Creative destruction? After the crisis: Neo-liberal ‘remodeling’ in east Asia

Abstract

ABSTRACT Why in the wake of the Asian financial crisis have certain emerging market states (EMs) proved more proficient in the implementation of advanced economic reforms than others, despite similar crisis experiences, similar stages of economic development, similar pressure from external actors (both political and market-based), and – most significantly – similar interests in preventing recurrence? The article seeks to account for this paradoxical divergence in state responses to financial crisis conditions and in so doing help compensate for the paucity of crisis response studies in the literature; it seeks to explain why states with numerous similarities are nonetheless responding differently. The evidence appears to confirm that EMs are more likely to implement a significant range of reforms where the ‘antecedents of good governance’ are positive (see below); conversely, where the antecedents of EM governance are negative, attempts to implement the requisite regulatory changes have foundered. In either case, an interaction effect with degree of democracy is discernable with respect to each of the antecedents of good governance. Without the domestic forms called for here, not to mention necessary reforms of the international financial architecture, a contagion of even global proportions is not only possible but probable.