Social Restructuring in East Asia after the Crisis: A Bottom-Up Style or a Top-Down Style

Abstract

When a currency and financial crisis attacked the Asian economy, international financial institutions such as IMF and the World Bank frequently attributed the major causes of this crisis to the structural weakness and institutional vulnerability accruing to Asian economic structure as well as the Asian way. These weaknesses, they claimed, include underdevelopment of the stock market, poor governance in the corporate sector, crony capitalism characterizing government and business relations, and government intervention in economic fields (World Bank 1998: Pem-pel 1999). According to such observations, IMF and the World Bank strongly recommended the government of crisis-hit countries to firmly introduce a set of institutional reforms on the basis of Anglo-American model (World Bank 1999; Suehiro 2000a: Chapter 4). As a result, the government started financial restructuring, focusing on the development of direct finance (stock market), corporate restructuring on the basis of a “good corporate governance” concept, and the restructuring of the public sector, including privatization of state enterprises. More broadly speaking, institutional reforms were designed to make the Asian economy adjust to the three different permanent movements of globalization, economic liberalization, and political democratization.