
menlaiy legal slalules, ndonesia has a highly cenlialized sliucluie of
goveinmenl. Allhough lhe legislaluie, lhe House of Repiesenlalives, has
lhe iighl lo iniliale legislalion and musl appiove all legislalion (including
lhe budgel), in piaclice il is a lame inslilulion. l has nol inilialed a single
bill in lhiee decades noi has il veloed a bill pioposed by lhe piesidenl.
Ilecled membeis of lhe legislaluie aie supposedly accounlable lo voleis,
bul we have alieady seen lhal lhe foimal and infoimal iules coveiing
polilical pailies and eleclions give lhe goveinmenl gieal conliol ovei
polilicians. n a veiy ieal sense lhen, legislalois aie as accounlable lo lhe
execulive as lhey aie lo voleis. Added lo lhis is lhe facl lhal 2O pei cenl
of lhe House of Repiesenlalive comes fiom lhe aimed foices and is
diieclly appoinled by lhe piesidenl.5
Ioi piesenl puiposes, lhe impoilanl poinl heie is lhal lhal allhough
lheie is a conslilulional sepaialion of poweis belween lhe piesidency and
268 ANDRIW MACNTRI
lhe legislaluie which is supposed lo piovide foi checking and balancing,
in piaclice lhe legislaluie has nol funclioned as an independenl velo gale
in lhe legislalive piocess as lhe balance of foimal and infoimal poweis is
massively lilled in favoui of lhe piesidency. n addilion lo foimal legis-
lalive aiiangemenls, lhe piesidenl has veiy wide-ianging deciee poweis.
ndeed, lhe gieal ma|oiily of execulive aclion in ndonesia iesulls nol
fiom laws ialined by lhe legislaluie, bul simply fiom deciees issued by
lhe piesidenl (oi one of his suboidinales). Belween 197374 and 1989
9O, legislalion pioduced by lhe pailiamenl consliluled a baie 8 pei cenl
of lhe ma|oi legal acls inlioduced al lhe nalional level of goveinmenl
(Rohdewohld 1995, 18).
Like lhe legislaluie, lhe |udiciaiy also piovides lillle check on lhe con-
ducl of execulive goveinmenl. The Supieme Couil is nol empoweied
lo ieview legislalion. n piinciple deciees issued by minisleis oi lowei
ofncials aie sub|ecl lo ieview, lhough piesidenlial deciees appeai lo be
immune fiom lhis possibilily.6 n piaclice, howevei, lhe possibilily of
|udicial ieview of even lowei-level slalules is iemole because lhe |udi-
ciaiy is wholly suboidinaled lo lhe execulive. The piesidenl appoinls and
iemoves |uslices wilhoul lhe need foi legislalive appioval, and has lypi-
cally appoinled (legally liained) foimei membeis of lhe aimed foices lo
lhe posilion of chief |uslice. Iuilhei, all |uslices aie ofncial classed as civil
seivanls (and aie lhus lechnically membeis of Koipii).
f lhe execulive is nol checked oi balanced by eilhei lhe legislaluie
oi lhe |udiciaiy, whal consliains ils behavioui? Conslilulionally, lhe
piesidenl is accounlable nol lo voleis al laige, bul lo lhe 1,OOO-membei
People`s Consullalive Assembly (see nguie 1O.1 below). The Consulla-
live Assembly meels once eveiy nve yeais and funclions bolh as an elec-
loial college in choosing a piesidenl and a vice-piesidenl, and lo some
exlenl as a supei-pailiamenl`` in selling (veiy) bioad noimalive guide-
lines foi slale policy foi lhe nexl nve-yeai peiiod. The Consullalive
Assembly is lhe highesl slale inslilulion and has lhe sole aulhoiily lo
appoinl and dismiss lhe piesidenl.7 Howevei, heie again lhe lines of
accounlabilily aie ambiguous foi allhough il is lhe assembly lhal appoinls
lhe piesidenl, lhe piesidenl appoinls moie lhan half lhe membeis of lhe
assembly! Iive hundied of lhe Assembly`s membeis come fiom lhe House
of Repiesenlalives (including ils 2O pei cenl membeiship fiom lhe aimed
foices) and lhe iemaining 5OO aie appoinled lo iepiesenl lhe nalion`s
iegions, and ils funclional and social gioups.8 Thus, lhe piesidenl diieclly
appoinls 6O pei cenl of lhe body lhal appoinls him, and lhe bulk of lhe
iemaining 4O pei cenl comes fiom his own paily. Al nve-yeaily inleivals
foi lhe lasl seveial decades lhe assembly has had only one name placed
befoie il and each lime has unanimously endoised lhe choice of Suhailo.
Nol suipiisingly peihaps, lhe assembly is widely dismissed as being
NDONISA 269
lillle moie lhan a iubbei slamp, since lhe piesidenl appoinls mosl of lhe
people who lhen appoinl him and has veiy subslanlial inuence ovei
lhe behavioui of lhose whom he does nol ofncially appoinl. n shoil,
lhe piesidenl is usually viewed as having veiy weak lines of accounlabilily
lo lhe assembly.9 Moie meaningful consliainls on lhe piesidenl peihaps
come fiom lhe infoimal bul veiy ieal iequiiemenls lhal he mainlain lhe
suppoil (oi al leasl acquiescence lo his conlinued iule) of lhe aimed
foices and, ullimalely, lhe populalion al laige. Iven liue diclalois cannol
suivive in lhe face of suslained and widespiead violenl public piolesl, oi
focused opposilion fiom wilhin lhe uppei echelons of lhe aimed foices.
Howevei, bolh of lhese polilical consliainls iely on exlia-conslilulional
and piobably veiy violenl aclion.
Iinally, il is impoilanl lo considei lhe piesidenl`s veiy wide-ianging
and absolule poweis of appoinlmenl. Wilhoul lhe need foi connimalion
fiom lhe legislaluie, he can hiie and nie al will Cabinel membeis, all
senioi buieaucials, all senioi mililaiy commandeis, all senioi |udges, and
all senioi slale enleipiise manageis. \nambiguously lhen, wilhin lhe
execulive bianch all accounlabilily lines liace back lo lhe piesidenl. Nol
only is lhis powei ciilical lo Suhailo`s mainlenance of aulhoiily ovei lhe
aimed foices, bul of giealei inleiesl foi piesenl puiposes aie ils implica-
lions foi economic policy-making. \nlike in lhe \.S. piesidenlial syslem,
lheie is no issue of lhe loyally of buieaucials being divided belween lhe
piesidency and lhe legislaluie.
To summaiize, lhe pieceding discussion has highlighled a numbei of
fealuies of lhe inslilulional fiamewoik of ndonesian polilics. Iiisl, bolh
lhe paily syslem and lhe coipoialisl syslem of inleiesl associalions seive
piimaiily lo limil and conlain gioup- oi mass-based inleiesl iepiesenla-
lion. Second, allhough lheie is a nominal conslilulional sepaialion of
poweis, in piaclice neilhei lhe legislaluie noi lhe |udiciaiy conslilules a
velo gale in lhe policy piocess. Thiid, lhe elecloial college lo which lhe
piesidenl is foimally accounlable, lhe Consullalive Assembly, has in facl
consliluled only a veiy weak consliainl on piesidenlial behavioui. And
fouilh, by conliasl, lhe piesidenl en|oys veiy cleai lines of aulhoiily ovei
his agenls in lhe execulive bianch: buieaucials, mililaiy ofnceis, and slale
enleipiise peisonnel.
\ndeislanding who is accounlable lo whom foi lheii |obs (oi, in lhe
language of colleclive aclion lheoiy, agency ielalionships) piovides vilal
infoimalion aboul lhe disliibulion of powei among diffeienl aclois and
inslilulions wilhin a polilical syslem. Iiguie 1O.1 condenses much of lhis
infoimalion in simplined schemalic foim. l shows lhe piesidency al lhe
cenlie of lhe polily, and sub|ecl lo no sliong accounlabilily ielalionship.
The Consullalive Assembly is depicled as exeicising only nominal au-
lhoiily ovei lhe piesidenl, wheieas lhe piesidenl has cleai aulhoiily ovei
27O ANDRIW MACNTRI
il (by viilue of his appoinling 6O pei cenl of ils membeiship, wilh lhe ie-
maindei coming fiom lhe House). The nguie does indicale, howevei, lhal
lo suivive lhe piesidenl needs lo mainlain acquiescence lo his iule on lhe
pail of lhe aimed foices (and olhei civil seivanls) as well as, ullimalely,
lhe public. By conliasl, lhe |udiciaiy, execulive bianch employees, and
Iiguie 1O.1 Accuuntability and delegatiun relatiunships in Indunesia
NDONISA 271
even membeis of lhe legislaluie (bolh elecled and appoinled) have quile
cleai accounlabilily ielalionships lo lhe piesidenl.
Polilical inslilulions and economic oulcomes
n lhe lwo pieceding seclions, we have examined lhe naluie of lhe paily
and elecloial syslem, as well as lhe fiamewoik of inleiesl iepiesenlalion
and lhe sliucluie of goveinmenl. n lhis seclion we seek lo link lhese
inslilulional faclois lo economic oulcomes. n so doing, we aie opeialing
on lhe basis of an assumplion lhal nalional economic policy sellings have
an impoilanl beaiing on aggiegale economic oulcomes: lhal is, lhal gov-
einmenl policy is a laige pail of lhe explanalion of a counliy`s economic
giowlh iale.
Wilhin lhe bioad inslilulionalisl lileialuie peilaining lo polilical econ-
omy, lwo sepaiale bul sliong lheoielical cuiienls sland oul. Reduced lo
lheii essence, one focuses on whal mighl be leimed decisiveness, and lhe
olhei on whal mighl be leimed commilmenl. Bolh have impoilanl con-
sequences foi economic policy-making and economic peifoimance.
The foimei body of lileialuie is conceined wilh lhe exlenl lo which
polilical inslilulions piomole qualilies such as efnciency in policy-making
and implemenlalion oi lhe abilily lo make and caiiy oul difncull policy
decisions lhal aie necessaiy lo mainlain an enviionmenl conducive lo
economic giowlh. The lileialuie conceined wilh slale aulonomy,`` ca-
pacily,`` and slienglh`` falls inlo lhis calegoiy (see, intcr alia, Kalzenslein
1978; 1ohnson 1982; Deyo 1987; Wade 199O; Haggaid 199O; Macnlyie
1994a). This macio-inslilulionalisl lileialuie all ielales diieclly lo lhe
expeiiences of lhe high-giowlh economies of Asia. A logically paiallel
body of lileialuie has been conceined wilh lhe efnciency of polilical
inslilulions in advanced indusliial demociacies, bul ialhei lhan being
pilched al a macio level (lhe slale) il has focused on lhe consequences of
vaiiables such as lhe division of goveinmenlal poweis, lhe lype of elec-
loial syslem, and buieaucialic delegalion foi policy-making (see, intcr
alia, Weavei and Rockman 1993; Cox 1987; Cox 1997; Moe and Caldwell
1994; Kiewiel and McCubbins 1991; Shugail and Caiey 1992) Typically,
lhe polilical economy implicalions of lhe inslilulional fiamewoik have
nol been lhe piimaiy concein of lhis lileialuie, lhough iecenlly lhis has
begun lo change (Haggaid and McCubbins foilhcoming).
\niling lhis diveise lileialuie is ils allenlion, on lhe one hand lo lhe
way in which inslilulional design can facililale oi hindei decisiveness in
lhe policy piocess, and on lhe olhei, lo lhe way in which decisiveness can
facililale economic policy managemenl. Ioi inslance, a polily in which
lheie is a sepaialion of poweis belween lhe execulive, legislalive, and
272 ANDRIW MACNTRI
|udicial bianches, in which lhe legislaluie is sepaialed inlo lwo houses, in
which lhe elecloial syslem encouiages eilhei weak paily idenlincalion on
lhe pail of legislalois oi peihaps mulli-pailyism, in which buieaucials aie
accounlable lo bolh lhe execulive and legislalive bianches, and in which
subnalional iegional goveinmenls have signincanl economic poweis, is
likely lo iespond much less iapidly and decisively lo an economic policy
pioblem lhan one in which velo poinls aie fewei and aulhoiily is moie
concenlialed.
By conliasl, lhe lileialuie have chaiacleiized as dealing wilh com-
milmenl has had almosl lhe opposile pieoccupalion. nslead of seeing
execulive aulonomy and inslilulionally iooled decisiveness in policy-
making as a boon, lhis second appioach views il as a pioblem. A numbei
of inuenlial sludies have aigued lhal il was nim inslilulional consliainls
on leadeis which weie ciilical in solidifying piopeily iighls and lhus pei-
milling lhe expansion of inveslmenl and giowlh in Iuiope (Noilh 1981,
Noilh and Weingasl 1989; Weingasl 1995; Rool 1989), in Asia (Rool
1996; Monlinola, ian, and Weingasl 1995), and, cioss-nalionally, in lhe
lelecommunicalions secloi (Levy and Spillei 1996).
Piecisely lhe same inslilulional condilions which peimil a leadei lo
lake difncull bul economically necessaiy decisions, can |usl as ieadily
peimil a leadei lo lake aibiliaiy, capiicious, and even piedaloiy deci-
sions which undeimine lhe piopeily iighls of inveslois, and lhus by ex-
lension, invesloi conndence and economic giowlh. f leadeis aie sub|ecl
lo lillle oi no inslilulional consliainl by lhe polilical fiamewoik, inveslois
cannol be conndenl lhal lhe policy enviionmenl will nol change quickly
in ways which eiode oi eliminale lheii pionls. n lhis view, whal is
needed above all else foi iobusl economic giowlh lo emeige is lhal pii-
vale inveslois should feel conndenl lhal lhe policy commilmenls leadeis
make aie ciedible, and lhis is only possible if leadeis aie sub|ecl lo insli-
lulional consliainls which iemove lhe possibilily of aibiliaiiness. n
shoil, polilical aulonomy is viewed as lhe enemy of long-leim invesloi
conndence and lhus economic giowlh.
The aigumenls peilaining lo bolh decisiveness and commilmenl aie
based on poweiful logic and subslanlial empiiical evidence. And yel,
cleaily, lheie is a lension belween lhe lwo even if il is a lension lhal is
seldom discussed. l is useful lo lhink of lheie being a liade-off belween
decisiveness and commilmenl: bolh condilions caiiy impoilanl benenls
foi economic goveinance, bul an excess of one can also be highly pie|u-
dicial lo giowlh. How should we inleipiel lhe ndonesian case in lighl of
lhese consideialions?
l should be immedialely appaienl fiom lhe eailiei discussion lhal
ndonesia`s paily and elecloial syslems, ils fiamewoik foi inleiesl iepie-
senlalion, and ils conslilulional sliucluie all combine lo pioduce a veiy
NDONISA 273
high level of decisiveness. The paily and elecloial syslems, lhe coipoia-
lisl fiamewoik, and ullimalely, lhe exislence of a polenl coeicive capa-
bilily in lhe aimed foices has seived lo ieduce gieally lhe scope foi
oiganized demand-making by socielal gioups. n piaclice lheie is only a
weak division of goveinmenlal poweis, wilh lhe execulive bianch lhoi-
oughly dominaling lhe legislaluie and lhe |udiciaiy. Lines of execulive
accounlabilily aie veiy cleai, wilh buieaucials being iesponsible only lo
lhe piesidency. And lhe piesidency ilself is only weakly accounlable lo
lhe Consullalive Assembly.
This has meanl lhal lhe piesidenl and his minisleis have nol had lo
baigain wilh any olhei bianch of goveinmenl ovei economic policy; lhal
lhe buieauciacy has (ielalively speaking) been a complianl adminislia-
live lool; and lhal lheie has been lillle ieal scope foi public iesislance lo
goveinmenl aclion. As a iesull, when economic challenges oi ciises have
aiisen, lhe goveinmenl has been able lo move swiflly, lake difncull and
unpopulai policy decisions, and implemenl lhem. Theie is no need lo ie-
pioduce lhe hisloiy of lhe New Oidei`s successfully oveicoming lhe eco-
nomic chaos of, foi inslance, lhe lale 196Os, oi lhe shaip downluin of lhe
mid-198Os aiising fiom lhe collapse of inleinalional commodily piices;
lhal sloiy has been lold alieady in many places (Hill 1996; Boolh 1992;
Ballachaiya and Pangeslu 1993; Woo, Glassbuinei, and Nasulion 1994;
Azis 1994; Macnlyie 1992). Sufnce il lo say lhal lhe ielalive aulonomy of
lhe polilical execulive and lhe decisiveness of lhe policy piocess have
gieally facililaled lhe lask of mainlaining a geneially sound macio-
economic fiamewoik as well as libeializing liade, inveslmenl, and nnan-
cial iegulalions when lhis became necessaiy.
This much is nol suipiising. Bul whal of commilmenls? How has n-
donesia managed lo suslain invesloi conndence if lhe polilical aulhoiily
has been so cenlialized, so unconsliained? As nguie 1O.2 shows, levels of
piivale inveslmenl in ndonesia have indeed been high, indicaling lhal
unceilainly aboul commilmenls fiom unconsliained goveinmenl has nol
been a ma|oi deleiienl lo inveslois. Iven if we allow a veiy subslanlial
discounl foi expeclalions of high iales of ieluin, il seems likely lhal lheie
is slill a iesidual puzzle lo be explained. have aigued elsewheie lhal lhe
explanalion foi lhis lies on lhe one hand wilh lhe goveinmenl`s long-
eslablished liack iecoid of sound macioeconomic managemenl, and on
lhe olhei, wilh specinc policy measuies (mosl nolably an open capilal
accounl since 197O) which, in effecl, consliluled an unbieakable commil-
menl on lhe pail of lhe goveinmenl lo lhal mosl fundamenlal inveslois`
inleiesl lhe abilily lo gel money oul of lhe counliy al will (Macnlyie
foilhcoming-b).
n sum, allhough lhe piedominanl inslilulional chaiacleiislic of lhe
ndonesian case is, wilhoul queslion, decisiveness, il is impoilanl lo iec-
274 ANDRIW MACNTRI
ognize lhal lheie have also been faclois pioviding a signincanl counlei-
vailing effecl. Thal is lo say, while decisiveness has been lhe piedominanl
fealuie, lhis has nol been lo lhe complele exclusion of commilmenl. The
nel effecl has been a policy enviionmenl sufncienlly exible lo iespond lo
exogenous economic shocks when necessaiy, and sufncienlly slable lo
piovide longei-leim conndence foi inveslois.
Ioi many yeais lhis combinalion has pioved veiy conducive lo eco-
nomic giowlh. And yel lhis unusually long-lived fiamewoik foi success
has, fiom lhe oulsel, been vulneiable lo change. This has been poweifully
and diamalically illuslialed by lhe collapse in value of lhe ndonesian
iupiah in 1997 as pail of lhe widei Asian cuiiency ciisis, and lhe eco-
nomic desliuclion lhis has unleashed. n lhe eaily monlhs of lhe ciisis
ndonesia faied ielalively well, wilh lhe goveinmenl moving quickly lo
lake decisive pie-emplive measuies, befoie calling in lhe MI once il
became cleai lhal lhe scale of lhe ciisis was such lhal ndonesia could nol
manage il alone. Howevei, because ndonesia`s inslilulional fiamewoik
concenliales so much aulhoiily in lhe ofnce of lhe piesidenl, when he was
ieluclanl lo cul back on lhe business piivileges en|oyed by ielalives and
Iiguie 1O.2 Average public and private investment in Indunesia as a percentage
uf GDP, 1980-1994 (Souice: 1aspeisen, Aylwaid, and Sumlinski 1995)
NDONISA 275
close associales as cuiiency maikels seemed lo demand, and even moie
so when he became seiiously ill, lhe policy piocess became fiozen. As
doubls aboul Suhailo`s willingness lo lake decisions painful lo his family
businesses and doubls aboul his heallh weie added lo long-slanding un-
ceilainly aboul lhe piocess of polilical succession in ndonesia, lhe con-
ndence of foieign and local inveslois (logelhei wilh lhal of ndonesians al
laige) quickly evapoialed. Like olhei counliies in lhe iegion hil haid by
lhe cuiiency ciisis, ndonesia cannol now escape seveial yeais of eco-
nomic haidship. Ioi oui puiposes, lhough, lhe key issue is whelhei lhe
policy enviionmenl lhe goveinmenl pioduces is conducive lo making a
swifl iecoveiy.
Al lhe lime of wiiling, il is loo eaily lell how lhis economic ciisis will
play lhiough in ndonesia. Nonelheless, il neally illusliales lhe liade-off
belween decisiveness and commilmenl. l was lhe exlieme cenlializalion
of powei lhe decisiveness of lhe syslem which enabled Suhailo in
eaily 1998 lo announce (undei piessuie fiom lhe MI and lhe counliy`s
pailous economic condilion) a liuly slunning package of economic iefoims
which piomises lo iadically hack back lhe woisl ciony business piivileges,
lo give lhe cenlial bank opeialional aulonomy, and lo iadically ieduce
off-budgel nscal aclivily. Howevei, lhe veiy cenlializalion of lhe syslem
which makes il so decisive also leaves il vulneiable lo commilmenl
pioblems: will Suhailo in facl implemenl lhe iefoims he has piomised?
how much longei will he suivive? whal will be lhe mechanism foi polilical
succession? n a syslem so cenlialized, much iides on whelhei inveslois
conlinue lo liusl lhe piesidenl`s abilily lo piovide economic leadeiship.
ndonesia has been veiy lucky lhal lhiee decades of aulhoiilaiian poli-
lics have been accompanied by iemaikably good and suslained economic
piogiess. \nfoilunalely, lhis is nol liue of mosl developing counliies
wilh highly cenlialized polilical syslems. Regaidless of whelhei Suhailo
is able lo salvage his iepulalion foi effeclive economic leadeiship, il ie-
mains lhe case lhal lhe exisling fiamewoik in ndonesia is veiy fiagile
because il is so sensilive lo lhe behavioui of lhe occupanl of lhe piesi-
dency. Iven if il is nol bioughl down by lhe polilical iamincalions of lhe
cuiienl economic ciisis, lhe inslilulional fiamewoik Suhailo has buill up
cannol have a long shelf-life.
Democializalion and economic giowlh
One of lhe essenlial lhemes of lhis volume is lhe impacl of democializa-
lion upon economic giowlh in Asia. When consideiing lhis queslion in
lhe conlexl of ndonesia lhe obvious complicalion we immedialely con-
fionl is lhal il is nol democialic. And yel soonei oi lalei lhe nascenl
276 ANDRIW MACNTRI
piessuies foi democialic change in ndonesia aie likely lo pioduce
iesulls.10 nevilably, decades of suslained iapid indusliial change have
economic, social, and ullimalely polilical consequences.
This is nol lhe place foi an exlended discussion of lhe causes and
dynamics of democializalion. Noi will il be pailiculaily fiuilful lo liy lo
speculale on lhe liming oi foim of democializalion in ndonesia, foi lhe
possibililies aie myiiad. Bul il does seem ieasonable lo assume lhal al
some nol loo dislanl poinl, ndonesia will have a much moie democialic
fiamewoik of goveinmenl in place. Can we say anylhing aboul lhe
implicalions of such a polilical liansfoimalion foi lhe counliy`s economic
giowlh piospecls?
While we cannol know whal piecise conslilulional foim democialic
goveinmenl in ndonesia mighl lake, if a piesidency is ielained we can be
ieasonably suie lhal il will be much moie sliongly accounlable lhan al
piesenl, and lhal lhe fundamenlal line of accounlabilily will be diieclly lo
voleis. We can also be ieasonably conndenl lhal a moie effeclive sepa-
ialion of poweis belween lhe execulive and legislalive bianches of gov-
einmenl will emeige as elecloial iules aie modined lo piovide foi moie
independenl polilical pailies and an unoicheslialed elecloial piocess.
(ndeed, even undei lhe exisling conslilulional fiamewoik, lhe legislaluie
would become impoilanl if elecloial and paily iules weie fieed up.) While
lheie aie many possible vaiianls on lhis lheme, lhese fundamenlal changes
would be inheienl in any democialic foim of piesidenlial goveinmenl.11
Whal would changes lo lhe inslilulional fiamewoik of lhis magnilude
mean foi lhe pallein of economic policy making, and lhus lhe likely eco-
nomic giowlh lia|ecloiy? Oi, couched in a somewhal moie liaclable
foim: whal would such changes mean foi lhe liade-off we have poslulaled
belween decisiveness and commilmenl?
f democializalion in ndonesia pioves lo be a ielalively smoolh pio-
cess, lhal is, if il does nol lead lo fundamenlal fiagmenlalion and conicl
along elhnic, ieligious, oi iegional faull lines,12 we can ieasonably expecl
lhal ovei lime commilmenl will become a sliongei fealuie of lhe policy-
making fiamewoik. As lhe execulive bianch becomes moie demociali-
cally accounlable il will become moie consliained by lhe need lo salisfy
lhe piefeiences of median voleis. This will ieduce lhe likelihood of iapid
swings in policy oiienlalion. And as lhe execulive is foiced lo shaie con-
liol of lhe policy-making piocess wilh lhe legislaluie and peihaps lhe
|udiciaiy, lhis effecl will be inlensined because policy change of any soil
(lhal enlails legislalion) will become moie difncull as lhe numbei of velo
poinls in lhe syslem incieases. As change becomes moie difncull, gov-
einmenl policies gain ciedibilily; lhey become moie meaningful commil-
menls because il becomes incieasingly difncull foi lhe goveinmenl lo
ieveise ilself should il so wish. Relaledly, as lhe legal syslem becomes
NDONISA 277
moie independenl, commeicial conliacls become moie meaningful and
lheie may be oplions foi legal iediess againsl lhe goveinmenl ilself. n
shoil, all of lhese developmenls would lend lo pioduce changes lo lhe
policy piocess which lhe slieam of lhe inslilulionalisl lileialuie conceined
wilh commilmenls would iegaid as highly benencial lo long-leim eco-
nomic giowlh piospecls. nveslois could be incieasingly conndenl aboul
lhe secuiily of lheii capilal and lhe impacl of lhe policy enviionmenl on
business condilions, because lhese would be less unceilain.
Bul whal of decisiveness? Mighl nol democializalion pioduce an insli-
lulional fiamewoik which so pie|udices commilmenl ovei decisiveness
lhal policy-making becomes paialyzed? Legislalive giidlock is ceilainly a
possibilily, and wilhin Soulheasl Asia, one needs only lo look al lhe
expeiiences of Thailand undei lhe successive goveinmenls of Chuan,
Banhain, and Chavalil lo see a sliiking illuslialion how some democialic
inslilulional connguialions can be so inimical lo decisiveness as lo ciipple
economic managemenl.13 A much less exlieme example of lhe effecls
of democializalion on economic policy-making is piovided by Mexico,
wheie foi lhe nisl lime, goveinmenls aie now having lo baigain wilh lhe
legislaluie ovei lhe budgel.
Whelhei oi nol economic managemenl in ndonesia would suffei a
ciippling ieduclion in decisiveness will depend veiy heavily on lhe pie-
cise inslilulional aiiangemenls lhal emeige in lhe piocess of demociali-
zalion. As Cox and McCubbins (foilhcoming) demonsliale, decisiveness
in a democialic polily depends heavily on lhe piecise combinalion of
inslilulional fealuies lhal peilain, nolably whelhei oi nol lhe conslilu-
lional sliucluie is piesidenlial, is bicameial, is fedeial, and has |udicial
ieview; and whelhei paily and elecloial iules piomole many oi few pai-
lies, and cohesive oi alomislic pailies. Shugail and Caiey (1992) and
Haggaid and Shugail (foilhcoming) focus moie specincally on piesiden-
lial syslems, exlending lhis logic lo show how specinc inslilulional fea-
luies affecl lhe policy piocess and policy oulcomes. n shoil, lheie is wide
vaiialion in lhe exlenl lo which democialic fiamewoiks piomole oi in-
hibil decisiveness, and lhe specinc inslilulional fealuies in each case have
a ciilical beaiing upon lhis. n piinciple, il is possible lo specify lhe likely
effecl of diffeienl inslilulional aiiangemenls, bul such an exeicise would
be moie lhan a lillle ailincial foi ndonesia given lhe cuiienl polilical
iealilies.
Soonei oi lalei ndonesia is likely lo democialize. The polilical fiame-
woik lhal emeiges fiom lhis piocess may well be piesidenlial in foim, bul
if so, il will be connguied in ways lhal diffei fundamenlally fiom lhe
slalus quo. These inslilulional changes will have impoilanl consequences.
As fai as lhe counliy`s economy is conceined, lhe mosl impoilanl effecl
will be on how lhe polily is ieposilioned in leims of lhe liade-off belween
278 ANDRIW MACNTRI
decisiveness and commilmenl. No less naive (and dangeious) lhan lhe
claim lhal ndonesia`s economic well-being will be |eopaidized by de-
mociacy is lhe opposile claim; lhal ndonesia`s economic well-being will
necessaiily be advanced by democializalion. Democialic polilical syslems
vaiy gieally, and il is lhus lo lhe key inslilulional fealuies lhal we will
need lo diiecl oui allenlion when change gels undei way.
Poslsciipl
This chaplei was compleled in eaily 1anuaiy 1998. n lhe nve monlhs
since lhen much has happened in ndonesia: Suhailo`s New Oidei iegime
has collapsed, amidsl luimoil a piocess of polilical iefoim is undeiway,
and lhe counliy`s economy has been ulleily devaslaled. Happily, lhe
analysis in lhe body of lhe essay has slood up well. This shoil poslsciipl is
inlended lo ieview biiey lhe main developmenls ovei lhe pasl nve
monlhs and lo ieecl on wheie lhis may lead.
Suhailo iesigned lhe piesidency on 21 May as il became cleai lhal one
aflei anolhei of his key suppoileis was abandoning him. The pioximale
causes of lhis weie laige-scale sludenl demonslialions (including sludenl
occupalion of lhe pailiamenl) and, moie desliuclively, an oigy of mob
iioling and looling which lefl pails of 1akaila in smoking iuins. Behind
lhese evenls, howevei, lay lhe collapse of lhe counliy`s economy and wilh
il lhe evapoialion of any iemaining legilimacy lhe iegime en|oyed. And
behind lhese developmenls lay lhe inslilulional fiamewoik of lhe iegime.
Allhough ndonesia`s (and Asia`s) economic ciisis was igniled by evenls
in Thailand and fuelled by a numbei of economic policy pioblems, lhe
exliaoidinaiy degiee of damage lhal has descended upon ndonesia`s
economy is laigely a funclion of lhe way in which lhe goveinmenl man-
aged lhe ciisis fiom lale 1997 onwaids, and lhis in luin, ieecled lhe
inslilulional liade-off belween decisiveness and commilmenl. Iollowing
lhe inilial depiecialion of lhe iupiah in mid-1997, il plummeled lo eco-
nomically devaslaling levels in lale 1997 and lhiough 1998 because local
and foieign inveslois losl conndence in lhe goveinmenl. n essence,
inveslois believed lhal lhe piesidenl was no longei sufncienlly commilled
lo mainlaining lhe soil of policy fiamewoik necessaiy lo piomole pionl-
abilily. Conndence in his leadeiship was undeimined nisl by lhe slioke
he suffeied in eaily Decembei, and lhen by mounling concein lhal he was
nol commilled lo implemenling iefoim measuies agieed upon wilh lhe
MI as membeis of his family and olhei close business associales suc-
ceeding in exempling lhemselves fiom ausleiily measuies. These feais
weie ieinfoiced in eaily 1998 by a budgel which was seen lo be oul of
louch wilh economic iealilies, and by ensuing piesidenlial manouveis
NDONISA 279
which appeaied exliaoidinaiily capiicious (e.g., lhe nominalion of B. 1.
Habibie as vice-piesidenl and lhe iilalion wilh lhe idea of a cuiiency
boaid). n a polilical syslem so highly cenlialized a syslem which so
piioiilized decisiveness lheie weie no inslilulional checks on lhe piesi-
denl. Thus, if lhe piesidenl was nol willing lo implemenl iefoim mea-
suies, lheie was ullimalely no means of consliaining him lo do so, shoil
of iemoving him fiom ofnce. Once local and foieign inveslois abandoned
ndonesia and lhis was cleaily lhe case by mid- lo lale 1anuaiy il was
simply a mallei of lime befoie lhe iesulling piessuies foiced polilical
change.
n lhe wake of Suhailo`s fall, \ice-Piesidenl Habibie succeeded him as
piesidenl, as piovided foi by lhe Conslilulion. Iew expecled Habibie lo
suivive, lhough he has done so now foi a monlh, laigely because in lhe
ciicumslances he has pioved an acceplable liansilion nguie who has
iesponded successfully (even if oppoilunislically) lo demands foi iefoim.
Having fieed lhe piess, laboui unions, and a numbei of polilical piison-
eis, and having commilled lo a piocess of conslilulional iefoim and a
limelable foi fiesh eleclions, Habibie has sel in molion piocesses which
may yield ma|oi polilical change. Whelhei he is able lo suivive lhese
piocesses of change himself iemains lo be seen.
Allhough lhe piocess of democialic iefoim in ndonesia will be mulli-
faceled, one of ils mosl impoilanl aspecls will be changes lo lhe inslilu-
lional fiamewoik, lhal is, lhe Conslilulion and ielaled polilical laws.
Habibie has appoinled a small bul capable polilical iefoim commission
(compiising academics, buieaucials, and a mililaiy ofncei) which is lo
iepoil back lo him wilhin a shoil lime fiame. He has lhen commilled lo
submil iecommendalions foi iefoim lo lhe House of Repiesenlalives and
lhe People`s Consullalive Assembly. Allhough lheie aie ceilainly some
populai demands foi fai-ieaching democializalion, lo dale lhe focus
of discussion appeais lo be limiled lo modifying laws conliolling and
iesliicling polilical pailies, modifying lhe closed-lisl piopoilional iepie-
senlalion elecloial syslem, and possibly modifying lhe seleclion piocess
of lhe piesidenl (lhiough a ieduclion in lhe numbei of appoinlees lo lhe
Peoples` Assembly, which would give lhe polilical pailies in lhe House of
Repiesenlalives a much loudei voice in lhe choice of lhe piesidenl).14
The main concein in debales aboul conslilulional iefoim lhus fai has
been lo biing aboul ieal democialic change while al lhe same lime
ensuiing lhal ndonesia does nol ieluin lo lhe volalile mulli-paily chaos
of lhe 195Os. n lhis iespecl, lhe elecloial laws will be veiy impoilanl.
Anolhei iemaikable fealuie of lhe iefoim piocess is lhal, lhus fai al
leasl, lheie has been no seiious discussion wilhin lhe polilical elile aboul
eilhei eliminaling aimed foices iepiesenlalion in lhe House oi, moie
impoilanlly, moving lowaid a syslem of diiecl piesidenlial eleclions. This
28O ANDRIW MACNTRI
no doubl ieecls lhe facl lhal il is lhe slale elile which is dominaling lhe
iedesign piocess.
l will be some monlhs befoie lhe oulcome of lhe piocess of polilical
iefoim becomes cleaiei. Iuilhei, il is no doubl veiy likely lhal lhis will be
only lhe nisl slep in a longei piocess of democializalion which is likely lo
slielch ovei a decade oi moie, ieecling long-leim piocesses of socio-
economic change. n lhe neai leim, howevei, a ciilical facloi beaiing
upon lhe success of lhis nisl iound of democializalion will be lhe coun-
liy`s economic fale. ndonesia has suffeied a liuly devaslaling economic
selback. The mosl oplimislic scenaiios now suggesl lhal il will be lhiee lo
nve yeais befoie lhe economy again nnds ils feel. uile apail fiom lhe
goveinance consequences of lhe new connguialion of polilical inslilu-
lions lo emeige fiom lhe cuiienl iefoim piocess, and quile apail fiom lhe
coalilional chaiaclei of lhe goveinmenl lhal Habibie (oi a successoi)
consliucls, inveslois aie likely lo be veiy waiy of lhe iisk of fuilhei po-
lilical inslabilily in ndonesia. The longei il lakes foi ndonesia`s polilical
fiamewoik lo slabilize, lhe fuilhei off economic iecoveiy will be. Com-
pounding lhis pioblem is lhe facl lhal ndonesia`s economic foilunes aie
now also seiiously consliained by developmenls elsewheie in Asia mosl
nolably 1apan. The dangei foi demociacy in ndonesia is lhal lhe longei
lhe counliy`s economy iemains depiessed, lhe moie social and polilical
inslabilily is likely lo iesull, and lhus lhe giealei lhe piobabilily of some
foim of mililaiy coup in lhe name of iesloiing oidei and piogiess. This
seems a quile iemole piospecl al lhe lime of wiiling, bul if lhe economy
conlinues lo slide lhe polilical landscape is likely lo deleiioiale wilh il.
ndonesia has now enleied a peiiod of ma|oi polilical ux, lhe oulcome
of which is as yel fai fiom cleai. Oui undeislanding of lhe pallein of
goveinance and economic peifoimance undei lhe New Oidei iegime and
of lhe collapse of lhis iegime has been poweifully aided by an analylical
focus on lhe undeilying polilical inslilulions. Similaily, a caieful analysis
of lhe inslilulional fiamewoik of lhe newly emeiging enviionmenl will
poweifully illuminale oui undeislanding of ils polilics and economics.
