The Political Economy of the Asian Financial Crisis

The Asian crisis has sparked a thoroughgoing reappraisal of current international financial norms, the policy prescriptions of the International Monetary Fund, and the adequacy of the existing financial architecture. To draw proper policy conclusions from the crisis, however, it is necessary to understand its domestic politics. In this study, political scientist Stephan Haggard focuses on the most seriously affected countries-Indonesia, Korea, Malaysia, and Thailand-while also drawing lessons from those economies, such as Taiwan, that escaped the most severe distress. Haggard focuses on the political economy of the crisis, emphasizing the longer-run problems of moral hazard and corruption, the politics of crisis management and the political consequences of severe economic downturn. Looking forward, he focuses on two critical policy issues: changes in social safety nets in the crisis countries and efforts at corporate and financial restructuring. The Asian crisis has sparked a thoroughgoing reappraisal of current international financial norms, the policy prescriptions of the International Monetary Fund, and the adequacy of the existing financial architecture. To draw proper policy conclusions from the crisis, it is necessary to understand exactly what happened and why from both a political and an economic perspective. In this study, renowned political scientist Stephan Haggard examines the political aspects of the crisis in the countries most affectedKorea, Thailand, Malaysia, and Indonesia. Haggard focuses on the political economy of the crisis, emphasizing the longer-run problems of moral hazard and corruption, as well as the politics of crisis management and the political fallout that ensued. He looks at the degree to which each government has rewoven the social safety net and discusses corporate and financial restructuring and greater transparency in business-government relations. Professor Haggard provides a counterpoint to the analysis by examining why Singapore, Taiwan, and the Philippines escaped financial calamity. The volume... provides an excellent overview of both the theories and facts of the crisis. Strongly recommended for academic collections, lower-division undergraduate through research. The Asian crisis has sparked a thoroughgoing reappraisal of current international financial norms, the policy prescriptions of the International Monetary Fund, and the adequacy of the existing financial architecture. To draw proper policy conclusions from the crisis, it is necessary to understand exactly what happened and why from both a political and an economic perspective. In this study, renowned political scientist Stephan Haggard examines the political aspects of the crisis in the countries most affected-Korea, Thailand, Malaysia, and Indonesia. Haggard focuses on the political economy of the crisis, emphasizing the longer-run problems of moral hazard and corruption, as well as the politics of crisis management and the political fallout that ensued. He looks at the degree to which each government has rewoven the social safety net and discusses corporate and financial restructuring and greater transparency in business-government relations. Professor Haggard provides a counterpoint to the analysis by examining why Shingapore, Taiwan and the Philippines escaped financial calamity iie.com......Page 0 Political Economy of the Asian Financial Crisis -- Stephan Haggard, Institute for International Economics......Page 1 http://www.iie.com/publications/chapters_preview/107/niie2830.pdf......Page 3 http://www.iie.com/publications/chapters_preview/107/1iie2830.pdf......Page 4 http://www.iie.com/publications/chapters_preview/107/2iie2830.pdf......Page 5 http://www.iie.com/publications/chapters_preview/107/3iie2830.pdf......Page 6 http://www.iie.com/publications/chapters_preview/107/4iie2830.pdf......Page 7 http://www.iie.com/publications/chapters_preview/107/5iie2830.pdf......Page 8 http://www.iie.com/publications/chapters_preview/107/6iie2830.pdf......Page 9 Annotation. Renowned political scientist Stephan Haggard examines the political aspects of the Asian financial crisis in the countries most affected: Korea, Thailand, Malaysia, and Indonesia. Haggard focuses on the political economy of the crisis, emphasizing the long-running problems of moral hazard and corruption, as well as the politics of crisis management and the political fallout that ensued This study not only examines the countries most severely affected by the Asian financial crisis, but also draws lessons from those whose economies escaped the worst problems. The author focuses on the political economy of the crisis, emphasizing long-standing problems and crisis management tactics Rapid lending growth, an increase in corporate leveraging, declining returns on capital, and weaknesses in the financial sector contributed to the vulnerability of the most seriously affected countries well before the Asian financial crisis actually broke. Stephan Haggard. Includes Bibliographical References (p. 239-253) And Index.