Regime Maturity and the Future of Asia's Regional Economic Order

Abstract

Regime Maturity and the Future of Asia's Regional Economic Order Saori N. Katada (bio) In 2020 the Asian economies became larger than those of the rest of the world combined, and the region is now home to half the world's middle class. These economies' growth over the last several decades has been impressive but not uniform. As such, T.J. Pempel's new book, A Region of Regimes: Prosperity and Plunder in the Asia-Pacific, provides a comprehensive and insightful analysis of the distinctive developmental pathways in the region. These pathways are heavily influenced by "regimes" that are constructed by interactions among political, socioeconomic, and international properties.1 Covering the growth paths of ten countries in East Asia, Pempel maps out three distinct types of regimes, with two styles (developmental and ersatz) that have achieved prosperity and one (rapacious) that has led to plunder. A Region of Regimes is a tour de force—the culmination of the depth, breadth, and expanse of Pempel's research career as a prominent scholar of the international and comparative political economy of East Asia. This study provides an ambitious and comprehensive yet nuanced treatment of the region's political-economic trajectory. The complex interaction among domestic regimes, policy paradigms, and the regional order, Pempel argues, has evolved in an Asia-Pacific that has not only pursued and mostly achieved rapid economic growth but also introduced diplomatic and security tension threatening the regional order. With this generative book, Pempel provides a multitude of insights that will attract many other studies on the topic to follow. Of particular interest to me are the regional implications of the "aged" or "mature" developmental regimes of Japan, South Korea, and Taiwan. In chapter four, Pempel examines their slow transformation. Once having had very cohesive unity pursuing embedded mercantilism, these developmental regimes have undergone fragmentation due to globalization and private-sector maturity, including the regional expansion of production networks. Nonetheless, these regimes have been very resistant to fundamental changes. In other words, [End Page 174] "regime shift" has not been a smooth process. With such regime stickiness on the one hand, I see that these economies are faced with a challenge of disembedded private businesses on the other. Despite the continued influence that large corporations or peak associations, such as Keidanren in Japan, wield over governments' economic policies, these businesses no longer need government protection, nor are they willing to be controlled by state guidance. As discussed elsewhere by Henry Wai-chung Yeung, new strategic couplings through Asian firms' pursuit of competitive positions in the global marketplace are leading these firms to free themselves from national constraints.2 By extending Pempel's argument regarding these three developmental economies, an interesting angle to investigate would be to consider multiple implications that these matured developmental regimes with disembedded businesses could have on the regional order. First, to support the national firms that have offshored and globalized, developmental governments such as those in Japan, South Korea, and Taiwan are faced with the task of supporting businesses that stretch outside of their national jurisdiction. Particularly given their demographic challenges with aging populations and low birth rates, these mature developmental states continue to rely on regional production and global markets continue as the lifeline for their future prosperity. Economic regionalization and regional institutions built over the course of the last twenty years have created a heavily connected region, as Pempel discusses in chapter six. These conditions would inevitably draw these governments to act in support of a rules-based economic order and continued globalization to undergird their firms' regional and global activities. Furthermore, intraregional contagion through emulation and diffusion of policy ideas are an important factor in predicting the region's future course. In the 20th century, Japan was the developmental model to emulate. Since the 1980s, China has learned from Japan's successes and failures (p. 157), and Malaysia has also implemented a "Look East" policy during this time. In the 21st century, China has its own version of a "going out" and connectivity strategy that is particularly prominent in the Belt and Road Initiative introduced in 2013. At the same time, the mature developmental states from Japan to South Korea must...