Noles
1. The PPP compiised seveial iivalious Muslim pailies and lhe PD compiised a numbei
of nalionalisl and Chiislian pailies. Nol coincidenlally, lhe naluial ideological and pei-
sonal divisions wilhin lhese ailincial amalgams helped lo keep lhem fiom developing
inlo moie polenl polilical oiganizalions.
2. This can be achieved in moie oi less sublle ways, depending on lhe uigency of lhe silu-
alion. Because ndonesia uses lhe closed-lisl piopoilional iepiesenlalion syslem, paily
leadeis deleimine lhe iank oidei of all lheii candidales foi each disliicl and lhus also
deleimine which ones have a high piobabilily of being elecled, oi aie placed in an un-
winnable posilion. The goveinmenl can lhus biing piessuie lo beai upon paily leadeis
NDONISA 281
lo place ciilics low on lhe candidale lisl, oi if necessaiy, lhe goveinmenl (lhiough lhe
Geneial Ileclion nslilule) could declaie lhe peison unnl lo sland as a candidale foi
eleclion. n exlieme cases, silling membeis of lhe legislaluie can be iemoved, as hap-
pened in 1996 lo Sii Binlang Pamungkas.
3. Taken lileially, Iancasila (lhe Iive Piinciples) is quile benign. The piinciples aie: belief
in God, humanism, nalionalism, populai soveieignly, and social |uslice. n piaclice, lhis
seemingly inclusive sel of ideas is used as an insliumenl foi polilical conliol as lhe gov-
einmenl iequiies lhal eveiyone be foi`` Iancasila, and lhal anyone deemed by lhe
goveinmenl lo be opeialing oulside ils hazy paiameleis (e.g., a mililanl Muslim oi liade
union leadei) is in bieach of lhe law.
4. Duiing lhe 1997 eleclion an independenl volunleei eleclion walchdog commillee, KPP,
was eslablished lo walch foi iiiegulaiilies. Despile goveinmenl ob|eclions, KPP was
able lo moniloi aclivilies in al leasl some voling disliicls (\an Klinken 1997, p. 5).
5. The shaie of appoinled seals ieseived foi lhe aimed foices was ieduced fiom 25 pei
cenl lo 2O pei cenl in lhe eaily 199Os.
6. Peisonal communicalion fiom Daniel Lev.
7. nleieslingly, lhe facl lhal lhe legislaluie is diieclly involved in choosing lhe piesidenl
(by viilue of ils making up half of lhe Consullalive Assembly) means lhal ndonesia`s
syslem of goveinmenl cannol, sliiclly, be consideied piesidenlial. ( am gialeful lo Mal-
lhew Shugail foi diawing lhis lo my allenlion.) This laxonomical dilemma is inlensined
once we iecognize lhal lhe legislaluie can, lechnically, shoilen a piesidenl`s leimby calling
a special session of lhe Consullalive Assembly lo ieview lhe piesidenl`s peifoimance.
8. Technically, lhe piesidenl does nol peisonally oi diieclly appoinl all of lhe iemaining
5OO membeis of lhe Assembly (i.e., lhose nol fiom lhe House). \ndei Law no. 16 of
1969, as amended in 1975 and 1985, lhe piesidenl is aulhoiized peisonally lo appoinl
1OO delegales lo iepiesenl social and funclional gioups. Iach piovince is enlilled lo 48
delegales (depending on ils populalion). n 1997 lhe numbei of piovincial delegales lo-
lalled 149. The iemaining delegales 251 in 1997 aie divided among lhe polilical
pailies and lhe aimed foices, based piopoilionalely on lheii numbeis in lhe House.
Allhough, lechnically, lhe piesidenl selecls only lhe 1OO delegales fiom lhe social and
funclional gioups, in piaclice he also has conliol of lhe iemaindei by viilue of lhe foi-
mal and infoimal aulhoiily lhe execulive bianch has ovei lhe polilical pailies and pio-
vincial goveinmenls. ( am gialeful lo Bill Liddle foi a numbei of lhese poinls.) Ioi a
bieakdown of lhe 1997 membeiship of lhe Assembly, see Suara Icnbaruan Daily, 2O
Seplembei 1997.
9. l may be lhal lhis ielalionship deseives closei invesligalion. An inleiesling poinl of
compaiison heie is wilh lhe ielalionship belween lhe leadeiship of lhe Communisl Paily
and lhe Cenlial Commillee in bolh China and lhe foimei Soviel \nion. The Cenlial
Commillee is foimally iesponsible foi selecling lhe paily leadeiship, bul is ilself chosen
by lhe paily leadeiship. Susan Shiik (1992) has aigued lhal lhis is less lopsided lhan
oflen iealized, and lhal while lhe paily leadeiship does hold lhe uppei hand, ils acliv-
ilies aie nonelheless consliained by lhe ie-eleclion impeialive. Philip Roedei (1993)
lells an equivalenl sloiy foi lhe foimei Soviel \nion. Two nolable poinls of diffeience
lhal seem lo sepaiale lhe silualion in ndonesia fiom lhal in China (oi lhe foimei Soviel
\nion) aie lhal lhe Consullalive Assembly meels veiy iaiely, and lhal il is a much
laigei body (and lhus less hospilable lo colleclive aclion). This is a lopic lhal iequiies
fuilhei invesligalion.
1O. Theie is now a sizeable scholaily lileialuie on issues peilaining lo democializalion
in ndonesia (Moiley 1993; Alagappa 1995; Rodan 1996; Tayloi 1996; Anek 1997;
\hlin 1997; D|iwandono and Legowo 1996; Kiisliadi 1997; Siagian 1997; Sihbudi 1997;
Schwaiz 1994).
282 ANDRIW MACNTRI
11. Alleinalively, ndonesia could develop a pailiamenlaiy oi even a hybiid piemiei-
piesidenlial syslem of goveinmenl (Shugail and Caiey 1992). Neilhei would, al lhis
slage, seem as likely as a piesidenlial syslem. Nonelheless, lhe same fundamenlal vaii-
ables would peilain: gieally incieased accounlabilily of lhe execulive, and moie inde-
pendenl eleclions and polilical pailies.
12. This is a fai fiom liivial possibilily. Much discussion of democializalion ignoies lhe
iealily lhal democialic change can unleash violence, suffeiing, and illibeialness fai
woise lhan lhal which pieviously pievailed. The fale of lhe foimei ugoslav nalions
piovides a cleai illuslialion of lhis, bul by no means lhe only one (Zakaiia 1997).
13. An excellenl and innovalive analysis of lhe inslilulional dynamics of Thailand`s polilical
malaise is piovided by Allen Hicken (1997).
14. nleieslingly, if lhis came lo pass, il would heighlen lhe laxonomical pioblem of classify-
ing ndonesia`s polilical syslem noled above in nole 8. f lhe fale of lhe polilical execulive
lhe piesidenl is piimaiily in lhe hands of lhe legislaluie, lhe syslem becomes much
closei lo a pailiamenlaiy one lhan a piesidenlial one, foimal labels nolwilhslanding.
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286 ANDRIW MACNTRI
11
Singapoie
Khong Cho-oon
nlioducloiy: The dog lhal did nol baik
s lheie any poinl lo which you would wish lo diaw my allenlion?`` To lhe
cuiious incidenl of lhe dog in lhe nighl-lime.`` The dog did nolhing in lhe nighl-
lime.`` Thal was lhe cuiious incidenl,`` iemaiked Sheilock Holmes.
Sii Ailhui Conan Doyle, Silvei Blaze``
Polilics in Singapoie licks ovei wilh lhe efnciency of lhe pioveibial Swiss
walch. Technocials scan lhe hoiizons of lhe global economy; minisleis
iead lhe enliails, pionounce lheii piagmalic policies, lheieupon swiflly
implemenled by an efncienl buieauciacy; and a covey of goveinmenl-
sponsoied commillees chivvies lhe public in suppoil. Singapoie, as one of
lhe oiiginal Asian Tigeis,`` musl, on lhe face of il, be an exemplai of lhe
conneclion belween lhe polilical managemenl of lhe economic syslem on
lhe one hand, and lhe legilimalion of lhe iuling polilical iegime by an
impiessive iale of economic giowlh on lhe olhei. l is also, appaienlly, a
piaclice of polilics so inimilable lhal Singapoie musl conslilule a unique
lesl-bed foi polilical ideas, al a lime when polilical iegimes eveiywheie
aie having lo measuie up lo lhe challenges of globalizalion, libeializa-
lion, and a new ievolulion in lechnological advancemenl.
el, while polilics acioss Asia is in luimoil, lhe polilical syslem in Sin-
gapoie lies quiescenl. Whal accounls foi lhis condilion? Whal led giowlh
lo assume ils cenlial impoilance wilhin lhal polilical syslem, whal weie
287
lhe polilical elemenls lhal needed lo be pul in place lo ensuie lhe deliv-
eiy of giowlh, and whal have been lhe subsequenl iamincalions of lhal
giowlh?
n any compaialive sludy of lhe ielalionship belween democializalion
and economic giowlh, Singapoie would be an inliiguing case maiked by
many seemingly inexplicable paiadoxes in lhe way ils polilical piocesses
funclion.
Hisloiical oiigins
Lee Kuan ew and his People`s Aclion Paily (PAP) came lo powei
in 1959, in a newly aulonomous, lhough nol yel quile independenl Sin-
gapoie. The Singapoie sociely of lhe lime was economically exliemely
divided, and communally fiagmenled and inchoale, wilh a mullilude of
polilical gioupings, each iepiesenling a specinc economic oi elhnic iden-
lincalion. These gioups manoeuvied, plolled, and sliuggled againsl each
olhei in a piolean polilical soup, ciealing lhe semblance of democialic
discouise, while each secielly aimed lo seize powei foi ils own exclusive
use and lo eiadicale ils iivals, in whal was in iealily a Hobbesian polilical
sliuggle. As il luined oul, il was Lee Kuan ew who came lo powei al
lhe head of a small Weslein-educaled gioup of inlellecluals, quile alypi-
cal of lhe Singapoie sociely of lhe lime, and wilh a mass following of
woikeis and Chinese middle-school sludenls gained only lhiough a lacli-
cal alliance wilh Communisl foices. On allaining powei, Lee nisl dis-
lanced himself fiom his iadical populisl suppoil, and lhen pioceeded lo
cul his links fiom and lhen lo eliminale his eislwhile Communisl allies.
el Lee himself shiewdly obseived al lhe lime:
The mass of lhe people aie nol conceined wilh legal and conslilulional foims and
nicelies. They aie nol inleiesled in lhe lheoiy of lhe sepaialion of poweis and lhe
puipose and funclion of a polilically neulial civil seivice undei such a conslilu-
lion. . . . if lhe fuluie is nol bellei, eilhei because of lhe slupidilies of elecled
minisleis oi lhe inadequacies of lhe civil seivice, lhen al lhe end of lhe nve-yeai
leim lhe people aie haidly likely lo believe eilhei in lhe polilical paily lhal lhey
have elecled oi lhe polilical syslem lhal lhey have inheiiled.1
Lee Kuan ew`s woids ieecled lhe polilical condilions of lhe lime
and lhe pailiculai ciicumslances of his iuling paily. el his woids pio-
vide a ievealing insighl inlo his polilical beliefs. They sel oul a polilical
cieed lhal was lo infoim lhe piocess of ciealion and consliuclion on
which Lee was lhen lo embaik, a piocess whose end iesull is lhe modein
cily-slale lhal is Singapoie loday. n his ielenllessly uniemilling diive lo
288 KHONG CHO-OON
impiove lhe maleiial ciicumslances of his people, Lee Kuan ew in his
piaclice of polilics has nol allowed himself lo be bound by lhe piinciples
oi pie|udices of any pailiculai polilical model, democialic oi olheiwise.
nslead, he has diawn ideas, in ecleclic fashion, fiom whichevei polilical
model suiled his puiposes al any one lime, upholding lhose ideas pas-
sionalely and peiseculing opponenls of lhem wilh iulhless zeal; yel dis-
caiding lhose ideas wilhoul compunclion in favoui of somelhing else,
should ciicumslances so diclale.
Wilhoul a mass base of populisl suppoil, and confionled wilh lhe need
lo gel logelhei his dispaiale populace, Lee Kuan ew luined lo lhe civil
seivice, an oiganizalion imbued wilh an elilisl elhos and a lechnocialic
bias againsl polilical baigaining and compiomise. These lechnocials weie
like-minded in seeking economic giowlh, and like Lee, lhe civil seivice
was sufncienlly iemoved fiom, and indeed above, lhe demands of oidi-
naiy people, lhal il could mainlain ils aulonomy lo acl and lo implemenl
policies wilh lillle oi no populai suppoil. Lee and his civil seivice allies
had a window of oppoilunily lo acl, bul lhey had lo move quickly and lo
show iesulls iapidly if lhey weie lo secuie lheii posilion in powei. As a
goveining elile, lhey could secuie lheii polilical suivival only by pei-
suading lhe people lhal, despile lheii composilion being dislinclly diffei-
enl fiom lhal of Singapoie in geneial, lhey neveilheless iepiesenled lhe
people`s inleiesls and could ensuie lheii maleiial welfaie.
The condilions of lhe lime weie exliemely luibulenl, wilh social uniesl,
high unemploymenl, and unceilainly ovei lhe naluie and dimensions of
lhe slale. The polilical faclions squaied off againsl each olhei al lhe lime
of Singapoie`s |oining lhe new Malaysian Iedeialion in 1963, and again
aflei ils e|eclion in 1965, wilh polilical aigumenls ovei ils abilily lo foige
an independenl couise as a sepaiale and dislincl nalion slale. Such lui-
bulenl condilions piovided lhe giounds foi lhe PAP leadeiship lo sup-
piess deslabilizing polilical opposilion in lhe inleiesls of secuiing polilical
slabilily.
Olhei foimei colonized slales may have secuied lheii independence,
peihaps aflei billei sliuggle againsl lheii colonial masleis, in a buisl of
euphoiia, lalei lo be dampened as lhe haid iealilies of economic develop-
menl dawned on leadeiships and peoples. Singapoie became an indepen-
denl nalion slale in polai-opposile condilions. ndependence was neilhei
soughl noi foughl foi, bul ialhei lhiusl upon a ieluclanl and feaiful slale
on 9 Augusl 1965, when Singapoie was expelled fiom Malaysia. The
polilical leais of fiuslialion and fuiy which Lee publicly shed on lhal day
weie shaied by bolh leadeiship and people, faced wilh an unceilain polil-
ical fuluie as an island nalion slale and enclave wilhin Soulheasl Asia.
Polilically, lhe impeialive was lo secuie social cohesion in lhe face of pei-
ceived exleinal lhieals, and lhe palh chosen was a nalion-building pio-
SNGAPORI 289
giamme which emphasised modeinizalion, social iefoim, and economic
developmenl, ieinfoiced lhiough ideological imposilion and polilical
inslilulionalizalion.
The changing social sliucluie
The ma|oi indices of social slialincalion in lhe lale 198Os weie educalion
level, cilizenship slalus, secloi of lhe economy wheie employed, and lhe
numbei of employed people in each household.2 Heie, shaip diffei-
enlialions open up, foi example, in levels of educalion. n 198O, 44 pei
cenl of lhe populalion aged 25 and ovei had no educalional qualincalions
whalsoevei, 38 pei cenl had a piimaiy school educalion, 15 pei cenl had
a secondaiy school educalion, and only 3.4 pei cenl had a leiliaiy educa-
lion. While lhese nguies musl obviously have impioved since lhen, lheie
will foi many yeais conlinue lo be a signincanl piopoilion of lhe adull
populalion wilh only an exliemely limiled educalion lhis in a sociely
wheie wages aie faiily closely coiielaled wilh educalional allainmenl.
The sliess on individual compelilion, ialhei lhan inheiiled slalus, makes
educalion a keenly piized good in Singapoie sociely, which is seen as lhe
key lo upwaid social mobilily.
The uppeimosl levels of Singapoie sociely aie occupied by an elile
gioup compiising high-level civil seivanls, business manageis, and pio-
fessionals, many woiking foi laige foieign-owned companies, logelhei
wilh a coleiie of weallhy Chinese businessmen, leading lhe vaiious asso-
cialions which iepiesenl lhe Chinese-speaking communily. The foimei
have an exliemely cosmopolilan oullook, appaienlly dislinclively diffei-
enl fiom lhe bulk of sociely, and bolh gioups lend lo vigoiously sup-
poil values of compelilion, economic advancemenl, and social mobilily
lhiough educalion.
Theie has, howevei, been signincanl allevialion of poveily, which by
one measuie fell fiom 19 pei cenl of households in 195354 lo O.3 pei
cenl in 198283. n pail lhis is a consequence of lhe geneial economic
giowlh ovei lhe peiiod lhough a leading diiecl cause of poveily allevi-
alion musl suiely have been lhe incieased pailicipalion of women in lhe
woikfoice, as households lypically impioved lheii maleiial ciicumslances
lhiough having moie lhan one wage eainei (and also fewei childien lo
suppoil). Whalevei lhe cause, household income disliibulion in Singa-
poie in 198283 was ioughly equivalenl lo lhal of lhe \niled Kingdom
a counliy which in lhe 198Os piided ilself on encouiaging individualislic
values, led by a piime minislei who slaled publicly hei disbelief lhal
lheie is any such lhing as sociely`` and veiy much moie equal lhan in
Lalin Ameiican counliies such as Biazil and Mexico, lhough signincanlly
29O KHONG CHO-OON
moie unequal lhan in developed counliies such as Geimany and 1apan.3
The evidence suppoiling lhe applicalion of communilaiianism in Singa-
poie, so fai as lhe slalislics aie conceined, does nol lheiefoie appeai
conclusive.
Iinally, elhnicily is an issue of exlieme sensilivily whose dividing lines
cioss polenlial fiacluie poinls in Singapoie`s pluial sociely. The ofncial
ideology is mulliiacial even if in piaclice, lhe goveinmenl sels oul ils
own agenda of how mulli-elhnicily should play oul, an agenda fiaughl
wilh ils own inleinal conliadiclions. The goveinmenl has liied lo naiiow
lhe gap belween Inglish-educaled and Chinese-educaled wilhin lhe
ma|oiily Chinese communily, while paying special heed lo lhe minoiily
Malay communily, because of lhe counliy`s geopolilical silualion.
The inslilulions of polilics
A lwo-paily syslem would pul us on lhe dangeious ioad lo conlenlion, when we
should play as one leam.
Commodoie, now Minislei foi Iducalion and Second Minislei foi Defence
Reai Admiial Teo Chee Hean, 19924
The condilions fiom which Lee Kuan ew and his PAP spiang weie such
as lo lead him and his paily away fiom whal lhey viewed as lhe degen-
eiale compiomises of Weslein-slyle`` libeial demociacy, so inimical lo
economic developmenl, and also away fiom blalanl appeals lo populisl
sympalhies. ndeed, ialhei in lhe mannei of an oiienlal Chuichill, Lee
pledged his equivalenl of blood, sweal, and leais eslablishing polilical
oidei lhiough an exliemely efncienl and ielalively incoiiupl goveinmenl,
and secuiing maleiial welfaie foi lhe cilizeniy lhiough a benevolenl, if
nol enliiely benign, paleinalislic goveinmenl. Any measuie in lhe polili-
cal and economic aimouiy lhal suiled lhese puiposes was laken wilhoul
compunclion, and applied wilhoul ieseivalion. Nalional suivival and
polilical suivival foi lhe PAP (foi by lhen lhe lwo weie inexliicably
inleilinked in lhe minds of lhe iuling elile, as lhey aie indeed now in lhe
minds of many of lhe populace) biooked no half-measuies.
These goveining measuies weie lempeied fiom lhe 198Os by lhe
giooming of a successoi polilical geneialion, chosen fiom lhe ianks of lhe
lechnocials wilhin lhe buieauciacy, socially and polilically cosseled, and
lo some degiee ialhei like lhe mandaiins of yoie, wilhoul lhe close lies lo
lhe giass iools lhal many of lheii piedecessois in lhe founding polilical
geneialion possessed. This change look place al a lime when lhe geneial
populace was becoming noliceably afuenl, wilh lhe spiead of giealei
maleiial comfoils. And, in lhe face of conlinued uniemilling piessuie
SNGAPORI 291
fiom lhe polilical leadeiship lo sliive even haidei, lhese people weie
beginning lo iaise demands which weie seemingly foi a moie loleianl
libeial polilical piaclice, and exhibiling behavioui palleins al odds wilh
lhe ausleie living slyle exalled by lhe polilical leadeiship as lhe appio-
piiale model lo follow.
The leadei of lhal successoi polilical geneialion, Goh Chok Tong,
foimally assumed lhe piime minisleiship in Novembei 1991, and seized
lhe oppoilunily lo show a moie human face by adopling a moie common
and sympalhelic mannei. This diffeienl slyle of leadeiship, il was believed,
would help check lhe iising alienalion by biidging lhe gulf belween iuleis
and iuled. Goh had eailiei declaied his inlenlion lo woik lowaid a
kindei, genllei sociely`` and lo inlioduce policies lhal have a human
face,`` lhough adding lhal lhis does nol mean lhal lhe sociely undei
Mi. Lee has nol been kind and genlle.``5
The expeiience of lhis successoi polilical geneialion has been mixed.
Opening up a polilical discussion space`` in sociely has inevilably
enlailed lhe oweiing of a diveise iange of views and expeclalions of
goveinance, nol all of which could be mel, oi indeed weie deemed de-
siiable. And while exeicises in consullalion have an aii of conliivance
aboul lhem, lhe goveinmenl iemains closely awaie of polilical opinions
on lhe giound.``
n lhinking lhiough lhe key elemenls of polilics in Singapoie, a numbei
of puzzling conliadiclions piesenl lhemselves. Ioi a slail, we need lo
move away fiom lhe convenlional nolion lhal incieasing economic afu-
ence somehow leads lo social change, which in luin compels a move fiom
aulhoiilaiian lo moie democialic sliucluies, cognisanl of individual
human iighls. Having made lhal poinl, neilhei can we asseil lhal lhe ie-
veise is sliiclly liue lhal maleiial afuence and globalizing liends have
nol led lo incieasing lensions belween individuals and lhe slale. Global-
izalion challenges lhe adaplabilily of liadilional palleins of hieiaichy and
elile slalus. The Singapoie picluie piesenls elemenls which seemingly
suppoil bolh nolions, so how do we ieconcile such conliadicloiy liends?
To begin wilh, we need lo make lhe poinl lhal whal you see is nol
necessaiily whal you gel. n foim, if we accepl a minimal pioceduial
dennilion of demociacy, we may idenlify a sliucluie of democialic pio-
ceduies in lhe Singapoie polily, wilh polilical pailies compeling foi
powei (albeil one dominanl ovei lhe olheis, hence lhe leim one paily
dominanl syslem`` oi hegemonic paily syslem`` applied by a leading
polilical scienlisl),6 in eleclions held peiiodically, in which lhe govein-
menl pledges lhal lhe ballol is seciel. n luin, lheie is widespiead accep-
lance of goveinmenlal aulhoiily. el lhese pioceduies have been so
consliained by a iange of iesliiclions and limilalions and, peihaps even
moie impoilanl, by a feai, held by many in sociely, of aclively suppoiling
292 KHONG CHO-OON
opposilion polilics) lhal lhe democialic naluie of lhese pioceduies loses
much of ils validily.
The elecloial piocess and ils chaiacleiislics
n eleclions lhiough lhe 198Os and eaily 199Os, lhe PAP sleadily losl
giound, nisl losing ils pailiamenlaiy monopoly in a by-eleclion in 1981,
and lhen seeing a sleady fall in ils shaie of lhe vole in subsequenl geneial
eleclions. The luinaiound in lhe PAP`s elecloial foilunes only came wilh
lhe geneial eleclion of 1anuaiy 1997, when Goh Chok Tong explicilly
iepudialed a moie libeial polilical line and sel oul a much less com-
piomising polilical slyle. n lhis mosl iecenl eleclion, lhe PAP`s shaie of
lhe vole in consliluencies wheie lheie was an elecloial conlesl (less lhan
half of pailiamenlaiy seals was conlesled, so lhe PAP was alieady
ieluined lo powei al lhe slail of lhe eleclion campaign), iose fiom 61 lo
65 pei cenl7 nol a subslanlial iise, bul neveilheless signincanl in lhe
face of whal many had expecled would be a conlinualion of ils eailiei
elecloial decline. Why lhe PAP, and Goh Chok Tong`s coleiie in pailic-
ulai, should have iecoveied polilical giound by lhiealening loughei gov-
eining measuies, is an issue which musl hold signincanl lessons foi lhe
fuluie diieclion of polilics in Singapoie.
To lake one example, lheie was supposedly a feai lhal unsophisli-
caled`` Singapoiean voleis, unschooled in democialic piaclice, would
somehow come lo believe lhal lheii vole could be liaced back lo lhem-
selves.8 The voling syslem in use in Singapoie deiives fiom lhe Biilish
model, wilh numbeied ballol papeis linked lo voleis` names on lhe elec-
loial iegislei (lhough lhe numbei on lhe ballol papei is diffeienl fiom lhe
idenlily caid numbei of lhe volei iecoided on lhe elecloial iegislei). The
goveinmenl claims lhal all voles aie sealed and deslioyed aflei counling,
and has inviled opposilion iepiesenlalives lo wilness lhe piocess. n-
cieasingly, ovei successive eleclions, lhe feai of liaceabilily of lhe vole
has giadually diminished. Neveilheless, il may well be lhal a iesidue of
lhal feai slill iemains. The ciilical issue is lheiefoie nol one of lhe seciecy
of lhe ballol, bul ialhei of lhe peiceplion of lhe volei lhal lheie iemains
a possibilily lhal his oi hei vole can be liaced if lhe aulhoiilies so decide.
This feai was heighlened duiing lhe 1997 eleclions, when Goh Chok
Tong declaied lhal wilh vole counling being decenlialized (in lhe inlei-
esls of giving oul lhe iesulls moie iapidly), il would lhen be possible lo
quickly eslablish how individual piecincls voled (each wilh aiound 5,OOO
voles) and lo iewaid lhose who mosl sliongly suppoiled lhe goveinmenl.9
Ceilainly, Singapoie`s polilical evolulion has nol gone down lhe liail-
blazing democialic palh sel by Taiwan and Soulh Koiea. Bul lo lhe
SNGAPORI 293
queslion, why did lhe dog nol baik? The answei (as Sheilock Holmes
made cleai) is lhal il was in peifeclly familiai suiioundings and lhal il
iecognized lhe ob|ecl of ils aclions. l is nol lhal lhe goveinmenl foi-
mulaled communilaiianism in oidei lo deny demociacy; on lhe conliaiy,
whal is cleai in lhe piaclice of polilics in Singapoie loday, is lhe seiious-
ness wilh which lhe goveinmenl lieals lhe exeicise of foimal demociacy,
wheie eveiy peicenlage poinl losl in elecloial suppoil (fiom whal is, al
ovei 6O pei cenl of lhe vole, a veiy high level of suppoil) is woiiied ovei
by lhe goveinmenl piecisely because il iesls ils claim lo powei on a
communilaiian ideology. f lhis goveinmenl claims lo embody lhe col-
leclive inleiesls of sociely, such a claim lo powei would sil uneasily wilh
an appaienlly incieasing dissension wilhin lhe ianks of lhal sociely.
Whal Goh Chok Tong did, in lhe 1anuaiy 1997 eleclions, was lo luin
aiound lhis geneial expeclalion of lhe elecloiale, by spelling oul his in-
lenlion lo link goveinmenl public-spending piogiammes lo lhe exlenl of
volei suppoil of lhe goveinmenl, nol |usl in individual consliluencies, bul
also in individual waids wilhin consliluencies.10 Ralhei lhan lhe govein-
menl being accounlable lo lhe people, lhe people weie now explicilly
made accounlable lo lhe goveinmenl.
Whal, lhen, of lhe consliainls which lhe Singapoie goveinmenl places
on lhe mass media and on lhe volunlaiy associalions of civil sociely?
Ralhei lhan being symploms of a liansilional polilical phase lo full de-
mociacy, lhese consliainls aie inslead lhe means by which lhe govein-
menl imposes ils view of whal lhe communilaiian consensus should be.
Communilaiianism may have a sofl cenlie lhe desiie lo build and lo
live in slable communilies, and consideialion and iesponsibilily foi lhe
widei communily lo which one belongs viewed as a social viilue (shades
of Iiancis Iukuyama) bul il also has a haid edge, emphasizing dulies
and iesponsibililies ialhei lhan iighls. llibeial measuies which iesliicl
lhe public expiession of individual inleiesls aie pail of lhe expiession of
lhis haid-edged communilaiianism. People have lo iecognize lhal lhey
may need lo make saciinces foi lhe giealei good, ialhei lhan pandei lo
lheii own individual gialincalion.11
The communilaiian ideology and ils iole
Thioughoul lhe whole peiiod of independence, lheie has been a lension
in lhe Singapoie polily belween lhe compeling claims of communilaiian-
ism and individualism which evokes a familiai aigumenl ovei supposed
Asian values.`` Supeincially, lhe Singapoie goveinmenl may be seen as
lhe guaidian of communilaiianism, againsl lhe appaienl eiosion of lhose
values by moie self-cenleied individualislic conceins. Communilaiian
294 KHONG CHO-OON
values did indeed undeipin populai suppoil foi lhe goveinmenl`s inilial
decision lo legilimize ils iule lhiough economic giowlh. The goveinmenl
and civil seivice had lo have in place mechanisms and inslilulions which
lhe dispaiale elemenls making up Singapoie sociely could believe would
spiead lhe benenls of giowlh. Only lhen did a gioundswell of suppoil
build up which ciealed sufncienl socio-polilical slabilily lo suslain lhe
economic policies lhal weie pul in place. Wilhoul lhis communilaiian
ieassuiance, il would be safe lo say lhal lheie would nol have been
lhe co-opeialion belween gioups which would have allowed lhe social
slabilily lo give lhese policies lime lo lake effecl.
One sliiking fealuie of polilics in Singapoie is lhe way lhal ideology
has been denned by lhe goveinmenl so as lo ieinfoice ils claim lo powei
and lhe duly of cilizens lo obey. Molivaled by concein lhal people weie
being oveily inuenced by ideas seeping in fiom abioad, inuences lhal
weie difncull foi lhe goveinmenl lo moniloi and conliol, lhe goveinmenl
diiecled a lenglhy public debale ovei lhe ielalive meiils of Asian values``
(good) veisus Weslein values`` (bad). The Asian values`` espoused
weie lhe alleged values of Confucian high culluie, lo which lhe culluial
dislincliveness of Asian polilics is nowadays fashionably alliibuled. Asian
polilics has eveiylhing lo do wilh lhe Asian spiiil, denned as a belief in
sliong aulhoiilaiian conliol, iespecl foi buieauciacy, and emphasis on
lhe gioup al lhe expense of lhe individual. Lee Kuan ew, incidenlally, is
oflen chaiacleiized as advancing lhis view, bul a close ieading of his
public pionouncemenls shows a ialhei moie sophislicaled appiecialion:
disclaiming lhal an Asian model`` exisls, accepling lhal value syslems do
change, and ciilicizing Weslein sociely, inleieslingly enough, foi a pei-
ceived eiosion of individual iesponsibilily and foi an ovei-ieliance on
goveinmenl lo solve social pioblems.12
The ideas piopagaled by Confucius and lhe school of lhoughl he
eslablished weie ideas foi a goveining elile, al a lime when cilies weie
being buill and slales being eslablished in China. l look cenluiies
almosl iighl down lo oui own lime foi lhese ideas lo peicolale down lo
lhe common people, and in doing so lhey became mixed in wilh all soils
of local folk liadilions and piaclices. This is nol lhe populai Confucian
elhos innale in lhal pail of Singapoie`s populalion lhal is immigianl
Chinese. Whal we see al lhis populisl level is nol lhe high Confucianism
of lhe inlelleclual elile (aclually exliemely sliing lowaids enliepieneu-
iial inilialive and innovalive ideas), bul lhe vulgai Confucianism of oidi-
naiy people (besl exemplined in lhe nelwoiking of oveiseas Chinese). l is
lhis lowei foim of Confucianism which shapes lhe values and lhe polilical
choices of many oidinaiy people fiom among lhe immigianl Chinese
communily in Singapoie. Al lhis level, lhe ponlincaling of Asian eliles
SNGAPORI 295
becomes iiielevanl; and we need lo discaid all lhose absliacl concepls of
high Confucianism such as loyally and nlial piely.
Sliangely enough, lhe Singapoie goveinmenl had lo sponsoi lhe sludy
of Confucian elhics lhiough lhe selling up of an nslilule of Iasl Asian
Philosophies, slaffed by eminenl academics bioughl in fiom abioad, lo
denne Confucianism foi lhe cilizens of Singapoie. ndeed, allhough Lee
Kuan ew once conndenlly asseiled lhal foi mosl Chinese sludenls,
Confucianism nol Buddhism will be whal paienls would piefei lheii
childien lo sludy,``12 in lhe evenl, a suivey of sludenl piefeiences in 1989
gave Buddhism 44 pei cenl, bible knowledge 21 pei cenl, and Confu-
cianism a meie 18 pei cenl. The piesumed iole of Confucian values in
Singapoie`s economic developmenl is indeed an inliiguing issue, which
ceilainly deseives delailed consideialion.
Populai Confucianism, as il affecls lhe man oi woman in lhe slieel, is
fai iemoved fiom high Confucian lheoiy. l is peihaps no moie lhan a
vague amalgam of iesidual elhical beliefs and a bias lowaids pailiculai
piaclices nol amenable lo ialional analysis, bul neveilheless piompling
ceilain alliludes lowaids lhe family, educalion, social iesponsibilily, and
goveinmenl. The family is lhe focus of allenlion and close affeclions, edu-
calion is iespecled, public seivice honouied, bul goveinmenl viewed wilh
a measuie of suspicion. Theie is a concein lo keep some dislance belween
one`s family on lhe one side, and lhe slale whose inlenlions cannol, in
lhe lasl iesoil, be fully known on lhe olhei. Such alliludes aie neilhei
obviously democialic, noi ieadily aulhoiilaiian. They do, howevei, lend
lhemselves lo pailicipaloiy polilics which is veiy much locally focused.
n Singapoie, lhe iuling paily conslanlly iewoiks ils legilimizing ide-
ology lo suil changing economic ciicumslances. The advocacy of Confu-
cianism has since moved on, wilh lhe evolulion of a foim of communi-
laiianism, lhiough a piocess by which lhe PAP has iepealedly iepackaged
and iedenned a nalional ideology lo seive as ils raison Jc`trc. l has been
aigued lhal lhe ob|eclive of ideological iefoimulalion in Singapoie`s case
has been lo obsliucl and lo deny any logical lineai move lo libeial de-
mociacy, as exemplined by lhe expeiiences of Taiwan and Soulh Koiea.13
el il could be even moie plausibly aigued lhal lhis conslanl iedennilion
by goveinmenl of lhe basis of ils legilimacy is a measuie of ils adapl-
abilily lo a iapidly changing sociely. ndeed, lhis capacily lo conlinually
ieinvenl ilself in lhe peiceplions of lhe elecloiale could well be lhe key lo
lhe goveinmenl`s long-leim suivival.
The Singapoie goveinmenl`s inleipielalion of communilaiianism is a
docliine in which goveinmenl, as cuslodian of lhe communilaiian will,
ineluclably imposes a sel of civic values on individual behavioui. By
emphasizing lhe communily and lelling us how lhings should be foi lhe
giealei good, lhis foim of communilaiianism cuibs egocenliic behavioui
296 KHONG CHO-OON
and asseils lhal iesponsibililies lo lhe widei communily coexisl wilh in-
dividual iighls. n any sociely wheie lheie is a iange of peisonal moial
and ieligious beliefs (and in Singapoie, lhis iange is even widei lhan is
usually lhe case, given lhe pluial naluie of ils sociely), any asseilion of a
common slandaid of behavioui musl involve a measuie of coeicion. The
Singapoie goveinmenl mighl piesumably asseil lhal all slales (even lhe
mosl supposedly libeial) coeice, bul lhe queslion is: lo whal end is lhal
coeicion addiessed?
n lhe case of Singapoie, lhe aggiegale effecl of lhe goveinmenl`s
communilaiian slyle, howevei illibeial il may be chaiacleiized as being,
is lo consolidale lhe polilics of lhe middle giound, delibeialely excluding
whal aie peiceived lo be polilical exliemes. Goh Chok Tong`s own
declaied inlenlion has been lo enlaige lhe middle giound lhiough a moie
accommodaling and pailicipaloiy slyle of goveinmenl, and he has cleaily
moved lo include lhe giealesl numbei of Singapoieans in lhe polilical
piocess, ialhei lhan lo exclude lhem fiom il.
ndeed, communilaiian ideology iendeis lhe Singapoie goveinmenl,
despile ils aulhoiilaiian lag, even moie vulneiable lo elecloial iebuff
lhan so-called democialic goveinmenls elsewheie. f communilaiianism
is denned in leims of a common nalional will, any dissenling polilical
aclivily musl call inlo queslion lhe exlenl of lhal common will. The
Singapoie goveinmenl musl lheiefoie conslanlly be aculely sensilive lo
lhe vaiying shades of public opinion, and acl quickly lo deal wilh conliaiy
views, eilhei lhiough suppiessing lhem oi lhiough going some way lo
meeling lhem. Iully conscious of lhe posilion lhe goveinmenl is in,
Singapoieans aie peihaps even moie sophislicaled lhan lheii Weslein
counleipails in exeicising lheii voling iighls. Because opposilion pailies
iecognize lhe geneial senlimenl lhal lheie ieally is no piaclical allei-
nalive lo keeping lhe PAP in powei, and lheiefoie do nol conlesl lhe
ma|oiily of seals in geneial eleclions (giving lhese geneial eleclions a
by-eleclion avoui), Singapoieans vole, nol lo change lhe goveinmenl,
bul lo iegislei dissalisfaclion wilh ils policies and lo expiess lheii ex-
peclalion lhal lhe goveinmenl, piecisely because of ils communilaiian
legilimizing ideology, will acl lo iediess lhe giievances iaised.
The inslilulions of economic policy: Chasing bubbles of value
Ixceplional ieluins aiise fiom exploilalion of maikel, polilical and lechnological
disconlinuilies. . . . Successful companies pay inoidinale allenlion lo idenlifying
disconlinuilies eaily on, as well as piedicling lheii implicalions foi money making
oppoilunilies lhal may be shoil-lived.
McKinscy Quartcrly, 1994
SNGAPORI 297
When Singapoie gained ils independence in 1965, il was buidened wilh
an economy seemingly in leiminal decline. Ioiced oul by Malaysia and
slill in confionlalion wilh ndonesia, lhe new slale confionled an exleinal
enviionmenl lhal appeaied daikly lhiealening. Theie would, appaienlly,
be no iegional common maikel of which Singapoie could be a pail, and
ils own domeslic maikel was minuscule. So lhe impoil subslilulion poli-
cies of giowing nascenl indusliies lhal weie lhe economic developmenl
fashion of lhe day weie obviously inappiopiiale. The economy, mean-
while, was buidened by a declining enliepol liade, dependence on Biilish
mililaiy spending, low pioduclivily, and chionic unemploymenl lhe
seeding giound, logelhei wilh lalenl iiiedenlisl sympalhy by elemenls
wilhin lhe ma|oiily elhnic Chinese communily foi lhe People`s Republic
of China, of much of lhe suppoil foi iadical Maixisl polilical opposilion
depicled in lhe above.
Given lhal all economic palhs being puisued al lhe lime led lo obvious
dead ends, lheie was no alleinalive lo a complele iesliucluiing of lhe
Singapoie economy lo foice il in a diieclion which il had nevei laken
befoie. The piivale secloi would nol lake lhe lead, wilh foieign capilal
being iepaliialed abioad in lhe face of such pooi economic piospecls,
wilh no laige agglomeialions of domeslic capilal given lhe small scale of
Chinese family businesses and local banking houses, and wilh lillle pios-
pecl of iaising much moie money fiom a piofoundly non-egalilaiian so-
ciely. The slale, lheiefoie, was foiced lo puisue policies of massive eco-
nomic inleivenlion, in a bid lo ie-align lhe domeslic economy. The iesull
was an example of economic developmenl ciled by economisls woild-
wide, howevei inappiopiiale Singapoie may be lo lheii own pailiculai
pieoccupalions, as a giowlh model lo emulale.
This iiony is compounded by lhe facl lhal economic policy in Singapoie
is chaiacleiized by lo use lhe goveinmenl`s favouiile leim of appioba-
lion piagmalism.`` The economy has been shepheided along by lhe
slale nisl suimounling one challenge, nexl anolhei nol accoiding lo
iigid piinciple, bul ialhei, in a spiiil of willingness lo adapl and change
accoiding lo whal ciicumslances iequiie. The domeslic economy, because
of ils small size and iesponsiveness lo goveinmenl conliol, has pioved
manoeuviable and quick lo change swiflly moving oul of one aiea
wheie ils compelilive advanlage is being eioded, lo seize bubbles of
value`` in anolhei, and lo build a posilion lo exploil lhem iapidly befoie,
ineluclably, olhei compelilois come in lo squeeze il oul.
Lee saw lhal lhe only possible economic slialegy he could puisue
would be lo cieale an inveslmenl climale conducive lo foieign inveslois,
since only lhey could giow lhe economy. To do so, Singapoie offeied a
iange of inducemenls, lhough lhese pioved less signincanl in lhe long iun
lhan sound goveinmenl, a slable cuiiency, a lavishly suppoilive and ieli-
298 KHONG CHO-OON
able physical infiasliucluie, and a dependable woikfoice, disciplined by
goveinmenl in|unclion and easily conliolled because of ils uiban chaiac-
lei and lhe small size of lhe slale.
Mosl of all, howevei, by plugging inlo lhe emeiging global economy,
Singapoie benenled fiom lhe favouiable economic silualion of lhe lime.
The 196Os weie a peiiod of iapid economic giowlh foi all indusliialized
counliies, and lhe \ielnam conicl also piovided an economic slimulus
foi iegional slales (much as 1apan had benenled in lhe 195Os fiom lhe
Koiean Wai). So also did lhe 1973 oil ciisis, which led lo a heighlened
seaich foi oil ieseives in Soulheasl Asia.
nilial indusliializalion was based on laboui-inlensive heavy indusliy,
such as shipbuilding and lhe piocessing of oil pioducls aclivilies lhen
nol lo be found in neighbouiing counliies. Heavy indusliy . . . swepl lhe
whole economy along in ils wake lhioughoul lhe 197Os, eneigy pioducls
alone seiving as lhe diiving foice foi manufacluiing indusliy and expoils
and becoming lhe piimaiy focus of Singapoie`s aclivilies.``14
The Singapoie goveinmenl`s managemenl of mullinalional companies
played a key iole in shaping lhe policies of lhe polilical leadeiship, and in
nuiluiing laige slale-owned companies iun by lhe civil seivice buieau-
ciacy. These slale companies (compiising lhiee laige holding companies
foi a diveise iange of small lo medium-scale enleipiises), logelhei wilh
mullinalional enleipiises, piovided lhe main lhiusl foi lhe economic de-
velopmenl lhal was lhe leadeiship`s piimaiy ob|eclive. The foundalions
of a much-expanded iole foi mullinalional inveslmenl in lhe domeslic
economy weie laid by lhe laboui legislalion of l968, which, by eslablish-
ing lhe iighls of manageis while limiling lhe employmenl pioleclion of
laboui, shifled lhe balance of powei belween employeis and employees.
n pailiculai, lhe ndusliial Relalions (Amendmenl) Oidinance sel oul lhe
pieiogalives of managemenl and iemoved a iange of conlenlious issues
fiom laboui-managemenl negolialions.15 The manageis of mullinalional
enleipiises, lhough nol pail of lhe goveining elile, found lhemselves
playing a moie signincanl iole in goveinmenl policy foimulalion, lhiough
lheii links wilh goveinmenl slaluloiy boaids and slale-owned companies,
lhan lhey mighl have expecled lo play in mosl olhei counliies.
The aim of lhe new laboui laws was lo assuie employeis, especially
polenlial employeis fiom mullinalional companies, lhal laboui in Singa-
poie was disciplined and piovided a ieliable low-cosl iesouice. l should
be sliessed lhal in lhe view of lhe polilical leadeiship, lhese laws did
nol leave laboui unpiolecled. Ralhei, given lhe ciilical, impoilance of
expoil-oiienled inveslmenl in lhe leadeiship`s developmenl slialegy,
liade unions could nol be expecled lo caiiy oul lheii laboui pioleclion func-
lion while giving due iegaid lo lhe goveinmenl`s, and hence lhe counliy`s
widei inleiesls. Laboui inleiesls weie lheiefoie yel anolhei iesponsibil-
SNGAPORI 299
ily lhal lhe goveinmenl aiiogaled lo ilself, using a coipoialisl, ialhei
lhan a legalislic, appioach lo managing ielalions belween employeis
and laboui by caiefully iegulaling wage levels lhiough a Nalional Wages
Council, in consullalion wilh bolh employeis and laboui.
Iconomic giowlh lheiefoie allowed lhe civil seivice buieauciacy lo
consolidale ils powei and inuence wilhin lhe Singapoie polily. A iange
of slaluloiy boaids was sel up, moslly duiing lhe 197Os, lo guide govein-
menl involvemenl in lhe economy in a diveise iange of seemingly
unielaled aclivilies. Lawience Kiause obseives: lheie appeais lo be no
ideological baiiiei pievenling lhe goveinmenl fiom enleiing any eco-
nomic aclivily.``16 These oiganizalions, slaffed by goveinmenl employees
and diiecled by lop-level civil seivanls wilh diiecl access lo lhe piime
minislei`s ofnce, have played a key iole in enhancing lhe powei of lhe
civil seivice wilhin lhe goveining coalilion and in impelling lhe coales-
cence belween polilical leadeiship and high-level buieaucials.
Iiom 1979 lo 1981, lhe goveinmenl began a new diive lo push lhe
economy up lhe lechnological laddei, impelled by incieasingly effeclive
compelilion in laboui-inlensive indusliy in neighbouiing counliies. The
iising cosls of doing business in Singapoie meanl lhal il was losing ils
abilily lo compele in manufacluies wheie cosl of faclois of pioduclion
was lhe piimaiy consideialion. New piioiily economic seclois weie
idenlined: piecision engineeiing, eleclionics, infoimalion lechnology,
oplics, chemicals, phaimaceulicals, aeionaulics, lelecommunicalions, and
biolechnology. The goveinmenl-iun Nalional Wages Council decieed a
subslanlial inciease in pay foi laboui, ianging up lo 2O pei cenl, wilh lhe
inlenlion of foicing oul laboui-inlensive indusliies which added lillle
value lo gioss domeslic pioducl. Olhei measuies weie also inlioduced lo
enhance skills and lo iaise laboui pioduclivily. This policy lipped lhe
Singapoie economy inlo iecession: il moved fiom a giowlh iale of 8.3 pei
cenl in 1984 lo minus 1.6 pei cenl in 1985. el lhe economy was lo slage
an exliaoidinaiy iecoveiy in lwo yeais, wilh giowlh iales ieaching 9.7
pei cenl in 1987 and 11.6 pei cenl in 1988.17
An Iconomic Commillee undei lhe chaiimanship of Lee Hsien Loong,
Lee Kuan ew`s son, aimed al chailing a couise of aclion lo end lhe ie-
cession. Bul equally impoilanl in luining aiound lhe iecession was lhe
impacl of exleinal developmenls in pailiculai, an inux of 1apanese
inveslmenl bioughl aboul by a iapid appiecialion of lhe yen and encoui-
aged by goveinmenl-imposed culs in local employmenl and opeialing
cosls (a consequence of lhe Iconomic Commillee`s delibeialions).
Neveilheless, lhe iecoveiy fiom lhe lale 198Os led lo a ielhinking by
lhe slale of ils appiopiiale iole in lhe economy. n 1986, lhe goveinmenl
began a piogiamme of deiegulalion and piivalizing public enleipiises,
nisl wilh obviously commeicial enleipiises which had piivale-secloi
3OO KHONG CHO-OON
compelilion (such as Singapoie Aiilines and Neplune Oiienl Lines), and
lhen wilh olhei companies (such as Singapoie Telecoms). The govein-
menl, lhough, ielained a minimum pailicipalion of 3O pei cenl in each
and eveiy case, and hence a voice in managemenl. The goveinmenl also
began a piogiamme of suppoiling local indusliial enliepieneuis wilh n-
nancial and lechnical assislance, a piogiamme loo iecenl foi ils long-leim
iesulls lo be assessed, lhough lhe inilial impiessions aie veiy mixed.18
Singapoie lheiefoie faces new challenges, if il is lo mainlain ils ie-
maikable economic giowlh. The lesson of lhe 198Os was lhal lhe economy
is loo small lo sland on ils own, bul will have lo conlinue lo adapl lo
liends in global and iegional maikels liends which aie incieasingly
swifl-moving, luibulenl, and unpiediclable. Singapoie will also have lo be
adepl al seizing lhe new lechnologies which aie iapidly becoming avail-
able, as ils own iegional compelilois giow in economic and lechnological
sophislicalion. Ralhei like lhe Red ueen in Through thc 1ooking Class,
lhe Singapoie economy will have lo iun veiy fasl |usl so as nol lo slide
backwaids. f il is lo conlinue lo push ahead, lhe pace al which il needs lo
go will be posilively bieakneck.
f lhe Singapoie economic developmenl model is an exemplai, il is
lhiough lhe iole of lhe slale, led by a polilical-buieaucialic alliance,
akin lo lhe managemenl of a business enleipiise, opeialing in lhe global
economy. While almosl eveiywheie else, lhe slale has been much dimin-
ished by globalizing foices of polilical change, lhe inleinalionalizalion of
nnancial maikels, and iapidly cumulalive incieases in lechnological ca-
pabilily, lheie is an alleinalive by which lhe slale can build up ils slienglh
vis-a` -vis lhe domeslic economy and polily lhiough going along wilh and
feeding, ialhei lhan vainly allempling lo counlei, lhose foices of global-
izalion. Singapoie piovides an example of such a compeling nalion.``
Ralhei lhan liy lo pick indusliial winneis`` and build up laige nalional
companies behind meicanlilisl baiiieis, as 1apan and Soulh Koiea have
done, Singapoie iecognizes lhal capilal is mobile; lhal companies aie
incieasingly lhinking in global leims; lhal goveinmenls have lillle lalenl
foi picking winneis (pailiculaily as lhey move ahead of lhe iesl of lhe
compelilion oi if lheii ciicumslances like Singapoie`s small size aie
such lhal meaningful compaiisons wilh olhei counliies aie difncull); and
lhal lheie is inlense compelilion belween companies which counliies
can exploil lo lheii own advanlage. A sense of nalional economic pui-
pose can be ciealed aiound lhis idea of compeliliveness wilh lhe gov-
einmenl implemenling pioaclive nonlaissez-faiie policies lo cieale a
pool of highly educaled and exible woikeis, an exlensive and efncienl
infiasliucluie, and a sound and slable cuiiency. f lhe goveinmenl can sel
up such a base of economic suppoil, lhen lhe nalion il goveins is well
placed lo opeiale as an open economy, alliacling mobile nnancial and
SNGAPORI 3O1
human capilal lo a place wheie lhe enviionmenl is conducive foi business
and wheie people can live in maleiial comfoil. The goveinmenl slill plays
an exliemely aclive iole in conliolling social behavioui, and in policing
lhe oulei boundaiies of lhe slale lo keep oul nol goods, bul illegal im-
migialion; while lhe economy is exliemely open lo liade ows, all faclois
of pioduclion ciossing inlo oi oul of ils leiiiloiy aie kepl undei lighl
conliol. Such is lhe Singapoie model.
Conclusion: The fuluie of lhe slale
ou wanl lo go inlo lhe woild and you aie going emply-handed, wilh some
piomise of fieedom, which men in lheii simplicily and lheii innale lawlessness
cannol even compiehend, which lhey feai and diead foi nolhing has evei been
moie unenduiable lo man and lo human sociely lhan fieedom!``
The Giand nquisiloi in Iyodoi Dosloyevsky, Thc Brothcrs Karana;ov
Iiie is neice, and people feel feai al lhe sighl of il. So lhey seldom die of il. Walei,
on lhe olhei hand, is genlle, so lhal people aie inclined lo play in il. As a iesull,
many of lhem diown.
Tiadilional Chinese saying
Singapoie polilics is nol in a liansienl phase, evolving lowaids a fuluie,
moie libeial foim. Ralhei, lhe cuiienl foimally democialic yel illibeial
polilical slyle, whalevei lension il may bieed in pails of lhe populace, is
likely lo piove faiily iesislanl lo change. Singapoie iesenls compaiisons
wilh Weslein models. ndeed, al a lime when lhe Weslein polilical vision
has ilself become clouded by alienalion and unceilainly, and many people
in lhose counliies aie engaged in a seaich foi new polilical foims and
values lo ievilalize exisling sliucluies, lhe Singapoie goveinmenl would
piesumably aigue lhal ils veision of imposed communilaiianism has man-
aged, by whalevei means il was done, and howevei lenuous lhe iesull, lo
slienglhen weak civic bonds in a pluial sociely (foimeily fiacluied), and
lo inslil a sense of belonging lo lhe ma|oiily of lhe populalion.
Iuilheimoie, foi a counliy puisuing a compeling nalion`` slialegy in
lhe global economy, lhe Singapoie goveinmenl`s willingness lo spell oul
and lo successfully impose on eveiyone a common view of how people
should live logelhei, achieves a sense of cohesion, of liusl wilhin sociely,
and of an inliinsic civic |uslice, which helps oil lhe wheels of business and
commeice. Thal lhis imposilion iequiies a haid edge is due lo lhe apalhy
of many people, who do feel a vague sense of commilmenl lo lheii own
communily, bul aie nol piepaied lo do much aboul il a hangovei, pei-
3O2 KHONG CHO-OON
haps, fiom lheii immigianl oiigins. As wiileis like Robeil Pulnam and
Iiancis Iukuyama asseil, a high level of inleipeisonal liusl in sociely
piovides a ciilical compelilive advanlage, and leads lo high iales of eco-
nomic giowlh.19
A coiollaiy lo lhe slialegy of playing as a compeling nalion`` in lhe
global economy is lhe need foi peiiodic acls of symbolic nalionalism
lo ieinfoice nalional cohesion and puipose, againsl lhe dissolving inu-
ences of global inleinalionalism on lhe loyallies of lhe domeslic popula-
lion. Hence, Singapoie has emeiged as a sliidenl champion of Asian
Confucian values in lhe global ideological debale, neuleied since lhe
collapse of Soviel communism. The advocales of Asian values poinl lo
lhe inheienl culluial advanlages of counliies such as Singapoie, imbued
wilh Confucian values, ovei a declining and degeneiale Wesl.
Polilical lensions will peisisl, and we will see a new youngei geneialion
of voleis make incieasing demands on a nol loo exible polilical syslem.
Bul as benenciaiies of lhe sleely-eyed paleinalism which chaiacleiizes
lhal syslem, lhey will geneially seek lo mainlain lhe slalus quo, as change
is lhiealening and unceilain. A few may lake upon lheii shouldeis lhe
mission of acling as a conscience foi lheii sociely, asseiling individual
iighls and calling foi a giealei sense of iesponsibilily lowaids lhe dis-
advanlaged. Bul lhe ma|oiily have made a piagmalic calculalion, and will
conlinue lo uphold il, lhal swings lhe olhei way, lowaid calculaled inac-
lion. Howevei enlicing ideas of libeial individualism may be, why iock lhe
boal when il is mooied in such comfoilably familiai waleis? l would lake
a liopical lyphoon lo sliike spaiks off lhese people, lo galvanize lhem inlo
allempling lo shifl Singapoie polilics onlo a complelely diffeienl couise.
Noles
1. Lee Kuan ew, Tcxt oj a Spccch by thc Irinc Ministcr, Mr. 1cc Kuan Ycw, at thc Oj-
cial Opcning oj thc Civil Scrvicc StuJy Ccntrc (Singapoie goveinmenl piess slalemenl,
15 Augusl 1959).
2. Measuies ciled in \.S. Libiaiy of Congiess documenl addiessed hup lllcweb2 loc govj
cgi-bion queiy Djcsldy:2:.jlempj-ffd_MKZf, fiom which lhe nguies foi educalional levels
come.
3. Dala fiom Woild Bank, VorlJ Dcvclopncnt Rcport 1997 (New oik: Oxfoid \niveisily
Piess, 1997).
4. Straits Tincs, 12 Decembei 1992.
5. bid., 27 Seplembei 199O.
6. Change Heng Chee, Thc Dynanics oj Onc Iarty Doninancc. Thc IAI at thc Crassroots
(Singapoie: Singapoie \niveisily Piess, 1976); and Polilical Pailies,`` in 1on S. T.
uah, Chan Cheng Hee, and Seah Chee Meow (eds.), Covcrnncnt anJ Iolitics oj
Singaporc (Singapoie: Oxfoid \niveisily Piess, 1987), pp. 14672.
SNGAPORI 3O3
7. hup:jjwww.sinleicom.oigjjeleclion96jiesulls97.hlml (13 Iebiuaiy 1997).
8. Iiom discussion in hllp:jjwww-leland.slanfoid.eduj-chongkeejsef96jvole_liace.hlml (31
Decembei 1996). See also Deiek da Cunha, Thc Iricc oj Victory. Thc 1997 Singaporc
Ccncral 1lcction anJ BcyonJ (Singapoie: nslilule of Soulheasl Asian Sludies, 1997),
p. 64.
9. Straits Tincs, 1 and 12 1anuaiy 1997.
1O. Da Cunha, Thc Iricc oj Victory, pp. 4O41.
11. Thus in lhe debale on emigialion by Singapoieans lo Auslialia, Canada, and olhei
counliies, lhe aigumenl is even made lhal people have a paliiolic obligalion lo iemain
in Singapoie, even if lhey feel lhal lhey and lheii families would do bellei elsewheie.
12. Iaieed Zakaiia, Culluie s Desliny: A Conveisalion wilh Lee Kuan ew,`` Iorcign
Ajjairs MaichApiil 1994; 73(2): 1O926.
13. See Beng-Hual Chua, Connunitarian IJcology anJ Dcnocracy in Singaporc (London:
Roulledge, 1995).
14. Philippe Regniei, City-Statc in Southcast Asia, lians. Chiislophei Huisl (Honolulu:
\niveisily of Hawaii Piess, 1991), p. 55.
15. See Pang Ing Iong, Tan Chwee Hual, and Cheng Soo May, The Managemenl of
People,`` in Kemial Singh Sandhu and Paul Whealley (eds.), Managcncnt oj Succcss.
Thc MoulJing oj MoJcrn Singaporc (Singapoie: nslilule of Soulheasl Asian Sludies,
1989), pp. 1293O.
16. Lawience B. Kiause, Goveinmenl as Inliepieneui,`` in Sandhu and Whealley, Man-
agcncnt oj Succcss, p. 439.
17. nleinalional Monelaiy Iund, Intcrnational Iinancial Statistics Ycarbook 1998 (Wash-
inglon, D.C.: Publicalion Seivices, MI, 1998), pp. 15457.
18. See Lee Tsao uan and Linda Low, 1ocal 1ntrcprcncurship in Singaporc. Irivatc anJ
Statc (Singapoie: nslilule of Policy Sludies, 199O).
19. Robeil D. Pulnam, Making Dcnocracy Vork. Civic TraJitions in MoJcrn Italy
(Piincelon, N.1.: Piincelon \niveisily Piess, 1993); and Iiancis Iukuyama, Trust. Thc
Social Virtucs anJ thc Crcation oj Irospcrity (London: Hamish Hamillon, 1995).
3O4 KHONG CHO-OON
12
Hong Kong
1ancs T. H. Tang
nlioduclion
The minimalisl slale of Hong Kong is undei liansfoimalion in lhe biave
new posl-colonial woild. On 1 1uly 1997 Biilish iule ended. China
iesumed soveieignly ovei Hong Kong and gianled il lhe iighl lo self-
goveinmenl foi al leasl 5O yeais, excepl ovei diplomalic and defence
malleis. \ndei an aiiangemenl desciibed as one counliy; lwo syslems,``
Hong Kong has become a Special Adminislialive Region (SAR) of lhe
People`s Republic of China. As an adminislialive slale, colonial Hong
Kong had been al lhe foiefionl of lhe Iasl Asian economic miiacle``
belween lhe 197Os and lhe mid 199Os. Colonial Hong Kong, howevei, was
an exceplion in a iegion wheie economic developmenls have been laigely
piopelled by slale-led slialegies.1
Thal Iasl Asian slales have been able lo develop lheii economies
iapidly has been alliibuled lo slale capacily in lhe iegion. Woiks on
indusliializing Asian economies such as Soulh Koiea and Taiwan have
emphasized lhe exislence of effeclive slales wilh well-developed
buieauciacies capable of foimulaling economic policy wilhoul being
caplive lo ienl-seeking socielal gioups. While lhe polilical elile did foim
alliances wilh business inleiesls, lhe ielalionship was highly unequal, wilh
lhe slale acling lhe dominanl pailnei. Mosl of lhese slales have been
desciibed as sliong slales`` which weie willing lo coeice business gioups
lo move lowaids economic ob|eclives foimulaled by lhe goveinmenl.2
3O5
The colonial Hong Kong slale, howevei, was widely seen lo be
minimalisl. The goveinmenl was nol iegaided as a dominanl pailnei in
ils infamous alliance wilh lhe business communily. n facl a populai
chaiacleiizalion of lhe goveinmenl-business ielalionship was lhal Hong
Kong was iuled by lhe Royal Hong Kong 1ockey Club, 1aidine Malhe-
son and Co., lhe Hongkong and Shanghai Bank, and lhe Goveinoi in
lhal oidei.``3
nslilulionally, ma|oi business inleiesls had been veiy much an inlegial
pail of lhe syslem of goveinance in colonial Hong Kong. A closei look,
howevei, suggesls lhal Hong Kong could haidly be consideied a weak
slale`` in leims of ils aulonomy againsl sociely, ils oiganizalional capac-
ily, and ils effecliveness in implemenling policies. The leiiiloiy`s well-
eslablished economic philosophy of posilive non-inleivenlionism`` was
nol simply lhe oulcome of a pio-business agenda, bul also a delibeiale
choice by a colonial adminislialion whose raison Jc`trc was almosl com-
plelely commeicial. n facl, colonial Hong Kong was a dominanl slale.
Ioimal polilical aulhoiily was concenlialed in lhe hands of lhe goveinoi,
a iepiesenlalive of lhe queen of Ingland whose foimidable poweis weie
compaiable lo lhose of lhe monaich in pie-democialic Ingland; and lhe
goveinoi was appoinled by London fiom lhe ianks of lhe Colonial Sei-
vice and, aflei lhe demise of lhe Colonial Ofnce, lhe Ioieign and Com-
monweallh Ofnce (Chiis Pallen, lhe lasl goveinoi, was lhe only excep-
lion). n addilion, colonial Hong Kong was seived by a well-developed
and highly efncienl buieauciacy when lhe cily wenl lhiough ils induslii-
alizalion slage duiing lhe 196Os and 197Os. n piaclice lhe adminislialion
iuled in coalilion wilh lhe ma|oi Biilish business coipoialions and wilh
lhe suppoil of piominenl local Chinese.4
The polilical syslem of colonial Hong Kong had iemained moie oi less
unchanged and nol diieclly challenged (apail fiom an inleiiuplion of
lhiee yeais and eighl monlhs of 1apanese occupalion belween 1941 and
1945) foi almosl one and a half cenluiies unlil lhe Sino-Biilish lalks on
lhe fuluie of lhe leiiiloiy began in lhe eaily 198Os. Hong Kong expeii-
enced iapid economic expansion belween lhe 196Os and 198Os despile a
biief peiiod of polilical luibulence in lhe lale 196Os when lhe Culluial
Revolulion swepl lhiough mainland China. Allhough Hong Kong was
nol immune fiom lhe upheaval, lhe Chinese leadeiship made no allempl
lo challenge lhe leiiiloiy`s slalus and Hong Kong iemained Biilish.5
Hong Kong`s economic peifoimance iemained impiessive wilhoul po-
lilical change unlil lhe 198Os when, feaiful of an unceilain fuluie undei
Communisl iule, lhe people of Hong Kong became moie asseilive polil-
ically. The polilical luibulence in lhe 198Os, howevei, did nol make any
ma|oi impacl on Hong Kong`s piospeiily. Difncullies did occui in eaily
3O6 1AMIS T. H. TANG
1983 when lhe goveinmenl had lo peg lhe Hong Kong cuiiency lo lhe
\.S. dollai al a nxed iale lo mainlain economic slabilily.
Accoiding lo lhe 1984 Sino-Biilish Agieemenl on Hong Kong`s fuluie
and lhe conslilulional aiiangemenls in lhe foim of lhe Basic Law, Hong
Kong`s polilical and economic syslem aie lo be pieseived. Some have
aigued lhal Hong Kong is meiely being liansfeiied fiom one lype of
aulhoiilaiian iule (in lhe foim of Biilish colonialism) lo anolhei (in lhe
foim of Chinese communism). Iconomically, given lhe inlegialion of lhe
Hong Kong and mainland China economies, many have mainlained lhal
lhe economic silualion in Hong Kong would nol be affecled by lhe
handovei. n facl lhe SAR adminislialion uses lhe expiession, business
as usual`` lo desciibe posl-handovei Hong Kong.
This chaplei suggesls lhal inleinal polilical developmenls in Hong
Kong since lhe mid-198Os have made a signincanl impacl on economic
managemenl in lhe leiiiloiy, and lhal lhis liend will be accenlualed in
Hong Kong`s seaich foi a posl-colonial oidei aflei China`s iesumplion of
soveieignly. Allhough lhe democializalion piocess which began in lhe
198Os was lempoiaiily ieveised when colonial Hong Kong became a
Chinese SAR, lhe polilical syslem in Hong Kong had alieady undeigone
impoilanl changes piioi lo lhe polilical handovei. This chaplei examines
lhe impacl of democializalion on Hong Kong`s economic goveinance and
lhe implicalions of such changes foi posl-colonial Hong Kong.
Iconomic giowlh wilhoul demociacy
The adminislialive slale of colonial Hong Kong adopled a pio-business
slance. Local business eliles exeicised inuence ovei goveinmenl lhiough
iepiesenlalion in lhe Ixeculive Council (lhe highesl advisoiy body in lhe
colony), and lhe Legislalive Council was dominaled by civil seivanls up
lo 1976. Iven by lhe mid-198Os lhe membeiship of bolh councils was
enliiely appoinled by lhe goveinmenl. The colonial adminislialion also
sel up a consullalive syslem in lhe foim of commillees lo advise lhe gov-
einmenl on malleis ielaled lo lhe economy.6
\nlike wilh neighbouiing Soulheasl Asian slales, decolonizalion did
nol come lo Hong Kong following lhe end of lhe Second Woild Wai as
China plunged inlo civil wai almosl immedialely aflei 1apan`s defeal. The
leadeiship of lhe People`s Republic of China lhen decided lhal Biilish
Hong Kong would seive as a window foi lhe newly eslablished commu-
nisl slale which was isolaled by lhe Wesl because of Cold Wai polilics.
Hong Kong faced ma|oi polilical challenges in lhe 195Os, wilh an uncei-
lain polilical fuluie, a massive inux of iefugees fiom acioss lhe boidei,
HONG KONG 3O7
and economic difncullies when lhe colony`s enliepo` l liade collapsed
following lhe \niled Nalions sanclions againsl China as a iesull of lhe
Koiean Wai. The colony, againsl all odds, managed lo suivive when il
became cleai lhal China had no inlenlion of laking ovei lhe cily. Sliale-
gically localed, wilh a libeial economic policy and slable polilical oidei,
Hong Kong managed lo suivive and piospei.
Wilhin a 36-yeai span fiom 1961 lo 1997 Hong Kong iose lo be one of
lhe iichesl leiiiloiies in Asia, and ils aveiage weallh even suipassed lhal
of ils colonial maslei when lhe Biilish depailed. The economy look off in
lhe 196Os, and expansion was al ils mosl diamalic duiing lhe 197Os.
Duiing lhe 196Os economic giowlh aveiaged 11.7 pei cenl pei yeai and
inleinalional liade expanded foui limes al an annual iale of neaily 1O pei
cenl. The 197Os saw Hong Kong`s economy giowing al an even faslei
pace, wilh an aveiage annual inciease of 21.1 pei cenl. Hong Kong`s
economic expansion was less speclaculai in lhe 198Os, bul slill impiessive
by any slandaids wilh a 6.3 pei cenl aveiage annual giowlh iale. The nisl
half of lhe 199Os saw conlinuous expansion of lhe economy and a sleady
climb of pei capila income. By lhe lime lhal lhe leiiiloiy luined inlo a
SAR in 1997, Hong Kong had mainlained an annual giowlh iale of 7 pei
cenl foi lwo decades, lwice as fasl as lhe woild economy. ls GDP pei
capila, which giew al an aveiage iale of 5 pei cenl pei yeai, also doubled
in lhe same peiiod lo ieach \S$26,4OO. Hong Kong`s aveiage weallh was
second only lo lhal of 1apan and Singapoie, and suipassed nol only lhal
of lhe \.K. bul also lhal of counliies such as Canada and Auslialia.7
\nlike olhei Iasl Asian economies, Hong Kong did nol begin ils in-
dusliial developmenl wilh a phase of impoil subslilulion. n lhe 195Os
Hong Kong`s economy was based on enliepo` l liade; il shifled lo expoil-
oiienled indusliializalion in lhe 196Os, lo inleinalionalizalion of lhe
nnancial secloi in lhe 197Os, and lo expansion of lhe seivice secloi as well
as ielocalion of ils manufacluiing secloi in lhe 198Os. As a leading econ-
omisl obseived, all lhese phases look place wilhoul goveinmenl plans oi
diieclives.8 The goveinmenl, connned ils iole lo exeicising vaiying
degiees of micioeconomic conliol ovei essenlial public seivices including
lianspoilalion, poslal seivices, and public ulililies such as walei, elecliic-
ily, and land supply, and lo pioviding iegulaloiy fiamewoiks. l followed
a non-inleivenlion appioach lo lhe developmenl of piivale indusliies. n
macioeconomic leims, lhe colonial goveinmenl also iesisled employing
nscal policies lo accommodale lhe diffeienl slages of lhe business cycle.
Bul lhe goveinmenl did follow a slabilizing budgelaiy policy ieminiscenl
of lhe Keynesian model, wilh budgel suipluses duiing peiiods of fasl
giowlh and dencils duiing peiiods of iecession.9
A numbei of lheoiies have been advanced lo explain why Hong Kong
slayed polilically slable undei colonial iule foi so long when luibulence
3O8 1AMIS T. H. TANG
swepl lhiough neighbouiing counliies in lhe foim nisl of lhe anlicolonial
sliuggle foi nalional independence and lhen of inleinal sliuggle foi de-
mociacy. The adminislialion was able lo piovide an economic haven foi
bolh people and capilal fiom lhe polilical and economic luibulence in
China. Wilh a slable polilical enviionmenl and a common law syslem as
well as an efncienl public seivice, lhe Biilish goveinmenl was able lo
keep ils iule in lhe leiiiloiy. Hong Kong was pail of China when Biilain
look ovei and lhe local populalion has always been laigely Chinese, bul
lheie was lillle suppoil foi independence. When lhe Chinese Commu-
nisls look powei in 1949 lhey delibeialely kepl Hong Kong as a window
lo lhe woild because of economic and slialegic consideialions.
f China`s decision nol lo challenge colonial iule piovided lhe exleinal
conlexl foi polilical slabilily wilhoul independence, lhe absence of a
sliong polilical demand foi demociacy in Hong Kong has been explained
wilh iefeience lo specinc hisloiical ciicumslances, lhe buieaucialic polily,
and lhe polilical culluies of lhe populalion.
Decolonizalion did nol come lo Hong Kong, pailly because lhe people
in Hong Kong did nol see lhemselves as a sepaiale nalion fiom mainland
China, and many wenl lo Hong Kong foi lempoiaiy iefuge fiom lhe
upheavals in lhe mainland and consideied lhe Biilish-adminisleied leiii-
loiy as a place of liansil fiom wheie lhey would move on once lhey
secuied lhe economic means lo do so. By lhe 197Os, howevei, lhe local
populalion, bellei educaled and wilh a sliongei sense of belonging, be-
gan lo demand moie polilical involvemenl in lhe goveinmenlal piocess.
When Sino-Biilish negolialions began in lhe mid-198Os Hong Kong soci-
ely was fuilhei polilicized by lhe unceilain piospecl of ieunincalion
undei Chinese Communisl iule. A demociacy movemenl developed
iapidly.
Duiing lhe Sino-Biilish lalks lhe people of Hong Kong weie oflen
ielegaled lo lhe posilion of byslandeis, bul many did make lheii views
known and polilical gioups weie foimed lo champion lheii polilical
demands. By 1984 when lhe Sino-Biilish agieemenl on Hong Kong`s
fuluie was ieached, lhe polilical syslem was being giadually libeialized.
Polilical iefoims in lhe 198Os began al lhe local level wilh lhe eslablish-
menl of disliicl boaids wilh elecled membeis lo advise lhe goveinmenl
on malleis affecling lhe welfaie of lhe disliicl. The goveinmenl sub-
sequenlly nol only fuilhei bioadened lhe base of cilizen iepiesenlalion al
lhe level of local and disliicl adminislialion, bul also inlioduced elecled
seals lo lhe Legislalive Council as lhe Biilish and Chinese goveinmenls
negolialed foi Hong Kong`s fuluie in lhe eaily and mid-198Os.
Allhough lhe Chinese goveinmenl iemained suspicious of Biilish
inlenlions, il accepled limiled demociacy foi Hong Kong. By 1991 lhe
people of Hong Kong had alieady laken lhe nisl sleps lowaids demociacy
HONG KONG 3O9
by diieclly elecling lheii iepiesenlalives lo lhe Legislalive Council which
was moving lowaids a fully elecled legislaluie. Sino-Biilish confionla-
lions ovei lhe pace and scope of lhe democializalion piocess, howevei,
maiked much of lhe nnal phase of Hong Kong`s exislence as a Biilish
colony wilh lhe aiiival of lhe lasl Biilish goveinoi, Chiis Pallen, in 1uly
1992.
n lhe afleimalh of lhe 1989 Tiananmen ciackdown on lhe pio-
demociacy sludenl movemenl in Bei|ing, lhe Biilish goveinmenl
allempled lo iesloie bolh lhe conndence of Hong Kong and ils inlei-
nalional iepulalion as a iesponsible colonial powei by pushing foi faslei
democialic iefoim and inlioducing a highei degiee of iepiesenlalion in
lhe lasl colonial Legislalive Council eleclions in 1995. Iollowing lhe
inlioduclion of a conslilulional iefoim package, which was vehemenlly
opposed by lhe Chinese goveinmenl, lhe people of Hong Kong casl lheii
voles foi a fully elecled Legislalive Council in Seplembei 1995. Ilecloial
polilics and polilical pailies have also emeiged in lhe polilical landscape
of Hong Kong polilics wheie lhe voices foi laboui and olhei giass-iools
gioups and demands foi moie goveinmenl aclion lo impiove lhe liveli-
hood of lhe people have become impoilanl elemenls in local polilics. The
Hong Kong goveinmenl`s liadilional hands-off appioach lo economic
goveinance was incieasingly challenged lowaids lhe end of colonial iule.
Hong Kong undei Chinese soveieignly
The nisl Hong Kong SAR goveinmenl undei Tung Chee-hwa`s leadei-
ship is widely expecled lo be a pio-business adminislialion. The facl lhal
Tung Chee-hwa comes fiom lhe business communily himself and is
suppoiled by piominenl businessmen in lhe leiiiloiy has given iise lo
suggeslions lhal Bei|ing`s piomise of Hong Kong people iuling Hong
Kong`` (gangrcn ;higang) would luin oul lo be business people iuling
Hong Kong`` (shangrcn ;higang). Moieovei, lhe ialionale foi Hong
Kong`s exislence as a SAR and lhe piivileges gianled lo lhe leiiiloiy in
mainlaining a high degiee of aulonomy is based piimaiily on economic
consideialions. Allhough lhe one counliy, lwo syslems`` foimula is also
used by lhe mainland goveinmenl as a solulion lo lhe pioblem of ieuni-
ncalion wilh Taiwan, Bei|ing obviously would like lo see an economically
lhiiving Hong Kong dominaled by business inleiesls ialhei lhan a polili-
cally aclive Hong Kong dominaled by populaily elecled democials and
giass-iools leadeis.
Tung Chee-hwa himself has iepealedly asseiled lhal Hong Kong be-
came loo polilicized duiing lhe decade oi so of polilical liansilion since
lhe signing of lhe Sino-Biilish 1oinl Declaialion on Hong Kong`s fuluie
31O 1AMIS T. H. TANG
in 1984. He would, piesumably, piefei lhe ieluin of lhe old polilical oidei
which was chaiacleiized by adminislialive absoiplion of polilics,`` wilh
lhe lop echelon of goveinmenl woiking closely wilh lhe business elile,
and a iesloialion of lhe pie-Pallen colonial goveinmenl`s laissez-faiie
appioach lo economic goveinance. n facl a few monlhs aflei lhe ievei-
sion of soveieignly lhe SAR adminislialion undei Tung Chee-hwa
insisled lhal lhings had iemained unchanged in Hong Kong. f lhal is lhe
case lhe depailuie of lhe Biilish simply iepiesenls lhe ieplacemenl of
one business elile gioup by anolhei. The only diffeience would be lhal
inslead of having a pio-Biilish business oiienlalion, lhe SAR would shifl
lowaids a moie pio-mainland oiienlalion.
While lhe business communily cannol expecl lhe same degiee of dom-
inalion in Hong Kong`s economic goveinance as il had in colonial limes,
il has iegained ils piominence as a cenlial polilical foice in lhe SAR. The
chief execulive is a foimei businessman. His closesl adviseis in lhe foim
of lhe Ixeculive Council aie also dominaled by people fiom lhe business
communily and piofessionals. Among lhe membeis only Tam iu-chung,
a liade unionisl and membei of lhe Democialic Alliance foi lhe Bellei-
menl of Hong Kong, comes fiom a giass-iools backgiound. Many execu-
live councillois also have close conneclions wilh lhe mainland.10
Bei|ing loyalisls weie also able lo dominale lhe piovisional legislaluie
eslablished by lhe Bei|ing goveinmenl following lhe collapse of lhe Sino-
Biilish lalks iegaiding lhe Pallen iefoims. While a ma|oiily of lhe
Piovisional Legislalive Council membeis seived in lhe 1995 Legislalive
Council undei lhe foimei colonial adminislialion, polilical dynamics have
undeigone signincanl changes. The Democialic Paily, lhe laigesl polilical
foice in lhe 1995 Legislalive Council, was oul of lhe piovisional legisla-
luie. Polilical pailies and olhei gioups such as lhe Democialic Alliance
foi lhe Belleimenl of Hong Kong, lhe Hong Kong Piogiessive Alliance,
and lhe Libeial Paily, which had good ielalions wilh lhe leadeiship in
Bei|ing duiing lhe leiiiloiy`s liansilion, became dominanl foices in lhe
legislaluie.
While pio-democialic foices ieluined lo lhe nisl SAR Legislalive
Council following lhe May 1998 eleclions, lhe numbei of Democialic
Paily councillois has been ieduced by 6 fiom 19 lo 13, and lhe oveiall
polilical slienglh of pio-demociacy foices is shoil of one-lhiid of lhe
legislaluie (see lable 12.1). The elecloial aiiangemenls foi lhe nisl legis-
lalive eleclions in lhe SAR had lhe effecl of ensuiing lhal lhe Democialic
Paily and olhei pio-demociacy gioups such as lhe Iionliei would be only
a minoiily in lhe nisl Legislalive Council in 1998. Of lhe 6O council seals
only 2O weie lo be nlled by diiecl eleclions based on geogiaphical aieas.
Thiily seals, oi half of lhe lolal, weie lo be nlled by piofessional and
business gioups which weie foimed inlo funclional consliluencies, and
HONG KONG 311
1O seals weie lo be nlled by an elecloial commillee. Molions, bills, oi
amendmenls of goveinmenl bills inlioduced by individual Legislalive
Council membeis can only be passed wilh lhe suppoil of a ma|oiily of
membeis fiom bolh calegoiies. This effeclively imposes limilalions on lhe
powei of lhe Legislalive Council. Pio-Bei|ing foices, well iepiesenled in
lhe funclional consliluencies and lhe Ileclion Commillee seals, have
iemained dominanl in lhe legislaluie.
Wilh moie pio-Bei|ing businessmen gaining polilical piominence, and
as mainland China becomes one of lhe leading inveslois in Hong Kong,
Table 12.1 olitil prtyGgroup strengths in rong uong9s legisltureD IWWSPHHH
Legislalive
Council
Piovisional
Legislalive
Council
Iiisl SAR
Legislalive
Council
(19951997) (19971998) (19982OOO)
Democialic Paily 19 O 13
Libeial Paily 1O 1O 9
DABjIT\ 7 11 1O
ADPL 4 4 O
HKPA1 2 6 5
LDI1 1 3 n.a.
NHKA 1 2 n.a.
123 DA 1 O O
Cilizen Paily2 n.a. n.a. 1
Iionliei3 n.a. n.a. 3
NWSC4 n.a. n.a. 1
ndependenls 15 24 19
Tolal 6O 6O 6O
Souice: Compiled by lhe aulhoi based on elecloial iesulls supplied by lhe
goveinmenl.
123 DA: 123 Democialic Alliance.
ADPL: Associalion foi Demociacy and lhe Developmenl of lhe People`s
Livelihood.
DAB: Democialic Alliance foi lhe Belleimenl of Hong Kong.
IT\: Iedeialion of Tiade \nions.
HKPA: Hong Kong Piogiessive Alliance.
LDI: Libeial Democialic Ioundalion.
NHKA: New Hong Kong Alliance.
NWSC: Neighbouihood and Woikeis` Seivice Cenlie.
1 The HKPA and lhe LDI meiged on 26 May 1997.
2 The Cilizen Paily, foimed in May 1997, did nol lake pail in lhe Piovisional
Legco eleclions.
3 The Iionliei, foimed on 26 Augusl 1996, did nol lake pail in lhe Piovisional
Legco eleclions.
4 The NWSC candidale was also a Iionliei membei bul decided lo iun undei
lhe NWSC bannei.
312 1AMIS T. H. TANG
a key queslion is: will vaiious slale enleipiises fiom lhe mainland and
olhei business venluies funded by mainland Chinaielaled oiganizalions
become lhe new hongs nims owned and managed by Biilish inleiesls,
which dominaled lhe leiiiloiy in colonial limes? Chinese slale enleipiises
had a long hisloiy of business aclivily in Hong Kong when lhe China
Meichanls Coipoialion was eslablished. Iiom 1949 lo lhe lale 197Os
mosl mainland enleipiises in Hong Kong weie piimaiily liade agenls
wilhoul local business inleiesls. By 1978 lheie weie only 122 mainland
enleipiises in lhe leiiiloiy. Theii numbei expanded diamalically duiing
lhe 198Os when a laige numbei of piovincial goveinmenls, ma|oi cilies,
and minisliies sel up companies in Hong Kong. By 1989 mainland enlei-
piises iegisleied in Hong Kong ieached ovei 2,5OO. Belween 1989 and
1991 lhe cenlial goveinmenl weeded oul lhose consideied nol lo have
lhe necessaiy managemenl and business capacilies and lhe numbei was
ieduced lo 1,5OO, befoie iising sleadily lo 1,83O in 1996.11
By lhe mid-199Os lhe mainland had alieady become a signincanl eco-
nomic foice in Hong Kong. n 1995 lhe gioss assel value of mainland
enleipiises was eslimaled lo be moie lhan HK$1,3OO billion (\S$17O
billion). Allogelhei lheie weie 11 mainland conglomeiales in Hong Kong
wilh ovei HK$1O billion (\S$1.2 billion) gioss assels. Since May 1994 lhe
Bank of China also become a Hong Kong dollai nole issuing bank. Wilh
11 sislei banks, lhe Bank of China gioup has become lhe second laigesl
banking gioup in lhe leiiiloiy aflei Hongkong Bank. n addilion lo
lhe nnancial secloi, mainland enleipiises have also penelialed inlo all
lhe olhei ma|oi seclois of lhe Hong Kong economy, including liading,
lianspoilalion, consliuclion, ieal eslale, holels, ielailing, and louiism.12
Many mainland enleipiises also made use of lhe capilal maikel in lhe
leiiiloiy by seeking public lisling in lhe slock maikel. By mid-1997 lhe
63 lisled enleipiises, wilh a lolal shaie value of almosl HK$39O billion
(\S$5O billion), weie populaily iefeiied lo as ied-chip companies.``
The ied chips achieved iecoid highs in lhe iun-up lo lhe handovei. n
facl shaie piices foi blue chips also wenl up whenevei iumouis aboul
lhe in|eclion of capilal fiom mainland enleipiises weie iepoiled. Some
obseiveis aie iefeiiing lo such companies as pink chips.`` The expansion
of mainland businesses in Hong Kong and lheii penelialion of lhe econ-
omy have been exlensive.
Repiesenlalives fiom ma|oi mainland enleipiises aie becoming nol
only moie inuenlial in lhe boaidiooms of Hong Kong`s coipoiale
woild, bul also in public inslilulions. One example is lhe Ixchange Iund
Advisoiy Commillee. The Ixchange Iund ieseives aie a key elemenl in
mainlaining Hong Kong`s nnancial slabilily. On 17 Oclobei 1983 lhe
Hong Kong goveinmenl adopled a linked exchange iale syslem al a nxed
iale of \S$1 lo HK$7.8O. The coie fealuie of lhe aiiangemenl is lhe full
HONG KONG 313
backing of domeslic cuiiency noles by a foieign cuiiency. n lhe foieign
exchange maikel, lhe Hong Kong dollai exchange iale is deleimined by
supply and demand. The iale has iemained iemaikably slable since 1983
laigely because of Hong Kong`s laige ofncial ieseives. The ieseives
foiming lhe Ixchange Iund, managed by lhe Hong Kong Monelaiy
Aulhoiily (HKMA), ieached HK$535 billion al lhe end of 1996, oi
HK$83,316 pei peison in lhe leiiiloiy. Accoiding lo lhe Ixchange Iund
Oidinance, lhe nnancial secielaiy exeicises conliol of lhe fund in con-
sullalion wilh an Ixchange Iund Advisoiy Commillee chaiied by him-
self, wilh olhei membeis who aie appoinled by lhe goveinoi. The com-
millee advises lhe nnancial secielaiy as conliollei of lhe Ixchange Iund
on geneial policy ielaling lo ils deploymenl.13 While lhe commillee
membeis sil in a peisonal capacily, lhey iepiesenl ma|oi banks in lhe
leiiiloiy.
n 1997 lhe membeiship consisled of lhe nnancial secielaiy, lhe chief
exculive of lhe Hong Kong Monelaiy Aulhoiily, and lop managemenl
iepiesenlalives fiom ma|oi banks in Hong Kong, including lhe Hong-
kong and Shanghai Banking Coipoialion, lhe Bank of Iasl Asia, lhe
Slandaid Chaileied Bank, lhe Chase Manhallan Bank, lhe Hang Seng
Bank, and lhe Bank of China. Many membeis aie also polilically inu-
enlial. Anlhony Leung of Chase Manhallan is a membei of lhe SAR
Ixeculive Council; lhe Bank of Iasl Asia`s David Li, who seived on lhe
SAR`s seleclion and piepaialoiy commillees, iepiesenls lhe Iinancial
Consliluency in lhe Legislalive Council. All aie piominenl nguies in lhe
neld of nnance who have spenl mosl of lheii caieeis in lhe leiiiloiy, wilh
lhe exceplion of Bank of China`s Liang Xiaoling.14 Mi. Liang`s mem-
beiship cleaily has do wilh his posilion al lhe Bank of China. Moie iep-
iesenlalives fiom ma|oi mainland banks and olhei enleipiises aie likely
lo be appoinled lo impoilanl advisoiy bodies. The foimalion of lhe Hong
Kong Chinese Inleipiises Associalion in 1991 gave such enleipiises a
colleclive and dislincl polilical voice. l is peihaps nol suipiising lhal as
mainland business aclivilies in lhe SAR expand, iepiesenlalives fiom lhe
moie poweiful enleipiises will be appoinled lo ma|oi advisoiy bodies
and play a moie inuenlial iole in Hong Kong`s economic goveinance.
Howevei, lhe mainland Chinese enleipiises aie unlikely lo play a iole
similai lo lhal played by lhe hongs. The dominalion of Biilish business
inleiesls was evidenl in lhe days of colonial iule. n 1965 ovei one-lhiid
of lhe seals of lhe Ixeculive, Legislalive, and \iban Councils weie
occupied by Biilish businessmen. n 1976 all bul lwo of lhe ma|oi busi-
ness gioups weie owned and conliolled by expaliiale business families.
Bul lhe hongs have been on lhe decline since lhen. By 1986 Chinese
businessmen such as Li Ka Shing and . K. Pao had laken ovei a numbei
of Biilish nims, and expaliiales occupied only 13 pei cenl of lhe council
seals. The sleep decline of lhe Biilish businesses and lheii polilical in-
uence ieecled sliucluial changes in lhe Hong Kong economy. A num-
bei of local Chinese nims have become immensely successful. The sliuc-
luial diveisily of lhe Hong Kong economy, which consisls of inleinalional
businesses, a numbei of laige Chinese nims, numeious small and me-
dium-sized enleipiises, and Chinese enleipiises which aie in luin divei-
sined in naluie, means lhal business inleiesls aie nol always coheienl,
and lhis would make il haid foi mainland Chinese enleipiises lo acquiie
lhe kind of dominance lhal lhe hongs once possessed.15
Moieovei, lhe polilical elile fiom lhe pio-Bei|ing business communily
may also encounlei iesislance fiom lhe ianks of lhe buieauciacy. \nlike
lheii counleipails elsewheie, as lhe elile of an adminislialive slale Hong
Kong`s lop civil seivanls have been bolh polilicians and adminislialois
iesponsible foi foimulaling and implemenling policies. Theiefoie lhey
have had powei lo make policy choices as well as lo explain govein-
menl policies lo lhe public. The iise of lhe new elile is lhiealening lheii
posilions.
Allhough pio-China and pio-business inleiesls will be inuenlial foices
in shaping lhe economic goveinance of lhe Hong Kong SAR, lhe diveise
economic sliucluie and fiagmenlalion of business and pio-China inlei-
esls as well as iesislance wilhin lhe adminislialion aie likely lo limil lheii
inuence. The inlioduclion of elecloial polilics in Hong Kong also means
lhal laboui and welfaie inleiesls cannol be easily biushed off. While lhe
inslilulional machineiy which seives lhe new polilical elile in lhe SAR
has become moie poweiful, Hong Kong`s democializalion in iecenl yeais
has in|ecled new elemenls inlo goveinmenl-business ielalions as lhe lei-
iiloiy liansfoims inlo a SAR wilhin lhe PRC.
Only a few days befoie lhe polilical handovei, on 25 1une 1997, lhe
Legislalive Council haslily passed new laboui laws lo piovide woikeis
wilh lhe iighl of colleclive baigaining and bellei condilions of woik. The
goveinmenl was opposed lo lhe inlioduclion of such laws, aiguing lhal
lhey had nol been piopeily discussed in lhe noimal consullalive channels
such as lhe Laboui Advisoiy Boaid. The secielaiy foi educalion and
manpowei, 1oseph Wong, suggesled lhal lhe laws would adveisely affecl
indusliial ielalions in Hong Kong wilh fai-ieaching consequences. The
membeis of lhe Libeial Paily, which iepiesenls business inleiesls,
walked oul of lhe council meeling in disgusl when lheii opposilion lo lhe
bills was ignoied by olhei legislalois iepiesenling giass-iools and laboui
inleiesls.16
Ma|oi chambeis of commeice in Hong Kong expiessed lheii opposi-
lion lo lhe new laboui laws in a |oinl newspapei adveilisemenl, and many
expecl lhe SAR goveinmenl lo iepeal lhe laws. Chaiiman of lhe Hong
Kong Geneial Chambei of Commeice 1ames Tien wiole on 29 1une 1997
HONG KONG 315
lhal Hong Kong had been polaiized by laboui issues and policies undei
lhe lasl colonial adminislialion. Tien, who is also a membei of lhe Libeial
Paily, expecled lhal n lhe SAR eia, employeis and employees, inslead
of iesoiling lo colleclive baigaining, sliikes, union mililancy and piivale
membeis` bills will iesolve lheii diffeiences lhiough ieason, dialogue and
compiomise, and woik lowaids a common goal mainlaining slabilily
and piospeiily foi Hong Kong.`` He fuilhei mainlained lhal we need lo
ensuie lhe execulive adminislialion is nol oveiwhelmed by populisl poli-
licians who enlice voleis wilh fiee lunches and welfaie piomises. The
iepiesenlalion in lhe legislaluie needs lo be moie diveise and ieeclive
of lhe wide iange of views in oui communily.`` He piedicled lhal n lhe
SAR eia, wilh economics laking piecedence ovei polilics, we will ieluin
lo a moie oideily and pioduclive enviionmenl which we had duiing lhe
lime when oui GDP giowlh was double whal il is loday.``17
When lhe SAR goveinmenl inlioduced lhe Legislalive Piovisions
(Suspension of Opeialion) Bill 1997 lo fieeze seven laws passed by lhe
foimei Legislalive Council, including lhose ielaled lo laboui malleis,
membeis of lhe Piovisional Legislalive Council iaised ob|eclions.18 The
goveinmenl`s unpiecedenled move lo suspend oidinances alieady in op-
eialion was seen as a depailuie fiom usual piaclices.19 The Piovisional
Legislalive Council suppoiled lhe adminislialion`s posilion on foui oidi-
nances ielaled lo laboui malleis wilh 4O voles, bul nol lhe olhei oidi-
nances. The council also exliacled a piomise fiom lhe goveinmenl nol lo
exlend lhe fieeze beyond 3O Oclobei 1997 wilhoul ils appioval.
Theie is lillle doubl lhal lhe business communily has mainlained ils
inuence and indeed ieasseiled ilself as lhe cenlial polilical foice undei
lhe Tung adminislialion. This is demonslialed by lhe ieveisal of lhe de-
mocializalion piocess wilh lhe eslablishmenl of a moie pio-business and
pio-Bei|ing Piovisional Legislaluie. Pio-Bei|ing polilical foices conlinued
lo dominale lhe nisl SAR Legislalive Council, helped by lhe new elec-
loial aiiangemenls, and pio-democialic polilical foices weie lefl wilh 19
seals following lhe eleclions.
\nlike in lhe old colonial days, lhe legislaluie will nol be dominaled by
lhe business elile alone. Nol only will a signincanl minoiily voice in lhe
foim of lhe Democialic Paily be likely lo peisisl, bul some of lhe pio-
China gioups such as lhe Democialic Alliance foi lhe Belleimenl of
Hong Kong, and lhe Hong Kong Iedeialion of Tiade \nions, aie also
sliongly oiienled lowaids laboui and giass-iools inleiesls. The laboui
laws passed by lhe Legislalive Council weie lhe iesull of a coalilion
among gioups wilh diffeienl posilions on lhe Bei|ing goveinmenl. Iui-
lheimoie, accoiding lo lhe Basic Law addilional diieclly elecled seals
will be giadually inlioduced in lhe legislaluie: half of lhe 6O-membei as-
sembly will be ieluined by diiecl eleclion by 2OO4. Wilh lhe inlioduclion
of compelilive elecloial polilics, even in a limiled foim, and wilh a much
bellei-developed polilical culluie of open debale and discussion, even
undei consliainls, lhe polilical landscape of Hong Kong has undeigone
fundamenlal change. The condilions foi iesloiing lhe old inlimale busi-
ness-goveinmenl ielalionship no longei exisl.
Towaids lhe end of colonial iule lhe adminislialion had come undei
incieasing piessuie lo ie-denne posilive non-inleivenlionism.`` Polilical
changes following lhe Sino-Biilish negolialions foi lhe ieluin of Hong
Kong lo Chinese soveieignly have opened up a polilical syslem which
was iemained closed lo lhose oulside lhe eslablishmenl. As a commeicial
cenlie Hong Kong has also faced loughei compelilion fiom neighbouiing
indusliializing economies. This chaplei examines changes in lhe business-
goveinmenl ielalionship in lhe Hong Kong SAR by examining lhiee
inleiielaled issues: economic ideology, inslilulional and policy develop-
menls, and lhe polilical enviionmenl in lhe leiiiloiy.20
Iconomic ideology in ux
Hong Kong`s minimalisl appioach, oiiginaling in lhe nineleenlh-cenluiy
Biilish liadilion of allowing fiee play lo maikel foices, has guided lhe
goveinmenl`s economic policies evei since lhe eslablishmenl of lhe col-
ony. n 1997 lhe leiiiloiy won lhe lille of lhe woild`s fieesl economy,
accoiding lo lhe Heiilage Ioundalion`s index of economic fieedom, foi
lhe lhiid lime in a iow. n ils 1997 ieview lhe foundalion declaied:
Theie is lillle goveinmenl inleifeience in lhe maikelplace; laxes aie low
and piediclable; incieases in goveinmenl spending aie linked closely lo
economic giowlh; foieign liade is fiee; and iegulalions, in addilion lo
being lianspaienl, aie applied bolh unifoimly and consislenlly. Hong
Kong now has lhe woild`s fieesl economy.``21
The colonial adminislialion`s lasl annual iepoil slaled lhal lhe gov-
einmenl advocales fiee and faii compelilion. Business decisions aie lefl
lo lhe piivale secloi, excepl wheie social consideialions aie ovei-iiding.
l is consideied lhal lhe allocalion of iesouices in lhe economy is besl lefl
lo maikel foices. Adopling lhis fiee-maikel philosophy, lhe goveinmenl
has nol soughl lo inuence lhe sliucluie of indusliy lhiough iegulalions,
lax policies oi subsidies.`` The goveinmenl also held lo a low lax iegime
and conlained lhe giowlh iale of public-secloi expendiluie.22 A iecenl
analysis of lhe slienglh of lhe Hong Kong economy conlains lhe follow-
ing obseivalion: The cleai sepaialion in Hong Kong belween lhe iole of
lhe goveinmenl as iefeiee, and lhe iole of piivale companies as aclive
playeis in lhe economy, is unique in Asia and iaie woild-wide.``23
Allhough lhe Chinese syslem is ofncially socialisl, lhe Chinese veision
HONG KONG 317
of socialism cleaily embiaces lhe piinciples of a fiee-maikel economy. Al
lhe lime of lhe polilical handovei in 1uly 1997, lhe aigumenls foi believ-
ing lhal Hong Kong`s economy would conlinue lo piospei undei lhe
same model of economic goveinance weie veiy poweiful. The Hong
Kong economy iemained iobusl, and lhe economic fundamenlals weie
sliong. The new adminislialion`s moie pio-business oullook as well as
Bei|ing`s economic inleiesls in Hong Kong should also ensuie lhal lhe
polilical liansilion would nol biing economic disiuplion, and lhal lhe
ideology of a fiee-maikel economy would conlinue lo guide lhe SAR.
The ma|oi concein seemed lo be aiising fiom lhe giowing piesence of
mainland enleipiises in lhe SAR and whelhei lhe adminislialion could
mainlain lhe inlegiily of ils legal syslem wilhoul special piivileges foi
Chinese enleipiises in lhe leiiiloiy.24
The conslilulional aiiangemenls foi lhe Hong Kong SAR, as piomised
by lhe 1oinl Declaialion and connimed by lhe Basic Law, aie meanl lo
ensuie lhe conlinualion of lhe exisling syslem in Hong Kong which was
guided by a libeial economic ideology. The Basic Law slipulaled: The
socialisl syslem and policies shall nol be piaclised in lhe Hong Kong
SAR, and lhe pievious capilalisl syslem and way of life shall iemain
unchanged foi 5O yeais`` (Ailicle 5).
The fiamewoik of economic goveinance as piovided foi undei lhe
Basic Law included lhe following elemenls: independence, pieseivalion
of lhe piesenl economic and legal fiamewoik, developmenl of appiopii-
ale policies lo mainlain lhe cuiienl nnancial syslem which is bolh libeial
and highly open, and mainlenance of lhe exisling inleinalional nelwoik.
These fealuies aie slipulaled by vaiious ailicles in lhe Basic Law:
.
The Hong Kong SAR shall have independent nances. It shall use its
own nancial revenues without contributing to the central govern-
ment. The central government also cannot levy taxes in the SAR.
(Article 106.)
.
The SAR shall practise an independent taxation system and continue
to pursue a low-tax policy. (Article 108.)
.
The Hong Kong SAR shall provide an appropriate economic and
legal environment for maintaining Hong Kong's status as a nancial
centre. (Article 109.)
.
The Hong Kong SAR shall formulate its own monetary and nancial
policies, and safeguard the free operation of nancial business and
markets with proper regulations. (Article 110.)
.
The Hong Kong SAR shall ensure the continued free convertibility of
currency with no foreign exchange control, and the free ow of capital
in and out of the territory. (Article 112.)
.
The Hong Kong SAR shall maintain its status as a free port, remain
as a separate customs territory, and pursue a policy of free trade.
(Articles 114, 115, and 116.)
n a sludy of lhe legal oidei of lhe SAR, one of Hong Kong`s mosl
piominenl public law expeils slales lhal lhe inlenlion in lhe Basic
Law was lo enliench lhe exisling capilalisl syslem.``25 The iefeience lo
pieviousjexisling piaclices and policies suggesls lhal lhe SAR govein-
menl would have lo opeiale wilhin lhe economic fiamewoik lhal was in
place piioi lo lhe signaluie of lhe 1oinl Declaialion belween lhe lwo
soveieign goveinmenls. While lhe legal fiamewoik slipulaled in lhe Basic
Law has guaianleed lhe independence and libeial oiienlalion of lhe
economic syslem in Hong Kong, lhe SAR would slill be able lo puisue
bioad economic ob|eclives using diffeienl insliumenls and wilh vaiying
degiees of involvemenl in macioeconomic managemenl.
Hong Kong`s 199798 budgel, which is a pioducl of |oinl Sino-Biilish
consullalion, connimed lhal lhe capilalisl syslem will iemain unchanged,
and lhe commilmenl lo Hong Kong`s iole as an inleinalional business
and nnancial cenlie was demonslialed by lhe adminislialion`s decision
nol lo inciease business and pionl laxes. n 1998, when lhe nnancial sec-
ielaiy announced lax culs and incieased benenls foi lhe public in lhe nisl
budgel lhal was piepaied wholly foi lhe SAR, he also mainlained lhal
lhe SAR goveinmenl iemained small and efncienl, wilh lolal public ex-
pendiluie kepl below 2O pei cenl of GDP.26
Al lhe lime of lhe polilical handovei, lhe adminislialion was sel lo caiiy
on lhe laissez-faiie liadilion of lhe pievious adminislialion. The SAR
inheiiled a veiy sliong economy. n 1997 Hong Kong was lhe woild`s
nflh laigesl banking cenlie foi exleinal nnancial liansaclions, lhe nflh
laigesl foieign exchange maikel, lhe sevenlh laigesl slock maikel, lhe
sevenlh laigesl liadei, and lhe busiesl conlainei poil. l was ianked as
lhe second mosl compelilive economy in lhe woild in 1997 aflei Singa-
poie by lhe Woild Iconomic Ioium, and ieclassined as an advanced
economy by lhe nleinalional Monelaiy Iund. n Iinancial Secielaiy
Donald Tsang`s woids, Hong Kong is alieady lhe besl place in lhe woild
in which lo do business. The Goveinmenl is lolally commilled lo ensuiing
lhal il iemains so.``27
n Iebiuaiy 1998, oullining some of lhe economic pioblems Hong
Kong could have lo wealhei in 1998 and 1999, lhe nnancial secielaiy
iemained oplimislic aboul lhe SAR`s economic silualion. Acknowledging
lhe economic pain iesulling foi lhe SAR fiom a shaip decline in slock-
maikel and piopeily-maikel values, he neveilheless iemained oplimislic
aboul Hong Kong`s economic oullook. While lhe goveinmenl iecognized
HONG KONG 319
lhal lhe nnancial luimoil would damage lhe leiiiloiy`s exleinal liade
giowlh and lhal unemploymenl would likely iise, lhe nnancial secielaiy
foiecasl a modesl yel posilive GDP giowlh of 3.5 pei cenl foi 1998. He
also piedicled a solid 4.8 pei cenl giowlh in expoils of goods and a 3.5
pei cenl giowlh of expoils of seivices, as well as an inalion iale al
aiound 5 pei cenl.28
n choosing Riding Oul lhe Sloim: Renewing Hong Kong Slienglhs``
as lhe lille of his speech, lhe nnancial secielaiy mainlained lhal he was
guided by lwo piinciples: assuiance of conlinuily malched wilh incenlives
foi new giowlh. The chief execulive has also iepealedly afnimed lhal we
piaclise a sound macio-economic policy of small goveinmenl, wilh sliong
suppoil foi lhe fiee maikel.``29 This seemed consislenl wilh lhe economic
policy of pievious adminislialions. n shoil, lhe new SAR goveinmenl
indicaled lhal il would conlinue a pio-business and laissez-faiie economic
policy, i.e., business as usual.``
Bul as Noiman Mineis has poinled oul, lhe goveinmenl`s belief in lhe
fiee maikel is nol absolule. Sii Philip Haddon-Cave, nnancial secielaiy
of lhe leiiiloiy duiing lhe 197Os, who coined lhe leim posilive non-
inleivenlion`` lo desciibe lhe goveinmenl`s appioach lo economic man-
agemenl, cleaily fell lhal lhe adminislialion did have a iole in lhe man-
agemenl of Hong Kong`s economy. His view was lhal lhe goveinmenl
would piovide lhe basic legal fiamewoik and infiasliucluie lo facililale
lhe opeialion of maikel foices.30 Iiom lhe 197Os onwaid, howevei, lhe
giowing sophislicalion of lhe Hong Kong economy, and iising piolec-
lionism in lhe foim of non-laiiff baiiieis in lhe indusliialized woild as
well as lhe inlensincalion of compelilion fiom neighbouiing counliies,
have eioded lhe libeial economic ideology of lhe adminislialion.31 n facl
lhe business communily, which had in pasl always endoised lhe libeial
economic ideology of lhe goveinmenl, has uiged lhe goveinmenl lo pio-
vide moie suppoil lo business.
While lhe goveinmenl has conlinued lo adopl a hands-off appioach lo
economic managemenl, a numbei of economic ciises have foiced lhe
goveinmenl lo slep up iegulaloiy aclions and piovide moie diiecl sup-
poil lo local indusliies. Ioi example, lhe goveinmenl eslablished lhe
Secuiilies and Iuluies Commission in 1989 lo iegulale lhe liading of
secuiilies, fuluies, and leveiaged foieign exchange conliacls in iesponse
lo lhe exposuie of denciencies of iegulaloiy fiamewoik following lhe
maikel ciash of 1987.32 Reecling giowing piessuie on lhe goveinmenl
lo assume a moie aclive iole in iegulaling economic aclivilies and pio-
viding moie suppoil lo local businesses, lhe Hong Kong 1997 yeaibook
pioclaimed lhal lhe goveinmenl`s policy was minimum inleifeience and
maximum suppoil.``33 n facl lhe maikel ciash of 1997 piompled lhe
goveinmenl lo conducl a compiehensive ieview of lhe nnancial maikels
32O 1AMIS T. H. TANG
in Hong Kong. Allhough lhe iepoil mainlained lhal lhe economic syslem
in lhe leiiiloiy was sound and lhe iegulaloiy mechanism had woiked
duiing lhe nnancial ciisis, il also made specinc iecommendalions lo
lighlen lhe iegulaloiy fiamewoik fuilhei.34
n his nisl policy speech as chief execulive of lhe SAR, Tung Chee-hwa
suggesled lhal undei his leadeiship Hong Kong`s developmenl slialegy
would be based on a fiee-maikel economy and a piudenl nscal policy.
Bul he obviously consideied lhal a new slialegy would be iequiied lo
push Hong Kong foiwaid. He announced lhal a commission on slialegy
developmenl would be sel up lo conducl ieviews and sludies on oui
economy, human iesouices, educalion, housing, land supply, enviion-
menlal pioleclion, and ielalions wilh lhe Mainland, lo ensuie lhal oui
iesouices aie well used, and lhal we keep up wilh lhe woild liends in
compelilive leims, and lhal we mainlain lhe vilalily of Hong Kong`s
economic developmenl.``35 Thus while Tung pieaches lhe same funda-
menlal economic philosophy as pievious adminislialions, he obviously
also wanls lo adopl a moie pioaclive appioach in developing a new eco-
nomic slialegy foi lhe SAR.
Iiom a diffeienl diieclion, lhe inlioduclion of a moie iepiesenlalive
Legislalive Council since lhe eaily 199Os has also geneialed moie pies-
suie foi lhe piomolion of laboui and welfaie iighls, which in luin has led
lo moie inlense piessuie on lhe goveinmenl fiom lhe business commu-
nily lo piolecl business inleiesls in Hong Kong.
n geneial, lhe numbei of public inslilulions involved in developing
goveinmenl economic policies, mainlaining lhe iegulaloiy fiamewoik foi
lhe economy, and piomoling economic giowlh and bellei oppoilunilies
foi Hong Kong businesses has giown sleadily in iecenl yeais.
nslilulional and policy changes
The Hong Kong slale has been desciibed as weak nol because il has an
ineffeclive adminislialion oi one wilh limiled aulonomy vis-a` -vis sociely,
bul because il has kepl goveinmenl involvemenl in lhe economy lo a
minimum in lhe pasl. The weakness of lhe Hong Kong slale was lheie-
foie lhe iesull of a policy choice guided by a libeial economic ideology
and olhei polilical consideialions. n leims of iesouice and capacily lhe
buieaucialic machineiy of Hong Kong is by no means weak.
The chief execulive of lhe SAR look ovei a poweiful buieaucialic
machineiy when he assumed ofnce on 1 1uly 1997. \ndei colonial iule,
polilical powei was always concenlialed in lhe hands of lhe goveinoi.
The goveinois weie advised by lhe Ixeculive Council and implemenled
goveinmenl policies lhiough lhe policy bianches which weie in luin
HONG KONG 321
suppoiled by goveinmenl depailmenls and agencies. A paiallel nelwoik
of slaluloiy bodies, many diieclly answeiable lo lhe goveinois, also
exisled lo suppoil oi implemenl goveinmenl policies when diiecl gov-
einmenlal conliol was iegaided as inappiopiiale.
When lhe SAR goveinmenl came inlo exislence in 1997 lheie weie 15
policy and iesouices buieaux,36 71 goveinmenl depailmenls and agen-
cies, plus a numbei of slaluloiy bodies.37 The goveinmenl employed ovei
18O,OOO civil seivanls, oi aboul 6 pei cenl of lhe laboui foice. \nlil lhe
198Os lhe legislaluie was an appoinled body dominaled by lhe civil
seivice and business. The foimal goveinmenlal and public agencies oi
coipoialions weie suppoiled by 5OO-odd boaids, councils, and advisoiy
commillees composed of civil seivanls and membeis of lhe public
appoinled by lhe goveinmenl.
l is nol my inlenlion lo ieview compiehensively all lhe inslilulions
involved in lhe economic goveinance of Hong Kong. This seclion high-
lighls lhe iole of some of lhe moie impoilanl inslilulions and assesses lhe
impacl of Hong Kong`s polilical liansilion on such inslilulions.
Of lhe lhiee ma|oi calegoiies of public inslilulions goveinmenl
bianches and depailmenls, olhei public agencies, and advisoiy commillees
lhose in chaige of nnancial malleis and liade and indusliy aie lhe mosl
ielevanl in lhe piesenl conlexl. The Iinance Buieau (foimeily lhe Iinan-
cial Bianch) plays a ciilical iole, being iesponsible foi oveiall iesouice
planning including diawing up and applying oveiall public expendiluie
guidelines. l manages and co-oidinales lhe annual iesouice allocalion
exeicise, and compiles lhe annual eslimales. n addilion, lhe buieau also
manages lhe goveinmenl`s ievenue policy and adminislialion, bolh lo
ensuie lhal sufncienl ievenue is iaised, and lo keep lhe lax syslem as
simple, slable, and pioduclive as possible. l lays down and implemenls
policies and pioceduies lo ensuie effeclive conliol and managemenl
of public ievenues and expendiluie, including assels and inveslmenls.
ls olhei ioles include: exeicising policy iesponsibilily foi laxalion, iales,
fees, and chaiges; goveinmenl accounling aiiangemenls; piocuiemenl
and lendeiing; land lianspoil; piinling; infoimalion lechnology; and lhe
goveinmenl eslale. Iinally il also seives as lhe foimal inleiface belween
lhe adminislialion and lhe legislaluie on all nnancial malleis.38
Olhei goveinmenl buieaux and depailmenls such as lhe liade and
indusliies depailmenls also play impoilanl ioles in economic goveinance
and in facililaling lhe expansion of lhe economy. The Tiade Depailmenl,
foi example, pioclaiming ils mission as lo be a diiving foice in libeializing
woild liade, plays a key iole nol only in lhe piomolion and pioleclion of
Hong Kong`s economic and liade inleiesls, bul also in ensuiing compli-
ance, and in safeguaiding lhe inlegiily and ciedibilily of Hong Kong`s
liade iegime. The depailmenl has lo make suie lhal Hong Kong indus-
liialisls and liadeis obseive lhe lexliles conliol policy in accoidance wilh
lhe Woild Tiade Oiganisalion Agieemenl on Texliles and Clolhing. l
also imposes licensing conliol foi phaimaceulical pioducls and medicines
on heallh and safely giounds, and ensuies lhe availabilily of essenlial
foodsluffs foi emeigency silualions. l exeicises licensing conliol ovei
local consumplion of conliolled subslances as agieed undei lhe 1987
Monlieal Piolocol on Subslances lhal Deplele lhe Ozone Layei. The
depailmenl also imposes licensing conliol ovei slialegic commodilies lo
pievenl Hong Kong being used as a conduil foi lhe piolifeialion of
weapons.39
The ndusliy Depailmenl is iesponsible foi facililaling lhe fuilhei de-
velopmenl of manufacluiing and seivice indusliies. While lhe depailmenl
has declaied lhal ils commilmenl lo piomole manufacluiing and seivice
indusliies will nol lead lo inleifeience wilh maikel foices, il has become
moie aclive in developing closei ielalionships among goveinmenl, busi-
ness, educalion and liaining inslilulions, and indusliial suppoil bodies. ls
piioiily aieas include physical, human and lechnological infiasliucluie;
pioduclivily and qualily; applied ieseaich and developmenl of pioducls
and piocesses; lechnology upgiade and liansfei; and moniloiing and
infoiming indusliies of woild-wide developmenls lhal may impinge on
lheii compeliliveness in lhe global maikel.``40
Allhough lhe goveinmenl does subsciibe lo a libeial economic ideol-
ogy, il is cleai lhal lhe goveinmenl cannol be liuly laissez-faiie as lhe
Hong Kong economy becomes incieasingly complex and sophislicaled. n
iecenl yeais lhe Hong Kong goveinmenl`s iole in macioeconomic man-
agemenl has become fai moie visible. A laige numbei of goveinmenl
depailmenls and olhei public coipoialions have been sel up lo iegulale
lhe economy and piovide moie suppoil lo local indusliies, lo ensuie lhe
leiiiloiy`s compliance wilh inleinalional agieemenls.
One example is lhe nlelleclual Piopeily Depailmenl. As inlelleclual
piopeily has become an impoilanl elemenl in lhe woild liade iegime, lhe
goveinmenl eslablished lhe depailmenl on 2 1uly 199O. l is lhe focal
poinl in lhe ieview and enfoicemenl of Hong Kong`s inlelleclual piop-
eily legislalion. The depailmenl also adminisleis lhe syslem of iegislia-
lion of liade maiks and palenls.41 Of lhe numeious inslilulions eslab-
lished in iecenl yeais in economic goveinance, lhe mosl impoilanl is lhe
Hong Kong Monelaiy Aulhoiily. l was eslablished on 1 Apiil 1993, by
meiging lhe Ofnce of lhe Ixchange Iund wilh lhe Ofnce of lhe Com-
missionei of Banking. The piimaiy monelaiy policy ob|eclive of lhe
HKMA is lo mainlain exchange iale slabilily wilhin lhe fiamewoik of lhe
linked exchange iale syslem which is sel al lhe iale of appioximalely
\S$1.OO lo HK$7.8O. The aulhoiily is also iequiied lo piomole lhe
safely and slabilily of lhe banking syslem lhiough lhe iegulalion of
HONG KONG 323
banking business and lhe business of laking deposils, and lhe supeivision
of aulhoiized inslilulions; and lo piomole lhe efnciency, inlegiily and
developmenl of lhe nnancial syslem, pailiculaily paymenl and selllemenl
aiiangemenls.``42 n defence of lhe Hong Kong cuiiency in Oclobei
1997, lhe HKMA adopled measuies which led lo incieased inleiesl iales
in lhe leiiiloiy. The allack on lhe Hong Kong cuiiency has piompled
debales in Hong Kong aboul lhe link syslem. While a ma|oiily of Hong
Kong analysls and lhe public suppoil lhe syslem, some economisls have
aigued lhal lhe HKMA should nol iely solely on inleiesl iales lo defend
lhe Hong Kong cuiiency. Bul aflei lhe HKMA`s ieview of lhe cuiiency
defences, lhe goveinmenl decided lo conlinue wilh lhe exisling linked
exchange iale mechanisms.43 n Augusl 1998, howevei, lhe goveinmenl
decided lo inleivene in lhe slock maikel lo pievenl speculalois`` who
weie engaged in double play selling Hong Kong dollais lo foice a
highei inleiesl iale and selling shoil in lhe slock maikel anlicipalion of a
fall in slock piices as a iesull of an inleiesl iale inciease.
The goveinmenl`s moie pioaclive appioach lo economic managemenl
is ieecled by lhe eslablishmenl of oiganizalions such as lhe Hong Kong
ndusliial Technology Cenlie Coipoialion, lhe Hong Kong ndusliial
Islales Coipoialion, a Soflwaie ndusliy nfoimalion Cenlie and Cybei-
space Cenlie, and effoils in piomoling ieseaich and developmenl as well as
lhe eslablishmenl of lhe Goveinmenl Task Ioice on Seivices Piomolion.
The nnancial secielaiy in lhe 1997 budgel ieafnimed lhe pioaclive
appioach. He idenlined goveinmenl effoils in foui aieas: manufaclui-
ing, seivices, lhe nnancial secloi, and infiasliucluie. n his speech he
announced lhe goveinmenl`s plans in suppoil of lhe manufacluiing secloi
which included: HK$41O million eaimaiked foi Science Paik Phase ;
planning foi a second indusliial lechnology cenlie; planning woik slailed
on a fouilh indusliial eslale; applied ieseaich and developmenl schemes
lo suppoil lechnology venluies wilh HK$25O million seed money. n lhe
aiea of seivices piomolion, lhe goveinmenl announced lhe foimalion of
a new Seivices Piomolion Slialegy Gioup, biinging lhe goveinmenl and
lhe piivale secloi logelhei. The goveinmenl also concluded negolialions
on all ma|oi aii seivices agieemenls and issued six new licenses foi pei-
sonal communicalions seivices. The Ixpoil Ciedil nsuiance Coipoialion
is lo inlioduce a specinc insuiance policy foi small and medium enlei-
piises. Thiough lhe Seivices Suppoil Iund, lhe goveinmenl commilled
HK$28 million lo help 14 pio|ecls. The Tiade Developmenl Council is lo
spend anolhei HK$3O million in 199798 lo piomole expoils of seivices.
The nnancial secloi is suppoiled lhiough lhe inlioduclion of legislalion
lo peimil developmenl of a caplive insuiance indusliy. A Moilgage
Coipoialion is lo commence opeialion in 1997. The goveinmenl is also
lo develop a Mandaloiy Piovidenl Iund lo spui ciealion of new nnancial
pioducls, and launched 1O-yeai Ixchange Iund Noles. A laige numbei
of infiasliucluial pio|ecls have also been compleled oi aie aboul lo be
nnished, including lhe Weslein Haiboui Ciossing (HK$7.5 billion) lhe
Ching Ma Biidge, lhe woild`s longesl ioadjiail suspension biidge (HK$7.9
billion), lhe Convenlion Cenlie Ixlension, lhe new inleinalional aiipoil
wilh a second iunway, and plans foi lhe Weslein Coiiidoi Railway and
commulei iailway exlensions.44
The goveinmenl also foimed a Business Advisoiy Gioup on 1 Decem-
bei 1996, and eslablished lhiee subgioups in Iebiuaiy 1997 lo examine
issues such as deiegulalion, cosl of compliance assessmenl, and liansfei
of seivices lo lhe business secloi. The new Business and Seivices Pio-
molion \nil was foimed in May 1997 lo piovide execulive suppoil. A
one-slop Business Licence nfoimalion Cenlie in lhe ndusliy Depail-
menl was opened in Seplembei 1997.
n ils policy piogiammes foi 199798 lhe Tung adminislialion com-
milled aboul \S$64 million lo suppoil lhe commeicializalion of ieseaich
in infoimalion lechnology and olhei high lechnology nelds,`` and \S$6.4
million lo nnance inilialives which help suslain and impiove lhe com-
peliliveness of lhe seivice secloi.`` The goveinmenl also moved ahead
wilh lhe developmenl of lhe Science Paik al Pak Shek Kok, and lhe es-
lablishmenl of a second lechnology cenlie as well as a fouilh indusliial
eslale in Tuen Mun, and exploied lhe need foi lhe eslablishmenl of a
business paik.45
The lasl colonial adminislialion had sel in liain a pioaclive appioach
and giadually developed a sel of inslilulional aiiangemenls which have
become moie complex and much widei in scope lhan befoie. nslead of
ieveising lhe liend in economic goveinance, lhe Tung adminislialion has
mainlained a sliong elemenl of inslilulional conlinuily and slienglhened
lhe goveinmenl`s iole in economic affaiis.
Conclusions
Polilical developmenls in Hong Kong since lhe 198Os have alleied lhe
fiamewoik of economic goveinance which once seived lhe colonial slale
well. Towaids lhe end of Hong Kong`s colonial days, ils libeial economic
ideology had alieady been eioded nol only by a deleiioialing inlei-
nalional economic enviionmenl and incieased compelilion fiom neigh-
bouiing economies, bul also by a moie polilicized domeslic enviionmenl.
While lhe goveinmenl slill mainlained a policy of minimum inleifeience,
posilive non-inleivenlionism was ie-denned. The inslilulions involved in
HONG KONG 325
economic goveinance have become moie poweiful as a iesull of new
iegulaloiy iequiiemenls ciealed by lhe incieasing sophislicalion of lhe
economy as well as inleinalional developmenls.
The weak slale`` of Hong Kong has liied lo become moie asseilive
since lhe eslablishmenl of lhe SAR by allempling lo iesloie lhe pie-
Pallen polilical fiamewoik. The new polilical fiamewoik which has
emeiged in lhe SAR, howevei, is fai moie complex lhan lhe old days.
The dominance of lhe buieaucials is being challenged by lhe new pio-
Bei|ing business elile in a syslem which is maiked by lhe giowing impoi-
lance of compelilive polilics. nleinalionally, lhe globalized naluie of lhe
woild economy has ieinfoiced lhe vulneiabilily of an open and ielalively
small economy like Hong Kong and lhe impoilance of keeping lhe leiii-
loiy compelilive. The SAR economy has been badly shaken by exleinal
economic foices. The Asian nnancial ciisis, piecipilaled by lhe collapse of
Soulheasl Asian cuiiencies in lhe second half of 1997, subsequenlly led lo
a widei nnancial luimoil in lhe iegion and ciippled mosl Iasl Asian
economies. The liansfei of soveieignly and domeslic polilical changes
have also led lo lhe ieconnguialion of economic and polilical inleiesls.
While mainland Chinese enleipiises aie becoming moie impoilanl in
lhe leiiiloiy, lhey do nol seem lo have acquiied special piivileges. To
whal exlenl inuences fiom Bei|ing would in lhe long iun evenlually allei
lhe iules of lhe game in Hong Kong slill iemains uncleai. Ioi lhe lime
being, howevei, lhe cenlial goveinmenl has adopled a hands-off appioach
lo lhe SAR. The moie immediale challenge lo lhe Tung adminislialion is
lhal on lhe one hand il has lo iespond lo populai demand foi impioving
lhe livelihood of lhe people, and on lhe olhei hand il musl face lhe busi-
ness gioups` misgivings aboul luining Hong Kong inlo a welfaie slale as
well as lheii demand foi moie iesouices duiing a ma|oi economic down-
luin. The goveinmenl`s appioach lo economic managemenl is evolving
wilhin lhe fiamewoik of domeslic and inleinalional polilical and economic
silualions which have been changing iapidly. As Hong Kong becomes
moie polilicized and lhe conliadiclions in lhe polilical syslem suiface, il is
haidly suipiising lhal lhe model of economic goveinance as piaclised in
colonial days has become inappiopiiale. \nfoilunalely, lhe Hong Kong
SAR will only be able lo develop a coheienl appioach lo economic gov-
einance aflei il eslablishes a slable polilical oidei.
Noles
1. A compaialive sludy of lhe diffeienl palhs of economic and polilical developmenl in
Iasl Asia is Anek Laolhamalas (ed.), Dcnocracy in Southcast anJ 1ast Asia (Singa-
poie: nslilule of Soulheasl Asian Sludies, 1997).
2. See discussions in Andiew Macnlyie (ed.), Busincss anJ Covcrnncnt in InJustriali;ing
Asia (lhaca, N..: Coinell \niveisily Piess, 1994), pp. 34. The slandaid woik on lhe
sub|ecl is Iiedeiic Deyo, Thc Iolitical 1conony oj Thc Ncw Asian InJustrialisn (lhaca,
N..: Coinell \niveisily Piess, 1987). See also u-han Chu, Slale Sliucluie and Ico-
nomic Ad|uslmenl of lhe Iasl Asian Newly ndusliializing Counliies,`` Intcrnational
Organi;ation 43(4); Slephan Haggaid, Iathways jron thc Icriphcry. Thc Iolitics oj
Crowth in thc Ncwly InJustriali;ing Countrics (lhaca, N..: Coinell \niveisily Piess,
199O).
3. Noiman Mineis, Covcrnncnt anJ Iolitics oj Hong Kong (Hong Kong: Oxfoid \nivei-
sily Piess, 1994), p. 46.
4. A compiehensive accounl of how Hong Kong was goveined is Noiman Mineis, Cov-
crnncnt anJ Iolitics oj Hong Kong, 5lh ed. wilh posl-handovei updale by 1ames T. H.
Tang (Hong Kong: Oxfoid \niveisily Piess, 1998).
5. One delailed sludy of lhe Chinese Communisl leadeiship`s allilude lowaids Hong Kong
fiom lhe 194Os lo lhe lale 196Os is Gaiy Wayne Calion, China and Hong Kong, 1945
1967`` (Ph.D. diss., Haivaid \niveisily, 1971). Ioi a moie geneial accounl of lhe evo-
lulion of China`s policy lowaids Hong Kong, see Kevin Lane, Sovcrcignty anJ thc Status
Quo. Thc Historical Roots oj Chinas Hong Kong Iolicy (Bouldei, Colo.: Weslview
Piess, 199O).
6. Ioi a discussion of lhe hisloiy and naluie of lhe colonial goveinmenl`s consullalion wilh
lhe business communily, see Noiman Mineis, Consullalion wilh Business nleiesls:
The Case of Hong Kong,`` Asian 1ournal oj Iublic AJninistration Decembei 1996;
18(2): 24656.
7. Goveinmenl of lhe SAR, 1stinatcs oj Cross Doncstic IroJuct 19611997 (Hong Kong:
Census and Slalislics Depailmenl, HKSAR, 1998); Bod Howlell, ed., Hong Kong A
Ncw 1ra. A Rcvicw oj 1997 (Hong Kong: nfoimalion Seivices Depailmenl, HKSAR
Goveinmenl, 1998), p. 43.
8. Idwaid K. . Chen, The Iconomic Selling,`` in Ng Sek Hong and David G Lelhbiidge
(eds.), Thc Busincss 1nvironncnt in Hong Kong, 3d ed. (Hong Kong: Oxfoid \niveisily
Piess, 1995), p. 34.
9. bid., pp. 354O.
1O. The membeis of lhe SAR goveinmenl`s nisl Ixeculive Council aie: Chief Ixeculive
Tung Chee-hwa; Chief Secielaiy foi Adminislialion Anson Chan; Iinancial Secielaiy
Donald Tsang; Secielaiy foi 1uslice Ilsie Leung; Sze-yuen Chung (convenoi), Nellie
Iong, Rosanna Wong, Heniy Tang, Chailes Lee, Tam iu-chung, ang Ti-liang, Leung
Chun-ying, Anlony Leung, Raymond Chìen, and Chung Shui-ming.
11. A useful accounl of lhe developmenl of mainland economic inleiesls in Hong Kong is
Wulan Mulun (ed.), Maixiang crshiyi shiji Jc xianggang jingji |Hong Kong`s economy
lowaids lhe lwenly-nisl cenluiyj (Hong Kong: Hong Kong 1oinl Publishing, 1997),
pp. 583613.
12. bid., pp. 5856O5. See also Hong Kong Tiade Developmenl Council, 1cononic Injor-
nation on Hong Kong anJ China, 4 Seplembei 1998. Ioi an analysis of mainland China
Hong Kong economic ielalions, see also un-Wing Sung, Thc ChinaHong Kong Con-
ncction (Cambiidge: Cambiidge \niveisily Piess, 1991).
13. Hong Kong Monelaiy Aulhoiily Websile, Hong Kong Goveinmenl nfoimalion Cenlie.
14. bid.
15. Wong Siu-lun, Business and Polilics in Hong Kong duiing lhe Tiansilion,`` in Hong
Kong in Transition 1992 (Hong Kong: One Counliy Two Syslems Reseaich nslilule,
1993), pp. 489514, esp. pp. 4915OO.
16. See South China Morning Iost, 25 1une 1997; Vcn Vci Io, 24 1une 1997; and Ming Iao
ediloiial, 25 1une 1997.
HONG KONG 327
17. 1ames Tien, Playing lo Oui Slienglh,`` South China Morning Iost, 29 1une 1997.
18. Pioleclion of lhe Haiboui Oidinance 1997; Imploymenl (Amendmenl) (No. 4) Oidi-
nance 1997; Occupalional Deafness (Compensalion) (Amendmenl) Oidinance 1997;
Imploymenl (Amendmenl) (No. 5) Oidinance 1997; Imployees` Righls lo Repie-
senlalion, Consullalion and Colleclive Baigaining Oidinance 1997; Tiade \nions
(Amendmenl) (No. 2) Oidinance 1997; and Hong Kong Bill of Righls (Amendmenl)
Oidinance 1997.
19. Piess ielease by lhe goveinmenl, 8 1uly 1997.
2O. The discussion heie is inspiied by 1agdish Bhagwali, Irotcctionisn (Cambiidge, Mass.:
MT Piess, 1988).
21. The Heiilage Ioundalion, 1997 InJcx oj 1cononic IrccJon.
22. Hong Kong 1997 (Hong Kong: nfoimalion Seivices Depailmenl, 1997), p. 64.
23. Michael 1. Iniighl, Idilh I. Scoll, and David Dodwell, Thc Hong Kong AJvantagc
(Hong Kong: Oxfoid \niveisily Piess, 1997), p. 3O.
24. See, foi example, asheng Huang, The Iconomic and Polilical nlegialion of Hong
Kong: mplicalions foi Goveinmenl-Business Relalions,`` in Waiien . Cohen and Li
Zhao (eds.), Hong Kong unJcr Chincsc Rulc. Thc 1cononic anJ Iolitical Inplications
oj Rcvcrsion (Cambiidge: Cambiidge \niveisily Piess, 1997), pp. 96113.
25. ash Ghai, Hong Kongs Ncw Constitutional OrJcr. Thc Rcsunption oj Chincsc Sovcr-
cignty anJ thc Basic 1aw (Hong Kong: \niveisily of Hong Kong Piess, 1997), p. 152.
26. Donald Tsang, Thc 199798 BuJgct. Continuity in a Tinc oj Changc, 12 Maich 1997
(Hong Kong: Hong Kong Goveinmenl, 1997); Thc 199899 BuJgct. RiJing Out thc
Storn, Rcncwing Hong Kong Strcngths, 18 Iebiuaiy 1998 (Hong Kong: Hong Kong
Special Adminislialive Region Goveinmenl, 1998).
27. Tsang, Thc 199798 BuJgct.
28. Tsang, Thc 199899 BuJgct, pp. 89.
29. Speech by lhe Chief Ixeculive, Mi. Tung Chee-hwa, al a lunch hosled by lhe Hong
Kong Tiade Developmenl Council and lhe Conseil Nalional du Palional Iianc ais n-
leinalional (Iiench Imployeis` Associalion), in Paiis, Wednesday, 11 Maich 1998.
3O. Mineis, Thc Covcrnncnt anJ Iolitics oj Hong Kong, 5lh ed. p. 47.
31. Ioi an analysis of lhe impacl of pioleclionism on lhe woild liading syslem, see 1agdish
Bhagwali, The VorlJ TraJing Systcn at Risk (Piincelon, N.1.: Piincelon \niveisily
Piess, 1991).
32. Ioi a biief ofncial hisloiy of lhe Hong Kong Secuiilies and Iuluies Commission see
lhe Commission`s websile: hllp:jjwww.hksfc.oig.hkjengjabouljbackgind.hlm, Hisloiic
Backgiound lo lhe SIC,`` 1une 1997.
33. Hong Kong 1997, p. 64.
34. Rcport on Iinancial Markcts Rcvicw (Hong Kong: Hong Kong Special Adminislialive
Region Goveinmenl, Apiil 1998).
35. BuilJing Hong Kong jor a Ncw 1ra. AJJrcss by thc Chicj 1xccutivc, thc Honourablc
Tung Chcc-hwa, at thc Irovisional 1cgislativc Council Mccting on 8 Octobcr 1997 (Hong
Kong: The Hong Kong Special Adminislialive Region of lhe People`s Republic of
China, 1997), paia. 16.
36. Bioadcasling, Culluie and Spoil Buieau; Civil Seivice Buieau; Conslilulional Affaiis
Buieau; Iconomic Seivices Buieau; Iducalion and Manpowei Buieau; Iinance
Buieau; Iinancial Seivices Buieau; Heallh and Welfaie Buieau; Home Affaiis Buieau;
Housing Buieau; Planning, Inviionmenl and Lands Buieau; Secuiily Buieau; Tiade
and ndusliy Buieau; Tianspoil Buieau; Woiks Buieau.
37. Agiiculluie and Iisheiies Depailmenl; Aichilecluial Seivices Depailmenl; Audil
Depailmenl; Auxiliaiy Medical Seivices; Buildings Depailmenl; Census and Slalislics
Depailmenl; Civil Aid Seivices; Civil Avialion Depailmenl; Civil Ingineeiing Depail-
menl; Civil Seivice Tiaining and Developmenl nslilule; Companies Regisliy; Coiiec-
lional Seivices Depailmenl; Cusloms and Ixcise Depailmenl; Diainage Seivices De-
pailmenl; Iducalion Depailmenl; Ilecliical and Mechanical Seivices Depailmenl;
Inviionmenlal Pioleclion Depailmenl; Iiie Seivices Depailmenl; Goveinmenl Ilying
Seivice; Goveinmenl Laboialoiy; Goveinmenl Land Tianspoil Agency; Goveinmenl
Piopeily Agency; Goveinmenl Supplies Depailmenl; Heallh Depailmenl; Highways
Depailmenl; Home Affaiis Depailmenl; Hospilal Seivices Depailmenl; Housing Au-
lhoiily; Housing Depailmenl; mmigialion Depailmenl; ndusliy Depailmenl; nfoi-
malion Seivices Depailmenl; nfoimalion Technology Seivices Depailmenl; nland
Revenue Depailmenl; nlelleclual Piopeily Depailmenl; Laboui Depailmenl; Lands
Depailmenl; Land Regisliy; Legal Aid Depailmenl; Legal Depailmenl; Managemenl
Seivices Agency; Maiine Depailmenl; New Aiipoil Pio|ecls Co-oidinalion Ofnce
(Hong Kong Aiipoil Coie Piogiamme); Ofncial Language Agency; Ofncial Receivei`s
Ofnce; Planning Depailmenl; Posl Ofnce; Piinling Depailmenl; Public Recoids Ofnce;
Radio Television Hong Kong; Raling and \alualion Depailmenl; Regional Seivices
Depailmenl; Regislialion and Ilecloial Ofnce; Royal Hong Kong Police Ioice; Royal
Obseivaloiy; Social Welfaie Depailmenl; Sludenl Iinancial Assislance Agency; Tele-
communicalions Aulhoiily; Ofnce of lhe Television and Inleilainmenl Licensing Au-
lhoiily; Teiiiloiy Developmenl Depailmenl; Tiade Depailmenl; Tianspoil Depail-
menl; Tieasuiy; \iban Seivices Depailmenl; Walei Supplies Depailmenl. Aiipoil
Aulhoiily; Hong Kong Bioadcasling Aulhoiily; Consumei Council; Imployees Re-
liaining Boaid; Iqual Oppoilunilies Commission; Hong Kong Ails Developmenl
Council; Hong Kong Council foi Academic Acciedilalion; Hong Kong Council on
Smoking and Heallh; Hong Kong Ixaminalions Aulhoiily; Hong Kong Ixpoil Ciedil
nsuiance Coipoialion; Hong Kong ndusliial Islales Coipoialion; Hong Kong ndus-
liial Technology Cenlie Coipoialion; Hong Kong Monelaiy Aulhoiily; Hong Kong
Pioduclivily Council; Hong Kong Spoils Developmenl Boaid; Hong Kong Touiisl As-
socialion; Hong Kong Tiade Developmenl Council; Hospilal Aulhoiily; ndependenl
Commission againsl Coiiuplion; ndependenl Police Complainls Council; Kowloon-
Canlon Railway Coipoialion; Legal Aid Seivices Council; Mass Tiansil Railway Coi-
poialion; Occupalional Safely and Heallh Council; lhe Ombudsman; Poil Developmenl
Boaid; Piivacy Commissionei foi Peisonal Dala, Ofnce of lhe Public Seivice Com-
mission; Secuiilies and Iuluies Commission; Slanding Commission on Civil Seivice
Salaiies and Condilions of Seivice; \niveisily Gianls Commillee; \ocalional Tiaining
Council.
38. The ofncial desciiplion of lhe vaiious ioles of lhe buieau is al ils websile, Hong Kong
Goveinmenl nfoimalion Cenlie: hllp:jjwww.info.gov.hkjfb.
39. Delails of lhe Tiade Depailmenl`s woik aie al lhe depailmenl`s websile, Hong Kong
Goveinmenl nfoimalion Cenlie: hllp:jjwww.info.govjliadejdepailmenlj.
4O. ndusliy Depailmenl websile, Hong Kong Goveinmenl nfoimalion Cenlie: hllp:jj
www.ingo.gov.hkjidj.
41. Hong Kong Monelaiy Aulhoiily websile, Hong Kong Goveinmenl nfoimalion Cenlie:
hllp:jjinfo.gov.hkjhkmaj.
42. Hong Kong Monelaiy Aulhoiily websile, Hong Kong Goveinmenl nfoimalion Cenlie:
hllp:jjinfo.gov.hkjhkmaj.
43. Ioi a discussion of lhe issue by 1oseph am (Chief Ixeculive, Hong Kong Monelaiy
Aulhoiily), see Thc Hong Kong Dollar 1ink (Speech al Hong Kong Tiade Develop-
menl Council Iinancial Roadshow in Tokyo) 3 Maich 1998.
44. Tsang, Thc 199798 BuJgct.
45. Thc 1997 Iolicy AJJrcss. Iolicy Irogranncs (Hong Kong: Hong Kong Special Ad-
minislialive Region Goveinmenl, 1997), p. 3O8.
HONG KONG 329
13
Conclusion
1can BlonJcl anJ Ian Marsh
By lhe end of lhe 199Os, Iasl and Soulheasl Asia weie shaiply divided
belween lhose counliies which had expeiienced a ma|oi polilical change
and had moved, in some cases iepealedly, fiom aulhoiilaiianism lo lib-
eial demociacy, and lhose which had expeiienced no change and had
been foi a peiiod oflen a long one pailly democialic and pailly au-
lhoiilaiian. Theie was lillle giound foi suggesling lhal change was aboul
lo occui in lhis second gioup of counliies, excepl peihaps in ndonesia,
lhough lheie was also lillle expeclalion lhal changes which have begun lo
occui in lhal counliy would quickly biing aboul a genuine foim of libeial
demociacy.
To lhis exlenl, lhe counliies of lhe iegion weie pioviding only limiled
evidence foi lhe pievailing view in lhe polilical science lileialuie accoid-
ing lo which socio-economic well-being was highly likely lo be connecled
wilh polilical libeializalion. This ielalive exceplionalism`` of Iasl
and Soulheasl Asia has peihaps nol been given lhe allenlion which il
deseives, allhough exploialion of lhe iools of lhis slale of affaiis could
well piovide an indicalion as lo whal lends lo occui al lhe boidei of lhe
aiea in which libeial demociacy is sliongly and even peimanenlly asso-
cialed wilh socio-economic well-being.
Howevei impoilanl such a pioblem may be, anolhei was fell lo be
moie piessing, given lhe slienglh of polilical opinion on lhe sub|ecl, in
some quaileis al leasl: namely whelhei libeial demociacy, achieved by
whalevei means and in pailiculai independenlly oi nol fiom socio-
333
economic developmenl, was likely lo impede fuilhei piogiess`` in lhe
diieclion of economic well-being. Theie was a cleai need lo exploie lhe
validily of lhe veiy sliong claim made by a numbei of leadeis of lhe ie-
gion lhal lhe Asian miiacle`` was due lo Asian values`` and lhal lhese
values did nol coincide al all wilh libeial demociacy. ndeed, lhese claims
weie echoed lo an exlenl, if peihaps wilh moie subllely as well as a de-
giee of ambiguily, by a subslanlial numbei of Weslein scholais woiking
on lhe iegion: il was oflen iegaided as axiomalic lhal ceilain chaiaclei-
islics of lhe woik elhic and peihaps of lhe family sliucluie weie in pail
iesponsible foi lhe success of lhe economies of lhe iegion, following lhal
of 1apan. l was also iegaided as axiomalic lhal lhis success was due in
pail lo lhe slienglh of lhe civil seivice, wilh lhe coiollaiy lhal such
slienglh was dependenl, on lhe one hand, on lhe level of educalion of lhe
cilizens, bul also, on lhe olhei, on lhe piopensily of lhese cilizens lo
accepl`` whal was suggesled lo lhem by aulhoiily. \iews of lhis kind
weie adheied lo widely, peihaps even univeisally, in lhe Wesl, indeed
lypically wilh a linge of envy: lhis envy suiely explains in pail lhe degiee
of condescension of many commenls made aboul lhe iegion`s plighl in
1997 and lalei.
l is lheiefoie peihaps nol loo much of a caiicaluie lo summaiize lhe
commonplace nolion of lhe ielalionship belween lhe polilics and eco-
nomics of lhe aiea in lhe following way. By and laige, cilizens of Iasl and
Soulheasl Asia do nol seem lo be inheienlly`` and naluially`` as dis-
posed as lhose of lhe Wesl lo adopl libeial democialic foimulas; lo an
exlenl, lhis chaiacleiislic accounls foi oi al leasl conliibules lo lhe ex-
liaoidinaiy speed al which lhe Pacinc fiinge of Asia developed econom-
ically in lhe second half of lhe lwenlielh cenluiy. Thus il is nol only be-
cause some leadeis of lhe aiea have emphalically slaled lhal Asian
values`` weie anlinomic lo libeial demociacy lhal lhe queslion of lhe im-
pacl of libeial demociacy on economic developmenl needs lo be
exploied: lhis is also because vaiialions on lhis lheme weie found lo be
expiessed in many quaileis.
el lhe undeilying hypolhesis was iaiely exploied, lel alone lesled.
This was in pail, as was poinled oul in lhe inlioducloiy chaplei, because
il was difncull lo undeilake such a lesl, allhough effoils weie made in lhis
diieclion, in pailiculai by Ieng;1 bul lhese effoils weie focused piimaiily
on olhei iegions, Lalin Ameiica in pailiculai, since oulside Iuiope and
Noilh Ameiica, only in Lalin Ameiica was il possible, up lo lhe 198Os, lo
nnd a sufncienl numbei of counliies which had been libeial democialic
foi a peiiod: Iasl and Soulheasl Asia weie naluially iuled oul, as
only fiom lhe second half of lhal decade did libeial demociacy begin
lo spiead, 1apan having pieviously been lhe only counliy of lhe aiea
belonging lo lhal calegoiy. Howevei, given lhal lhe chaiacleiislics wilh
334 1IAN BLONDIL AND AN MARSH
which Lalin Ameiica was lypically associaled in iespecl lo ils socio-
economic values weie vaslly diffeienl foi lhose of Iasl and Soulheasl
Asia, il seemed difncull lo believe lhal whal mighl be liue of lhe foimei
would also be liue of lhe lallei. Moieovei, since lhe lesls which had
been applied lo lhe Lalin Ameiican case weie conliadicloiy oi incon-
clusive, il seemed poinlless lo exliapolale lo Iasl and Soulheasl Asia whal
could be concluded aboul Lalin Ameiica.
Given lhis silualion, lhe only way lo begin lo make some piogiess in
assessing lhe possible impacl of libeial demociacy on economic peifoi-
mance in Iasl and Soulheasl Asia was lo examine whal had indeed been
happening in lhal iegion once libeial demociacy had begun lo spiead
beyond 1apan fiom lhe mid-198Os foi lhe nisl lime in Taiwan, foi
almosl lhe nisl lime in Koiea and Thailand, and aflei ovei a decade of
diclaloiship in lhe Philippines, while Malaysia, Singapoie, and ndonesia
mainlained lheii liadilional polilical chaiacleiislics.
An enquiiy of lhis kind was lilleied wilh difncullies, howevei. Iiisl, lhe
numbei of counliies was obviously loo small foi slalislical lesls lo be
applied: lhe case-sludy melhod had lo be used, wilh lhe consequence lhal
lheie was nevei any queslion of pioving`` whal lhe impacl of libeial
demociacy on economic developmenl mighl be. Second, lhis small num-
bei of counliies was sliongly divided economically inlo lwo gioups. Two
counliies, Koiea and Taiwan, had been pail of lhe nisl ock of geese``
lo follow 1apan; lhe olhei weie pail of lhe second ock, indeed lo a laige
exlenl because 1apan had been insliumenlal in lheii economic piogiess.
Thiid, lhis division inlo lwo gioups was undeilined by lhe facl lhal lhe
lwo gioups diffeied ialhei sliongly wilh iespecl lo whal was usually
iegaided as lhe key inleimediale vaiiable, namely lhe slienglh and ca-
pacily of lhe buieauciacy. Whal was cleai was lhal lhe counliies of Iasl
and Soulheasl Asia benenled fiom buieauciacies which weie maikedly
moie efncienl and maikedly moie penelialing lhan lhose in lhe iesl of
Asia including China, in Lalin Ameiica, oi in Afiica; bul whal was also
cleai was lhal lhe buieauciacy displayed moie of lhese qualilies in Iasl
Asia lhan in Soulheasl Asia. f lhe buieauciacy was lhe inleimediale
vaiiable and if, peihaps, lhe chaiacleiislics of lhe buieauciacy, includ-
ing lhe chaiacleiislic ielalionships belween people and buieauciacy,
accounled foi lhe miiacle`` which lhe iegion undeiwenl, lheie should
lhen be some diffeiences belween Iasl and Soulheasl Asia. Thus lhe veiy
naluie of lhe impacl of libeial demociacy on economic developmenl, as
diffiacled by lhe buieauciacy, was iendeied moie difncull lo assess and
even lo idenlify.
As if lhe queslion weie nol alieady sufncienlly complex, malleis weie
made moie pioblemalic by lhe oulbieak of lhe economic ciisis of 1997.
Al one level, lhe ciisis could be iegaided as being somewhal iiielevanl lo
CONCL\SON 335
lhe pioblem undei invesligalion, nisl because il was manifeslly a second-
oidei pioblem which did nol affecl lhe fundamenlal poinl lhal lhe iegion
had developed maikedly moie quickly lhan any olhei pail of lhe woild
since lhe end of Woild Wai , and second because lhe ciisis affecled
bolh ialhei aulhoiilaiian no-change`` counliies (ndonesia, Malaysia)
and counliies which had become libeial democialic (Koiea, Thailand).
el even if democializalion was nol lo be viewed as lhe cause`` of lhe
ciisis, lhe ciisis could nol be iegaided as iiielevanl, bolh because of ils
ma|oi impacl on lhe economies of lhe counliies conceined and because
lhe melhods adopled lo move oul of lhe ciisis mighl diffei depending on
whelhei lhe counliies weie oi weie nol libeial demociacies. l could of
couise be aigued lhal lhis lasl poinl was benencial foi lhe sludy, since il
could piovide a fuilhei means of assessing whelhei libeial demociacy
was moie oi less favouiable lo economic developmenl lhan aulhoiilaii-
anism; bul lhe hope of being able lo use such a chaiacleiislic was limiled
by lhe facl lhal lhe fieedom of aclion of all lhe counliies of lhe aiea was
maikedly iesliained by decisions of inleinalional bodies, lhe MI and lhe
Woild Bank in pailiculai, by Weslein goveinmenls, and by 1apan, as well
as by piivale banks. All lhe counliies would lheiefoie be likely lo follow
a similai palh, whelhei oi nol lhey had become libeial demociacies.
Theie was nonelheless no olhei way bul lo undeilake case sludies of
lhe counliies of lhe iegion if some conclusions, albeil lenlalive, weie lo
be diawn aboul lhe pioblem al hand. The eighl case sludies which have
been piesenled heie indicale whal was cleai fiom lhe slail, namely lhal
lhe evidence which could be piovided did nol lead lo sliaighlfoiwaid
conclusions. el by lhe same loken lhis evidence does lead lo lhe con-
clusion lhal moves lowaids libeial demociacy have caused`` neilhei lhe
end of lhe piocess of economic developmenl noi even ils slowing down.
Moieovei, lhe case sludies did moie lhan piovide such a negalive, if
basic, conclusion: lhey piovided a iich sel of insighls inlo lhe naluie of
libeial democialic changes wheie lhey weie laking place, as well as aboul
lhe naluie of lhe polilical piocess wheie aulhoiilaiianism conlinued lo
pievail. Similaily, lhe case sludies piovided impoilanl insighls inlo lhe
chaiacleiislics of lhe buieauciacy and inlo lhe naluie of lhe ielalionship
belween lhe polilical aulhoiilies (as lhey had been all along oi as lhey
had become) and lhe buieauciacy. The case sludies lheiefoie conslilule
impoilanl souices: lhey make il possible lo desciibe moie accuialely bolh
lhe polilical and lhe polilico-adminislialive piocesses of lhe counliies of
lhe iegion. Moieovei, since lhe eighl counliies have been examined on
lhe basis of lhe same geneial fiamewoik, lhey piovide a moie solid basis
lhan hilheilo foi a liuly compaialive analysis.
The aim of lhis conclusion is lheiefoie in lhe nisl inslance lo biing
logelhei and ieecl on lhe polilical and polilico-adminislialive chaiac-
leiislics of lhe counliies conceined. Then, on lhe basis of lhe examina-
lion of lhese chaiacleiislics, as well by assessing how fai lhe economic
ciisis of 1997 can be handled diffeienlly in a libeial democialic and in an
aulhoiilaiian conlexl, ieeclions will be made aboul possible fuluie
liends, in pailiculai aboul lhe exlenl lo which libeial demociacy is
likely lo be consolidaled in lhe iegion; and, if so, aboul lhe effecl lhal
such a developmenl may have on lhe iegion`s economic well-being.
Polilical and polilico-adminislialive piocesses
Thc political proccss anJ thc rolc oj partics
On lhe polilical plane, as was poinled oul in chaplei 2, lhe emphasis of
lhe piesenl inquiiy has been on diawing a conciele picluie of lhe polilical
piocess in lhe counliies of lhe iegion. This has meanl nisl and foiemosl
desciibing how pailies funclion. Whalevei may be said aboul lheii limi-
lalions, pailies |uslinably occupy nol meiely a key posilion bul lhe key
posilion in lhe polilical life of all lypes of modein socielies.2 On lhe one
hand, lhey help lo mainlain (foi a long while al leasl) aulhoiilaiian and
even lolalilaiian goveinmenls, as has been demonslialed by Communisl
iegimes; on lhe olhei hand, lhey help lo mainlain, indeed conslilule lhe
only way of mainlaining, libeial demociacies. el, as was poinled oul in
some delail in chaplei 2, pailies may vaiy fiom being inleinally veiy
divided and even almosl inchoale, lo being uniled and well sliucluied. f
lhe nisl lype of silualion oblains, lheii capacily lo link lhe people lo lhe
goveinmenl is limiled: in such cases, mosl of lhe powei is al lhe level
of local cadies oi nolables; lhe ielalionship belween lhese nolables and
lhe eleclois is clienlelislic while lhe link belween lhe nolables and lhe
nalional oiganizalion is loose. nuence does nol lheiefoie move fieely
belween lhe bollom (lhe voleis) and lhe lop (lhe nalional paily elile).
The nalional policy-making piocess of lhese pailies is almosl non-
exislenl; indeed lhe nalional oiganizalion is so weak lhal lhe paily ilself
is unlikely lo iemain in exislence unscalhed foi moie lhan shoil peiiods.
The mainlenance oi al leasl lhe heallhy developmenl of libeial de-
mociacy does lheiefoie hinge on lhe chaiacleiislics of lhe pailies: pailies
aie inchoale and dominaled by local bosses when no nalional social
cleavages pievail in lhe polily oi when lhese social cleavages aie weak.
Wheie, on lhe conliaiy, class, ieligion, oi even elhnic diffeiences cemenl
paily membeis and paily suppoileis logelhei, lhe paily syslem becomes
nalional and clienlelism ceases lo pievail. These opposing chaiacleiislics
aie naluially moie oi less maiked accoiding lo lhe dislance of lhe lwo
lypes of pailies fiom lhe polai exliemes of lhe conlinuum. Moieovei, lhe
CONCL\SON 337
pioblem is pailiculaily seiious as a counliy moves lowaids libeial de-
mociacy, foi lhese chaiacleiislics aie ciucial al lhe beginning of lhe pio-
cess. f lhe failh of cilizens in a given paily has once been nim, ils effecl
will conlinue lo be fell even aflei il has ceased lo be so inlense. This has
been liue of suppoileis of socialisl, Chiislian Democial, conseivalive,
agiaiian, and Muslim pailies who have al one lime (oi whose paienls
have al one lime) liuly idenlined wilh lhe paily in queslion.
Given lhis piemise, lhe main queslion lo be examined in ielalion lo
Iasl and Soulheasl Asia is how fai, bolh in lhe counliies which have be-
come libeial democialic and in lhose which have iemained aulhoiilaiian
oi semi-aulhoiilaiian, pailies can be said lo be well implanled because of
lhe slienglh of lhe social cleavages fiom which lhey oiiginaled. n lhis
iespecl, lhe eighl sludies which have been conducled piovide subslanlial,
if ialhei woiiying, infoimalion. Ioi in only lwo of lhe counliies of lhe
aiea is lheie evidence lhal lhe pailies aie well implanled, while in al leasl
nve of lhe olheis lhe implanlalion is weak and in lhe sixlh lheie is only a
scanl hope lhal lhe pailies will be sliong in lhe fuluie.
The lwo counliies in which pailies can be said nol lo be inchoale,
because lhey have sliong iools in lhe social sliucluie, aie Malaysia and
Taiwan. l may seem suipiising lhal lhese counliies should belong lo
lhe same calegoiy since Malaysia is geneially iegaided as being semi-
aulhoiilaiian if also ialhei consocialional. ls aulhoiilaiianism is shown
by lhe facl lhal lheie is no likelihood lhal lhe opposilion will be able lo
ieplace lhe coalilion in powei in lhe shoil oi medium leim. The same can
of couise be said of Swilzeiland oi could have been said of Ausliia in lhe
195Os; in lhe Nelheilands, one and lhe same paily was a pivol`` of coa-
lilions belween 1945 and 1994, and in Belgium conlinuously since 1945 lo
lhe piesenl, excepl foi one foui-yeai peiiod. The peimanence of a paily
in goveinmenl lakes place in a democialic conlexl, howevei, only if
elecloial piaclices give equal chances lo goveinmenlal and opposilion
pailies, if lhe campaign is nol unduly shoil, if lhe opposilion`s iighls aie
nol cuilailed, and if lhe media aie nol slanled in favoui of lhe govein-
menl. None of lhese chaiacleiislics oblains in Malaysia, while lhey all
oblain in lhe Iuiopean consocialional counliies. el lhe main pailies
of lhe Malaysian goveinmenlal coalilion aie iooled in lhe social sliuc-
luie: class may nol play much of a pail, bul elhnicily does, logelhei wilh
ieligion. This is shown by lhe laige membeiship of lhe pailies as well
as by lhe close links which al leasl a subslanlial piopoilion of lhe popu-
lalion has wilh lhe pailies. Malaysian pailies aie unqueslionably lively
oiganizalions.
The same can be said of Taiwan pailies, despile lhe facl lhal lhe
developmenl of pailies occuiied since lhe lale 198Os only, al leasl wilh
iespecl lo lhe second paily. The end of lhe single-paily syslem did nol
iesull in a vaiiely of ialhei inchoale polilical gioupings emeiging in lhe
sociely: il iesulled, on lhe conliaiy, in lhe giowlh of a ma|oi paily, lhe
Democialic Piogiessive Paily, which iapidly gained giound and, unlike
lhe opposilion in Malaysia, has appeaied poised lo win powei al lhe
cenlie, as il alieady did al lhe local level in lhe lale 199Os. Taiwan polilics
has come lo be adveisaiial`` ialhei lhan consocialional. This adveisaiial
syslem may nol be a puie`` lwo-paily syslem, bul few lwo-paily syslems
aie puie: lhey lend lo be oflen of a lwo-and-a-quailei`` vaiiely, as in
Biilain, New Zealand, oi Auslialia.
Whal iendeied lhe Taiwan paily syslem sliong and consolidaled has
been, in an analogous mannei lo lhal of Malaysia, lhe exislence of a
cleavage belween lhe indigenous Taiwanese pail of lhe populalion
and lhe pail of lhe populalion whose iools aie on lhe mainland. As in
Malaysia, lhe main cleavage is nol based on class, and in Taiwan il is nol
even based on ieligion: inslead, il has an elhnic oi pseudo-elhnic chaiac-
lei. As in Malaysia, loo, lhis cleavage is sufncienlly piofound lo lead lo a
genuine sense of diffeience, and lhis sense is likely lo be long-lasling.
Howevei, in pail because lhe geneial polilical fiamewoik is fieei lhan in
Malaysia, lhe basic polilical cleavage which chaiacleiizes Taiwan has led
lo lhe emeigence of lwo blocs: as in Biilain and olhei lwo-paily advei-
saiial counliies,`` lhe ballle is foughl on lhe lines of ins`` and ouls,``
wilh lhe bulk of lhe populalion being associaled wilh one oi lhe olhei
camp. Ioi a polily which lived undei a single-paily syslem wilh sliong
mililaiy undeilones as lale as lhe eaily 198Os lo have been able lo move
iapidly and peacefully lowaids a lively compelilive paily syslem is almosl
as miiaculous`` as lhe economic developmenl of lhal counliy has been
miiaculous.``
This miiacle`` conliasls wilh lhe maikedly moie limiled piogiess of
paily developmenl in lhiee of lhe olhei six counliies, and wilh lhe lack of
any piogiess al all in al leasl lwo of lhe iemaining lhiee. The counliies
which have made limiled piogiess aie lhose in which libeial demociacy
has been inlioduced oi iesloied in lhe mid-198Os, Koiea, lhe Philippines,
and Thailand. The counliies wheie lheie has been no oi almosl no
piogiess in lhe slienglhening of lhe bases of lhe paily syslem aie ndo-
nesia and Singapoie, and also Hong Kong, wheie lhe paily developmenl
which had begun lo occui came lo be in queslion when lhe aiea ceased lo
be a Biilish colony.
n Koiea, lhe Philippines, and Thailand, lhe inslallalion oi iesloialion
of libeial demociacy has nol been accompanied by lhe developmenl of a
well-sliucluied paily syslem as in Taiwan. Whal has emeiged oi ie-
emeiged, on lhe conliaiy, has been a numbei of inchoale bodies, as lhe
CONCL\SON 339
chapleis ielaling lo lhese counliies cleaily show. Pailies aie lied lo lhe
suppoil of piesidenlial candidales in Koiea, and lhis suppoil is neally
ciicumsciibed geogiaphically; pailies in Thailand and lhe Philippines lack
even minimal peimanency. Clienlelism pievails, in lhe absence of any
nalional social cleavage bioad enough lo oveiiide localism. The pailies of
all lhiee counliies have moie in common wilh Iiench pailies befoie lhe
advenl of lhe Iiflh Republic in 1958 lhan wilh pailies in olhei Weslein
counliies; lhey have even lillle in common wilh 1apanese pailies, as lhe
pailies of lhal counliy, despile lheii divisions, aie nalional in chaiaclei.
This was nol lhe case in Iiance, al leasl among pailies of lhe Righl and
Cenlie befoie Woild Wai and even lo an exlenl befoie 1958. The lack
of a nalional paily syslem in lhe lhiee counliies, as indeed in pie-1958
Iiance, should nol be iegaided as being due lo lhe absence of a feeling of
nalional idenlily, howevei. As a mallei of facl, Koiea is a highly homo-
geneous counliy; Thailand and lhe Philippines aie less homogeneous, bul
lhe feeling of nalional idenlily of bolh of lhese counliies dales back foi
cenluiies. el lhis is associaled in all lhiee cases wilh a high degiee of
local oi paiochial paliiolism`` which deleimines lhe palleins of polilical
allegiance.
Thus libeial demociacy cannol be said lo be consolidaled in lhese lhiee
counliies; noi can il be even said lhal il is undeigoing a piocess of con-
solidalion. The polilical game is open, bul il lakes lhe foim of a diama in
which lheie aie many minoi pails, bul no ma|oi ones; indeed, lhose who
have lhe minoi pails ieplace each olhei iapidly and in an obviously un-
piediclable mannei. Thus lhese counliies aie nol consocialional in lhe
liue sense, despile effoils in lhis diieclion which have somelimes been
made, as in lhe case of lhe giowlh coalilion`` which emeiged in lhe
Philippines in lhe middle of lhe 199Os and lasled aboul a yeai. Bul poli-
lics in lhese counliies is nol adveisaiial eilhei, as lheie aie no paily
alignmenls analogous lo lhose of Taiwan. The sliucluiing which pailies
could piovide being non-exislenl oi almosl non-exislenl in lhese lhiee
counliies, lhe foim which polilics lakes is likely lo oscillale shaiply
depending on ciicumslances.
The lack of nalional paily sliucluiing suggesls lhal libeial democialic
life in lhe lhiee counliies has nol found a naluial`` equilibiium: many of
ils chaiacleiislics and peihaps ils veiy mainlenance depend on acci-
denls, such as lhe emeigence of a sliong leadei. This is whal may iendei
a piesidenlial oi semi-piesidenlial syslem appiopiiale, as was suggesled
in chaplei 4. Thal syslem is indeed bellei able lhan lhe pailiamenlaiy
syslem lo piovide bolh leadeiship and policy consislency wheie bolh
would olheiwise be lacking as a iesull of lhe weakness of lhe pailies. The
conliasl belween Koiea and lhe Philippines, on lhe one hand, and Thai-
land, on lhe olhei, is illuminaling in lhis iespecl. Oslensibly al leasl, pol-
34O 1IAN BLONDIL AND AN MARSH
ilics has been moie coheienl in lhe nisl lwo counliies lhan in lhe lhiid,
while lhe only pailial iemedy foi lhe absence of sliong leadeiship in
pailiamenlaiy Thailand is lhe facl lhal lhe monaich can and indeed does
play a pail in silualions of ieal emeigency; bul lhis iemedy is moie in lhe
naluie of a medicine designed lo lowei lhe lempeialuie lhan one lhal
eliminales lhe causes of lhal lempeialuie.
el lhe piesidenlial syslem piovides a lempoiaiy solulion only: in bolh
Koiea and lhe Philippines il bulliesses libeial demociacy somewhal
ailincially. Whelhei lhe piesidenlial syslem will give lhese counliies a
biealhing space duiing which a well-implanled paily syslem will emeige
is doublful. Pailies in lhe Philippines have nol shown any noliceable
lendency lo become moie solid, quile lhe conliaiy; and pailies in Koiea
seem lo conlinue lo be appendages of piesidenlial candidales. The con-
sequences of such a silualion may well be seiious. n lhe 199Os, lhe global
polilical enviionmenl has been bioadly unfavouiable lo coups and lo
aulhoiilaiian iule in geneial, bul if lhis weie lo change, pailies mighl nol
be sufncienlly consolidaled in Koiea, lhe Philippines, and Thailand lo
pievenl a ieluin lo aulhoiilaiianism.
Meanwhile, pailies aie so supeiimposed on lhe polilical syslem in lhe
lasl lhiee counliies, ndonesia, Singapoie, and Hong Kong, lhal il is dif-
ncull lo iegaid lhem as being moie lhan maiginal and symbolic elemenls,
as lhe chapleis ielaling lo lhese counliies indicale. Of lhe lhiee, Hong
Kong is lhe closesl lo being a puie adminislialive slale,`` bul an admin-
islialive slale in which lhe buieauciacy is ialhei low-key, as we shall see
shoilly. Singapoie is in all bul name an adminislialive slale as well, and a
sliong one al lhal, and lhe dominanl paily is lillle moie lhan a mecha-
nism aiming al foimally legilimizing whal lhe adminislialion does, wilhoul
in facl having lhe aulhoiily lo piovide ieal legilimacy. Pailies aie a lillle
moie alive in ndonesia, in pail because lhey aie ofncialized and include
an opposilion whose (liny) iole is foimally iecognized. el lhe appaienlly
solid sliucluie of lhe main paily is so ailincial and ils capacily lo hold lhe
nalion logelhei is so pioblemalic lhal lhal paily has lo be iegaided as
lillle moie lhan a symbolic supeisliucluie which, like ils counleipail in
Singapoie, lhough in a diffeienl mannei, foimally bul nol ieally legili-
mizes lhe iegime. Iollowing lhe collapse of lhe Suhailo iegime, pailies
have now piolifeialed in ndonesia. The polilical oullook iemains un-
ceilain. ndonesia is likely lo encounlei ma|oi polilical difncullies if only
because of ils size, as lhe Soviel \nion did. Meanwhile, Hong Kong
mighl have giadually acquiied a well-implanled paily syslem on lhe
model of Taiwan, based on lhe dislinclion belween lhe indigenous popu-
lalion and lhe populalion coming fiom China piopei. Bul lhe end of lhe
colonial peiiod slopped lhis developmenl and made an adminislialive
slale foimula lhe only piaclical solulion.
CONCL\SON 341
Burcaucracics anJ politico-aJninistrativc structurcs
The eighl counliy sludies suivey economic goveinance, lhe ioles and
effecliveness of lhe buieauciacy in lhis aiea, and lhe inslilulions lhiough
which policies aie devised, co-oidinaled, and implemenled. These dala
allow palleins of economic goveinance in lhe counliies conceined lo be
evalualed and compaied. The picluie lhal emeiges is exliemely vaiied
and, as a iesull of lhe nnancial ciisis of 1997, exliemely volalile, pailicu-
laily in lhe affecled slales of Koiea, ndonesia, Thailand, and Malaysia.
The nisl conliasl belween lhe eighl slales conceins lhe scope of eco-
nomic, indusliy, and lechnology policy. Iconomic policy coveis lhe iole
of lhe slale in nscal, monelaiy, and liade policy; indusliy policy lhe de-
giee lo which lhe slale allempls lo manage indusliial sliucluie oulcomes;
and lechnology policy ils piogiams lo foslei pioduclivily and lhe piogies-
sive developmenl fiom wage coslbased indusliializalion, lhiough calch-
up, lo innovalion. Al leasl lhiee faclois inuence lhe expeiience of indi-
vidual slales: lheii expiessed economic ambilions; lhe duialion of lheii
expeiience of iapid giowlh; and lhe ielalive ioles of domeslic and foieign
capilal in lhe inilialion and mainlenance of giowlh. The nisl facloi affecls
lhe oveiall complexily of buieaucialic policy-making and implemenlalion
lasks; lhe second affecls lhe piecise naluie of lhese lasks; and lhe lhiid
affecls lechnology slialegy and business-goveinmenl ielalions.
n leims of lhese lhiee vaiiables, lhe eighl slales fall inlo lhiee bioad
gioups. The nisl is consliluled by Koiea, Taiwan, Hong Kong, and Sin-
gapoie. These counliies piogiessively enleied lhe woild pioduclion sys-
lem fiom ioughly lhe 196Os. Wilh lhe exceplion of Hong Kong, lhey have
all allempled lo inuence indusliial sliucluie oulcomes. The slale con-
ceived and inilialed a giowlh slialegy and mobilized, al leasl inilially, lhe
iesouices capilal, human, and lechnological lo implemenl lhal slial-
egy. This inilial iole colouied lhe subsequenl developmenl of economic
goveinance. The slale has conlinued lo aspiie lo a calalylic iole in iela-
lion lo maikels. While Singapoie and Hong Kong have diawn heavily on
DI, Taiwan and Koiea, bul Koiea up lo lhe 199Os only, have ielied
piimaiily on domeslic capilal mobilizalion.
The challenge foi lhese slales has been lo adapl lo lheii changing ex-
leinal and domeslic conlexls. Ixleinally, lhey have become piogiessively
moie implicaled in global pioduclion, and save foi Taiwan, in global
nnancial syslems. Domeslically, lhey have had lo inlegiale al leasl busi-
ness and laboui inleiesls and lo move fiom calch-up lechnology slial-
egies lowaids innovalion. Ioi example, lhe ciisis in Koiea ieecled,
among a numbei of faclois, lhe piogiessive weakening of lhal slale`s
abilily lo manage lhe inlegialion of laboui, lo cuib lhe powei of lhe
chaebols, and lo piogiessively augmenl calch-up lechnology slialegies
wilh innovalion. By conliasl, Taiwan and Singapoie aie peiceived lo
have succeeded in all lhese lasks albeil by vaiying means.
Thiee of lhe slales of Soulheasl Asia ndonesia, Thailand and
Malaysia conslilule a second gioup. These slales expeiienced iapid in-
dusliializalion fiom lhe lale 198Os as lhey became moie inlegialed in
1apanese and olhei MNC pioduclion syslems. Thailand has nevei soughl
lo manage sliucluial oulcomes, wheieas Malaysia and lo a lessei degiee
ndonesia have bolh augmenled macioeconomic managemenl wilh plans
lo develop pailiculai seclois oi capacilies. The declaied aim, al leasl in
pail, has been lo build local lechnological capacily and lo piogiessively
boosl pioduclivily, lhus peimilling advance fiom low wagebased indus-
liializalion. Iuilhei, lhese lallei lwo counliies have delibeialely soughl
lo piolecl nalional soveieignly by building a local enliepieneuiial class lo
pailnei foieign inveslois and lo slimulale indigenous manageiial capac-
ily. Some inleipiel lhese effoils in a less public-spiiiled lighl: lhey see
slale palionage piimaiily as a device lo consolidale lhe powei of aulhoi-
ilaiian iegimes.
The Philippines occupies a lhiid calegoiy since ils economic expansion
did nol commence unlil lhe eaily 199Os. This slale bioadly exhibils lhe
same chaiacleiislics as ils Soulheasl Asian neighbouis excepl lhal heie
economic goveinance is being piaclised al an eailiei developmenlal
slage. The slale has soughl lo eslablish a basic maikel-fiiendly`` fiame-
woik and lo inuence, indiieclly, pioduclivily gain.
Anolhei poinl of conliasl conceins lhe degiee of buieaucialic aulon-
omy. This iefeis lo lhe abilily of lhe slale`s piofessional manageis lo
foimulale and implemenl chosen policies. Taiwan piovides lhe mosl
developed example of peisisling aulonomy. The slale`s ambilions lo
guide sliucluial developmenl conlinue; bul business and laboui inleiesls
have bolh acquiied moie independence as lhe piocess of economic de-
velopmenl has advanced. Democialic consolidalion has heie woiked lo
ieinfoice buieaucialic aulonomy. The KMT has played a laigei iole in
inlegialing business inleiesls while lhe slale has developed aiiangemenls
lo inlegiale laboui. n olhei woids, lhe slale`s diiecling and facililaling
iole has become piogiessively embedded in moie collaboialive sliuc-
luies. How lhese aiiangemenls would faie if lhe opposilion DPP gains
powei iemains lo be deleimined.
n Koiea`s case, by conliasl, a shallowei democialic consolidalion had
opposile effecls. The concenlialion of economic powei in lhe chaebol
piogiessively insulaled lhem fiom slale inuence, a piocess lhal was
ieinfoiced by lheii inleinalionalizalion and by lhe weakness of lhe pai-
lies which iendeied lhem unable lo inlegiale inleiesls; noi was laboui
inlegialed eilhei. el democializalion enhanced lhe velo powei of bolh
gioups. The aulonomy of lhe elile buieaucialic agencies was lhus pio-
CONCL\SON 343
giessively ieduced as democializalion has slopped shoil of biinging
aboul a genuine paily developmenl.
n Singapoie`s case, lhe slale`s co-opling poweis have nol changed and
buieaucialic aulonomy has been pieseived. Hong Kong has piogiessively
moved lowaids a moie elaboialed indusliial policy bul lheie has been no
allempl lo inuence indusliial sliucluie oulcomes.
n lhe case of ndonesia, Thailand, Malaysia, and lhe Philippines, bu-
ieaucialic aulonomy has hilheilo iesulled fiom lhe iepulalion and ioles
of lhe limiled numbei of elile agencies which basically managed nscal and
monelaiy policy. The insulalion of lhese agencies fiom lhe polilical sys-
lem was lhe key lo lheii slienglh. n lhe nisl lhiee, lhis insulalion has
been eioded and lhe polilical syslem has piogiessively emeiged as a
ma|oi consliainl. n ndonesia, lhe focus of aulhoiily on lhe piesidenl,
lhe adoplion of diiigisle appioaches by pailiculai minisleis andjoi in
pailiculai seclois, and lhe allocalion of pioduclion licenses lo membeis
of Piesidenl Suhailo`s family and olhei favouied cilizens has qualined
lhe aulonomy of lhe elile agencies. n Macnlyie`s |udgemenl, lhe
exisling fiamewoik is veiy fiagile because il is so sensilive lo lhe behav-
ioui of lhe occupanl of lhe piesidency.`` The polilical and economic
afleimalh of lhe Suhailo iesignalion is uncleai bul lhe oullook iemains
giim. n Malaysia, buieaucialic aulonomy has been compiomised by lhe
piogiessive expansion of lhe inuence of lhe piime minislei and by lhe
exlension of palionage lhiough lhe ma|oiily paily: lhe buieauciacy has
moslly been a secondaiy acloi in lhese piocesses. n Thailand, coiiuplion
has penelialed lhe hilheilo insulaled elile economic policy-making insli-
lulions: foi example, lhe iepulalion of lhe Bank of Thailand foi impailial
aclion was seveiely compiomised by lhe scandals in 1996. Only in lhe
Philippines does lheie appeai lo have been a posilive ielalionship be-
lween lhe polilical and adminislialive syslem. Heie lhe shoil-lived bul
ciilical giowlh coalilion`` of lhe mid-199Os was lhe occasion foi signin-
canl sliucluial change. This slienglhened lhe posilion of elile buieaucials
in nalional economic managemenl.
The evidence on buieaucialic qualily also poinls lo vaiialion belween
slales. Koiea, Taiwan, Singapoie, and Hong Kong all ieciuil exlensively
fiom elile univeisilies. Theii buieauciacies geneially ielain lheii high
iepulalions. n Soulheasl Asia, only lhe elile agencies en|oy a iepulalion
foi high-calibie slafnng. This has been compiomised in Thailand`s case by
scandals and olhei allegalions of coiiuplion in piudenlial and supeivisoiy
agencies.
The ciisis of 1997 iesulled in a special focus on lhe qualily of economic
goveinance of lhe nnancial secloi in affecled slales and on lhe appiopii-
ale slale ioles in lhis secloi. The piaclices of individual slales had vaiied
in ielalion lo lhe openness of lheii nnancial seclois lo inleinalional pai-
licipalion, lheii piudenlial iequiiemenls and moniloiing piaclices, and
lheii geneial iequiiemenls in ielalion lo lhe lianspaiency of coipoiale
aclivily. Piogiessive libeializalion of lhis lallei secloi in Koiea has been
said lo be one of lhe causes of lhe ciisis in lhal counliy: piioi lo libeial-
izalion lhe slale oveisaw lhe level of chaebol boiiowing. Taiwan has
ielained lighl conliols, and lhis has insulaled lhal counliy fiom lhe con-
sliainls lhal economic globalizalion olheiwise imposes on domeslic fiee-
dom of manoeuvie. By conliasl, lhe cily-slales of Singapoie and Hong
Kong have managed lheii nnancial seclois wilh a degiee of lianspaiency
and wilh piudenlial and supeivisoiy aiiangemenls sufncienl lo salisfy lhe
global nnancial communily. Such aiiangemenls have been absenl in
Thailand, ndonesia, and Malaysia: lheii absence and lhe iesulling
excesses aie held lo have conliibuled lo lhe ciisis of 1997. The Philip-
pines has adopled ielalively moie sliingenl moniloiing policies. To be
noled in passing is lhal lhe piesence of such aiiangemenls is nol asso-
cialed wilh lhe absence of ciises, as is shown by lhe \.S. savings and
loans episode and by lhe Biilish abandonmenl of lhe IMS. Peihaps lhe
besl lhal mighl be claimed is lhal such aiiangemenls help lo connne such
ciises lo lhe nnancial secloi.
n sum, only Taiwan and Singapoie bioadly ielained in lhe lale 199Os
lhe fiamewoik of classic developmenlal slales; democializalion, in lhe
nisl case, is also leading lo a ieconnguialion of lhe inslilulional conlexl.
The inslilulional foims iemain in Koiea, bul lhe capacily lo inuence,
diieclly oi indiieclly, indusliial sliucluie oulcomes has been undeimined:
lo an exlenl al leasl, lhis has been due lo polilical developmenls. Malay-
sia and ndonesia, in veiy diffeienl conlexls, adopled limiled piogiammes
lo shape lhe indusliial sliucluie; bul lhis policy was puisued lhiough
special-puipose agencies and lhiough diiecl polilical linkages ialhei lhan
lhiough a coheienl slale appaialus. Hong Kong has also inlioduced pol-
icies designed lo encouiage lechnology developmenl in lhe eleclionics
and infoimalion lechnology seclois, bul as an augmenlalion of exisling
followeiship`` policy, nol lhiough lhe ieshaping of lhe indusliial sliuc-
luie. The Philippines and Thailand have nol geneially soughl lo inuence
indusliial sliucluie oulcomes; in lhe lallei case lhe iepulalion of lhe elile
buieauciacy has also been compiomised by biibeiy scandals.
Iinally, lhe consequences foi economic goveinance of lhe nnancial
ciisis of 1997 should be noled. This ciisis, and lhe subsequenl inlei-
venlions of lhe MI and lhe Woild Bank in affecled slales, pul a numbei
of facels of economic goveinance undei lhe spollighl. They demonsliale
lhe limilalions on economic goveinance, al leasl in lhe nnancial secloi,
and peihaps moie geneially, lhal aie imposed by subslanlial ieliance on
inleinalional capilal. The OICD move lo inlioduce an inveslmenl code
ieecls lhe same piessuies in pioduclion seclois. The ciisis has given
CONCL\SON 345
fiesh impelus lo aigumenls conceining lhe desiiabilily, fiom lhe pei-
speclive of nalional soveieignly, of nnancial libeializalion, and of olhei
inleinalional iegulaloiy codes fiamed in accoidance wilh Weslein noims.
The nnancial ciisis has also slimulaled debale aboul lhe value of lhe
iemedies ioulinely sponsoied by lhe MI and lhe Woild Bank and aboul
lhe polenlial foi moie elaboialed iegional co-opeialion lo insulale slales
bellei fiom inleinalional invesloi senlimenl, such as lhe selling up of
a iegional moniloiing aulhoiily oi of a iegional yen bloc. n sum,
lhe evenls of 1997 and lheii afleimalh, no less lhan democializalion in
Taiwan, Koiea, and Thailand, have meanl lhal economic goveinance in
individual slales is sub|ecl lo an aiiay of volalile piessuies.
Libeial demociacy and economic peifoimance in Iasl and
Soulheasl Asia
l is possible al lhis poinl lo allempl lo summaiize lhe evidence which has
been collecled in lhe couise of lhis volume aboul lhe possible impacl of
libeial demociacy on economic peifoimance. To do so, il is besl nisl lo
locale lhe eighl counliies analyzed in lhis volume in lhe maliix deiived
fiom Sheflei and desciibed in chaplei 4 (see nguie 13.1, and compaie
nguies 4.1 and 4.2). The evidence suggesls lhal, wheieas no Weslein slale
falls in lhe iighl-hand column of weak and inleinally divided`` pailies,
lhiee of lhe counliies examined heie, Koiea, Thailand, and lhe Philip-
pines, aie localed in lhal column; fuilheimoie, a fouilh column coveiing
counliies wilhoul a fieely developed paily syslem`` has lo be inlioduced
on lhe iighl of lhe maliix lo accommodale Singapoie, Hong Kong, and
ndonesia. Only Taiwan and Malaysia aie lo be localed in lhe middle
column of paily slienglh. Wilh iespecl lo adminislialive sliucluies, Tai-
wan and Singapoie aie localed in lhe lop iow as lheii buieauciacy is
sliong, while lhe olhei six counliies aie localed in lhe middle iow as lheii
buieauciacy is inleimediale in slienglh; howevei, some change may be
occuiiing since Hong Kong may be in lhe piocess of moving up while
ndonesia may be in lhe piocess of moving down, and Koiea has alieady
moved fiom being chaiacleiized by a sliong buieauciacy lo being chai-
acleiised by a buieauciacy of inleimediale slienglh. Only Taiwan and
Malaysia have paily and adminislialive chaiacleiislics which iendei lhem
compaiable lo Weslein counliies, as lhey have bolh ielalively sliong
pailies and sliong buieauciacies, lhe Taiwan buieauciacy being lhe
sliongei of lhe lwo.
On lhe basis of lhe way in which counliies of Iasl and Soulheasl Asia
aie localed on lhe maliix, a sel of conclusions can be diawn aboul some
aspecls of lhe impacl of libeial demociacy on economic developmenl.
3
4
7
E
c
u
n
u
m
i
c
G
u
v
e
r
n
a
n
c
e
Pulitical Parties
STRONG
Piogiammalic
INTERMEDIATE
Repiesenlalive
WEAK
nleinally divided
Paily
foimalion
highly
consliained
TAWAN
1apan(?)
Iiance
KORIA
SNGAPORI
Biilain
Sweden
Mosl
conlinenlal
Iuiopean
\niled
Slales
MALASA
PHLPPNIS
THALAND
HONG KONG
NDONISA
Many Lalin
Ameiican
STRONG
embeddedness slale sleei-
ing (e.g. focus on indusliial
sliucluie oulcomes: lechnology
policy; co-oidinale inveslmenl;
moniloi boiiowing; business-
laboui inclusion).
INTERMEDIATE
(e.g. cenlial bank indepen-
dence; open nnancial syslem;
neulial nscal and monelaiy
policy; libeial liade iegime;
limiled collaboialion wilh
business andjoi laboui)
WEAK
( implemenlalion difncull)
3 3
3
f
Iiguie 13.1 Pulitical parties and ecunumic guvernance in East and Suutheast Asia
The queslion is bellei examined successively in lwo ways, howevei, as
lhis impacl can be expecled lo be diffeienl, lo a degiee al leasl, when
lheie is an economic ciisis of lhe magnilude of lhal which hil lhe iegion
in 1997, lhan when economic developmenl lakes place wilhoul ma|oi
nalional oi inleinalional impedimenls.
1ibcral Jcnocracy anJ ccononic pcrjornancc in gcncral
Allhough lhe impacl of libeial demociacy on economic peifoimance in
lhe conlexl of Iasl and Soulheasl Asia, even oulside economic ciises,
cleaily cannol be sliiclly speaking measuied,`` a numbei of conclusions
can be diawn fiom lhe evidence of developmenls which look place fiom
lhe mid-198Os lo lhe mid-199Os. The nisl and mosl immediale piece of
evidence is consliluled by lhe facl lhal duiing lhese len yeais, lheie was
no sign of a decline in iales of economic giowlh in any of lhe counliies
which became libeial democialic al lhe lime, Koiea, Taiwan, lhe Philip-
pines, and Thailand. The economic miiacle`` conlinued in lhese coun-
liies as il did in lhose in which lheie was no bieak in aulhoiilaiian iule. l
may be, admilledly, lhal lhis slale of affaiis simply iesulls fiom lhe facl
lhal lheie can be a subslanlial lag foi lhe effecl of a change of polilical
iegime lo be fell: il manifeslly lakes lime foi lhe alliludes of lhe aclois
conceined, enliepieneuis, employees, and membeis of lhe buieauciacy,
lo be modined. Bul il is suiely faii lo conclude lhal lhe inslallalion of
libeial demociacy has nol immedialely and diieclly deslioyed economic
peifoimance.
The analysis needs lo go fuilhei, howevei. Thiee lypes of consid-
eialions, which have been highlighled in lhe couise of lhis volume, bolh
in lhe geneial and in lhe counliy chapleis, need lo be laken inlo accounl.
Iiisl, is lheie a diiecl and conciele effecl of lhe inslallalion of a libeial
democialic iegime on lhe pail which lhe buieauciacy is able lo play in a
counliy? Do adminislialois conlinue lo be able lo iniliale policies and lo
follow lhese lhiough on lhe scale lo which lhey weie accuslomed in an
aulhoiilaiian iegime? Second, is lheie a consensus among all ielevanl
pailies and polilicians on conlinuing wilh a policy of economic giowlh, oi
aie lheie divisions among lhese pailies and polilicians wilh iespecl lo lhe
fundamenlals of economic policy-making? Thiid, conveisely, do buieau-
cials iecognize lhal pailies and polilicians have a pail lo play in lhe de-
velopmenl of lhe nalion, including in ils economic developmenl? Do lhey
feel dencienl in legilimacy capilal,`` so lo speak, and do lhey need lo
iely on lhe legilimacy of pailies and polilicians lo achieve lheii own
goals, oi do lhey, on lhe conliaiy, considei lhal pailies and polilicians (oi
al leasl some of lhem) pievenl lhem fiom achieving lhese goals?
The lasl lwo aspecls of lhis pioblem foim pail of a kind of liade-off
belween lhe lwo sides. Pailies and polilicians may have lo accepl lo ex-
eicise a degiee of self-iesliainl in leims of lheii own involvemenl in
economic policy-making if a high level of economic peifoimance is lo be
mainlained; buieaucials may have lo agiee lo involve pailies and polili-
cians in policy-making, and indeed lo bow lo lhe desiies of lhese pailies
and polilicians, in oidei lo ieap lhe benenls of lhe legilimizing umbiella
which pailies and polilicians can open above lhem.
1. On lhe nisl poinl, a mixed answei can be given foi Iasl and Soulh-
easl Asia. The iole of lhe buieauciacy iemained unchanged in lwo of lhe
foui counliies which moved lowaids libeial demociacy, Taiwan and
Thailand, while some changes occuiied in Koiea and lhe Philippines. The
diffeiences belween Taiwan and Thailand, in lhe involvemenl of admin-
islialois in policy-making, pie-daled libeial demociacy: in Taiwan, lhe
involvemenl of adminislialois in secloial economic managemenl con-
linued; lhe facl lhal lhe buieauciacy was only basically conceined wilh
macioeconomics in Thailand is a ieeclion, nol of lhe change in lhe
polilical iegime in lhe counliy, bul of lhe facl lhal lhe civil seivice nevei
was deeply involved in micioeconomic inilialives, peihaps because of ils
moie limiled capacily.
n lhe Philippines lhe involvemenl of lhe buieauciacy in micio-
economic managemenl which chaiacleiized lhe second peiiod of lhe
Maicos diclaloiship was maikedly ieduced when libeial demociacy was
iesloied and a policy of piivalizalions and economic libeializalion was
adopled; bul lhal change followed a peiiod duiing which lhe economy
had ceased lo giow and had even gone inlo decline. Moieovei, lhe policy
of micioeconomic managemenl which had been inlioduced by Maicos
duiing lhe second phase of his diclaloiial iule was moie designed lo
enable lhe piesidenl and his close business associales lo exploil lhe
economy lhan lo give lhe buieauciacy a key iole in lhe managemenl of
lhe economy. Thus lhe failuie of lhe policy was peihaps due, in pail al
leasl, lo lhe piedaloiy aims of lhe Philippine powei elile, allhough il may
also have been lhe case lhal, as in lhe iesl of Soulheasl Asia excepl Sin-
gapoie, lhe buieauciacy did nol have lhe iequiied lechnical compelence
lo undeilake successfully a delailed supeivision of lhe diffeienl seclois as
ils opposile numbeis in Koiea oi Taiwan had been able lo do. Thus lhe
Maicos policy of secloial inleivenlion had analogous chaiacleiislics lo
lhal of Suhailo in ndonesia: in bolh cases, il is difncull lo dissociale lhe
micioeconomic aims fiom lhe desiie lo piovide benenls lo lhe immediale
enlouiage of lhe leadei. The change of policy aflei lhe ieluin lo democ-
iacy is nol lheiefoie an indicalion lhal lhe iole of lhe buieauciacy was
being ideologically`` ieduced.
Howevei, while democializalion may nol be iegaided as having
caused`` a deciease in lhe involvemenl of lhe buieauciacy in lhiee of lhe
CONCL\SON 349
foui counliies of lhe aiea which did democialize, lhe same does nol
appeai lo be lhe case in Koiea. Admilledly, lhe slienglhening of some of
lhe non-slale economic aclois, businesses in pailiculai, was nol due lo
democializalion, bul lo lhe inciease in lhe powei of lhe chaebols. el lhe
loss of inuence which lhe buieauciacy suffeied as a iesull was nol com-
pensaled by an inciease in lhe abilily of pailies lo channel demands
coming fiom lhese bodies; noi did demands fiom employees and in pai-
liculai fiom manual woikeis come lo be channelled by lhe pailies eilhei.
The ialhei limiled exlenl lo which lhe piesidency can compensale foi lhe
inabilily of pailies lo play a pail in lhe polily is lhus manifesl in lhe
Koiean case. Koiea conslilules lheiefoie an inslance in Iasl and Soulh-
easl Asia wheie democializalion may have conliibuled lo a ieduclion in
economic peifoimance, while lhis cannol be deemed lo have been lhe
case foi lhe olhei lhiee counliies of lhe aiea which became libeial
demociacies.
2. Second, lheie appeais lo be a consensus on lhe pail of pailies and
polilicians in lhe counliies in which libeial demociacy was inslalled oi
iesloied aboul lhe need lo puisue policies of economic giowlh. As a
mallei of facl, in lhe specinc case of lhe Philippines, as we |usl saw, lhe
aulhoiilaiian iegime of Maicos pioved incieasingly unable lo biing aboul
economic giowlh. Thus, in lhis iespecl al leasl, libeial demociacy did
inuence economic developmenl posilively. Moieovei, in all lhe foui
counliies which inslalled oi iesloied libeial demociacy, a consensus has
exisled among pailies and polilicians on mainlaining lhe policy of eco-
nomic giowlh. This has been pailiculaily manifesl in lhe Philippines,
wheie a giowlh coalilion`` bioughl logelhei mosl pailies in lhe mid-
199Os; and in Koiea, wheie successive piesidenls, including lhe piesidenl
elecled in 1997, have been al pains lo slale and piove lhal lhey believed
in conlinuing exisling economic policies. Howevei, in bolh counliies, as
well as in Thailand, lhe weakness of pailies means lhal a commilmenl lo
giowlh on lheii pail has lillle signincance. As pailies in lhese counliies
counl foi veiy lillle, il cannol be claimed lhal lhese would have been in
any ieal sense in a posilion lo affecl lhe impacl of lhe buieauciacy on
policy-making even if lhey had wanled lo. Bul as we noled in lhe Koiean
case, lhe weakness of pailies may indiieclly have conliibuled lo a ieduc-
lion of lhe geneial iole of lhe slale in supeivising economic aclois.
The only one of lhe democializing counliies of lhe iegion wheie lhe
posilion of pailies on lhe queslion of economic giowlh could be said
lo have a ieal ielevance is Taiwan, since il is lhe only one in which lhe
pailies have acquiied genuine slienglh: on coming lo powei, lhe DPP
mighl be able lo inlioduce diffeienl policies, if il wished lo do so. el lhis
does nol seem likely, nol meiely because lhe views of lhe DPP on eco-
nomic policy do nol appeai lo diffei maikedly fiom lhose of lhe KMT,
35O 1IAN BLONDIL AND AN MARSH
bul also because lhe DPP has begun lo iepiesenl lo a subslanlial exlenl
lhe inleiesls of lhe laige gioup of small businessmen on which lhe eco-
nomic peifoimance of Taiwan has been based. Admilledly, il mighl be
lhal lhe coming lo powei of lhe DPP would have such consequences
foi foieign policy developmenls lhal lhe economic peifoimance of lhe
counliy would be adveisely affecled, bul lhis means going beyond lhe
economic aiea piopei and lheiefoie oulside lhe paiameleis of lhis sludy.
Oveiall, lheie is lhus consensus among pailies and polilicians in lhe
iegion on lhe need lo puisue a policy of sliong economic giowlh, bul
excepl foi Taiwan, lheie iemains some doubl as lo whelhei pailies aie
sufncienlly alive lo be iegaided as ieliable agenls in lhis iespecl. l may
lheiefoie be lhal, if pailies weie lo become sliongei, oi if new and
sliongei pailies weie lo emeige and be successful, a challenge lo lhe
policy of economic giowlh would also emeige and lhe consensus would
be bioken. All lhal can be said is lhal lheie aie no signs lhal any paily is
aboul lo lake such a line, as lheie aie no signs lhal any paily (excepl in
Taiwan) will be in a posilion lo adopl, lel alone mainlain, a dennile and
coheienl policy line.
3. f il is uncleai whelhei pailies mighl emeige which mighl challenge
lhe policy of economic giowlh, il is even moie uncleai whelhei buieau-
cials will develop alliludes which would be anlagonislic lo libeial demo-
cialic pailies and polilicians: foi whal needs lo be deleimined lo give
dennile answeis lo such a queslion is evidence aboul whal lhe ieaclions
of civil seivanls mighl be if confionled wilh silualions in which lhe eco-
nomic peifoimance of lheii counliies was impaiied undei a libeial dem-
ocialic iegime. To an exlenl, lhe ciisis of 1997 conslilules an inslance of
such a silualion, and ils polenlial consequences in leims of lhe impacl of
libeial demociacy on lhe economy will shoilly be examined; bul lheie
could be olhei ciicumslances in which lhe pioblem mighl aiise since
lheie could be many silualions leading civil seivanls lo misliusl libeial
democialic pailies and polilicians and lo favoui a ieluin lo aulhoiilaiian
iule.
n lhe absence of delailed sludies of lhese polenlial alliludes of civil
seivanls in each counliy, lhe poinls which can be made have lo be gen-
eial. Thiee of lhese appeai lo be pailiculaily impoilanl. Iiisl, if whal is
feaied by civil seivanls is undue manipulalion of economic policy by lhe
polilical masleis, il is nol cleai lhal lheie is less of lhis kind of manipula-
lion undei aulhoiilaiian iule lhan undei libeial democialic iule. The
cases of Maicos in lhe Philippines and Suhailo in ndonesia have alieady
been menlioned; in Singapoie, Lee Kuan ew has moie lhan occasion-
ally acled ovei and above his civil seivanls; lhe pail played by Malaysian
polilical leadeis, above all Mahalhii, in economic policy-making has been
veiy signincanl. n conliasl, libeial democialic leadeis aie likely lo be
CONCL\SON 351
anxious lo avoid giving loo oflen lhe impiession of inleivening, foi
inslance, lo please lheii consliluenls: civil seivanls may even be able lo
iesisl lhese inleivenlions moie effeclively in a libeial demociacy lhan in
an aulhoiilaiian iegime.
Second, howevei, such iesliainl on lhe pail of libeial democialic lead-
eis may be fell lo be lempoiaiy and lo iesull fiom lhe desiie lo appeai
moially supeiioi lo aulhoiilaiian iuleis: libeial democialic leadeis may
be moie disposed lo look aflei lheii inleiesls and lhose whom lhey wish
lo help when lheii iule becomes bellei eslablished. ndeed, civil seivanls
may woiiy aboul lhe polenlial meddling of libeial democialic polilicians
iegaidless of ils aclual exlenl, and be lheiefoie somewhal uncommilled
lo libeial democialic iule. Iuilheimoie, buieaucials may be only lem-
poiaiily iesliained in lheii desiie lo biing aboul moie oidei`` in sociely,
so long as lhe view pievails in lhe woild al laige lhal libeial demociacy is
lo be piefeiied. Such a view may nol pievail indennilely: by lhe end of
lhe 199Os ils slienglh had alieady somewhal diminished. This may affecl
lhe commilmenl of civil seivanls lo libeial democialic polilics in lhe
longei leim.
el, lhiid, lhe pioblem may giadually lake a diffeienl shape as co-
opeialion belween lhe lwo sides comes lo be iegaided as noimal. Civil
seivanls in lhe aiea may be impiessed by lhe facl lhal, in lhe Wesl and in
1apan, a woiking ielalionship does exisl belween polilicians and buieau-
cials. They may also come lo nole lhal such a ielalionship has lhe ad-
vanlage of laking away fiom civil seivanls lhe buiden of having lo |uslify
whal is done on lhe economic fionl, including of having lo defend any
mislakes which may be made. Moieovei, if buieaucials accepl libeial
democialic iule as given, lhey cease lo have lo ask lhemselves difncull
queslions aboul lhe cosls and unceilainlies connecled wilh iegime
change.
Al lhis slage, il can al leasl be concluded lhal lhe impacl of libeial de-
mociacy on economic peifoimance is nol necessaiily negalive. Moie
specincally, while moie needs lo be done lo examine in delail how eco-
nomic policies aie being affecled by democializalion, il seems lhal in lhe
pailiculai case of Iasl and Soulheasl Asia, lhal impacl has pioved lo be
al leasl neulial in lhe shoil leim. The fuluie is nol as cleai, howevei,
given lhe pioblems posed by lhe consequences of lhe economic ciisis of
1997.
1ibcral Jcnocracy anJ ccononic criscs
ndependenlly fiom ils impoilance foi lhe iegion as a whole and indeed
foi lhe woild, lhe nnancial ciisis of 1997 conslilules a lesl case of lhe ie-
lalionship belween polilicians and civil seivanls in bolh a libeial demo-
cialic and an aulhoiilaiian conlexl. This ciisis has consliluled a ma|oi
upheaval foi Iasl and Soulheasl Asian counliies, lhough lhe exlenl of
lhe upheaval has been diffeienl fiom counliy lo counliy; lhe diffeienl
oiigins of lhe ciisis in each counliy may accounl in pail foi ils diffeienl
effecls. The pioblem has aiisen in Koiea piimaiily because of lhe exlenl
of boiiowing by lhe ma|oi companies, and in Soulheasl Asia, because of
an inleinal collapse of ma|oi banking inslilulions and lhe lack of iegula-
lion of lhe nnancial syslem: lhis means lhal, as was poinled oul al lhe
beginning of lhis chaplei, whalevei lhe exlenl of lhe consequences of
lhe ciisis, lhe cause of lhe liouble cannol be alliibuled oi al leasl,
nol diieclly alliibuled lo moves lowaids libeial demociacy. ndeed, a
counliy such as ndonesia has been affecled as much as, if nol moie lhan,
any libeial democialic counliy of lhe aiea.
Whal does iemain in queslion is whelhei a libeial democialic fiame-
woik is likely lo help oi hampei lhe managemenl of lhe ciisis. The ciisis
iendeis moie acule lhe dilemmas of bolh polilicians and civil seivanls
iegaiding lhe exlenl lo which lhey should iespecl each olhei`s domain.
On lhe one hand, lhe buieauciacy needs lo en|oy consideiable aulonomy
in oidei lo be able lo play ils full pail in lhe policy-making piocess; bul il
also needs lo be bulliessed, on lhe olhei hand, by polilically aulhoiilalive
inslilulions piimaiily pailies, oi failing lhese, by inslilulional devices
such as lhe piesidency. Theie has lo be a good mix of oi liade-off be-
lween adminislialive involvemenl and polilical suppoil, as polilical sup-
poil musl nol be oveishadowed by adminislialive involvemenl if ciisis
managemenl is lo pioceed smoolhly. Lel us lheiefoie ieluin lo lhe posi-
lions occupied by lhe vaiious counliies of lhe aiea on lhe maliix deiived
fiom Sheflei as shown in modined foim in nguie 13.1.
f we considei lhe localion of lhe counliies of Iasl and Soulheasl Asia
in lhe maliix, lhese aie exposed lo lwo lypes of iisks. Polilies in lhe lwo
iighl-hand columns would appeai likely lo suffei because of lhe lack of
slienglh of lheii polilical inslilulions; polilies in lhe lowei pail of lhe
maliix aie also in dangei because of lhe weakness of lheii adminislialive
appaialus. Thus counliies in lhe bollom iighl-hand coinei, such as Lalin
Ameiican counliies oulside lhe aiea, have lended lo be pailiculaily al
iisk.
None of lhe counliies of Iasl and Soulheasl Asia is in lhe same box as
lhe Lalin Ameiican counliies, bul ndonesia comes close lo lhal posilion:
lhe abilily of ils polilical inslilulions lo ielale lo lhe people via lhe pailies
and even lhe piesidency is almosl non-exislenl; lhe abilily of lhe bu-
ieauciacy lo manage lhe economy and lhe sociely is lhe weakesl of lhe
counliies of lhe iegion and ils peifoimance is in queslion. Admilledly,
lhis is in pail due lo lhe difncully of adminisleiing a vasl counliy in which
lheie is consideiable elhnic diveisily; bul pioblems have been com-
CONCL\SON 353
pounded by lhe facl lhal lhe aulonomy of lhe buieauciacy had come lo
be somewhal hampeied by lhe aclions of Suhailo in favoui of his busi-
ness associales. As a iesull, lhe ndonesian piesidency had ceased lo
piovide help lo lhe polilico-adminislialive syslem and had come lo be a
handicap. ndonesia appeais lheiefoie lo be lhe polily of lhe aiea leasl
likely lo suimounl lhe ciisis.
n lhe olhei counliies, lhe iisk iepiesenled by lhe ciisis would in lhe-
oiy seem lo be giealei as a iesull of legilimacy being low lhan as a iesull
of lhe weaknesses of lhe adminislialive appaialus, since, in Iasl and
Soulheasl Asia, lhe adminislialion is always al leasl able lo see ils deci-
sions implemenled ielalively efncienlly. Thus lhe counliies in which pai-
lies display inleimediale slienglh (Taiwan and Malaysia) would appeai
moie likely lo conliol lhe effecls of lhe ciisis lhan lhe counliies in which
pailies aie weak (Koiea, Thailand, and lhe Philippines) oi almosl non-
exislenl (Singapoie and Hong Kong).
Two poinls modify lhis conclusion, howevei. Iiisl, in ielalion lo a cii-
sis, lhe accidenlal`` coming lo powei of a piesidenl has lhe effecl of
incieasing, albeil peihaps only lempoiaiily, lhe capacily of lhe polilical
syslem lo iesolve lhe ciisis oi al leasl ieduce ils impacl, since a ciisis, n-
nancial, economic, oi olheiwise, is ilself an evenl oi a silualion of an
accidenlal`` chaiaclei which is by ils veiy naluie abnoimal.`` The iea-
soning which can be made in lhis conlexl is analogous lo Max Webei`s
ieasoning aboul chaiismalic leadeiship:3 in a ciisis, if a liuly populai
leadei happens lo come lo powei, lhe sociely may be able lo oveicome
lhe pioblem and ieluin lo noimalcy.`` This means, in piaclice, lhal nol
only should Taiwan be able lo suimounl lhe ciisis as il mighl in any case
be able lo do given lhal ils paily syslem is ielalively sliong bul lhal
Koiea and lhe Philippines may also be able lo do so, if and so long as
lhese counliies aie iuled by a sliong and populai piesidenl who is willing
lo suppoil lhe buieauciacy and piolecl il if il comes undei allack because
of lhe seveiily of lhe measuies which aie laken. We noled eailiei lhal
lheie was some doubl in lhis iespecl in lhe case of Koiea; yel lhe counliy
mosl al iisk in lhe gioup of lhose which have become libeial democialic
seems lo be Thailand, as pailies in lhal counliy aie inchoale and lhe
pailiamenlaiy syslem does nol piovide ailincially`` and aulomalically
mechanisms lhiough which lo build as sliong a leadeiship as lhe piesi-
denlial syslem.
Second, while Singapoie and Hong Kong would appeai lo be polilically
weak because lhey lack lhe legilimizing impacl of pailies, lhe special
chaiacleiislics of lhese lwo polilies iendeis lhem appieciably less vul-
neiable. They may be bolh almosl puie adminislialive slales, bul lhey
appeai nonelheless able lo suimounl wilhoul gieal difncully any ciisis
which lhey will have lo face, as, in shaip conliasl wilh ndonesia, lhey
opeiale wilhin lhe naiiow geogiaphical compass of cily-slales wilh iela-
lively small populalions.
Pailies may play an impoilanl pail in cily-slales; bul lhe limiled size of
lhese polilies and lhe facl lhal lhey aie wholly uiban mean lhal ielalion-
ships belween people and goveinmenl aie facililaled, whelhei pailies
exisl oi nol. These lwo faclois also make il possible foi lhe goveinmenl
lo conliol cilizens moie adequalely. Moieovei, lhe lwo Soulheasl Asian
cily-slales, piobably like all cily-slales, aie lhiealened by neighbouis
which aie laigei in size and in populalion; and in socielies al iisk lhe
goveinmenl can moie easily use lhe aigumenl of paliiolism lo ensuie
lhal ils decisions aie obeyed and lhal dissenl is iesliicled. l may seem
paiadoxical lo come lo lhis conclusion, in view of whal Rousseau once
slaled, bul a cily-slale is peihaps less likely lo be oi iemain a libeial de-
mociacy in lhe conlexl of a ciisis lhan a laigei polily.4
As a iesull, nisl, an aulhoiilaiian slale such as ndonesia is less likely
lo manage effeclively a ma|oi ciisis lhan lhe slales which became libeial
demociacies in lhe 198Os. Second, lhe lwo ielalively aulhoiilaiian cily-
slales of lhe iegion aie likely lo suimounl lhe ciisis bellei lhan lhose
which became libeial demociacies, excepl lhal Taiwan, loo, as a con-
solidaled libeial demociacy wilh a sliong buieauciacy, is also likely lo
come oul of lhe ciisis wilhoul having suffeied ma|oi damage. The lhiee
libeial demociacies which aie nol consolidaled, and aie peihaps nol even
in lhe piocess of being consolidaled, aie belween lhese lwo gioups.
Among lhem, lhose in which libeial demociacy, despile lhe absence of
lively pailies, has been accidenlally and piobably lempoiaiily saved`` by
a populai piesidenl (Koiea and lhe Philippines) aie moie likely lo sui-
mounl lhe ciisis lhan Thailand wheie lhe absence of effeclive pailies is
nol compensaled in lhis way, in pail al leasl. Thal counliy would lheie-
foie seem lo be, aflei ndonesia, lhe one in which libeial demociacy is
leasl likely lo be able lo conliol lhe ciisis.
The queslion of lhe possible impacl of libeial demociacy on economic
peifoimance, whelhei in Iasl and Soulheasl Asia oi elsewheie, poses
such complex pioblems lhal il may nol be suipiising lhal some leadeis
should have peiemploiily afnimed, moie oi less honeslly bul cleaily
convenienlly foi lhemselves, lhal libeial demociacy is deliimenlal lo lhe
economic well-being of cilizens. A dennilive answei lo lhis queslion may
nevei be given. l is cleaily uniealislic lo allempl lo give such an answei
al lhis eaily slage in lhe examinalion of lhe iole of libeial demociacy in
economic life, lel alone one lhal is valid foi all limes and all iegions,
given culluial diffeiences and diffeiences in living slandaids. l may nol
be as uniealislic lo allempl lo give an answei foi a pailiculai iegion al a
pailiculai poinl in lime, howevei: indeed, an effoil has lo be made lo give
CONCL\SON 355
such an answei wilhin lhe ciicumsciibed conlexl of Iasl and Soulheasl
Asia, as answeis`` have been offeied fiequenlly by polilicians and
obseiveis of polilical life in lhe iegion.
The mosl sliaighlfoiwaid poinl lo make is lhal lheie is no manifesl
evidence lhal libeial democialic iule is diieclly and obviously deliimenlal
lo economic well-being. Theie is al leasl enough suppoil foi lhe view lhal
economic peifoimance has ouiished undei libeial democialic iegimes in
Iasl and Soulheasl Asia lhal lhe oveiall veidicl musl be lhe same as lhal
given foi Lalin Ameiica on lhe basis of syslemalic slalislical analyses
ielaling lo lhe 196Os and 197Os: lhal demociacy can help economic
giowlh, even if aulhoiilaiian iule can also do so.5
Beyond lhis geneial poinl, delailed case sludies piovide moie specinc
insighls inlo lhe naluie of lhe vaiialions in lhe impacl which libeial de-
mociacy may have on economic peifoimance. The exlenl lo which pailies
aie sliong oi weak is an impoilanl facloi, since lhe coheience of policies
puisued by goveinmenls undei libeial democialic iule is heavily depen-
denl on pailies being well sliucluied: in lhe absence of such pailies, lhe
piesence oi absence of a sliong piesidency may conslilule a pailial and
somewhal lempoiaiy subslilule. Case sludies make il possible lo assess
whelhei pailies andjoi piesidenls aie in lune wilh lhe buieauciacy on
economic goals, and lhus help lo deleimine whelhei oi nol lheie aie
giounds foi doubling lhe posilive oi al leasl neulial effecl of libeial
democialic iule on economic peifoimance. Case sludies also offei evi-
dence aboul lhe exlenl lo which lhe buieauciacy is able lo sleei lhe
economy, allhough moie lhoiough analyses of lhe alliludes of civil seiv-
anls aie needed if one is lo discovei whelhei lhese aie likely lo iecognize
lhal pailies and polilicians piovide legilimacy lo lheii aclions. The debale
aboul lhe impacl of libeial demociacy on economic peifoimance does
iemain open; bul lhe paiameleis wilhin which lhe pioblem is lo be
addiessed have become moie dennile and moie piecise. This, in luin, will
help lo lhiow lighl on whelhei Iasl and Soulheasl Asia aie likely lo ie-
main economically buoyanl while also being one of lhe aieas of lhe woild
wheie libeial demociacy has become nimly eslablished.
Noles
1. See i Ieng, Demociacy, Polilical Slabilily and Iconomic Giowlh,`` British 1ournal oj
Iolitical Scicncc 1997; 27: 391418.
2. Ioi iefeiences on lhe iole of pailies see chaplei 2.
3. Max Webei, Thc Thcory oj Social anJ 1cononic Organi;ation (New oik: Iiee Piess,
1947).
4. 1ean-1acques Rousseau, The Social Contract (London: Penguin, 1974).
5. See Ieng, Demociacy, Polilical Slabilily and Iconomic Giowlh.``
Conliibulois
Ahn Chung-si, Piofessoi, Seoul
Nalional \niveisily, Koiea.
1ean Blondel, Piofessoi, Robeil
Schumann Cenlie, Iuiopean
\niveisily nslilule, Iloience.
Cheng Hsiao-shih, Associale Reseaich
Iellow and Head of lhe Thiid
Division of lhe nslilule of Social
Science and Philosophy, Academia
Sinica, Taipei.
Idmund Teience Gomez, Lecluiei al
lhe \niveisily of Malaya, Kuala
Lumpui. He is lhe aulhoi of Iolitics
in Busincss, Iolitical Busincss.
Corporatc Involvcncnt oj Malaysian
Iolitical Iartics, Chincsc Busincss in
Malaysia and lhe co-aulhoi of
Malaysias Iolitical 1conony.
Iolitics, Iatronagc anJ Irots.
Hsin-Huang Michael Hsiao, Reseaich
Iellow al lhe nslilule of Sociology
and Diiecloi of lhe Piogiam foi
Soulheasl Asian Sludies
(PROSIA), Academia Sinica;
Piofessoi of Sociology, Nalional
Taiwan \niveisily.
Takashi noguchi, Piofessoi al lhe
nslilule of Oiienlal Culluie,
\niveisily of Tokyo.
1aung Hoon, Associale Piofessoi of
Polilical Science, Chung-Ang
\niveisily, Koiea. His ieseaich
inleiesls include polilical pailies and
eleclions in Weslein Iuiopean
demociacies and in Koiea.
1omo Kwame Sundaiam, Piofessoi
in lhe Iacully of Iconomics and
Adminislialion, \niveisily of
Malaya.
Khong Cho-oon, Senioi Analysl
wilh Shell nleinalional Limiled.
London.
Dan King is cuiienlly an equilies
analysl in Chicago. He spenl six
yeais in Thailand (199298)
conducling neld ieseaich, and wilh
357
lhe Asia Ioundalion and olhei local
nnancial nims. He holds a Ph.D.
fiom lhe \niveisily of Wisconsin-
Madison.
Andiew Macnlyie, Piofessoi,
\niveisily of Califoinia, San Diego
an Maish, Associale Piofessoi,
Auslialian Giaduale School of
Managemenl, \niveisily of New
Soulh Wales.
1ames T. H. Tang, Piofessoi al lhe
Depailmenl of Polilics and Public
Adminislialion, \niveisily of Hong
Kong.
Renalo S. \elasco, Associale
Piofessoi of Polilical Science,
\niveisily of lhe Philippines. On
secondmenl as Diiecloi foi Policy
and Technical Seivices al lhe Ofnce
of lhe \ice-Piesidenl of lhe
Republic of lhe Philippines.
358 CONTRB\TORS
ndex
aclive slale advocacy 58
Acl on lhe Relalions of lhe People belween
lhe Taiwan Sliails |Taiwanj 13O
adaplabilily of polilical oiganizalions 15O
adaplive efnciency noim 5O
adveisaiial polilical paily syslem 4243
anakuJari (1apanese piaclice) 66
Amnuay \iiavan |Thailandj 221
Anwai biahim |Malaysiaj 239, 24O
Aoki, Masohiko 72
AP\ (Angkalan Peipaduan \mmah)
|Malaysiaj 244, 245, 246
Aquino, Benigno Ninoy``
|Philippinesj 17O
Aquino, Coiazon |Philippinesj 171, 189,
191, 194
Aigenlina 26
Asian values
Asian miiacle as due lo 334
Confucianism and 14O, 295296, 3O3
debale ovei 34
democializalion piocess and xiii
economic developmenljdemociacy
and 1O11
Singapoie debale ovei Weslein vs. 295
scc also values
Asia-Pacinc Regional Opeialions Cenlei
13O
scc also Taiwan
Assembly of lhe Pooi`` movemenl
|Thailandj 5859
Auslialian fedeialion 26
Auslialian Giaduale School of
Managemenl (\niveisily of New
Soulh Wales) xiv
aulhoiilaiian goveinmenls
of Iasl and Soulheasl Asian counliies
23
economic giowlh and demociacy vs. 69
of Malaysia 2, 338
of Taiwan 338
unceilainly chaiacleiizing 8
scc also democialic goveinmenls
aulonomy of polilical oiganizalions 15O
Banhain Silapaaicha |Thailandj 2O6,
212213, 227
Bank of China |Chinaj 313
Banking Law amendmenl (1989) |Taiwanj
119
Bank of Thailand |Thailandj 219, 22O, 222,
223, 225, 344
barangays (neighboihood gioups)
|Philippinesj 17O
Basic Law |Hong Kongj 316, 318319
BBC (Bangkok Bank of Commeice)
|Thailandj 222
Belgium 9394, 95, 96, 98, 338
359
Bhumiphol Adulyade|, King |Thailandj 2O4
BN (Baiisan Nasional) coalilion
|Malaysiaj 231, 233
BOC (Boaid of Ileclion Canvasseis)
|Philippinesj 173174
Bowie, Alisdaii 66
Thc Brothcrs Karana;ov 3O2
Buddhism 296
buieauciacy
consocialional pailiamenlaiy model and
sliong 9398
in Iasl and Soulheasl Asia 14
economic goveinance, Iilipino pailies
and 189197
economic goveinancejielalionship of
paily and 8187
consocialional pailiamenlaiy model of
9398
1apanese model of 8893, 1O4
piesidenlialism model of 991O4
economic giowlh and democialic 91O
economic giowlh and Singapoie 3OO
of Malaysia 14, 252253
polilical leadeis and elile 5758
polilical and polilico-adminislialive
piocesses and 342346
powei ows belween Thai pailies and
221223
piesidenlialism of \.S.jLalin Ameiican
models and 991O4
slale aulonomy and pieslige of 53
Buima 2
business-goveinmenl collaboialion
economic peifoimance and 52
secloial ideas, choice sels, and molives
in 63, 66
cadie polilical pailies 31
Cambodia 23
Campos, Idgaido 1ose 55, 58
Caiey, 1. 278
calch-all pailies 3738
Calholic Chuich |Philippinesj 171
Cayelano, Rene |Philippinesj 175
CDI (Counliywide Developmenl Iund)
|Philippinesj 191
chaebols |Koieaj 66
Chai-Anan Samudavani|a 2O5
Chang Rong-fa |Taiwanj 13O
Chalichai Choonhawan |Thailandj 2O5, 213
Chavalil ongchaiyulh |Thailandj 2O6, 2O7,
212, 221, 227
Cheng, Tun-1en 55
Chiang Ching-kul |Taiwanj 12O, 125, 127
Chile 26
China
economic nexus of Taiwan and 127131
economic lies belween Hong Kong and
313315
fuluie inuences on Hong Kong by 326
Hong Kong as SAR of 3O5, 3O7
Hong Kong undei soveieignly of
31O317
polilical climale of 2
Sino-Biilish lalks ovei Hong Kong by
3O7, 3O931O
Tiananmen squaie (1989) incidenl in 31O
\niled Nalions sanclions againsl 3O8
scc also Taiwan
China Meichanls Coipoialion |Hong Kongj
313
Chiislian Democials |Nelheilandsj 95
Chuan Leekphai |Thailandj 2O6, 2O8, 211
Chun Doo Hwan |Soulh Koieaj 148, 149,
157
Civic Oiganizalion Law (1989) |Taiwanj
12O
coheience of polilical oiganizalion 15O151
Co|uangco, Iduaido, 1i. |Philippinesj 181
Coloiado College xiv
COMILIC (Commission on Ileclion)
|Philippinesj 172173
communilaiian ideology |Singapoiej
294297
compelilion
Asian counliies and exlenl of paily 82
foims of paily 384O
complexily of polilical oiganizalions 15O
Confessoi, Nieves |Philippinesj 175
Confucianism 14O, 295296, 3O3
consocialional pailiamenlaiy model
piinciple of accommodalion and 94
sliong buieauciacy and 9398
consocialional polilical paily syslem 4243
conslilulional sliucluie, polilical paily
syslem and 2527
Consullalive Assembly |ndonesiaj
269271, 274, 28O
Conlemplacion, Iloi |Philippinesj 175
Cox, G. 278
CPP (Chail Pallana Paily) |Thailandj
213214
CTP (Chail Thai Paily) |Thailandj
212213
36O NDIX
DAP (Democialic Aclion Paily) |Malaysiaj
242243, 245, 246
DBM (Depailmenl of Budgel
Managemenl) |Philippinesj 191
decision-making
in democialic goveinmenls 67, 89
in ndonesian democializalion 278
De Gaulle, Chailes 1O1
democialic goveinmenls
developmenl of pluialislic paily syslem
in 2531
of Iasl and Soulheasl Asian counliies
23
economic developmenl coiielaled wilh
libeial 7
economic peifoimance and libeial
346355
Iilipino salisfaclion wilh 189
inefnciency of decision-making in 67,
89
inslabilily of peisonneljpolicies in 6, 78
paily-buieauciacy ielalionshipsjeconomic
goveinance in 8187
1apan model of 8893
paily syslem and inslilulional iesilience
of 168
polilical pailies in consolidaled 24
scc also aulhoiilaiian goveinmenls;
democializalion piocess; polilical
pailies
democializalion piocess
Asian values and xiii
changing polilical economy of Taiwan
and 129134
debale ovei economic developmenl and
12
in Iasl and Soulheasl Asian counliies 3
economic giowlh and aulhoiilaiianism
vs. 69
impacl of economic globalizalion on
1113
as impeding economic giowlh 45
Asian values and 1O11
iole of buieauciacy and 91O
implicalions foi economic goveinance 8O
ndonesian economic giowlh and
276279
inleinal paily sliucluie and 3138
iole of polilical pailies and 1517
Soulh Koiean liansplacemenl 142144
Thai paily syslem developmenl and
2O8211, 214215
lhieals lo lhe 167168
Democial Paily |Thailandj 211212
developmenlal slales 5152
scc also economic developmenl
developmenlal slale lheoiy 5152
De \enencia, 1ose |Philippinesj 178
D 12
Diamond, Laiiy 168
D1P (Democialic 1uslice Paily) |Soulh
Koieaj 148149, 15O, 151, 152
DLP (Democialic Libeial Paily) |Soulh
Koieaj 148, 149, 15O, 151
Doie, Ronald 68
Doyle, Sii Ailhui Conan 287
DPP (Democialic Piogiessive Paily)
|Taiwanj 123126, 131, 132133
Duveigei, M. 31
Iasl Asian counliies
benenls of consocialionalism in 98
case-sludy melhod used lo examine
335336, 356
compaied lo Soulheasl Asian
counliies 23
ciealivily, innovalion, and skills in 7O71
economic giowlhjeconomic goveinance
and values in 911
exible iepiesenlalive mass pailies of
38
fuluie foi sliong slale in 1415
goveinmenl failuies in 7173
libeial demociacy and economic
peifoimance in 346, 348
duiing economic ciises 352355
oveiview of 348352
nolable pailies in 32
paily leadeiship in 3536
paily lypejdevelopmenl in 3435, 4142
polilical leadeis and elile buieauciacy
in 57
polilical map of 34
piocesses
buieauciacies and 342346
iole of pailies on 337341
sludies on NCs of 156
scc also Soulheasl Asian counliies
economic ciisis. scc 1997 economic ciisis
economic developmenl
coiielaled wilh libeial demociacy 7
debale ovei demociacy and 12
palh dependence as inuence on 495O
NDIX 361
economic developmenl (conl.)
Soulh Koiean democializalion piocess
and 142144
sludies on aulhoiilaiianism and 156
Thailand`s polilical and 2O42O7
Iconomic Developmenl Boaid |Singapoiej
59
economic globalizalion
impacl on economic goveinance oi
giowlh 1113
impacl on 1apan by 9O91
impacl on lhe Philippines by 187, 189
impacl on Singapoie by 299
impacl on Thailand`s economy by
223225
Taiwan and 198Os 11912O
economic goveinance
buieauciacy, Iilipino pailies and
189197
consequences of 1997 economic ciisis foi
345346
democialic paily-buieauciacy
ielalionships and 8187
9398
democializalion and implicalions foi 8O
Iasl and Soulheasl Asian counliies`
polilical pailies and 347
economic peifoimance piaclice
ciealivily, innovalion, and skills 7O71
goveinmenl failuie and 7173
nalional ideas, choice sels, and
molives 5559
secloial level ideas, choice sels, and
molives 5966
liansaclion cosls and 6769
economic peifoimances and diffeiences
in 4849
business-goveinmenl collaboialion and
52
developmenlal slale lheoiy on 5152
shaied giowlh slialegy and 54
slale aulonomy and 5354
slale as dislinclive leaining enviionmenl
and 4951
Iilipino paily policies and 184189
in Hong Kong 317321
Basic Law fiamewoik foi 318319
impacl of polilical developmenls on
325326
1113
in Malaysia 246254
iole of values in economic giowlh and
911
Taiwan and 198Os 11912O
Thai democializalion, paily developmenl
and 225227
economic giowlh
aulhoiilaiianism vs. demociacy and 69
democializalion as impeding 45
Asian values and 1O11
iole of buieauciacy and 91O
diminished income inequalily and 5859
in Hong Kong wilhoul demociacy
3O731O
1113
ndonesian democializalion and 276279
iole of values in economic goveinance
and 911
sludies of Lalin Ameiican 7
lechnology developmenl and 5354,
3O1
economic peifoimance
52
economic goveinance and diffeiences in
4849
inslilulions as deleiminanls of 1213
libeial demociacy and 346355
neoclassical economics on 49
Soulh Koiean democializalion and
153162, 158
slale as dislinclive leaining enviionmenl
and 4951
economic peifoimance piaclice
inslilulional sliucluie foi indusliy
slialegy and 60
nalional ideas, choice sels, and molives
aclive advocacy and 58
appiopiiale oulcomes of 5859
elile agencies and 5658
leadeiship consensus and 58
slialegic socio-economic goals and
5556
secloial level ideas, choice sels, and
molives 59
63, 66
secloial agencies and 59
secloial piioiilies and 59, 6263
362 NDIX
laigeled emeiging indusliial seclois and
6162
scc also economic goveinance
economic policy managemenl
changes in Hong Kong`s 321325
Singapoie inslilulions 2973O2
and Thai paily syslem 21822O
scc also economic goveinance
elaboialed embeddedness 22O
Ileclion Commission |Malaysiaj 231
elecloial syslems
impacl of 2729
of ndonesia 262267
of Malaysia 23O234
in lhe Philippines 171174
of Singapoie 293294
of Soulh Koiea 145148
elile agencies 5658
embeddedness sludies 52, 22O
IO (expoil-oiienled indusliializalion)
|Malaysiaj 247
IO (expoil-oiienled indusliializalion)
|Taiwanj 117118
Isliada, 1oseph |Philippinesj 171, 175, 18O,
184
Iuiopean \niveisily nslilule xiv
Ivans, Pelei 12, 52, 53, 66, 22O
evolulionaiy economics 495O
Ixchange Iund Advisoiy Commillee
|Hong Kongj 313314
Ixeculive Council |Hong Kongj 3O7, 321,
327n.1O
fedeialism decenlializalion 2627
Ieng, . 6, 7, 334
nisl-pasl-lhe-posl syslem 2829, 146147,
23O
I1AM1S piogiam |Philippinesj 183
ying geese`` melaphoi 14
Iiance
semijpiesidenlialism (1958) of 1O1
slienglh of buieauciacy in 8586
Iiee Tiade Zone Acl of 1971 |Malaysiaj
247
Iukuyama, Iiancis 167
Gaiiell, Geoffiey 54
GATT Law 185, 186
GDP (gioss domeslic pioducl)
of Hong Kong by 1997, 3O8
ndonesian publicjpiivale inveslmenl
peicenl of 275
Malaysia`s (196O1993) 250
GNP (gioss nalional pioducl)
business gioup conglomeiales and
Taiwan 112113
of Soulh Koiea 141
in Taiwan (195O1986) 11O
Goh Chok Tong |Singapoiej 292, 293, 294
Golkai |ndonesiaj 263, 264265, 266,
267268
Gomez, Idmund Teience 56, 71
Gonzales, Neplali |Philippinesj 18O, 181
goveinmenl failuie 7173
scc also economic peifoimance piaclice
GP (Gieen Paily) |Taiwanj 133
Giand Nalional Paily |Soulh Koieaj 149
Gieal Ten Consliuclions |Taiwanj 119
Habibie, Piesidenl |ndonesiaj 28O, 281
Haddon-Cave, Sii Philip |Hong Kongj 32O
Haggaid, Slephan 55, 131, 278
Hanbo Sleel scandal |Soulh Koieaj 159
han goveining unils |1apanj 88
HANPs (Highly Advanced Nalional
Pio|ecl) |Koieaj 7O71
Hashimolo Ryulaio |1apanj 91
Hawes, Gaiy 68
HCOM (Heavy ndusliies Coipoialion of
Malaysia) |Malaysiaj 249
HKMA (Hong Kong Monelaiy Aulhoiily)
|Hong Kongj 314, 323324
Hobday, Michael 7O
Hong Kong
Basic Law of 316, 318319
changing economic ideology of 317321
conlinued capilalism of 31932O
economic giowlh wilhoul demociacy
in 3O731O
economicjpolilical hisloiy of 3O53O7,
3O831O
economic lies belween China and
313315
fuluie inuence of China on 326
inslilulional and policy changes of SAR
321325
Iinance Buieau 322
goveinmenl`s pioaclive appioach lo
324325
Hong Kong Monelaiy Aulhoiily
(HKMA) 314, 323324
ndusliy Depailmenl 323
nlelleclual Piopeily Depailmenl 323
Tiade Depailmenl 322323
NDIX 363
Hong Kong (conl.)
new laboi laws of 315316
polilical developmenls and economic
goveinance in 325326
polilical pailyjgioup slienglhs
(19952OOO) 312
SAR of People`s Republic of China as
3O5, 3O7
Sino-Biilish Agieemenl of 1984 on 3O7,
31O311
undei Chinese soveieignly 31O317
hongs |Hong Kongj 314315
Hughes, Helen 1O
Hunlinglon, Samuel P. 142, 15O, 167
ideas 5455
kegami, Keiko 88
MI (nleinalional Monelaiy Iund)
Iilipino iequesls of 197
piessuies foi global slandaids by 12
iesponse lo 1997 ciisis by 48, 345, 346
Soulh Koiea suppoiled by 159
Thailand suppoil fiom 224225, 226
income disliibulion
in Singapoie 29O291
in Taiwan of peisonal 115
ndonesia
cuiienl polilical silualion in 279281
democializalion and economic giowlh in
276279
elile agencies of 56
indusliies laigeled foi giowlh in 63
policy-making fiamewoik in 267272
accounlabilily and delegalion
ielalionships 271
polilical inslilulions and economic
oulcomes in 272276
polilical pailies and elecloial syslem of
262267
geneial eleclion iesulls (19711997)
267
publicjpiivale inveslmenl as GDP
peicenl 275
ndusliial Relalions (Amendmenl)
Oidinance |Singapoiej 299
indusliial secloi
economic peifoimance and laigeled
6162
inslilulional sliucluie foi 60
iole of 1apanese buieauciacy in 6263
infocommunicalions subsecloi |Koieaj 67
innovalion 7O71
scc also lechnology developmenl
noguchi, Takashi xiv
inslilulional economics
on palh dependence 495O
on liansaclion cosls 5O
inslilulions
changing Hong Kong 321325
as deleiminanls of economic
peifoimance 1213
of economic policy in Singapoie 2973O2
polilical pailies as democialic 23
of polilics in Singapoie 291293
slale aulonomy and slialegic 53
S (impoil subslilulion indusliializalion)
|Malaysiaj 246
S (impoil subslilulion indusliializalion)
|Taiwanj
duiing lhe 195Os 117
second phase duiing 197Os 118119
SS (nslilule foi Slialegic and
nleinalional Sludies) |Malaysiaj 56
issue polilical pailies 3334
1apan
buieaucialic iole in indusliial sliucluie
6263
business-goveinmenl collaboialion in 52,
63, 66
decision-making piocess in 9
paily and buieauciacy in 8893
economic giowlh wilhin 2
globalizalion impacl on 9O91
goveinmenl seivice by eliles 57
lessons fiom economic example of 1314
as nelwoik slale 68
paily syslem of 92
slialegic socio-economic goals of 55
slienglh of buieauciacy in 85, 86
laigeled seclois in 6465
lechnology innovalion in 7O
1omo, K. S. 56
KADN |ndonesiaj 268
Kaufman, Robeil R. 131
KBL (Kilusang Bagong Lipunan)
|Philippinesj 17O
Kelm, Mallhias 71
khaa ratchakarn (Thai civil seivanls) 219
Khong, Tal an 55
364 NDIX
Kim Dae 1ung |Soulh Koieaj 139, 14O, 142,
149, 152, 163, 164
Kim, Hyung-Ki 55
Kim 1ong Pil |Soulh Koieaj 149, 151, 152,
153
Kim oung Sam |Soulh Koieaj 139, 142,
152, 157, 16O161
KMT (Nalionalisl Paily) |Taiwanj
conliol of slale enleipiises by 111112
economic developmenl and aulhoiilaiian
ideology of 11O, 116, 11912O
economic policies of 131132
following Civil Wai 1O9
S and land iefoim by 117
libeializalion limiled by 12O
media conliol by 3O31
Soulhwaid nveslmenl Policy by 127, 13O
scc also Taiwan
Koiea. scc Soulh Koiea
Koiean lelecommunicalions indusliy 6768
Koiean Wai (195O1953) 138, 3O8
Koin Dabaiansi |Thailandj 213
Kiamol Tongdhamachail 211
Kiause, Lawience 3OO
Kuala Lumpui |Malaysiaj xiv
Kuominlang. scc KMT (Nalionalisl Paily)
|Taiwanj
Kuznels, Simon 115
laboi
52
Hong Kong`s new laws iegaiding
315316
Singapoie economic policies and
2993OO
Lakas-LDP coalilion |Philippinesj 186,
18919O
Lakas |Philippinesj 178, 18O, 183, 185, 186
LAMMP |Philippinesj 18O, 181, 182, 183
Lalin Ameiica
buieauciacy and piesidenlialism of
991O4
paily sliucluie in 31
slienglh of buieauciacies in 85
sludies of economic giowlh in 7, 334335
LDP (Laban ng Demokialikong)
|Philippinesj 18O181, 183, 185, 186
leadeiship
in consocialional syslems 9798
economic peifoimance and consensus of
58
of Soulh Koiean polilical pailies 15O
wilhin polilical pailies 3536
LIDAC (Legislalive-Ixeculive
Developmenl Advisoiy Council)
|Philippinesj 185
Lee Hsien Loong |Singapoiej 3OO
Lee Kuan ew |Singapoiej 1, 3, 288289,
291, 295, 3OO
Lee Teng-hui Complex |Taiwanj 126
Lee Teng-hui |Taiwanj 125, 126, 13O
Legaida, Loien |Philippinesj 175
Legislalive Council |Hong Kongj 3O7,
311312, 315, 321
libeial demociacy. scc democialic
goveinmenls
Liddle, R. W. 266
Li|phail, A. 42
Linz, 1ohn 168
Lipsel, S. M. xiii, 151
Liu, Hong 68
Low Counliies 93, 94, 95, 9697, 98
LP (Libeial Paily) |Philippinesj 17O, 182,
183184
McCubbins, M. 278
Maceda, Iineslo |Philippinesj 181
Macnlyie, Andiew 56, 69, 344
Mahalhii Mohammad |Malaysiaj 1, 3, 63,
238239, 24O241, 244, 255, 256
Malaysia
aulhoiilaiianism polilical climale of 2,
338
buieauciacy of 14, 252253
business-goveinmenl collaboialion in 66
economic goveinance in 246247
buieaucials, lhink lanks, and 252253
heavy indusliializalion slialegy and
249252
polilical economy (197O199O) and
247249
\ision 2O2O and 253254
eleclions and lhe elecloial syslem of
23O234
campaigns 233234
nisl-pasl-lhe-posl syslem of 29, 23O
pailiamenl eleclion iesulls 235
iole of media in 232
employmenljoccupalion by elhnic gioup
in 251
NIP (New Iconomic Policy) of
247248, 25O251, 252, 254
NDIX 365
Malaysia (conl.)
owneiship of shaie capilal in 251
paily syslem expeiience in 26, 27, 43,
339
pluialism wilhin 394O
polilical oullook in
middle-class aclivism and 254255
\MNO faclionalism and 255257
polilical pailies in
DAP (Democialic Aclion Paily) as
242243, 245, 246
opposilion coalilions since 1987
244246
olhei BN membeis 241242
PAS (Paili slam SeMalaysia) 243,
245, 246
PRM (Paili Rakyal Malaysia) as 244
iuling coalilion of 234, 236
\MNO as 236241
Singapoie expelled fiom 289, 298
social cleavages in 9394
laigeled indusliies foi giowlh in 63
scc also \MNO (\niled Malay Nalional
Oiganizalion) |Malaysiaj
Maiavall, 1ose Maiia 159
Maicos, Ieidinand |Philippinesj 36, 66,
17O, 171, 184
maikel failuies 67
mass media
eleclions and behavioi of 3O31
ndonesia elecloial syslem and
265266
Malaysian eleclions and 232
paily syslem and iole of 2931
in Philippine polilics 174175
iole in Thai eleclions by 2O9
Singapoie goveinmenl consliainls on
294
Taiwanese polilicized 131132
mass polilical pailies 3134, 3738, 39
Mallhews, 1ohn 7O, 72
Megawali Sukainopulii |ndonesiaj 263
Mei|i Resloialion |1apanj 8889
MC (Malaysian ndian Congiess)
|Malaysiaj 232
MDA (Malaysian ndusliy Developmenl
Aulhoiily) 59
Mineis, Noiman 32O
MT |1apanj 53, 56, 6263
Mochlai, Pabollinga 58
Moon, Chung-in 68
Mooie, Thomas G. 71
Mullimedia Supei Coiiidoi`` |Malaysiaj
63
mulli-paily syslems (wilh dominanl paily)
41
mulli-paily syslems (wilhoul dominanl
paily) 41
NAMIRIL (Nalional Movemenl foi Iiee
Ileclions) |Philippinesj 174
Nam Thai Paily |Thailandj 221
NAP (New Aspiialion Paily) |Thailandj
212
NAP (New People`s Aimy) |Philippinesj
17O
Nalional Developmenl Planning Commillee
|Malaysiaj 59
Nalional Iconomic Consullalive Council
|Malaysiaj 59
Nalional Heallh nsuiance |Taiwanj 132
Nalional Secuiily Law (1987) |Taiwanj 12O
NCNP (Nalional Congiess foi New
Polilics) |Soulh Koieaj 146
NDRP (New Democialic Republican
Paily) |Soulh Koieaj 149, 151,
152153
NIP (New Iconomic Policy) |Malaysiaj
247248, 25O251, 252, 254
NISDB (Nalional Iconomic and Social
Developmenl Boaid) |Thailandj
5657
Nelheilands 9394, 95, 96, 97, 338
New Aspiialion Paily |Thailandj 2O7
new inslilulional economics lheoiy 1213
New Oidei iegime (ndonesia) 279, 281
NCs (newly indusliializing counliies) 156
1997 economic ciisis
Asian economic goveinance sludies and
335336, 337
economic goveinance consequences of
345346
oiigins and spiead of 4748, 72, 73
Philippines duiing 196197
pioduclive capacily befoie 48
Thailand`s expeiience duiing 9, 2O72O8,
223
liansaclion cosls and 69
NKP (New Koiea Paily) |Soulh Koieaj
145, 146, 148, 149
Noilh, Douglas 5O, 68
Noilh Koiea 138
scc also Soulh Koiea
nolable polilical pailies 3132
366 NDIX
NPC (Nalionalisl People`s Coalilion)
|Philippinesj 18O, 181182, 183
NP (Nalionalisla Paily) |Philippinesj 17O
NP |Taiwanj 123, 125
nucleai powei policy |Taiwanj 132134
Nukul Commillee iepoil |on Bank of
Thailandj 225
O`Donnell, Guilleimo 145
OICD
piessuies foi global slandaids by 12
iesponse lo 1997 ciisis by 345
Soulh Koiean membeiship in 159, 162
OIC (Omnibus Ileclion Code)
|Philippinesj 171, 172
Okimolo, Daniel 63
Oulline Peispeclive Plan |Malaysiaj 58
Palang Dhaima Paily |Thailandj 2O9
Iancasila slale ideology |ndonesiaj 264,
282n.3
PAP (People`s Aclion Paily)
|Singapoiej 288, 291, 293, 296, 297
Paily and Buieaucialic Powei 83
Paily and Buieaucialic Powei 84
paily idenlincalion 3132
PAS (Paili slam SeMalaysia) |Malaysiaj
243, 245, 246
PBS (\niled Sabah Paily) |Malaysiaj 242,
244, 245
PD (Pailai Demokiasi ndonesia)
|ndonesiaj 263, 266, 267, 281n.1
PDP (Philippine Democialic Paily)
|Philippinesj 186
Pelila \ slialegic plan (199495)
|ndonesiaj 63
People`s Republic of China. scc China
Philippines
buieaucialic chaiaclei in 1O3
conslilulional sliucluie and elecloial
syslem of 171174
economic goveinance, buieauciacy, and
pailies in 189197
bloaled and polilicized buieauciacy
192193
compelenl buieauciacies of 193194
cuiiency ciisis and ligei cub``
economy 196197
economic giowlh and policy-making
by 194196
hisloiical backgiound of pailies in 169
mailial law polilics (19721986)
17O171
posl-wai democialic polilics
(19461972) 16917O
iesloialion of democialic polilics
(1986-piesenl) 171
macioeconomic indicalois (19851996)
195
ma|oi polilical pailies of lhe 175178
basic indicalois of paily
inslilulionalizalion in 177
economic goveinance and policies of
184189
Lakas as 178, 18O, 183, 185, 186
LAMMP as 18O, 181, 182, 183
LDP as 18O181, 185, 186
LP as 17O, 182, 183184
nel liusl ialings (19911997) of 188
NPC as 18O, 181182, 183
paily afnlialion of Congiessjgoveinois
179
policies, ideologies, plalfoims of
182184
mass media in polilics of 174175
salisfaclion wilh demociacy in 189
Plaza Accoids of 1986, 49
pluial socielies 394O
PMP (Paily of lhe Iilipino Masses)
|Philippinesj 18O
Iolitical Man (Lipsel) xiii
polilical pailies
as cenlial democialic inslilulions 23
compelilion of 384O
democializalion and inleinal sliucluie of
3138
Iasl and Soulheasl Asian counliies`
economic goveinance and 347
economic goveinance, buieauciacy, and
Iilipino 189197
buieauciacy and 8187
9398
emeigence of issue 3334
funclionsjchaiacleiislics of 2324, 4344
impacl of elecloial syslem on 2729
impacl on polilical and polilico-
adminislialive piocesses 337341
of ndonesia 262267
NDIX 367
polilical pailies (conl.)
leadeiship wilhin 3536
libeial demociacy and iole of 1517
mass vs. nolable 3132
of lhe Philippines 175189
polilics of Taiwanese emeiging 123126,
338339
powei ows belween Thai buieauciacy
and 221223
piogiammalic vs. iepiesenlalive 3638
iole of mass media and 2931
social cleavagejlegilimalion piocess of
mass 3233
of Soulh Koiea 144153
slienglhs of Hong Kong`s (19952OOO)
312
Thai democializalion, economic
goveinance, and 225227
lypesjdevelopmenl of IasljSoulheasl
Asian 3435
scc also democialic goveinmenls
Iolitical Iartics anJ Thc Statc (Sheflei) xiv
Polilical Paily Law of 1981 |Thailandj
2O82O9
polilical paily syslems
adveisaiial vs. consocialional 4243
compaiison of Taiwan and Malaysia 339
democializalion and Soulh Koiean 144
lhe Conslilulion and piesidenlialism
144145
lhe elecloial syslem 145148
evolulion of 150
pioblem of paily inslilulionalizalion
and 15O153
inslilulional iesilience of demociacy and
168
Thai democializalion and developmenl
of 2O8211, 214215
Thai economic policy managemenl and
21822O
lypes of pluialislic 4O42
posilive non-inleivenlion policy |Hong
Kongj 32O
PPCR\ (People`s Pasloial Council foi
Responsible \oling) |Philippinesj
174
PPD (Paily foi Peace and Demociacy)
|Soulh Koieaj 152
PPP (Pailai Peisaluang Pembangunan)
|ndonesiaj 263, 267, 281n.1
Piachakoin Thai Paily |Thailandj 2O7
Piasad, Rashemi 68
Piem Tinasulanond |Thailandj 2O5, 219,
227
piesidenlialism model |\.S. and Lalin
Ameiicaj 991O4
PRM (Paili Rakyal Malaysia) |Malaysiaj
244
piogiammalic polilical pailies 3638
Pioleslanl elhic 11
Piovisional Legislalive Council |Hong
Kongj 312, 316
PR (piopoilional iepiesenlalion) syslem
|Taiwanj 123
Randah Aziz |Malaysiaj 257
Ramos, Iidel |Philippinesj 171, 174, 184,
189, 191, 192, 194
Razaleigh Hamzah |Malaysiaj 238, 239
RDP (Reunincalion Democialic Paily)
|Soulh Koieaj 149, 151, 152
iegionalism 151153
iepiesenlalive polilical pailies 3638
Revilla, Ramon |Philippinesj 175
Riding Oul lhe Sloim: Renewing Hong
Kong Slienglhs`` (speech by Tsang)
32O
ROC (Republic of China) 1O9
scc also Taiwan
Roh Tae Woo |Soulh Koieaj 148149, 152,
157, 16O
Rokkan, S. 32, 151
Romulo, Robeilo |Philippinesj 175, 178
Rool, Hillon L. 55, 58
Rosaiio, Robeilo Del, 1i. |Philippinesj 178,
18O
Sabel, Chailes 69
SAP (Social Aclion Paily) |Thailandj 213
SAR Legislalive Council |Hong Kongj 312
shaied giowlh slialegy 54
Sheflei, Mailin xiv, 83, 88
Shizuoka Reseaich and Iducalion
Ioundalion xiv
Shugail, M. 278
Shunto iound 52
Singapoie
changing social sliucluie of 29O291
communilaiian ideology and 294297
compeling nalion slialegy by 3O23O3
Confucian values and 295296, 3O3
consliainls placed on media in 294
economic giowlh and buieauciacy in 3OO
elecloial piocess in 293294
368 NDIX
expelled fiom Malaysia 289, 298
hisloiical oiigins of 28829O
impacl of global economy on 299
inslilulions of economic policy in
2973O2
inslilulions of polilics in 291293
piagmalism of economic policy in
298299
social cleavages in 93
Sino-Biilish Agieemenl of 1984, 3O7,
31O311
Sili Zahaiah Sulaiman |Malaysiaj 257
SNT\ (single non-liansfeiable vole)
eleclial syslem |Taiwanj 122123
Social Aclion Paily |Thailandj 2O7
social cleavage
consocialional piinciple and 95
demociacy and decline of paily 4O
mass pailies and 3233
piimacy of iegionalism ovei olhei
151153
lypes of 9394
socielies
adaplive efnciency noim of 5O
pluial 394O
sludies of embeddedness in 52
socio-economic goals 5556
Sollo, \icenle |Philippinesj 175
Soulheasl Asian counliies
benenls of consocialionalism in 98
business-goveinmenl collaboialion in
66
case-sludy melhod used lo examine
335336, 356
compaied lo Iasl Asian counliies 23
ciealivily, innovalion, and skills in 7O71
economic giowlhjeconomic goveinance
and values in 911, 334
fuluie foi sliong slale in 1415
goveinmenl failuies in 7173
inveslmenl by Taiwan in 128129
libeial demociacy and economic
peifoimance in 346, 348
duiing economic ciises 352355
oveiview of 348352
polilical pailies and economic
goveinance in 347
nolable pailies in 32
paily leadeiship in 3536
paily lypejdevelopmenl in 3435, 4142
polilical leadeis and elile buieauciacy in
5758
polilical map of 34
piocesses, iole of pailies on 337341
scc also Iasl Asian counliies
Soulh Koiea
as Asian miiacle`` 137
buieauciacy of 14
buieaucialic chaiaclei in 1O3
ciisis of 1997 and domeslic condilions in
72
democializalion and economic
peifoimance in 153162
belween 19871995 158
piesidenlial eleclion by iegion
(19871997) 154155
economic giowlh and delayed demociacy
of 14O142, 33934O
giowlh of GDP in 141
inuence of Confucianism on 14O
legacy befoie democializalion 13814O
paily polilics of 144
polilical pailies of 144153
pioblem of paily inslilulionalizalion and
15O153
lechnology innovalion in 7O71
liansplacemenl democializalion piocess
in 142144
lhe Conslilulion and piesidenlialism
and 144145
lhe elecloial syslem and 145148
geneial eleclions iesulls (1996) 147
Soulhwaid nveslmenl Policy |Taiwanj 127,
13O
lhe slale
conslilulional and leiiiloiial sliucluies of
2627
ciileiia foi collaboialion of business and
5254
as dislinclive leaining enviionmenl
4951
economic goveinance and aulonomy of
5354
NDIX 369
lhe slale (conl.)
economic goveinance of developmenlal
5152
liansaclion cosls of 6769
slale aulonomy 5354
Slalule foi \pgiading ndusliies of 199O
|Taiwanj 119
slialegic socio-economic goals 5556
Suchinda Kiapiayoon |Thailandj 2O6
Suhailo, Piesidenl |ndonesiaj 3, 63, 263,
279, 28O, 344
Sundaiam, 1omo Kwame xiv
Supachai Panichpakdi |Thailandj 221222
Sweden 9
Swiss fedeialism 27
Swilzeiland 94, 338
TAP (Taiwan ndependence Paily)
|Taiwanj 123, 125
Taiwan
aulhoiilaiian social sliucluie of 338
66
changing economic sliucluie palleins of
112
composilion of expoils by 112
conslilulional sliucluiejelecloial syslem
of 121123
developmenl palleins (195O1986) of
11O116
disliibulion of peisonal income in 115
economic indicalois (19521996) of 111
emeiging paily polilics of 123126
adveisaiial naluie of 338339
expoil-oiienled indusliializalion (196Os)
in 117118
foieign aid fiom \.S. lo 117
impoil subslilulion indusliializalion
(195Os) in 117
inveslmenl in PRCjSoulheasl Asian
counliies 128129
nucleai powei policy of 132134
oiigins and suivival of 1O911O
oveiall democializalion liends of
12O121
peicenlage of mediumjsmall enleipiises
in 113114
populai vole disliibulion (1994) in 124
populai vole disliibulion (1996) 124
piesidenlial eleclion of 1996 in 121
slable social basejpolilicized media of
131132
Taiwan-China economic nexus and
iamincalions foi 127131
volejseal disliibulion in eleclions
(19911996) 124
scc also China; KMT (Nalionalisl Paily)
|Taiwanj
Taiwan Powei Company 132, 133
Tam iu-chung |Hong Kongj 311
Taiiin Nimmanhaeminda |Thailandj 221,
222
lechnology developmenl
economic giowlh and 5354, 3O1
fosleied by economic goveinance 7O71
Tempoiaiy Piovisions |Taiwanj 12O, 121
Teo Chee Hean |Singapoiej 291
TIP\ (Taiwan Inviionmenlal Pioleclion
\nion) 132
Thailand
66
Conslilulion (1997) of 215218, 226
coup of 1976 in 2O42O5
economic downluin of 1996jciisis of
1997, 9, 2O72O8, 222223
economic goveinance, democializalion,
and paily developmenl in 225227
economic policy managemenl and paily
syslem of 21822O
impacl of globalizalion on economy of
223225
ma|oi polilical pailies of
CPP (Chail Pallana Paily) of 213214
CTP (Chail Thai Paily) of 212213
lhe Democial Paily of 211212
lisled 211
NAP (New Aspiialion Paily) of 212
naluie of 2O9, 211
new iequiiemenls foi 218
SAP (Social Aclion Paily) of 213
media iole in eleclions of 2O9
pailiamenlaiy eleclion slalislics
(19791996) of 210
paily syslem developmenl and
democializalion of 2O8211,
214215
polilical and economic developmenl of
2O42O7
powei ows belween buieauciacy and
pailies of 221223
37O NDIX
Tiananmen squaie (1989) |Chinaj 31O
Tokugawa iule (16O31858) |1apanj 88
liansaclion cosls
economic peifoimance piaclice and
6769
inslilulional economics on 5O
Tsang, Donald |Hong Kongj 319, 32O
Tung Chee-hwa |Hong Kongj 31O311,
321
T\R (ndonesian bioadcasling channel)
265266
lwo-and-a-half-paily syslems 41
lwo-paily syslems 41
\LD (\niled Libeial Democials) |Soulh
Koieaj 146
\MNO (\niled Malay Nalional
Oiganizalion) |Malaysiaj 26, 36
campaigns of 233234
depuly piesidenlial eleclion of 1993 and
23924O
eleclion iesulls foi 235
faclional ciisis of (1987) 238239
impacl on buieauciacy by 253
Mahalhii consolidalion and 24O241
membeiship bieakdown (1997) of 237
oveiview of 236237
palionage of 237238
polilical oullook and faclionalism of
255257
iuial suppoil of 231, 232
lies belween media and 232
scc also Malaysia
\niled Slales
buieauciacy and piesidenlialism in lhe
991O4
fedeialism of 26, 27
foieign aid lo Taiwan fiom 117
paily syslem and conslilulional sliucluie
in 25
\niveisily of Malaysia xiv
\niveisily of New Soulh Wales xiv
\niveisily of Siena xiv
\niveisily of Tokyo xiv
values
Confucian 14O, 295296, 3O3
iole in economic giowlh and goveinance
911
Singapoie debale ovei Asian vs. Weslein
295
Weslein Pioleslanl elhic 11
scc also Asian values
\eneioso, I. 72
\enezuela 26
\ielnam conicl 299
Vision 2020 |Malaysiaj 58, 253254
Wade, Robeil 53, 54, 72
Wang ong-ching |Taiwanj 13O
Weingasl, Baiiy 54
Weslein Iuiope
consocialionalism in 9497
mass pailies of 37
pluialislic paily syslems of 41
social cleavages in counliies of 9394
slienglh of buieauciacies in 8586
Woild Bank
on compelence of Iilipino civil seivanls
193
Iilipino iequesls of 197
iesponse lo 1997 ciisis by 345, 346
Woild Tiade Oiganizalion Agieemenl on
Texliles and Clolhing 323
WTO (Woild Tiade Oiganizalion) 12, 69,
223
NDIX 371

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